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The last few years was a perfect storm of stupidity: - The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as trans

The last few years was a perfect storm of stupidity: - The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) - Covid stimulus going to people who didn't need it - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains.

rob_c 4y ago
> - Covid stimulus going to people who didn't need it Bit of a spicy opinion... (but perfectly accurate)
deleted 4y ago
[deleted]
dannyw 4y ago
Most importantly, the Fed Put that has been supporting markets since 2008 is unravelling.
arinlen 4y ago
> - Covid stimulus going to people who didn't need it Could you please elaborate? I think the way the US did it's COVID stimulus was outstanding and very close to the ideal way to actually address people's potential needs. > - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood What's exactly the problem? Aren't people free to spend their own money any way they feel like it? Or are we now held accountable by a righteous capitalism police to determine if an expense we make is kosher? > - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company What's exactly the problem? I mean, who are you to tell what's the "underlying value" of something, specially in a free market economy? It seems to me that worst case scenario the people spending their money on stocks are only gambling their own money, and best case scenario they profit from their own investment.
- CalRobert 4y ago
  I generally favour the way covid stimulus went but I suppose the argument would be that if it's going to people who are using it to buy GME maybe they didn't actually need it. Whether it _should_ only have gone to those who needed it, or just to everyone, is another question.
- twblalock 4y ago
  > It seems to me that worst case scenario the people spending their money on stocks are only gambling their own money, and best case scenario they profit from their own investment. A lot of people got swept up in the hype and got left holding the bag after the initial set of meme investors made their money and got out.
- PragmaticPulp 4y ago
  > Could you please elaborate? I think the way the US did it's COVID stimulus was outstanding and very close to the ideal way to actually address people's potential needs. I have a number of friends in the contracting/remodeling/construction industry. Demand for their services skyrocketed during COVID while they were all simultaneously working with their accountants to maximize their take from the COVID PPP program. Huge quantities of COVID money were pumped into companies that absolutely did not need it, and that's not even counting the massive volume of fraudulent claims. The COVID Paycheck Protection Program was supposed to shore up companies that would otherwise have to fire employees, but AFAICT nothing really stopped highly profitable companies from also collecting the money.
  - arinlen 4y ago
    > Huge quantities of COVID money were pumped into companies that absolutely did not need it (...) Since when is revenue and profit dictated by anyone's sense of fairness? That's an awfully moralistic and judgemental take on everyone else's needs and desires. Sadly this blend of judgemental view of everyone's money already hit small things like buying groceries. Damn the have-nots for generating inflation by actually stocking on the decent food that the well-to-do used to buy. Do you see any problem in anyone spending their own money in any way they'd like?
testfoobar 4y ago
Add one more: 0DTE options and gamma squeezes.
vuciv1 4y ago
Eh, I got into the meme stocks, cashed out, and paid off my student loans. So, not everyone is stupid for it!
- nr2x 4y ago
  Huge win, congrats. :-)
- madmax108 4y ago
  As long as you realise and acknowledge that your student loans where paid out not at the cost of growth of the company whose stock you meme-d or some hedge fund (who remained solvent long enough to ride this meme-wave), but at the cost of other retail investors who bought into the hype a few days/weeks/months after you only to lose their investments, many congratulations to you!
  - tjpnz 4y ago
    If I was op I would be sleeping very well at night.
giantg2 4y ago
"People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood" You mean people gambling and trading. Very few people engaging in these activities are really investing.
dalbasal 4y ago
The first and second point kind of cross each other. Stimulus to people who need it (to spend) is inflationary. Stimulus to those who don't need it inflates stock prices.
BoiledCabbage 4y ago
> - Covid stimulus going to people who didn't need it From the stimulus the worst of the offenses by far happend in the PPP for small business. It was absoutely shameful. While there was of course waste in the direct treasury payments to citizens, they get way overrepresented compared to what happened in the PPP. It's the same human nature of: If a big company gets 100M of our taxes for no reason, people grumble a bit, but if their next door neighboor gets an extra $100 and they don't, you never hear the end of it. The PPP was rife with waste, but by design you'll hear way more media and people complain about the co-worker they know of or cousin that spent $1000 on trading cards. Edit: And skipping my rant that it was by design that the PPP had no transparency and the adminstration fired the inspectors general that would oversee the program for waste to avoid transparency. Edit: And to be clear it's fine to have untargeted stimulus for people to cover day to day expenses, and also fine to have loans to businesses to keep things afloat. But to intentionally do so with blocking transparency, and removing oversite officials is just creating a cesspool for waste.
- pm90 4y ago
  If it kept businesses alive it was probably worth it. Small businesses take a long time to establish themselves but can be snuffed out pretty quickly. Many of my friends with such businesses barely made it and the PPP loans were crucial in getting them through the pandemic.
- runnerup 4y ago
  The purpose of the “stimulus” funds wasn’t to give what was needed to the people who needed it. The purpose was to smooth out the economic whiplash. We knew there would be an enormous temporary dip in demand, but that structurally (long term) we’d still need all our businesses and couldn’t really afford for them to go bankrupt. The money was supposed to be given to those who could spend it, to help keep all our small/medium/large businesses as healthy as possible.
