Reddit/Gamestop vs.Wall Street

A NY Times piece on it and the possible knock-on effects.
https://www.nytimes.com/2021/01/28/business/gamestop-stock-market.html

Bambi wrote: »

Robinhood "Let the people trade"

We can add that motto to:

Google "Don't be evil"

Twitter "The free speech wing of the free speech party"

They can change to "Sheriff of Nottingham" *




*stole that from reddit.

MisterAnarchy wrote: »

As if she can speak

https://finance.yahoo.com/news/nancy-pelosi-recent-stock-purchase-173817407.html

That was all public knowledge though. That's been Biden's published plan for yonks.

Accelerating the deployment of electric vehicles. There are now one million electric vehicles on the road in the United States. But a key barrier to further deployment of these greenhouse-gas reducing vehicles is the lack of charging stations and coordination across all levels of government. As President, Biden will work with our nation’s governors and mayors to support the deployment of more than 500,000 new public charging outlets by the end of 2030. In addition, Biden will restore the full electric vehicle tax credit to incentivize the purchase of these vehicles. He will ensure the tax credit is designed to targeted middle class consumers and, to the greatest extent possible, to prioritize the purchase of vehicles made in America. And, he will work to develop a new fuel economy standard that goes beyond what the Obama-Biden Administration put in place.

From his campaign site.

She has every right to speak, it's not like this was insider trading. She bought options, the stock price went up, and she exercised the option. All just from December, too, after Biden was elected. Not seeing the scandal.

PokeHerKing wrote:

You've just described the stock market essentially. Its the exact same thing, buy low sell high. For there to be winners there has to be losers.

In essence yes but the difference here is that one particular company has been hyped up by getting secific attention and exposure unlike any other has seen. If any of these investors had been told by a financial advisor to buy shares in gamestop they likely wouldn't have done it,if a studious investor looked at gamestop they likely wouldn't have touched it either.
Also the guys who started this know when to get out as they know the shares will tank, this is not something you could normally do unless you were insider trading.

shoxter wrote: »

In essence yes but the difference here is that one particular company has been hyped up by getting secific attention and exposure unlike any other has seen. If any of these investors had been told by a financial advisor to buy shares in gamestop they likely wouldn't have done it,if a studious investor looked at gamestop they likely wouldn't have touched it either.
Also the guys who started this know when to get out as they know the shares will tank, this is not something you could normally do unless you were insider trading.

This has been driven by a retail community who recognised that that GME was over shorted. Simples, no question some retail will be bag holding but it’s not a pyramid scheme.

This isn’t about good investments, it’s about gaming the system and Wall Street hedge funds picking up the tab.

hatrickpatrick wrote: »

That's the thing, there isn't one. If you read through the comments, most people are putting money in without expecting to get it back, for the privilege of hopefully watching some big Wall St players get burned. That's it. There's no objective beyond that for the majority of Redditors anyway.

What about this guy?
https://old.reddit.com/r/wallstreetbets/comments/l70vmz/if_i_can_hold_at_10mm_then_you_can_hold_too/

shoxter wrote: »

In essence yes but the difference here is that one particular company has been hyped up by getting secific attention and exposure unlike any other has seen. If any of these investors had been told by a financial advisor to buy shares in gamestop they likely wouldn't have done it,if a studious investor looked at gamestop they likely wouldn't have touched it either.
Also the guys who started this know when to get out as they know the shares will tank, this is not something you could normally do unless you were insider trading.

I'm not seeing much difference in this and the stock market overall. The average joe thinks the stock market is something its not. Its gambling pure and simple.

Its just that wealthy people dont go into PP with the average plumber or electrician to place a bet. They go to the stock market.

Its no different to a hyped IPO. Same same in my book, its getting a lot of attention but IMHO its just the stockmarket. Somebody is always left holding the bag, thats how it works.

Have any of you seen the film 21, about Kevin Spacey's character running a Blackjack card counting outfit?

One of the centrepieces of the film is a scene in which another character suddenly realises that Spacey is taking half of all the winnings as "manager" of the con, even though he doesn't actually play the game or contribute at all. And when those who actually play decide to tell Spacey's character to f*ck himself and refuse to pay him any more, he retaliates by getting the authorities to ban the outfit from the casino even though they were operating quite happily before the feud began.

This is why Hedge Funds and the financial sector are despised so much by leftists (and some on the libertarian right as well) - they essentially pay themselves absolutely gigantic amounts of money for doing very, very little. And as seen by the shenanigans today, they have the entire thing entirely rigged in their favour so that if they're losing, the rules can be changed in a heartbeat. It's exactly the same as what happened in 2008 in that sense - if the players start getting beaten at their own game, they're allowed to change the rules of the game. Now, there's nothing at all wrong with that if that's just how economics works generally - but it isn't. If an ordinary person ends up in the same situation, they just lose. And their entire life can be destroyed as a result.

Essentially, the people who manage the financial system take unlimited sums of money out of it to pay themselves, while anyone who tries to challenge the hegemony is dealt with through plain and simple violations of the rules - or changing thereof.

To give a Rugby analogy, it's as if the EPCR board wanted Leinster to win the Heineken Cup, but Munster were on the verge of beating them in the final. Leinster needs a converted try to win (7 points), while an ordinary try (5 points) won't cut it, and with no time left in the match, they've just scored a try but failed to convert. So they're two points behind where they need to be.

So the EPCR says "hang on, this isn't what's meant to be happening - quick, let's change the rules mid-game so that an ordinary try now counts as 7 points without a conversion. That way our boys still get through to the final".

That's more or less what's happening here.

Those in power like to push the "free market" analogy that anyone can pull themselves up by their bootstraps (in practise, get extremely lucky) and therefore do well. But this incident shows what has always been obvious, in black and white - the game itself is hopelessly rigged. In order for the system to function, the anointed ones have to win. If they don't, the system collapses. That's what happened in 2008 and that, on a much smaller scale, is what they're trying to prevent happening this week.

Once you understand that, the knock on effects for ordinary people are tremendous. Because this sector controls so much of our quality of life, the fact that the game is rigged in favour of the "house" says all kinds of things about the futility of reforming anything from the cost of housing to the economic model which requires ever increasing populations and consumption, thus putting the entire species on a collision course with the finite resources of the planet.

That's what's being exposed here, essentially. Everything Reddit has crowdsourced this week is something which has been done in smoky back rooms for decades. When it's done in those smoky back rooms, companies co bust, people lose their homes, people die - and somebody profits.

In this particular case, the scenario has simply been switched out so that a public forum is the smoky back room and the anointed elites are the ones being f*cked over by the back room deals. And the minute that happened, the rules were changed to safeguard the system and the people at the top of the pyramid.

That's why people should care about this. It's not that anything new or exceptional has happened - it's that the lie at the very heart of modern capitalism and monetary finance has been exposed in an extremely stark and impossible to hide way.

TL;DR, the problem with the financial sector is that those in charge of it set the rules and therefore can continually make sure they are ultimately the beneficiaries and the rest of us are forced to be benefactors - no matter what. That's why the sector was bailed out in 2008 where you or I would just lose our home or livelihood. That's why the sector is being protected today in, at best, extremely shady ways and at worst, actively illegal ways.

strandroad wrote: »

If these hedge funds were to actually collapse, does their obligation to buy shorted stock back evaporate too?

I'd imagine if they collapse would personal assets be taken?