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>I can easily imagine this being weaponized by short sellers and foreign actors. Hate to break it to you, bank runs have been a thing for hundreds of years. T

>I can easily imagine this being weaponized by short sellers and foreign actors. Hate to break it to you, bank runs have been a thing for hundreds of years. This isn't new. You put your own money at risk by participating. One of Elon's biggest achievements is normalizing demonizing "the shorts". In this case the Bank took took much risk and was insolvent; the shorts would be right.

warent 4y ago
demonizing short sellers is nonsense. They help markets correct and they lessen the damage of a crash by slowing the velocity of the drop
- toss1 4y ago
  Of course demonizing short sellers is nonsense. But if your venture relies on excessively inflated stock values to harvest the capital you want/need, then you really don't want short sellers exposing that discrepancy. So, yes, anyone in that position demonizing short sellers should be pretty much ignored (or taken as a sign that this is a good short oppo). That said, short sellers trying to manipulate the market or stocks can actually do real damage that would not otherwise occur. I see strong indications that Peter Theil is in this category. It looks very much like he made first significant public "Pull Your Money Out!" calls; if he was short SIVB at the time (or had other positions or situations that would gain from SVB's failure), that's very suspicious.
  - sidibe 4y ago
    >(or had other positions or situations that would gain from SVB's failure) Like for example he and all his startups keeping their money while some of their competitors don't? No need for any other bets for a bank run to benefit him
- corbulo 4y ago
  Thats a really rosy view of shorts. They are much more oppressive than you're painting them.
macintux 4y ago
Bank runs have been around, but social media and easy money transfers are much more recent. The U.S. has two major foreign powers and a noisy subset of its own elite who would like to see economic chaos right now, and it's never been easier to do that.
paulgb 4y ago
I worked for a long/short fund and am personally (and vocally[1]) short some names. I have nothing against short selling, it’s an important function of healthy markets. To give you an example of what I'm worried about, our accountant cautioned all of their clients yesterday about keeping funds with another bank that has had rumors circulating about it, saying that regardless the truth of the rumors, the fact that they are circulating could cause a run. This is the right thing for them to do; their fiduciary duty is to us and not to the stability of the market, but in aggregate, it's easy to imagine how everyone's accountant sending the same message at the same time could be exploited by someone who wants to destroy a small bank. [1] https://paulbutler.org/2022/the-problem-with-bitcoin-miners/ https://paulbutler.org/2022/the-problem-with-bitcoin-miners/
- seanmcdirmid 4y ago
  This comes in contrast of what they do in China: rumors are excised from media (including social media) and at best the government coerces certain players to “show patriotic confidence” in the market, and at worst those certain players are given a heads up so they can exit their positions before the scandal breaks. Western investors in these markets can get very confused. Take short seller Andrew Left in Hong Kong who warned of Evergrande being dangerously illiquid in…2016. He was fined and banned from trading by the HK SAR whose judges claimed he didn’t understand the Chinese market well enough. https://en.m.wikipedia.org/wiki/Andrew_Left https://en.m.wikipedia.org/wiki/Andrew_Left
yieldcrv 4y ago
demonizing shorts has been a thing for ages too. just obscure.
- paulgb 4y ago
  Yep. Patrick Byrne of Overstock has been railing against short sellers since at least 2007.
  - hoofhearted 4y ago
    Have you seen what Patrick Byrne has been railing against in the most recent years? Maria Butina really played him and messed him up lol
    - reducesuffering 4y ago
      'Byrne then emerged as a leading figure in promoting conspiracy theories, including the "Deep State" conspiracy theory. In 2020 and 2021, he repeatedly promoted unevidenced claims that Donald Trump had won the 2020 U.S. presidential election due to voter fraud.' involved with... "Maria Butina worked as an assistant for Aleksandr Torshin, a former member of the Federation Council, a member of Vladimir Putin's United Russia party, and a deputy governor of the Central Bank of Russia. In this role, she worked to infiltrate conservative groups in the US, including the National Rifle Association, as part of an effort to promote Russian interests in the 2016 United States presidential election. The Senate Intelligence Committee later concluded that she attempted to persuade the Trump campaign to establish a secret communications back channel with Russia." Two sides of the same coin these days...
- cryptonector 4y ago
  Before demonizing short sellers was a thing there was demonizing speculators.