  - BoiledCabbage 4y ago
    > The purpose of the “stimulus” funds wasn’t to give what was needed to the people who needed it. Agreed, and providing direct payments to people who are working to put together food or pay their rent makes perfect sense to me. The potential disasters we would have seen if we hadn't done that would've been horrible. And providing loans to small businesses so they can keep functioning also makes sense. But firing the inspectors who are supposed to oversee the small business loans (as they always have done), blocking pushes for basic transparency of even what businesses receive the loans, and then "forgiving" 97% of all loans as a gift from the govt is beyond wildly irresponsible.
funstuff007 4y ago
- The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) This in my mind is the key reason we as a society did not solve the pandemic quickly. If the investor class felt the same pain everyone else did, they'd be throwing their resources towards moving forward rather than re-locating to Palm Beach and complaining about the Northeast.
- rob_c 4y ago
  > This in my mind is the key reason we as a society did not solve the pandemic quickly. Ignoring a lot of the specifics you make a good point. There was a lot of good effort thrown after bad mistakes, financially, medically and unfortunately sacrificing civil liberties. This gamblers fallacy of 2020-2021 is starting to wear off and the hangover is setting in. 2023 is going to hurt :(
- bogomipz 4y ago
  Can you elaborate? I'm failing to understand the connection between the Fed Juicing the market and investors moving to Palm Beach dnd complaining about the Northeast? Was there a mass exodus? Would that not also be moving forward though? Or am I missing something?
- MomoXenosaga 4y ago
  We did solve the pandemic quickly. The entire population was vaccinated in a matter of months.
  - banannaise 4y ago
    looking at ongoing death tolls in the United States and elsewhere Are you serious?
usui 4y ago
Let's not forget to add the huge NFT/Web3 craze last year to the list. That is what, signaled to me personally, stupidity. Maybe even the Pokemon cards as well
- gregorty 4y ago
  Agreed. I had a friend lament to me recently that he hadn't got into NFTs early. To me, that just sounds like someone wishing they were born retarded.
  - baobabKoodaa 4y ago
    If they had got into NFTs early, they would have an investment that's up 100x or so. Why does that sound to you like they're wishing they were born "retarded"?
    - gregorty 4y ago
      Because the whole premise is completely idiotic, it's just designed to scam people into spending money on nothing.
      - baobabKoodaa 4y ago
        > Because the whole premise is completely idiotic, it's just designed to scam people into spending money on nothing. Ok, so this friend of yours wishes that they would have made 100x return on what you describe as a scam. You describe this as "wishing they were born retarded". How does that make sense to you? If you want to criticize the morality of making money of the backs of others in a scheme that resembles a Ponzi, do that. What you described was something else entirely.
    - boc 4y ago
      Anyone who unironically invested in an NFT project solo was a mark. NFTs are a simple scam: To plan this game you loan crypto to your friends, you all "buy" the same NFT from each other multiple times so that the price appears to go up astronomically, then you wait for a sucker to buy it from you or any one of your friends. When that happens you all laugh, split the money, and start the grift again with the next NFT. Nobody risked their money, and if you don't get a bite at the "top" price everyone just returns the money back to the original friend and nobody gets hurt. You just keep the NFT that is still "worth" whatever you last paid for it, but it's basically free to you. So what do you do? Loan it to a celebrity and announce it as if it's a sale! This generates news articles about celebrity adoption, they get your bored ape that you couldn't sell, and suddenly a new wave of suckers floods into the market. The fact that it's so simple to do this and scam people makes NFTs a great scam vehicle. Add in the fact that crypto tends to attract true believers (aka fantastic marks) and you elevate the grift from great to all-time. If anyone from a VC fund is reading this, yes this is actually what's happening with your Web3/crypto investments lmao.
jfrbfbreudh 4y ago
> - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company You’re giving way too much credit to meme traders, their wallets, and their ability to move markets.
- elihu 4y ago
  My understanding of the GameStop situation is that the stock's value had already diverged from the underlying value of the company, and the meme stock crowd noticed that and took advantage of it. Specifically, they saw that there were more short positions than total shares of existing stock, so they bought shares, thus causing a short squeeze. (This is possible because there's a power imbalance between the people who short a stock and the people who are long.) The meme stock crowd didn't create the value/price imbalance (it was created by the short sellers), they just saw that it was already off and took advantage of the situation, so then the value imbalance swung the other way. And in the end GameStop as a company survived and are now doing pretty well as far as I'm aware. GME is trading at about $100 a share, which is a lot better than about $4 a share a couple years ago. Maybe that's an artificially inflated price, but who cares? As far as I can tell that's just the normal market consequence of too many people shorting a stock and someone calling their bluff.
  - deleted 4y ago
    [deleted]
- athrowaway3z 4y ago
  No not really. Its a lot of hard cash moving stock prices around without hedging, and that's before the secondary effect of algorithms amplification.
systemvoltage 4y ago
> - Covid stimulus going to people who didn't need it You couldn't talk about this when it was taking place. Speech was stifled completely and universally. We need to really think about how to allow dissent. Without it, society will spiral out of control by people that want to control it.
- gowld 4y ago
  Can you give one example?
  - systemvoltage 4y ago
    Pretty much every comment that mentioned this was flagged in the year 2020 well into 2021 on HN. It was overwhelmingly clear.
