Elizabeth Warren

Elizabeth Warren and the SEC Should Let the GameStop Lulz Go On

The last thing this game-inspired, meme-powered finance fight needs is federal meddling.

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If you follow video game news, you've probably seen reports of solved puzzles, unlocked secrets, and game-breaking stunts meant to test the limits of a game's design. 

Sometimes these feats, which can range from speed runs to accessing game areas never meant to be explored, can take years of effort. Other times, they take hours or days, with puzzles meant to take months (or secrets meant to stay hidden forever) unlocked with unexpected rapidity. In every case, the secret is players working together, usually in an ad hoc fashion, loosely—and I mean very loosely—coordinating via online forums. 

These exploits have varying purposes: to beat intentionally designed in-game challenges, to map the vulnerabilities and quirks of a game's architecture, to secure loot drops or other high-level prizes, or just to brag about what you and your community have done online. Why climb the mountain? Because it's there. 

So one way of looking at the crowdsourced escalation of stock prices for GameStop, AMC Theaters, and other companies over the last few days—coordinated largely but not exclusively through the meme- and profanity-laced Reddit forum WallStreetBets—is as an inevitable advancement of online video game culture, and the prankish, puckish spirit of both earnest and mock heroism that flows through so many of these efforts. This was a meme-managed, crowdsourced effort to exploit a quirk in the financial system, to test its limits, and, in a way, to break the game. 

The "players" involved did it for any number of reasons. There was a belief that it would afflict the powerful by causing hedge funds that bet heavily on GameStop's decline to lose money. There was a desire for personal gain—not loot drops, but the real money that at least some of these investors are earning. And failing that, there was a sense of camaraderie and communal purpose: The real treasure was the memes they made along the way. 

It's also born out of a persistent desire apparent in so much online crowd behavior, from flash mobs to Boaty McBoatface: to simply cause amusing chaos, to see how far things can go. If you could organize a bunch of message board shitposters to bid up the price of a struggling relic of mall-era America and maybe collapse a multi-billion-dollar hedge fund in the process…why wouldn't you? Do it for bragging rights. Do it for money. Do it for the community. But mostly, do it for the lulz

Of course, if there's one thing America's national political class does not like or understand, it is lulz. Lulz are inherently chaotic and disorderly, and that tends to cause headaches for most anyone with a bureaucratic bent. But it also produces reactions like one we saw yesterday, in which Sen. Elizabeth Warren (D–Mass.) used the GameStop episode to call for intervention by the Securities and Exchange Commission (SEC). 

It's not at all clear what the SEC could do to stop what is essentially a financial market flash mob, aside from ensure that no large institutional investors are secretly in on the WallStreetBets side of the trade. If that's the case (and it may well be, though who knows), then the SEC will probably end up taking some sort of action based on existing rules designed to prohibit fraudulent pump-and-dump schemes, where stocks are artificially boosted and sold off. 

But mostly it just goes to show the limits of Warren's technocratic brand of populism. For years, she's positioned herself as a defender of average Americans and a critic of big finance. And in this case, she frames her argument as an indictment of the "hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades." Yet if the SEC were to intervene in the GameStop trades, it's more likely it would end up doing so in a way that benefited the big hedge funds who bet on the game retailer's fall. It would be to tip the scales against a movement that sees itself as a populist uprising.

I say "sees itself," because the populist valence of this particular form of guerilla financial warfare has probably been at least somewhat overstated. Some of the retail investors battling the hedge funders will probably make out like bandits; others are likely to lose money.

Some of the money losers are probably prepared to take financial hits, and are effectively paying to consume the experience, like gamblers who come into a casino prepared to lose a certain amount of money in order to have a good time. But there may well be others for whom that isn't true. This episode won't end without some sort of consequences. 

That's not to take Warren's side; the SEC has no call to intervene in a market tug-of-war that is freely chosen and entered into by all. On the contrary, this context and complexity highlight the ways Warren's bright-line, heroes-and-villains approach tends to fail as a justification for regulatory intervention.

Besides, it is pretty funny. Let the lulz play out.

NEXT: Houston Police Chief Tries To Blame Encryption for Failure To Uncover Far-Right Cops

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  1. Populism vs. corporatism. Don’t say you weren’t given the heads-up, folks, just like I warned years ago that all the political activism and increasing left-wing radicalism on college campuses was eventually going to come home to roost.

    1. If only Our Lord and Populist Savior, Donald the Magnificent, had NOT been dethroned, NONE of this would be happening! We’re badly screwed for another 4 years!

      To at least SLIGHTLY improve things, may I humbly suggest:

      All aspiring GOOD Trumplings should have embedded brain scanners with wireless links installed. Whenever they think BAD thoughts, such as even thinking about attempting to deliberately manipulate stock prices, their shock collars are activated, and a shoulder-mounted speaker announces, loudly, not just for the good-Trumpling-wannabe, but for public shaming also, of random passers-by, “BAD thought detected! Ah-oooOOOOgah!!! Ah-oooOOOOgah!!! BAD thought detected! What Would Our Lord and Savior Trump do? Trump-zone violation detected!”

      1. Can you please give it a rest? Let the record show that no one here mentioned Trump until you did.

        Seriously, your Flute rants were mildly relevant last year. But now you cannot get through a thread before crying about the orange man.

        1. It’s gotten to be a mania with these guys. They can’t even make money charging Trump for the space he’s taking up in their head now, because of the rent moratoriums.

          1. But they can’t evict him either

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      2. Yeah, go back to skin flutes. You are really losing it here.

        1. Sorry, lung flutes. But whatever you’re into, I guess.

        2. I am SOOOOO saddened to see that in the entire 4-year reign of Der TrumpfenFuhrer, He NEVER actually freed us up from the cheap-plastic-flute police!

          I hold high hopes that, where Der TrumpfenFuhrer FAILED, Der BidenFuhrer will SUCCEED!

          (But I’m not holding my breath. Y’all “out there”, I suggest, keep right on breathing like I am).

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  2. Many of the WSB “populists” are saying it is the little guy who wasn’t bailed out by Bush’s 2008 TARP program vs the “elite” on Wall Street who were. Many wingnuts are trying to pick this meme up.

    In reality it is just another Pump and Dump scheme by traders levered by massive short positions.

    Good for the WSB traders. They won this one.