warent 4y ago

demonizing short sellers is nonsense. They help markets correct and they lessen the damage of a crash by slowing the velocity of the drop

toss1 4y ago
Of course demonizing short sellers is nonsense. But if your venture relies on excessively inflated stock values to harvest the capital you want/need, then you really don't want short sellers exposing that discrepancy. So, yes, anyone in that position demonizing short sellers should be pretty much ignored (or taken as a sign that this is a good short oppo). That said, short sellers trying to manipulate the market or stocks can actually do real damage that would not otherwise occur. I see strong indications that Peter Theil is in this category. It looks very much like he made first significant public "Pull Your Money Out!" calls; if he was short SIVB at the time (or had other positions or situations that would gain from SVB's failure), that's very suspicious.
- sidibe 4y ago
  >(or had other positions or situations that would gain from SVB's failure) Like for example he and all his startups keeping their money while some of their competitors don't? No need for any other bets for a bank run to benefit him
corbulo 4y ago
Thats a really rosy view of shorts. They are much more oppressive than you're painting them.

macintux 4y ago

Bank runs have been around, but social media and easy money transfers are much more recent. The U.S. has two major foreign powers and a noisy subset of its own elite who would like to see economic chaos right now, and it's never been easier to do that.

paulgb 4y ago

I worked for a long/short fund and am personally (and vocally[1]) short some names. I have nothing against short selling, it’s an important function of healthy markets. To give you an example of what I'm worried about, our accountant cautioned all of their clients yesterday about keeping funds with another bank that has had rumors circulating about it, saying that regardless the truth of the rumors, the fact that they are circulating could cause a run. This is the right thing for them to do; their fiduciary duty is to us and not to the stability of the market, but in aggregate, it's easy to imagine how everyone's accountant sending the same message at the same time could be exploited by someone who wants to destroy a small bank. [1] https://paulbutler.org/2022/the-problem-with-bitcoin-miners/ https://paulbutler.org/2022/the-problem-with-bitcoin-miners/

seanmcdirmid 4y ago
This comes in contrast of what they do in China: rumors are excised from media (including social media) and at best the government coerces certain players to “show patriotic confidence” in the market, and at worst those certain players are given a heads up so they can exit their positions before the scandal breaks. Western investors in these markets can get very confused. Take short seller Andrew Left in Hong Kong who warned of Evergrande being dangerously illiquid in…2016. He was fined and banned from trading by the HK SAR whose judges claimed he didn’t understand the Chinese market well enough. https://en.m.wikipedia.org/wiki/Andrew_Left https://en.m.wikipedia.org/wiki/Andrew_Left

yieldcrv 4y ago

demonizing shorts has been a thing for ages too. just obscure.

paulgb 4y ago
Yep. Patrick Byrne of Overstock has been railing against short sellers since at least 2007.
- hoofhearted 4y ago
  Have you seen what Patrick Byrne has been railing against in the most recent years? Maria Butina really played him and messed him up lol
  - reducesuffering 4y ago
    'Byrne then emerged as a leading figure in promoting conspiracy theories, including the "Deep State" conspiracy theory. In 2020 and 2021, he repeatedly promoted unevidenced claims that Donald Trump had won the 2020 U.S. presidential election due to voter fraud.' involved with... "Maria Butina worked as an assistant for Aleksandr Torshin, a former member of the Federation Council, a member of Vladimir Putin's United Russia party, and a deputy governor of the Central Bank of Russia. In this role, she worked to infiltrate conservative groups in the US, including the National Rifle Association, as part of an effort to promote Russian interests in the 2016 United States presidential election. The Senate Intelligence Committee later concluded that she attempted to persuade the Trump campaign to establish a secret communications back channel with Russia." Two sides of the same coin these days...
cryptonector 4y ago
Before demonizing short sellers was a thing there was demonizing speculators.