    - hamburglar 4y ago
      I don’t think getting downvoted for spamming inflammatory political opinions on HN is the damning evidence of censorship conspiracy you think it is. Do you have examples of this? Did this happen anywhere besides HN? You may want to question your own objectivity on this subject.
    - smcl 4y ago
      This is weird, I remember seeing discussion on along these lines that wasn't ever flagged. It sounds like you're speaking from experience, do you have an example of something you posted maybe?
- antifa 4y ago
  That doesn't seem right, I remember people talking about it in pretty normal amounts since day 1.
sakopov 4y ago
Don't hold your breath. You're 600 points away from 2020 pre-pandemic levels and the way everything is looking right now, you would be lucky if it doesn't bottom out lower.
throwaway6734 4y ago
>The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) Interest rates should've been raised much more aggressively in 2018 and they should not have been lowered in 2019.
thkim 4y ago
Which part of it is "stupid" ? Please have some respect.
wfhordie 4y ago
> Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company I get what you’re saying but this point kind of implies that there was information symmetry, or even near-symmetry, between the market of investors and the underlying value of the company. A few big players and the professionals maybe have their finger on this pulse. But they are still subject to many biases that amateurs are.
thefourthchime 4y ago
"Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains." For now.
r3trohack3r 4y ago
> Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains. The market can stay irrational longer than you can stay solvent. Two years is a fairly short time to estimate market performance and corrections. We very well may be telling a different story in 15 years.
daveaiello 4y ago
COVID stimulus certainly did go to people and businesses that didn't need it. Or didn't need as much of it as they got. However, PPP didn't adequately cover some of the businesses that needed it the most. Consider somebody who is bootstrapping a small business because they were packaged-out of their corporate job a year or two before the pandemic began. They couldn't afford to draw anything close to what they need to live on in the year prior to the pandemic. So the PPP payment formula didn't approximate their true needs. People in that situation had no choice but to try for EIDL. But EIDL required income reported on a Schedule C or an 1120 / 1120S, and if you didn't have that because you were still finding the customers that could sustain the business, then in all likelihood your business either died an early death or came out of the deepest part of the crisis in much worse shape than when it began.
mahastore 4y ago
Ok genius .. so now where will the money flow to? What .. you cannot think of anything? Well get ready for bull run again.
uses 4y ago
It’s weird you didn’t mention the number one reason for all that. Millions of people with decent incomes and nothing to spend it on due to Covid, bored out of their minds and looking for something to do. Unfortunately for them they did something really stupid. At least nobody got hurt.
seanmcdirmid 4y ago
The fed should have stopped juicing the market as soon as the current boom seemingly began. We have no concept of loose monetary policy in bad times and tight in good times, just loose all the time now.
deleted 4y ago
[deleted]
patrick451 4y ago
You missed one - Forcibly shuttering the world economy over a bad cold while yammering on about a v-shaped recovering that increasingly looks like just as much nonsense as everything else from the last two years.
incomingpain 4y ago
>- Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company That's the hang up. The USA is the only country in the world which lets the market naked short sell. It's not that the meme investors manipulated the system, it's the short sellers that manipulated it. All these funds figured gamestop was headed to the pinksheets during covid; a reasonable bet but too many fund managers got the same idea. They short sold more stock than exists. That's fraud, I wish I could sell nothing for money. Other people noticed the disparity and simply started buying. Eventually these funds are basically forced to come to you to buy outside the market. They in person have to approach you unsolicited and offer to buy your stocks. It's going to be a blank cheque... but the SEC never punished them. These funds owe equivalently infinite money but aren't forced to pay. They just let them be criminal. Wells fargo obviously saw where they were, basically infinite money in the negative so they bowed out in 2021. There are a bunch of others who are in the same position. >Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains. I have a small position in S&P500 bought in late 2019 or so doing just fine. Im letting it ride, I expect it to drop another 50% or more. However, something you missed in your list that nobody is talking about. Nobody owns S&P500. If you look at FTSE, TSX, various other indexes for other countries. They are healthy. Rich folks own their percentages of them all. Excluding obviously amazon or tesla which have their billionaires protecting. AOS is a good example. 0.72% % of Shares Held by All Insider 98.87% % of Float Held by Institutions If you check the S&P500, the supermajority of stocks are like this. Basically insiders dont want to touch the stock with a 10foot pole. Basically the only people who own these stocks are suckers such as myself. Mind you, every other country in the world is healthy right now. This is USA only. There's no explanation. There's no 'I'm selling these stocks because of..." So we have a broken stock market in the USA because some memers discovered the fraud. We have some seriously bad economic health behind it as well as pretty major crash already happening. Lets not forget the imminent civil war situation. Star Trek Strange New World literally said 2nd US civil war. My recommendation? Dont be dealing with the USA stock markets at all; or accept the punishment. Ignore the meme stocks, ignore everything. Only buy stocks you see are of good value.
tootie 4y ago
There were definitely some missteps but given that these problems are global I don't think you can really pin it too tightly on any US policy. The main drivers by far are the pandemic and the war in Ukraine. Both black swan events.