    1. “In reality it is just another Pump and Dump scheme by traders levered by massive short positions.”

      If you really understood what was going on, you would realize how incorrect this sentence is.

      1. Bullshit. That is exactly what is going on.

        An Ex Goldman Sachs trader noticed the massive short positions in GME, BBBY, AMC and a few others and started spreading the info and pumping the equity on trader forums like WSB. When enough traders bought it triggers massive short covering.

        Nothing illegal Good for them.

        1. Pump and Dump is in fact illegal. Who is this Goldman Sachs trader who was “levered by massive short positions”?

          1. “Pump and Dump is in fact illegal”
            guess your mom should call the po po then

          2. What they’re doing probably doesn’t meet the criteria of a pump and dump scheme as per federal law (this isn’t a settled matter, but if you’re a betting person, you’d take the WSB side of that legal case).

            WSB just correctly recognized that it commands enough capital collectively to force a call from the short sellers and make a little money in the process. If the SEC decided to prosecute them, it’d effectively be outlawing coordination between financial firms in the stock market (which happens all the time, in varying levels of formality).

        2. Idiot as usual.

        3. No idea.

        4. No, it’s a short squeeze from hell and tomorrow it’s gonna be a gamma (options covering) driven squeeze again. You might compare the retail guys buying and holding to Tulip Mania, but not a pump and dump.

        5. Have you ever stopped to consider that maybe they just like the stock?

          It’s perfectly natural when a boy reaches a certain age that he starts to take an interest in stocks.

          1. I first started liking stocks when I was eleven, but I didn’t touch one until I was thirteen.
            Those were more innocent times.

        6. ….and the firms that owned those short positions before the skyrocketing? What about them?

          As somebody said, they can be stupid far longer than the market can remain solvent.

    2. They won by losing 30 percent in a day?

      1. They had fun. It was worth the 1 share they bought.

      2. They didn’t all buy this morning. A ton of them made money, a ton lost money. Melvin lost money, and for a lot of people that’s winning.

  3. PROTECT THE WALL STREET HEDGE FUNDS! DO SOMETHING WARREN!

    1. Sadly, the brainless morons will support her desire to intervene, even though it will inevitably benefit the billionaires they claim to hate.

      1. The sad fact is that there is a bit of truth. Generally speaking, when you risk a lot, the returns are higher. Of course, so are the losses.

        Warren is right that when you limit risk, you prevent people from losing big. Of course, you prevent people from winning big, too but they don’t mention that. The people who ultimately win in a low risk world are the billionaires for whom a low percentage gain is still biiiiiig money.

        1. Except we, for decades now, have idiotically privatized profit while put the losses on the public (“too large to fail”).

          As much as it may have hurt, it may have been best to allow the economy to crater in 2008 and not bail out anybody. Force “the market” to realize that YES, YOU CAN LOSE EVERYTHING. It’s why it is called “risk”.

          Would it have hurt? For sure. I don’t think the Weimaring of our currency is going to be appreciably better.

    2. Warren’s tweet did not make it clear who she wants to target with regulation in this case. Just someone. AOC and Ted Cruz are both tweeting support for the retail traders. Things are getting increasingly bizarre.

    3. The ‘something’ the government should do is look into the collusive and anti-competitive actions of Discord, Robinhood and others who rode to the rescue of the fatcats.

      But, much like the investigation of the excessive force used on Ashli Babbit, or Hunter Biden’s pay-to-play with China and the Ukraine, these are just not worthy of consideration by the powers that be here at Reason.

  4. Ugh, I hate Warren so much. So glad she didn’t win the nomination. Confused ideologues like her are so dangerous.

    1. I agree. She is a fake Bernie Sanders.

      1. Actually it’s not her fault. She was told growing up that there was some Sanders in her ancestry.

        1. 1/95 Sanders… From the Massachusett tribe.

      2. No she is something far worse. Bernie believes that the right Top Men can centrally plan our way into utopia. Warren believes she IS that Top Man.

        All of her fake research papers are exactly that: entries on her resume to show just how much she can ensure justice through insidious economic meddling.

        1. I also think that Bernie, no matter how faulted his logic is, actually believes what he is saying. Warren not so much.

        2. Yes, Warren is the most evil Donkey of the current crop of Asses. Most of the rest are hapless morons, hung up on their relentless self-righteousness. But she is really a sociopath.

        3. All of her fake research papers are exactly that: entries on her resume to show just how much she can ensure justice through insidious economic meddling.

          That Warren considers herself to be a one-woman RAND corporation is one of the more terrifying aspects of her personality.

        4. I agree here, but it should be pointed out that Bernie thinks he is the Top Man who can pick the right Top Men to centrally plan our way into utopia. Maybe a small degree of separation, but evil nonetheless.

    2. She, like Bernie, has argued for more nationalism and more socialism. She is by definition a nazi

      1. Oooo-kay…”Nationalism”, “Socialism”…but has she argued for a “Party” yet?

  5. But mostly it just goes to show the limits of Warren’s technocratic brand of populism.

    Warren is not a populist. If she were a populist, she’d let this continue and watch with glee as the Biden-supporting Wall Street hedge fund managers lost their shirts. She’s the exact opposite of a populist. She’s a DC insider with strong connections to Wall Street elites.

    1. She is the worst kind of populist – a finger-in-the-wind ambulance chaser type.

      She went all anti-trade protectionist Trump style on Obama in 2015 in preparation for her future run.

      She is fucking awful.

      1. If you didn’t like Trump and Warren’s protectionism, you’d really hate Sanders.

        1. You don’t need 47 different styles of candidates.

    2. Exactly. She talks a populist game, but when the rubber hits the road, she lines up with the party’s corporatist establishment like a good foot soldier is supposed to do.

      I’m reminded of the security hacks that the channers did in the mid-late 2000s. Instead of taking the lesson that companies needed to be more prudent about setting up their network security functions from the get-go, instead of cheaping out to save a few bucks, the establishment wrung their hands about “hackers” and the threat they posed. No, the threat is your own short-sightedness and general incompetence. Look in the mirror.

      It’s the same with this hedge fund. They should have been FAR smarter about hiding their short position, and because they weren’t careful, they got dusted. Warren needs to be telling these guys, “the stock market is a gambling casino; you cashed in all your chips and came up snake eyes. This is a real business with real employees; if you’re mad about what happened, take it to court.”

