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Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. When brokers did it it was OK, when algorithms

Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. When brokers did it it was OK, when algorithms did it in milliseconds (when common people can only operate with delays of hours and days, and with deterrent fees) it was OK, but now that there are platforms that allow more or less anyone to speculate, we start publishing moralistic pieces in the media and calling it "gambling"? Yeah, I'm sure people are going to listen... next time they want to promote values based on work and effort, maybe they should try not to create a system where workers are punished and gamblers are rewarded. PS: I don't even speculate myself, at most I buy and hold, but I'm disgusted by the level of hypocrisy of those who suddenly started saying that speculating was bad when common people started doing it. It almost makes me want to speculate just to do the opposite of what they say.

the_local_host 6y ago
Professionals don't gamble with their own money. They gamble with other people's money, and keep a percentage if they win. "Common people" are entering the game without the most important piece of equipment they need, namely a pile of money that doesn't come out of their own pocket if they lose.
- alex_anglin 6y ago
  Thanks to fees, professionals can also keep a portion if they loose. If they under-perform, they also win as long as their clients aren't calling them on it.
jayd16 6y ago
>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices...but putting that aside... I think the emphasis is more about how there's no other game in town that can compete, not that gambling is new. Interest rates are so low that there isn't a simple/safe investment entity to pull out a reliable 10%. We're all stuck gambling whether we want to or not.
- bondarchuk 6y ago
  >I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices... The existence of a financial elite hinges on the existence of a non-elite that actually does the work. If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial elite. In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't.
  - sixstringtheory 6y ago
    > In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't. Maybe, but are you insinuating that no back breaking work would need to be done if money weren’t to exist? Pretty sure the introduction of money reduces the total amount of backbreaking work to be done. Instead of hauling grain to trade for axe heads and carrying those back to your farm, you carry coins, paper, or in modern times, tap a few buttons on your smartphone.
    - toomuchtodo 6y ago
      The market would need to find ways to perform the back-breaking work, either by wages increasing or the development of automation. Supply and demand. The more people who can accumulate wealth and capital, and intelligently manage that wealth, the greater the reduction in the labor supply (as they will fund their expenses using investment returns versus engaging in labor activities to do so). Money is an abstraction, but the status quo as a whole (monetary policy, capital markets, labor policy) is designed to ensure a supply of labor. Capital begets capital [1], so those who don't have will engage in riskier behavior to get off the wage slave treadmill. [1] https://news.ycombinator.com/item?id=16592414 https://news.ycombinator.com/item?id=16592414 ("I think capitalism is much simpler: capital begets capital. Those who have capital will accumulate more capital, almost infinitely, until the capital/income ratio reaches an equilibrium who knows how high (in the absence of major corrections like wars and hyper inflation). Add inherited wealth and low taxes. Capitalism's winners are those who already have capital. Thomas Pickety's book "Capital in the 21st Century" cogently illustrates this using massive tax return based data sets.")
nunez 6y ago
SPACs are the perfect example of this. Before SPACs, retail couldn't get into IPOs at anything lower than $40/share...and even that was _after_ missing the initial pop that happens once the ticker starts trading. Now that retail can get into (support) exciting companies at a MUCH lower floor ($10 for commons, $2.50 for warrants), "SPAC bad" hit pieces are a dime a dozen and some brokers (Merrill Lynch, for example) won't allow retail to trade them unless they have $n million in net worth. Are SPACs riskier? Of course they are. Are they any riskier than IPOs (which can and do trade lower than first-day valuation)? I don't think so. Retail finally has a shot at the same pathways for wealth than IBs and others have had since forever...and we can't have that.
- paulpauper 6y ago
  except that the # of companies acquired this way is very limited
- namdnay 6y ago
  > Are they any riskier than IPOs (which can and do trade lower than first-day valuation)? I don't think so There are significant regulatory and disclosure differences that make it easier to be shady with a SPAC. If WeWork had gone with a SPAC there’s probably a lot of stuff they wouldn’t have needed to share If the aim is to open trading directly to retail, a direct listing (like Coinbase) is all you need.
paulpauper 6y ago
>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. Hardly. They make money from the commissions
AnimalMuppet 6y ago
This could be hypocrisy, but it doesn't have to be. It may be "kids, don't try this at home". The pros should have a lot better knowledge of the risks involved, and the resources to take the consequences when they're wrong. (Yeah, I know, they don't always either have the knowledge or the ability to take their lumps. They still are far ahead of the amateurs in both departments.)
tim333 6y ago
No one is that bothered when the elites lose their money gambling. It's more of an issue when people who are hard up do.
derefr 6y ago
> when algorithms did it in milliseconds (when common people can only operate with delays of hours and days, and with deterrent fees) it was OK What, you think that "low-frequency" brokers weren't upset about the rise of HFT, and didn't try to push back/kill HFT in the crib? Of course they did; HFT was classic "disruption" for their industry. You just didn't see that disruption happening, because an inside-baseball conflict between two groups of very rich businesspeople doesn't achieve anything by roping the public into the discussion. The public's opinion wouldn't have one shred of determination over which side won that conflict, so why bother spending money on mass-media propaganda? Mass-media propaganda won't do a thing to sway the rich businesspeople on the other side of the table. The moralistic Op-Eds are happening now because one side of the current conflict is the public. And so the rich people on the other side now have great interest in swaying public opinion.
Tenoke 6y ago
>maybe they should try not to create a system where workers are punished and gamblers are rewarded. I find it hard to see how people are even thinking that it's the gambling that's being rewarded. It doesn't take much to check that pure gambling is unlikely you to win you money on average, and that those who do make money are (again, on average) doing something more than just gambling.
ycombinete 6y ago
I don’t quite believe that there was no moralistic sentiment directed against it when high frequency started, or even before that when whatever changed changed. The fact that people weren’t currently writing about the status quo, but then write about a change to it isn’t surprising.
- Tenoke 6y ago
  The NYT had a pretty well received article on it back in 2009. Michael Lewis published a book criticizing HFT back in early 2014 which is a pretty good sign there was indeeed moralistic sentiment against it.
bennysomething 6y ago
This is really broad stroke. Everything we do is a gamble. Investment firms work for their clients if they didn't they wouldn't last very long. Contrary to what most people think they play a important roles. For example spending time with firms to decide if they are worth investing in. Capitol allocation is really important. It allows someone like me to delegate investment choices for my pension. This funds things new medicine development, new technology etc. Sure there are things like high frequency trading. But taken as a whole I know who'd I prefer to give my money to to invest: people with something to lose if it doesn't work out. I'm not sure how else to allocate capitol with out totally eroding personal choice.
a1369209993 6y ago
> but now that there are platforms that allow more or less anyone to speculate, we start publishing moralistic pieces in the media and calling it "gambling"? FWIW, I've been calling it gambling since I found out what the stock market is, because that is what it is. Can't speak for anyone else, though.
disabled 6y ago
It should be noted that gambling needs to be viewed as nothing more than a form of entertainment. Back in the day, formal engineering schools offered elective courses on the mathematics of gambling. Just know that if you partake in the activity in short stints long-term, they have it so rigged that it is mathematically impossible to yield net gains long-term. Personally, I think gambling is an atrocious activity. I am not religious in any way, either. I just think it is a horrible activity from a moral standpoint. Also, people who have gambling addiction do actually have one of the worst and self-destructive addictions out there. There are other ways to gamble in life without actually gambling.
- InvertedRhodium 6y ago
  What makes gambling inherently immoral in your opinion? I agree that it's addictive, but I don't see the how it's any less or more immoral than smoking, drinking alcohol, etc.
deleted 6y ago
[deleted]
eloff 6y ago
I think it's fair to snipe at speculating unreasonably when anyone does it. Its not good for society. But what's happening is somewhat different. It's really an alpha strategy to trigger a short and or gamma squeeze. It's not a simple ponzi scheme - it's not zero sum.