rob_c 4y ago

> - Covid stimulus going to people who didn't need it Bit of a spicy opinion... (but perfectly accurate)

deleted 4y ago

[deleted]

dannyw 4y ago

Most importantly, the Fed Put that has been supporting markets since 2008 is unravelling.

arinlen 4y ago

> - Covid stimulus going to people who didn't need it Could you please elaborate? I think the way the US did it's COVID stimulus was outstanding and very close to the ideal way to actually address people's potential needs. > - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood What's exactly the problem? Aren't people free to spend their own money any way they feel like it? Or are we now held accountable by a righteous capitalism police to determine if an expense we make is kosher? > - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company What's exactly the problem? I mean, who are you to tell what's the "underlying value" of something, specially in a free market economy? It seems to me that worst case scenario the people spending their money on stocks are only gambling their own money, and best case scenario they profit from their own investment.

CalRobert 4y ago
I generally favour the way covid stimulus went but I suppose the argument would be that if it's going to people who are using it to buy GME maybe they didn't actually need it. Whether it _should_ only have gone to those who needed it, or just to everyone, is another question.
twblalock 4y ago
> It seems to me that worst case scenario the people spending their money on stocks are only gambling their own money, and best case scenario they profit from their own investment. A lot of people got swept up in the hype and got left holding the bag after the initial set of meme investors made their money and got out.
PragmaticPulp 4y ago
> Could you please elaborate? I think the way the US did it's COVID stimulus was outstanding and very close to the ideal way to actually address people's potential needs. I have a number of friends in the contracting/remodeling/construction industry. Demand for their services skyrocketed during COVID while they were all simultaneously working with their accountants to maximize their take from the COVID PPP program. Huge quantities of COVID money were pumped into companies that absolutely did not need it, and that's not even counting the massive volume of fraudulent claims. The COVID Paycheck Protection Program was supposed to shore up companies that would otherwise have to fire employees, but AFAICT nothing really stopped highly profitable companies from also collecting the money.
- arinlen 4y ago
  > Huge quantities of COVID money were pumped into companies that absolutely did not need it (...) Since when is revenue and profit dictated by anyone's sense of fairness? That's an awfully moralistic and judgemental take on everyone else's needs and desires. Sadly this blend of judgemental view of everyone's money already hit small things like buying groceries. Damn the have-nots for generating inflation by actually stocking on the decent food that the well-to-do used to buy. Do you see any problem in anyone spending their own money in any way they'd like?