      1. Wrong.

        The “corporate establishment” desperately wanted Obama’s TPP and Lizzie Warren went all anti-trade Trump style populist against it.

        1. “Wrong”

          This has all the weight and value of your other observations.

        2. “Obama’s TPP”

          I mean, hell one example from 12 years ago that’s certainly…something.

      2. “They should have been FAR smarter about hiding their short position, and because they weren’t careful, they got dusted.”

        How, exactly, does one go about hiding their short position and from whom are they hiding it? Short interest on a stock is information available to anyone.

        1. Maybe by not trying to hasten the anticipated price drop by pimping their position to all their media allies.

    3. Well, at least it’s nice that everyone can apparently agree on Warren’s awfulness. Unity!

  6. Whether the SEC acts or not it looks like many of the big online trading platforms are preventing the trade of “volatile stocks”. No one else gets to rig the system except the big players.

    1. Looks like it’s time for a peer-to-peer stock trading platform of some kind.

      1. They exist. There is at least one block chain exchange I know of. The problem is that the damage to Robinhood users is that the damage to their positions and thesis has already been done. Tomorrow might squeeze again on gamma, but today’s price action was completely due to RH and other brokers’ manipulation. This is blatant. This is how capitalist systems lose faith. This type of capitalism is not good for people who want to continue to have capitalism.

    2. No one else gets to rig the system except the big players.

      Bingo.

    3. bUilD yoUr oWn rObinHOod

    4. Yes, I was trying to sell options on AMC yesterday, a capability that my account has long had and frequently used. TD Ameritrade restricted options selling on AMC and GME. Why? Well, maybe it was because a covered call on AMC at certain points yesterday was the actual, honest to god can’t lose trade. And my broker chose that moment in several years of using them to lock me out of this ability. Isn’t that convenient (for them)?

      1. To be fair though, derivatives are a different problem.

        Options Contracts are backed by market makers. For example, if you want to buy a call, someone is behind the scenes making sure that the stock is available if you call. If there is no one selling the stock, or the stock is extremely volatile, those market makers can’t back their contract and they won’t want to sell it to you.

        1. Only if a market maker is my counter party. A covered call is already a covered contract. No additional hedging by my broker is required. It is only not covered if I was doing it in a margin account, and they are loaning out my shares on margin to short sellers, which would their problem, not mine. And this was a cash account anyway.

          1. The broker isn’t the market maker. Generally the counter-party to your contract is a market maker. You are rarely (if ever) setting a contract with some other random investor. It is entirely possible that in yesterday’s volatility, there was no one willing to countersign your offered contracts.

            1. To put this another way, at the beginning of the pandemic, you could walk into a Target with cash in hand, and not get the TP you needed. The markets weren’t broken, but they were severely distressed by the massive change in supply and demand. It is possible that yesterday that was happening. It is possible that no one was willing or able to sell you what you wanted because the disruption was causing them to hold off.

              1. Nope

              2. I was selling covered calls. I already have own the underlying security, and am offering an option to buy my securities in the future for a fixed price for a premium.

                There was plenty volume at the premiums I was putting in limit sell orders for. I have been trading options since 2007. I don’t fuck around with thinly traded options unless it is part of a wheel strategy on my long term holdings.

                I understand the typical MM counter party move to a sold call is to sell the underlying short, and that would be difficult for them right now. But I think there are plenty of retail traders buying calls in these stocks who could have been my counter party if the broker would allow it. And brokers and market makers are often one and the same.

                This was TD trying to curtail any transaction other than selling in these shorted names.

                1. You identified a guaranteed win and you are surprised that no one was willing to sign up for a guaranteed loss?

                  1. It is conceivable that such a transaction could be a win for both, depending on the other’s original position. There is also the possibility the other is merely gaining the ability to define the limit of their loss, ie. you are allowing someone else an exit strategy.

                    Restricting otherwise legal activity creates market distortions – the trading houses are once again picking winners and losers.

                    1. OTOH, we are addressing a known liar, so I do remain skeptical.

                    2. Au contraire. I have offered proof to all of those who have called me a liar, and they always run and hide instead.

                  2. It’s a guaranteed win for me because of the combination of the two positions — long on the underlying stock, and short on a call option. It does not mean that someone else has to take a guaranteed loss.

      2. The bad part of that tale is the “my broker” part. Ouch.

    5. Worse. Robin Hood is selling GameStop stock even if the account holder doesn’t want to sell, and at last week’s closing price. People are going through the roof over this.

      1. Wow.
        The establishment is really going all out on the “Fuck you, proles!” aren’t they.

        1. Flagged this by accident, sorry.

      2. You’re kidding, right?

        That’s one o’ them “Conspirartey Theorems” ain’t it?

      3. Yep-saw that later.

  7. Short squeezes have been happening since the beginning of the markets. Why does this one deserve so much attention, much less some regulatory action?

    1. Because it happened in the era of viral social media.

    2. Because it’s damaging an aristocrat’s bottom line, so he called all his aristocrat buddies to circle the wagon. Hence the doubling down from not just the one hedge fund that was targeting GME, but the rest of the financial sector, the media, big tech, politicians and bureaucrats all putting up a united front to stand against the evil white supremacists that are holding Gamestop stock.

    3. For the same reason that violent “protests” were awesome, heart-warming displays of democracy in action…until the “protesters” started showing up at Democrat leaders’ homes.

    4. Because the Plebs got involved.

      But honestly, this is just a free market force against too much shorting. Doubling down on shorts is a progressive betting scheme, and it will sometimes end like this. Good on anyone who recognized it and made a buck on the hedge funds’ stupidity.

      1. “Because the Plebs got involved.”

        Yep, same as with protests at the Capitol. Leftist foot soldiers can burn and terrorize, but once the normals started getting militant that shit had to end.

  8. If hedge fund managers cannot even redeem their “political donations” for some clout in the market, why do we even need a government?

    1. The hell if they’re not going to get what they just paid for. The DNC owes them big time.

  9. Ah, the great champion of the poor, Lizzie Warren, fighting for…hedge fund millionaires. Kinda heartwarming, what?

    1. the lefts biggest complaint about Mitt Romney was he was a hedge fund manager destroying companies for profit he still is but its okay now since he is the biggest RHINO out there. they are willing to protect hedge funs but they will never let him in the oval office.