the_local_host 6y ago

Professionals don't gamble with their own money. They gamble with other people's money, and keep a percentage if they win. "Common people" are entering the game without the most important piece of equipment they need, namely a pile of money that doesn't come out of their own pocket if they lose.

alex_anglin 6y ago
Thanks to fees, professionals can also keep a portion if they loose. If they under-perform, they also win as long as their clients aren't calling them on it.

jayd16 6y ago

>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices...but putting that aside... I think the emphasis is more about how there's no other game in town that can compete, not that gambling is new. Interest rates are so low that there isn't a simple/safe investment entity to pull out a reliable 10%. We're all stuck gambling whether we want to or not.

bondarchuk 6y ago
>I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices... The existence of a financial elite hinges on the existence of a non-elite that actually does the work. If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial elite. In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't.
- sixstringtheory 6y ago
  > In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't. Maybe, but are you insinuating that no back breaking work would need to be done if money weren’t to exist? Pretty sure the introduction of money reduces the total amount of backbreaking work to be done. Instead of hauling grain to trade for axe heads and carrying those back to your farm, you carry coins, paper, or in modern times, tap a few buttons on your smartphone.
  - toomuchtodo 6y ago
    The market would need to find ways to perform the back-breaking work, either by wages increasing or the development of automation. Supply and demand. The more people who can accumulate wealth and capital, and intelligently manage that wealth, the greater the reduction in the labor supply (as they will fund their expenses using investment returns versus engaging in labor activities to do so). Money is an abstraction, but the status quo as a whole (monetary policy, capital markets, labor policy) is designed to ensure a supply of labor. Capital begets capital [1], so those who don't have will engage in riskier behavior to get off the wage slave treadmill. [1] https://news.ycombinator.com/item?id=16592414 https://news.ycombinator.com/item?id=16592414 ("I think capitalism is much simpler: capital begets capital. Those who have capital will accumulate more capital, almost infinitely, until the capital/income ratio reaches an equilibrium who knows how high (in the absence of major corrections like wars and hyper inflation). Add inherited wealth and low taxes. Capitalism's winners are those who already have capital. Thomas Pickety's book "Capital in the 21st Century" cogently illustrates this using massive tax return based data sets.")