testfoobar 4y ago

Add one more: 0DTE options and gamma squeezes.

vuciv1 4y ago

Eh, I got into the meme stocks, cashed out, and paid off my student loans. So, not everyone is stupid for it!

nr2x 4y ago
Huge win, congrats. :-)
madmax108 4y ago
As long as you realise and acknowledge that your student loans where paid out not at the cost of growth of the company whose stock you meme-d or some hedge fund (who remained solvent long enough to ride this meme-wave), but at the cost of other retail investors who bought into the hype a few days/weeks/months after you only to lose their investments, many congratulations to you!
- tjpnz 4y ago
  If I was op I would be sleeping very well at night.

giantg2 4y ago

"People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood" You mean people gambling and trading. Very few people engaging in these activities are really investing.

dalbasal 4y ago

The first and second point kind of cross each other. Stimulus to people who need it (to spend) is inflationary. Stimulus to those who don't need it inflates stock prices.

BoiledCabbage 4y ago

> - Covid stimulus going to people who didn't need it From the stimulus the worst of the offenses by far happend in the PPP for small business. It was absoutely shameful. While there was of course waste in the direct treasury payments to citizens, they get way overrepresented compared to what happened in the PPP. It's the same human nature of: If a big company gets 100M of our taxes for no reason, people grumble a bit, but if their next door neighboor gets an extra $100 and they don't, you never hear the end of it. The PPP was rife with waste, but by design you'll hear way more media and people complain about the co-worker they know of or cousin that spent $1000 on trading cards. Edit: And skipping my rant that it was by design that the PPP had no transparency and the adminstration fired the inspectors general that would oversee the program for waste to avoid transparency. Edit: And to be clear it's fine to have untargeted stimulus for people to cover day to day expenses, and also fine to have loans to businesses to keep things afloat. But to intentionally do so with blocking transparency, and removing oversite officials is just creating a cesspool for waste.

pm90 4y ago
If it kept businesses alive it was probably worth it. Small businesses take a long time to establish themselves but can be snuffed out pretty quickly. Many of my friends with such businesses barely made it and the PPP loans were crucial in getting them through the pandemic.
runnerup 4y ago
The purpose of the “stimulus” funds wasn’t to give what was needed to the people who needed it. The purpose was to smooth out the economic whiplash. We knew there would be an enormous temporary dip in demand, but that structurally (long term) we’d still need all our businesses and couldn’t really afford for them to go bankrupt. The money was supposed to be given to those who could spend it, to help keep all our small/medium/large businesses as healthy as possible.
- BoiledCabbage 4y ago
  > The purpose of the “stimulus” funds wasn’t to give what was needed to the people who needed it. Agreed, and providing direct payments to people who are working to put together food or pay their rent makes perfect sense to me. The potential disasters we would have seen if we hadn't done that would've been horrible. And providing loans to small businesses so they can keep functioning also makes sense. But firing the inspectors who are supposed to oversee the small business loans (as they always have done), blocking pushes for basic transparency of even what businesses receive the loans, and then "forgiving" 97% of all loans as a gift from the govt is beyond wildly irresponsible.

funstuff007 4y ago

- The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) This in my mind is the key reason we as a society did not solve the pandemic quickly. If the investor class felt the same pain everyone else did, they'd be throwing their resources towards moving forward rather than re-locating to Palm Beach and complaining about the Northeast.

rob_c 4y ago
> This in my mind is the key reason we as a society did not solve the pandemic quickly. Ignoring a lot of the specifics you make a good point. There was a lot of good effort thrown after bad mistakes, financially, medically and unfortunately sacrificing civil liberties. This gamblers fallacy of 2020-2021 is starting to wear off and the hangover is setting in. 2023 is going to hurt :(
bogomipz 4y ago
Can you elaborate? I'm failing to understand the connection between the Fed Juicing the market and investors moving to Palm Beach dnd complaining about the Northeast? Was there a mass exodus? Would that not also be moving forward though? Or am I missing something?
MomoXenosaga 4y ago
We did solve the pandemic quickly. The entire population was vaccinated in a matter of months.
- banannaise 4y ago
  looking at ongoing death tolls in the United States and elsewhere Are you serious?