      1. His nose isn’t that big.

      2. I thought Bain Capital was a corporate rescue and recycling operation. Buy, Save, sell or liquidate. Would you call Bain a hedge fund?

        1. “… or liquidate.”

          A functional ecosystem needs decomposers, as does any functional market. Real vultures are ok, but vulture capitalism is made into a villain by the Marxists.

      3. The Left’s biggest complaint about Mitt Romney was that he was a callous fat cat white male oppressor whose mere existence was staining the holy glory emanating from the smooth vibes of Black Jesus, savior of Democracy!

        The same Romney that people see in 2021 as a milquetoast rino pussy with no balls that couldn’t offend a fly was the same cuck that Biden in 2012 called an irredeemable racist that would put black American “back in chains.”

    2. Oh no. The “millionaires” are basically Dollar Tree customer service associates to her.

      You need three more zeroes to qualify for her empathy.

      Also, who wants to bet they’ll try and put some limitations on those “$1400” Covid gifts, if they ever come through?

      “We’ll give you plebs some money, but don’t go doing crazy shit with it!”

      1. EBT cards for everyone!

  10. It’s not at all clear what the SEC could do to stop what is essentially a financial market flash mob

    No one can even conceive of a reasonable “solution” to this problem. Herds are gonna run in both directions.

    1. Exactly.

      Everybody knows that the theoretical losses on a short position are infinite. Certainly “hedge fund billionaires” or whoever the hell is running these funds know that. So you’re careful when you’re short.

      Look at the GME stock chart – these guys had every opportunity in the world to cover and lock in a massive gain. But they got greedy and want to ride it to zero – a trip it may never take. So they got burned for their poor judgement. These will not be the first hedge funds that busted under the weight of a bad highly leveraged decision. Tough cookies. Nothing to do about it but learn, but some of them don’t.

      1. I’ve heard on Tom Sullivan’s show that the hedge fund involved may lose $3 billion and may collapse wana bet warren will have a bailout for them which if they do I will start to think the whole thing was a scam in the first place.

      2. Too bad they didn’t hedge against their hedges. Or did they?

        1. How in the world do you hedge against a naked short?

          And, if you have any confidence in going naked why would you ‘waste’ money trying to cover?

      3. Why would you try to learn from it when you can just get your friends to make it not have happened?

    2. Restrict naked short selling by fucking enforcing the existing laws and SEC regs on it, for starts.

      1. No need to do that. Let them go under and lessons get learned.

        As it is, we have a nasty habit of allowing these firms to keep profits while we protect them from losses

        1. To “let them go under” at this point, the government needs to enforce laws. Because we have hedge funds colluding with brokers directly to manipulate stock prices so that they (hedge funds) don’t go under. They also are naked short selling to get into this position in the first place.

          This is all illegal already. No new laws required. Maybe a lawsuit or EO or congressional hearing to get SEC to do their job.

          1. Because we have hedge funds colluding with brokers directly to manipulate stock prices so that they (hedge funds) don’t go under.

            Based on the story posted below, we are looking at that exact scenario. It’s not just preventing people from *buying*, they may also be *selling* shares that their site members own. These people are either so well-connected that they know they won’t get anything other than a wrist slap, or the redditors got completely inside their decision cycle and caused a mental/moral collapse.

            Someone is going to have to go to prison over this. People cannot pull this shit, in this kind of political environment, without severe socio-economic repercussions.

            1. If wall street keeps showing us that capitalism is a scam, then the people are going to demand reforms to capitalism. This is self defeating behavior and short sighted greed.

              1. To the contrary, what they are showing the world is that the socialists in this country are no longer bothering to hide their power grabs.

                Before, the game was “catch me if you can.” They still bothered slinking. They still tried running. In turn, all of their running and scheming and slinking required funding, and resources, and handicapped their operations. The veneer of legitimacy was costly to maintain.

                The game is fundamentally different now. They’re doing it. They’re not hiding it and because of that we are irretrievably locked in a perpetual escalation because the apologetics and explanations are no longer being employed. Nor, for the most part, are they necessary.

                There are thousands of active duty troops in Washington, D.C., as we speak, with live rounds and orders to Fallujah the shit out of anything that even resembles a “dangerous” protest. There’s only one way that this goes and I’d be willing to wager that we’re no more than a few months out from a Tiananmen Square type of situation.

                1. Yep. Now the game is “Grab everything you can before the whole thing comes down.”

              2. “capitalism”.

                This is the government meddling directly in the economy for the benefit of their friends. That’s not capitalism. I dare say it more closely resembles the dreaded F word, instead.

                1. This is capitalism. There is no capitalism without government. Sorry to inform you.

                  1. Capitalisms is defined as freedom within economic transactions, so a government is needed to enforce contracts and what not, but they are not needed to try to manipulate the market thru GND and other programs.

          2. “…congressional hearing to get SEC to do their job.”

            LOL!!!

            These are your peeps Dee.

            Good. Fucking. Luck.

      2. “That’s not the kind of “solution” we run our lobbying budget into eight figures to get from our government.”
        ~ {redacted}, Hedge Fund Manager

  11. “[T]hen the SEC will probably end up taking some sort of action based on existing rules designed to prohibit fraudulent pump-and-dump schemes, where stocks are artificially boosted and sold off.”

    When does something become fraud? If buying stock to send a political message is fraud, then so is every politically inspired boycott of a publicly traded company.

    If anything comes out of this I hope it is the widespread among Americans realization that we are not operating in a free market. And, when that realization hits …. well, you know, the troops are stationed in D.C. for a reason.

    1. In what way is the market in GME not free?

      The hedgies freely decided to lever up and short it. Somebody (redditors? whoever) figured that out and started buying – freely – causing the shorts to panic and start to cover and it cascades. It’s happened many times.

      And now many of the hero redditors will lose their asses on the way back down, because someone always ends up holding the bag.

      But this is all totally free market shit.

      1. Well there is all the companies refusing to let people buy stock.

        1. True, there is that. And those are the market manipulators. I guess they’re doing it under the guise of saving individual investors from themselves? So approximately the role that Warren would want the SEC to play.

          But before all the gnashing of teeth caused the reactions that you refer to the market was free and doing it’s thing.

          1. Right.

            The market was free up until this one hiccup.