nunez 6y ago

SPACs are the perfect example of this. Before SPACs, retail couldn't get into IPOs at anything lower than $40/share...and even that was _after_ missing the initial pop that happens once the ticker starts trading. Now that retail can get into (support) exciting companies at a MUCH lower floor ($10 for commons, $2.50 for warrants), "SPAC bad" hit pieces are a dime a dozen and some brokers (Merrill Lynch, for example) won't allow retail to trade them unless they have $n million in net worth. Are SPACs riskier? Of course they are. Are they any riskier than IPOs (which can and do trade lower than first-day valuation)? I don't think so. Retail finally has a shot at the same pathways for wealth than IBs and others have had since forever...and we can't have that.

paulpauper 6y ago
except that the # of companies acquired this way is very limited
namdnay 6y ago
> Are they any riskier than IPOs (which can and do trade lower than first-day valuation)? I don't think so There are significant regulatory and disclosure differences that make it easier to be shady with a SPAC. If WeWork had gone with a SPAC there’s probably a lot of stuff they wouldn’t have needed to share If the aim is to open trading directly to retail, a direct listing (like Coinbase) is all you need.

paulpauper 6y ago

>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. Hardly. They make money from the commissions

AnimalMuppet 6y ago

This could be hypocrisy, but it doesn't have to be. It may be "kids, don't try this at home". The pros should have a lot better knowledge of the risks involved, and the resources to take the consequences when they're wrong. (Yeah, I know, they don't always either have the knowledge or the ability to take their lumps. They still are far ahead of the amateurs in both departments.)

tim333 6y ago

No one is that bothered when the elites lose their money gambling. It's more of an issue when people who are hard up do.

derefr 6y ago

> when algorithms did it in milliseconds (when common people can only operate with delays of hours and days, and with deterrent fees) it was OK What, you think that "low-frequency" brokers weren't upset about the rise of HFT, and didn't try to push back/kill HFT in the crib? Of course they did; HFT was classic "disruption" for their industry. You just didn't see that disruption happening, because an inside-baseball conflict between two groups of very rich businesspeople doesn't achieve anything by roping the public into the discussion. The public's opinion wouldn't have one shred of determination over which side won that conflict, so why bother spending money on mass-media propaganda? Mass-media propaganda won't do a thing to sway the rich businesspeople on the other side of the table. The moralistic Op-Eds are happening now because one side of the current conflict is the public. And so the rich people on the other side now have great interest in swaying public opinion.

Tenoke 6y ago

>maybe they should try not to create a system where workers are punished and gamblers are rewarded. I find it hard to see how people are even thinking that it's the gambling that's being rewarded. It doesn't take much to check that pure gambling is unlikely you to win you money on average, and that those who do make money are (again, on average) doing something more than just gambling.

ycombinete 6y ago

I don’t quite believe that there was no moralistic sentiment directed against it when high frequency started, or even before that when whatever changed changed. The fact that people weren’t currently writing about the status quo, but then write about a change to it isn’t surprising.

Tenoke 6y ago
The NYT had a pretty well received article on it back in 2009. Michael Lewis published a book criticizing HFT back in early 2014 which is a pretty good sign there was indeeed moralistic sentiment against it.

bennysomething 6y ago

This is really broad stroke. Everything we do is a gamble. Investment firms work for their clients if they didn't they wouldn't last very long. Contrary to what most people think they play a important roles. For example spending time with firms to decide if they are worth investing in. Capitol allocation is really important. It allows someone like me to delegate investment choices for my pension. This funds things new medicine development, new technology etc. Sure there are things like high frequency trading. But taken as a whole I know who'd I prefer to give my money to to invest: people with something to lose if it doesn't work out. I'm not sure how else to allocate capitol with out totally eroding personal choice.

a1369209993 6y ago

> but now that there are platforms that allow more or less anyone to speculate, we start publishing moralistic pieces in the media and calling it "gambling"? FWIW, I've been calling it gambling since I found out what the stock market is, because that is what it is. Can't speak for anyone else, though.

disabled 6y ago

It should be noted that gambling needs to be viewed as nothing more than a form of entertainment. Back in the day, formal engineering schools offered elective courses on the mathematics of gambling. Just know that if you partake in the activity in short stints long-term, they have it so rigged that it is mathematically impossible to yield net gains long-term. Personally, I think gambling is an atrocious activity. I am not religious in any way, either. I just think it is a horrible activity from a moral standpoint. Also, people who have gambling addiction do actually have one of the worst and self-destructive addictions out there. There are other ways to gamble in life without actually gambling.

InvertedRhodium 6y ago
What makes gambling inherently immoral in your opinion? I agree that it's addictive, but I don't see the how it's any less or more immoral than smoking, drinking alcohol, etc.

deleted 6y ago

[deleted]

eloff 6y ago

I think it's fair to snipe at speculating unreasonably when anyone does it. Its not good for society. But what's happening is somewhat different. It's really an alpha strategy to trigger a short and or gamma squeeze. It's not a simple ponzi scheme - it's not zero sum.