usui 4y ago

Let's not forget to add the huge NFT/Web3 craze last year to the list. That is what, signaled to me personally, stupidity. Maybe even the Pokemon cards as well

gregorty 4y ago
Agreed. I had a friend lament to me recently that he hadn't got into NFTs early. To me, that just sounds like someone wishing they were born retarded.
- baobabKoodaa 4y ago
  If they had got into NFTs early, they would have an investment that's up 100x or so. Why does that sound to you like they're wishing they were born "retarded"?
  - gregorty 4y ago
    Because the whole premise is completely idiotic, it's just designed to scam people into spending money on nothing.
    - baobabKoodaa 4y ago
      > Because the whole premise is completely idiotic, it's just designed to scam people into spending money on nothing. Ok, so this friend of yours wishes that they would have made 100x return on what you describe as a scam. You describe this as "wishing they were born retarded". How does that make sense to you? If you want to criticize the morality of making money of the backs of others in a scheme that resembles a Ponzi, do that. What you described was something else entirely.
  - boc 4y ago
    Anyone who unironically invested in an NFT project solo was a mark. NFTs are a simple scam: To plan this game you loan crypto to your friends, you all "buy" the same NFT from each other multiple times so that the price appears to go up astronomically, then you wait for a sucker to buy it from you or any one of your friends. When that happens you all laugh, split the money, and start the grift again with the next NFT. Nobody risked their money, and if you don't get a bite at the "top" price everyone just returns the money back to the original friend and nobody gets hurt. You just keep the NFT that is still "worth" whatever you last paid for it, but it's basically free to you. So what do you do? Loan it to a celebrity and announce it as if it's a sale! This generates news articles about celebrity adoption, they get your bored ape that you couldn't sell, and suddenly a new wave of suckers floods into the market. The fact that it's so simple to do this and scam people makes NFTs a great scam vehicle. Add in the fact that crypto tends to attract true believers (aka fantastic marks) and you elevate the grift from great to all-time. If anyone from a VC fund is reading this, yes this is actually what's happening with your Web3/crypto investments lmao.

jfrbfbreudh 4y ago

> - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company You’re giving way too much credit to meme traders, their wallets, and their ability to move markets.

elihu 4y ago
My understanding of the GameStop situation is that the stock's value had already diverged from the underlying value of the company, and the meme stock crowd noticed that and took advantage of it. Specifically, they saw that there were more short positions than total shares of existing stock, so they bought shares, thus causing a short squeeze. (This is possible because there's a power imbalance between the people who short a stock and the people who are long.) The meme stock crowd didn't create the value/price imbalance (it was created by the short sellers), they just saw that it was already off and took advantage of the situation, so then the value imbalance swung the other way. And in the end GameStop as a company survived and are now doing pretty well as far as I'm aware. GME is trading at about $100 a share, which is a lot better than about $4 a share a couple years ago. Maybe that's an artificially inflated price, but who cares? As far as I can tell that's just the normal market consequence of too many people shorting a stock and someone calling their bluff.
- deleted 4y ago
  [deleted]
athrowaway3z 4y ago
No not really. Its a lot of hard cash moving stock prices around without hedging, and that's before the secondary effect of algorithms amplification.

systemvoltage 4y ago

> - Covid stimulus going to people who didn't need it You couldn't talk about this when it was taking place. Speech was stifled completely and universally. We need to really think about how to allow dissent. Without it, society will spiral out of control by people that want to control it.

gowld 4y ago
Can you give one example?
- systemvoltage 4y ago
  Pretty much every comment that mentioned this was flagged in the year 2020 well into 2021 on HN. It was overwhelmingly clear.
  - hamburglar 4y ago
    I don’t think getting downvoted for spamming inflammatory political opinions on HN is the damning evidence of censorship conspiracy you think it is. Do you have examples of this? Did this happen anywhere besides HN? You may want to question your own objectivity on this subject.
  - smcl 4y ago
    This is weird, I remember seeing discussion on along these lines that wasn't ever flagged. It sounds like you're speaking from experience, do you have an example of something you posted maybe?
antifa 4y ago
That doesn't seem right, I remember people talking about it in pretty normal amounts since day 1.

sakopov 4y ago

Don't hold your breath. You're 600 points away from 2020 pre-pandemic levels and the way everything is looking right now, you would be lucky if it doesn't bottom out lower.