          2. This is what happens when you let people buy one share , or even a fraction of a share, without commission fees. Get a big group buying small lots gives a lot of power. The big guys don’t want you to have power.

            1. Yep, plenty of those fractional ‘investors’ knew they were not going to make money, and would probably lose money. But the chance to sink a battleship with your $300 torpedo was thought worth it.

              1. Absolutely this. And well put. That’s basically the perfect analogy.

    2. For “show”?

      To put down the massive right-wing insurrection on Inauguration Day?

      To be ready to deploy to any of the 50 state capitols threatened with violent protests, per Anne Fbisource?

  12. Yeah, I have spent the last two days watching r/WallStreetBets. There are tons of people believing (or pretending to believe) they are going to make lots of money. Still others think they are fucking over Hedge funds.

    The ultimate downside of this comes on 2 sides: 1) the elites who are likening this to the capital hill riot (which in and of itself was overblown) in an attempt to fortify their status and 2) the many people who are going to lose their shirts, and who will blame it on “the man” rather than their own emotional behavior.

    Right now, Robinhood- which had positioned itself as trading for the little guy- has banned purchases of GME, BB and AMC. It has come out that one of the key investors in Robinhood is the hedge fund manager most likely to lose their shirts from this situation. To me, it is a great example of just how much these “Virtuous Corporations” are merely a thin veneer meant to dupe their customers.

    1. I can see some merit in Robinhood blocking the sales if they are trying to protect vulnerable small time investors from dumping all their money into a bubble that will most likely wipe out their savings. A sort of “it’s for your own good” logic coming from a genuine place of concern. But of course any such reasoning will be drowned out by calls of conspiracy and collusion with the big players.

      1. The gulags were also “for your own good.”

        1. What the fuck does that have to do with the current situation?

          1. “For your own good” is a stupid fucking explanation for fucking people over, believed only by stupid fucking people. The fact that you believe market manipulators are manipulating the market for the benefit of humanity makes you fucking stupid.

            Clear?

          2. You’re a tyrannical nanny statist.

          3. “for your own good” is a justification for endless evils.

            China claims their treatment of Uyghurs is for their own good, too.

      2. It’s not RH’s “job” to protect people from their own stupidity. That’s a never ending slippery slope, as there’s no limit to people’s stupidity.

        1. Just like there’s no limit to how high a shorted stock can go …..

      3. As I note above, “For your own good” is about limiting risk, which necessarily means limiting the reward. A world where elites pamper you “for your own good” is a world where the already rich continue to make millions on low risk, steady as we go, cow milking.

        The last think Elites want is for the creative destruction that comes from individuals taking risks. They want you swaddled in regulatory bubble tape. They tell themselves they are virtuous because they did this “for your own good”, and any perks of their status is just a happy coincidence.

      4. You’re a much bigger optimist than I. Just seems a lot more likely that the owners got some panicked calls from friend’s about to lose their livelihoods and decided to help out the people they know personally over a mob of strangers.

          1. Hmmmmm, I don’t doubt what he says is true. I just always doubt anyone who says they are a part of the business being hyped on the news currently. There are other reasons to believe this is happening though.

            1. Yeah, obviously this would need to be verified. It’s hearsay at best.

          2. This “For their own good” nonsense never passed the smell test. Robinhood trades in fucking cryptocurrency. You can’t offer that as a service and then fret about your users getting fleeced.

            1. “For their own good” is the refuge of every authoritarian in history, as well as the rallying cry of those so thoroughly ignorant, broken, and abused by their rulers that they have no other choice but to submit to their whims.

      5. Isn’t it so convenient that the virtuous and morally right course of action just happens to enrich the billionaires and politicians making that decision? Funny how that always happens.

      6. By Robinhood stopping the sale of stock forces its prices down to zero which is what the hedge funds want it will not protect the little guy investor. Robinhood knows this and is essentially protecting the hedge fund which is collusion. its bad all around

      7. “calls of conspiracy and collusion with the big players.”

        Right. Other than *that* Ms. Lincoln, how did you enjoy the play?

        The conspiracy and collusion is real. But it was for our own good!

      8. I had to re-read that post.

        Sooo…you have an “if” in your first sentence, followed by an implausible scenario that you have just made the fuck up.
        Then you top that stupidity by imputing to FUCKING HEDGE FUND MANAGERS actions “coming from a genuine place of concern”??

        Ho-lee shit. Tony’s got his work cut out for him to top this.

        Oh, and all topped off by the sleazy tactic of pre-emptive “conspiracy theory” dismissal of any skepticism.

        This is masterful, Smarmy repulsive and stupid. Great work fucktard.

        1. I have faith that Tony will overcome this challenge to his dominion of idiocy.

      9. Sorry, no one should be forced to do anything “for their own good.” Caveat emptor.

      10. CMW once again freely admitting he’s ok with Big Brother deciding.

        Totes libertarian.

    2. I pointed out, when this story was first posted in the comments, that these hedge funds have political and industry connections the Redditors could never possess, and that they could afford to wait things out while the Redditors couldn’t. That they might be getting hammered on the front end, but ultimately they would come out ahead on the back end.

      Doesn’t mean the hedge funds and their industry allies aren’t rigging the game, but people have to realize what they’re getting into when they’re doing stuff like this. “Operation Mayhem” is these oligarchs’ worst nightmare, only because it would mean the system collapsed before they could bug out, not that they’re worried about the collapse itself.

      1. I pointed out, when this story was first posted in the comments, that these hedge funds have political and industry connections the Redditors could never possess,

        I’m sure you are right. But when Ted Cruz and Rashida Tlaib both have you in their cross sites–you might be a bit toxic at the moment.

      2. If there was a monolithic “hedge fund managers”, I’d agree with you. However, that’s not the case. This is one group of hedge fund managers who are going to lose their shirts, and other bankers and financial institutions are going to sweep up their assets if they collapse or have to perform fire sales to stay afloat.

        When two wolves fight, the real winner is the bear who sweeps in after the fight is over and easily overpowers the exhausted “victor”.

        1. It doesn’t have to be monolithic–it just requires ones with the right connections.

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  14. Democrats and their bureaucrats have to meddle. It’s their nature.

    1. Exactly. If there’s one recurrent thread to Warren, it’s not so much populism as it is the desire to control and regulate anything that moves. I remember when she threw a fit at Airbnb when it started, she was like, “Wh… who’s renting in it?! Who are these people? What are they doing? We need regulators!”