throwaway6734 4y ago

>The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) Interest rates should've been raised much more aggressively in 2018 and they should not have been lowered in 2019.

thkim 4y ago

Which part of it is "stupid" ? Please have some respect.

wfhordie 4y ago

> Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company I get what you’re saying but this point kind of implies that there was information symmetry, or even near-symmetry, between the market of investors and the underlying value of the company. A few big players and the professionals maybe have their finger on this pulse. But they are still subject to many biases that amateurs are.

thefourthchime 4y ago

"Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains." For now.

r3trohack3r 4y ago

> Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains. The market can stay irrational longer than you can stay solvent. Two years is a fairly short time to estimate market performance and corrections. We very well may be telling a different story in 15 years.

daveaiello 4y ago

COVID stimulus certainly did go to people and businesses that didn't need it. Or didn't need as much of it as they got. However, PPP didn't adequately cover some of the businesses that needed it the most. Consider somebody who is bootstrapping a small business because they were packaged-out of their corporate job a year or two before the pandemic began. They couldn't afford to draw anything close to what they need to live on in the year prior to the pandemic. So the PPP payment formula didn't approximate their true needs. People in that situation had no choice but to try for EIDL. But EIDL required income reported on a Schedule C or an 1120 / 1120S, and if you didn't have that because you were still finding the customers that could sustain the business, then in all likelihood your business either died an early death or came out of the deepest part of the crisis in much worse shape than when it began.

mahastore 4y ago

Ok genius .. so now where will the money flow to? What .. you cannot think of anything? Well get ready for bull run again.

uses 4y ago

It’s weird you didn’t mention the number one reason for all that. Millions of people with decent incomes and nothing to spend it on due to Covid, bored out of their minds and looking for something to do. Unfortunately for them they did something really stupid. At least nobody got hurt.

seanmcdirmid 4y ago

The fed should have stopped juicing the market as soon as the current boom seemingly began. We have no concept of loose monetary policy in bad times and tight in good times, just loose all the time now.

deleted 4y ago

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patrick451 4y ago

You missed one - Forcibly shuttering the world economy over a bad cold while yammering on about a v-shaped recovering that increasingly looks like just as much nonsense as everything else from the last two years.

incomingpain 4y ago

>- Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company That's the hang up. The USA is the only country in the world which lets the market naked short sell. It's not that the meme investors manipulated the system, it's the short sellers that manipulated it. All these funds figured gamestop was headed to the pinksheets during covid; a reasonable bet but too many fund managers got the same idea. They short sold more stock than exists. That's fraud, I wish I could sell nothing for money. Other people noticed the disparity and simply started buying. Eventually these funds are basically forced to come to you to buy outside the market. They in person have to approach you unsolicited and offer to buy your stocks. It's going to be a blank cheque... but the SEC never punished them. These funds owe equivalently infinite money but aren't forced to pay. They just let them be criminal. Wells fargo obviously saw where they were, basically infinite money in the negative so they bowed out in 2021. There are a bunch of others who are in the same position. >Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains. I have a small position in S&P500 bought in late 2019 or so doing just fine. Im letting it ride, I expect it to drop another 50% or more. However, something you missed in your list that nobody is talking about. Nobody owns S&P500. If you look at FTSE, TSX, various other indexes for other countries. They are healthy. Rich folks own their percentages of them all. Excluding obviously amazon or tesla which have their billionaires protecting. AOS is a good example. 0.72% % of Shares Held by All Insider 98.87% % of Float Held by Institutions If you check the S&P500, the supermajority of stocks are like this. Basically insiders dont want to touch the stock with a 10foot pole. Basically the only people who own these stocks are suckers such as myself. Mind you, every other country in the world is healthy right now. This is USA only. There's no explanation. There's no 'I'm selling these stocks because of..." So we have a broken stock market in the USA because some memers discovered the fraud. We have some seriously bad economic health behind it as well as pretty major crash already happening. Lets not forget the imminent civil war situation. Star Trek Strange New World literally said 2nd US civil war. My recommendation? Dont be dealing with the USA stock markets at all; or accept the punishment. Ignore the meme stocks, ignore everything. Only buy stocks you see are of good value.

tootie 4y ago

There were definitely some missteps but given that these problems are global I don't think you can really pin it too tightly on any US policy. The main drivers by far are the pandemic and the war in Ukraine. Both black swan events.