      That’s just Warren. She longs for control. Her main problem with Wall Street isn’t so much elites and whatnot, but the fact that she sees the atmosphere in it as too cowboyish, too dog-eat-dog, and wants to limit that. That’s much of what Dodd-Frank was about.

      1. I think there’s something to that. Someone on here, years ago, pointed out that she became a pissed-off harpy right after she wasn’t given control of the credit regulation bureau that had been her brainchild. This is a women who is thirsty to boss people around because it makes her feel validated.

    2. There you go – except that it’s not just Democrats, it’s pretty much all politicians. They go into politics to “solve problems” and as far as they’re concerned there’s no problems that can’t be solved by the government. Or by more government.

      1. Not the highly paid watchdogs at the SEC, they go to work to watch porn all day.

  15. GME $238 now. My kid sold his one share yesterday at $293 after buying on Tuesday at $120. I saw $340 this morning. Woo Hoo!!!! And they wonder why people were protesting this government in Washington DC?

  16. https://twitter.com/themaxburns/status/1354873559663960066

    In case you aren’t following the Reddit/WallstreetBets/$GME stock market madness,
    @RobinhoodApp
    is now selling off many Redditors’ shares *whether they want to sell them or not.*
    Quote Tweet
    Max Burns
    @themaxburns
    · 1h
    Wow, @RobinhoodApp does in fact seem to be closing out $GME positions on behalf of retail investors, arguing it’s for their own good.

    Never seen folks *forced* to sell their stock to protect a hedge fund before. Absolutely wild.

    1. Yeah, that’s how you go to jail. The absolute last thing you do when you’ve got that many eyes on you is pull something this shameless. Even most politicians understand you can’t be this blatant in the two rules system.

      1. Watch them get away with it anyway.
        The establishment just doesn’t give a fuck about pretending anymore.
        In a few days you’ll be blocked for even posting about it on social media.

        1. Don’t you do nothing but mindlessly defend Republicans?

          Where do you think this system came from?

          1. What exactly have Democrats been doing since 1828?

        2. This whole thing has already been debunked!

    2. I am skeptical about this one, BTW. My wife came in to show me this during my lunch, and I figured it has to be 1) misinformation or 2) lacking context (like these are people who are purchasing on margin and had a margin call). But the twitter account insists this is not the case.

      Still, this strikes me as TOO ridiculous to be credible. Like, how does a big company get the data mining and people to suddenly start selling this stock off? Is there a data scientist somewhere that got a call from the CEO and said “Yes, my master, I will fuck over these people for you!”

      1. It does seem to good to be true, but at first I thought Twitter spiking the New York Post’s account over the Hunter Biden laptop story was some tech moderator sitting at home who went off the reservation, rather than a deliberately coordinated blackout between them and the rest of the media.

        At this point, I’m more inclined to believe they did this on purpose until proven otherwise.

      2. “Show me the difference between illegal and stupid, and I’ll have my wife’s brother arrested.”

      3. What part of it seems like a big job to you? If they’re selling the shares bought through them, this is like, *one* database query.

        “select * from user_stock where stockname = “GME” and purchasedate < "Jan 21 2021"

    3. Isn’t that collusion? Robinhood’s name has never been more ironic.

    4. Yeah this one doesn’t pass the smell test.

  17. No one thought they were going to lose money.

  18. It may be worse than you think.

    According to this, Robinhood is selling off account-holders shares of GameStop “for their own protection”. The fact that this helps out their buddies with their nuts in a vise has nothing to do with it, I’m sure. But it’s like I told my nephew when he was asking about his 401K funds, if you ain’t got the actual stock certificates, you only have somebody else’s promises that you have any stocks. If your stock brokerage goes broke, you may find out you don’t own any stock at all. And apparently in the case of Robinhood, you don’t own any stock either.

    1. Free markets. So free, in fact, that they don’t even exist.

  19. Are there any geeks out there who want to invest in Parler?

    1. Nobody wants to touch the toxic sludge.

      1. You’re an idiot

    2. Probably some of the 74 million or so would want to.

  20. She’ll use any excuse if it means she gets to regulate more shit.

  21. House flipping crazy liz has never made a honest dollar, she lives 100% off backs
    of others.

  22. Gamestop is a dying company, and AMC is facing a similar fate. I don’t see what a tug of war between medium fish and big fish on speculative action accomplishes anything in the long run, other than the immense satisfaction that a bunch of wealthy democrats lost money. Most “main street” Americans probably won’t get wealthy by playing the stock market this way.

    I’m not sure this kind of disruption is a good thing in a pandemic, and Wall Street and hedge fund managers aren’t people you can take lightly. If this kind of prank discourages investments who knows what will happen.

    1. besides a pre pandemic decrease in movie going isn’t the main reason AMC is hurting now is because of the pandemic lockdowns.

      1. Yup. A year of construction and an brand new AMC theater near me recently opened… to a lockdown were theaters are illegal. Gawd is must suck to be AMC. But it’s not their fault. Not sure if they can hang on long enough for that fancy new spot to actually show a movie.

        1. It wasn’t AMC, but one of those “dine-in” theaters opened up near me in February, only to get shut down a month and a half later. I don’t think it’s re-opened, although the big local chain started showing digital re-releases during the summer.

    2. The funny thing is that we know one guy did get wealthy here- he parlayed 53,000 of his cash over the last year into 23,000,000 in the last few weeks. Not. Too. Shabby.

      1. “did get wealthy HERE”
        “over the last year”
        “in the last few weeks”

        I think part of your post is missing.

  23. I don’t know what this short squeeze nonsense is, but I do know that the entire TD Ameritrade platform was offline yesterday morning and this morning (I’m one of those boring people who purchase index ETFs and hold them long).

    I do know that I will be moving future money from that site to a site that is online 100percent of the time. Shit, if they can shut the entire site down, what can they do during a brokerage RUN?

  24. Yet another senator angry that people are posting stuff on a forum. Gosh.

    1. People have to be put in their place.

    2. It would be hilariously ironic if the Post Office got a revenue boost from right-wingers going back to communicating via snail mail.

  25. Only when the _individual_ investors fleece the _hedge-funds_ do we finally see the gov’t go “Whoa, now!!! This market manipulation shouldn’t be allowed to happen”.

    1. Only when the _individual_ investors fleece the _hedge-funds_ do we finally see the gov’t go “Whoa, now!!! This market manipulation shouldn’t be allowed to happen”.

      You noticed that too, huh?

  26. I can’t believe I am in agreement with Elizabeth Warren, and from what I have heard AOC and Ted Cruz are in agreement on the opposite side.

    At the end of the day though hedge funds are just vehicles for investors to use. You can portray them as the evil rich Wall Street robber barrons. But they get their money by performing a service to their investors.

    The method used to run this Short Squeeze is pretty close if not actually an illegal Pump and dump. Pretty close in that a true pump and dump involves fraud, and their is not lie here. Short squeezes often get the attention of the SEC, but generally unless fraudulent are legal.

    The other thing is that Hedge funds back up these short positions with investments, typically in stable large blue chip stock like Microsoft and Apple. The covers on the shorts the hedge fund had to meet come by selling these stocks, which drive volatility across the market.

    Since this is very close to a Pump and dump, the reason pump and dumps are illegal, is that those in last are left holding an over valued worthless stock. This was unsustainable, although very clever, and eventually people would loose their shirt.

    Lastly the markets need to be trusted, that the values, at least long term in general are based in reality. The SEC primary job is to regulate the market to ensure that reasonable investors have the ability and faith to know that the prices reflect a market value of the company. Failure of the SEC or others to take action, the markets loose all faith, and much of our economy comes crashing down… purely for the lulz.

    1. The reason the hedge is going under is because they tried to short for more stocks than existed. This sort of thing needs to happen more often, so the complete idiot hedge funds go under and are replaced with one’s that don’t make blindingly stupid decisions in the belief that their connections will save them. You know creative destruction and all that.

    2. “The SEC primary job is to regulate the market to ensure that reasonable investors have the ability and faith to know that the prices reflect a market value of the company.”

      Completely false the SEC doesn’t regulate the market nor does it try to ensure share prices reflect market value. Not in any way shape or form.

      And a hedge fund shorting a stock with that high short interest gets what it deserves. Fuck Warren for defending them.

    3. “The method used to run this Short Squeeze is pretty close if not actually an illegal Pump and dump. Pretty close in that a true pump and dump involves fraud, and their is not lie here. ”

      You do realize how absurd this statement is, right? By this same phrasing, I could say “paid labor is pretty close if not actually illegal slavery. Pretty close in that real slavery involves involuntary servitude, and there is none of that here.”

      This is nothing like pump and dump, because there was no fraud. A group of people noticed a company in a vulnerable position, and they collaborated to exploit that weakness. Investors do that all the time. My company was sold out from under me because it had structural weakness and activist investors pounced at exactly the wrong time. It happens, and it is all on the level.

      “Failure of the SEC or others to take action, the markets loose all faith, and much of our economy comes crashing down… purely for the lulz.”

      There is no indication that this is true. markets are markets and they get stressed and thrown into disarray all the time. This is not failure, it is adaptation as people learn to price in new data. Just 15 years ago people were wailing about Amazon’s 20x price to earnings ratio because it was just plain illogical. And yet it was absolutely a decent price given what history has shown us.

      Contrary to what you said, people are losing faith in the market because they believe the government has rigged it against them. They aren’t screaming, “Please gubmint save me from the hedge funds.” They are screaming “Please stop saving the hedge funds from us!”

      1. No, they aren’t saying that. Only you are saying that. Everyone except the occasional Alex P. Keaton understands that non–government employees can be corrupt assholes too. Everyone but you understands how greed actually works. Even the Trumpers, god rest their sad, stupid little hearts.

        This was about telling an understandable story about the little guy hoisting the big guy on his own petard, and the big guy crying to mommy about it on CNBC. People don’t give a shit if the big guy is a senator or a hedge fund asshole.

        They all know perfectly well that anyone trying to sell them on the hedge fund asshole being the good guy is, himself, the asshole.

    4. You seem to be implying that the market should be constructed so that no one ever loses.

      I’m NEVER going to trust that.

  27. I don’t believe in “too big to fail”. Let Melvin Capital fail.

  28. Christ, what a cunt.

  29. Frozen concentrated orange juice, anyone?

  30. Hedge funds are a creation of Nixon closing the gold window and the Fed going all money printing to meet their masters the DC elites buy votes with deficit spending. All those bonds have to be laundered and it eventually means Hedge funds get access to all this “fake” money or “banks” willing to front them. Warren and DC pols will always defend/bailout wall street because it needs wall street to keep launder the debt. Period end of story.
    Robinhood blocking buying but not selling is manipulation to the benefit of the NYC Hampton elites and DC will NOT to anything about it. Solution is I hate to say this..end the Fed and force the Govt to issue bonds to the general public…that would force rates up and yes we might actually downsize govt.

    Melvin Capital is not a creation of the free market but monetary central bankers and authoritarian govts…

  31. Elizabeth Warren is not an important character in this story. You’re just framing it that way so you don’t have to talk about your own lifelong orgy of insisting the wealthy be allowed to do whatever they want with our money.

    The so-called populist right wants part of this action, and fine, let them help us crash the edifice of capitalism. You’re still going to have to be literate in the socialist utopia that follows.

    You think Warren and regulators shouldn’t worry their pretty little heads about this. Because the status quo is already capitalism in all its perfection, I guess. Just call me an old fashioned conservative, but I don’t mind having a stock market as long as neither rich assholes nor neckbeards can treat it like a masturbatorium.

    1. The so-called populist right wants part of this action, and fine, let them help us crash the edifice of capitalism. You’re still going to have to be literate in the socialist utopia that follows.

      No, you self-important pusbag, when that crash actually happens, if it happens, it’s about who possesses actual functional skills to not starve to death or die of thirst, and create groups that will actually trust each other enough to form defenses of their settlements. We become Yugoslavia after the collapse of communism. We would literally split into warring feudal tribes, based on ethnicity, because left-liberal pretensions about “diversity is our strength” and “love is love” only exist in decadent, highly complex societies–not the remnants of broken-down empires.

      Anyone thinking the simps will get their Fully Automated Luxury Gay Space Communist Utopia out of something like that is going to be in for a rude awakening when the axe cleaves their skull in a scramble over the last can of Van Camp’s Pork and Beans.

      Right now, your side’s strength lies entirely in the fact that most of your opponents still have something to lose, for now. The real, actual collapse of our economic system would change that situation radically, and there won’t be any use for a high-trust society to indulge your college-campus pretensions anymore.

      1. Our high trust society is being ripped apart by the internecine hatred the two wings of the oligarchy are hyping in their followers.

        I would say that Tony is an example of the dementia caused by this breakdown, but he has been like this for decades.

        1. Whatever remnants of our high-trust society existed, they evaporated right after 9/11, thanks to the overarching government response to that event, in addition to the “white privilege” ideology that was quickly becoming dogma in academia right around that same time.

          20 years later, the government spies on everyone incessantly while sustaining overseas conflicts, all while we’ve become an ethnically and ideologically balkanized nation where white liberals are the only ethno-political demographic to display negative in-group bias. As long as white liberals continue to enable this level of self-loathing, whatever “unity” is pimped by the oligarchs and the mass media complex is nothing but smoke.

    2. The United States, like much of the rest of the world, operates as a mixed-economy. Government spending and regulation, is in effect, over 40% of the economy, that is to say, 40% or so of our resources are diverted from productive use to be almost completely squandered by government. We hardly live in some bastion of capitalism. Resources are scarce, and the market does an incredibly efficient job of allocating them. This is really basic stuff.

    3. insisting the wealthy be allowed to do whatever they want with our money.

      Tony, you pig-ignorant lefturd pinhead: we libertarians insist that everyone be allowed to do what they want with THEIR OWN money.

      It’s you statists who demand that politicians and their cronies get their grubby paws on ever-increasing amounts of OUR money.

      -jcr

    4. Fuck off, Tony.

  32. Where DO you get all the straw, Tony?

    With all the “You think…” and “You believe”s in your posts, you might consider conducting these internal conversations as a soliloquy. You are dealing with an invented reality, and arguing (and winning!) against things you SAY people believe. There’s not really any point in you typing out your solipsisms.

  33. What can Warren do in this situation? Ban speculation? Prevent sites like Robin hood from stopping “mainstreet” investment to protect the sharks?

    If we do nothing, hedge fund guys will…… take less risks or have more safer options to cover their butts before trying to short sell stocks? I’m not sure. These guys are pissed right now and if any regulatory hammer drops, they might take their money or their client’s money and head to countries like China.

    The Reddit guys are just artificially inflating value of a dying company to stick it to hedge fund guys. They’re telling each other not to sell and turn a profit so they can keep on screwing wall street as long they can. That’s not market forces in action.

    America is playing dangerous games in a pandemic that’s putting its own squeeze on the nation- not reopening schools, cancelling energy production, doubling min wage in some states, defunding cops, massive tech censorship, a half senile man signing 100 EOs a day, and now this. We’re writing chapter 1 of “The beginning of the American collapse”

    Seriously what does this accomplish? On a personal level I’d be satisfied if they pulled this stunt on Amazon or Twitter but you know Bezos and Jack will be pissed and the democrats they feed will pass regulation that will hurt us more than them. Meanwhile this created all kinds of chaos in the market that’s already in uncertain times.

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  35. Fuck off, Fauxcahontas. When assholes try to wreck a company by selling naked shorts get their balls in a vise, it’s their own damned fault, and it’s not the business of the government to save them.

    -jcr

    1. The market is 80% institutional. Not going to be destroyed by retailers. This will make someone more cautious . . . . Until next time.

  36. The well educated experienced investors with their complex computer models failed to see the risk in shorting 140% of the outstanding shares of Gamestop.

    There is only one thing for the government to do, let the losers lose. Nothing cures excessive risk taking better than actually paying the price for it. Same as should have been done in the mortgage crisis but too many in politics were backing that risk taking.

  37. The proverb “Live by the sword, die by the sword” should apply. Both sides willingly entered into the stock market and the Government should NOT get involved.

    I do have difficulties with the notion of short selling in excess of the total number of shares. I admit that I’m not very knowledgeable on short selling of stocks.

    I have difficulties with trading platforms halting trading (specifically buying, but not selling) on specific stocks. To me this leave the impression that there is two sets of rules. One for the elites and another for everyone else.

    I have difficulties with trading platforms selling their members data to Wall Street firms including Hedge Funds. To me this is close to insider trading.

  38. In it’s most simple form a short is speculation – you think the prices is going to go down, so you sell short. As opposed to thinking a stock is going up and buying long.

    But the hedge fundies take it a step further, they take short positions then start telling all their media buddies about this with the intention of turning honest speculation into a fait accompli. If they think they then so momentum heading in their chosen direction they then double down and go naked.

    The retail investors playing with them are nothing more than the other side of that coin – going long and working their own communications systems to force momentum where they want it to go. Quite likely many are not doing this for financial gain, but instead are doing so for socio-political reasons. Not that that is a problem. There are entire funds devoted to that purpose.

    To argue that Warren et al should let this go on is to somehow think they have any business deciding what should go on. What Warren et al need to do is protect the playing field and look into the agents who tried to put their own thumbs on the scale – Discord, Robinhood, TD Ameritrade, etc.

    1. Then see momentum

    2. She might try pulling back on the (independent) FED. Zero interest pushes asset classes to higher values creating a nice wealth gap.
      Eat the rich !!!!

  39. EW is a disingenuous moron. She claims that the bottom 99% pay 7 1/2% of their wealth in taxes – it is actually income, an arguably immoral direct tax. And that the .01% should pay 2% of their wealth regardless of where they reside or where the money is kept as long they US citizens.
    The never ending grab for power and money, began by FDR confiscating Gold, furthered by Nixon leaving the Gold standard. We are fucked by following a centuries old playbook.
    Let freedom ring.

  40. The Tulip Bulb Mania scam, ransomware scam, and collectivism is mixing into a bitter cocktail (h/t to Suderman’s hobby) that promise a nasty hangover. Essentially worthless assets collectively bid into the stratosphere in a collusive scam. Someone’s assets and information for which they can not afford to not pay being collectively held for quasi ransom by many others in a collusive scam. No one should say that scammers are not creative.

    “tulpenmanie”
    https://en.wikipedia.org/wiki/Tulip_mania

  41. Surprisingly, AOC is on the side of the little investor in this situation.
    I hate to agree with her!!

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