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One problem is people just don't understand how fiance works. Credit is created out of thin air. The system depends on the credit being created matching the asset and any collateral used to secure it. That is why a house will not simply draw a loan without an assessment to cover it. The short positions simply do not have the collateral and its not unlike giving some fool enough money to buy a city and use the city as collateral. Then the "profit" is just a local monopoly that ensues and then call it "consolidation".
These idiots are printing money and securing it with their future profits , shorting a stock and then making the rounds on their complicit media on why a stock should tank. it fits the narrative as they dump their borrowed shares on the market which wrecks the targets credit rating becoming a self fulfilling prophesy. Gamestop fulfilled a purpose and could recapitalize to reflect a new realty. However if it cannot raise capital then no obviously it wont.
If the powerful do something harmful to the powerless, its a necessary harm and any regulation is immoral and should be illegal.
If the powerless find a way to do the same thing to the powerful, then regulation is necessary to protect against harm.
Pathetic.
Yep. This unfortunate mindset holds true not just in this example (this example was just spotlighted and obvious) but many areas.
I can think of 3 truths here:
1. The needs of the many outweigh the needs of the few.
2. Fame, wealth and power is held by few
3. As long as #2 holds true, #1 will not be achieved
One problem is people just don't understand how fiance works. Credit is created out of thin air. The system depends on the credit being created matching the asset and any collateral used to secure it. That is why a house will not simply draw a loan without an assessment to cover it. The short positions simply do not have the collateral and its not unlike giving some fool enough money to buy a city and use the city as collateral. Then the "profit" is just a local monopoly that ensues and then call it "consolidation".
These idiots are printing money and securing it with their future profits , shorting a stock and then making the rounds on their complicit media on why a stock should tank. it fits the narrative as they dump their borrowed shares on the market which wrecks the targets credit rating becoming a self fulfilling prophesy. Gamestop fulfilled a purpose and could recapitalize to reflect a new realty. However if it cannot raise capital then no obviously it wont.
140% short interest was a cosmic joke
Institutional short sellers holding that position, and super leveraged too, deserved to be slaughtered and wiped out
Institutional short sellers holding that position, and super leveraged too, deserved to be slaughtered and wiped out
But if you hear most Wallstreet types tell it, short sellers usually lose money, help discover the true value of securities, provide liquidity, and we should basically feel sorry for the valuable short sellers .
But if you hear most Wallstreet types tell it, short sellers usually lose money, help discover the true value of securities, provide liquidity, and we should basically feel sorry for the valuable short sellers .
I'm all about free markets - short what you like, and yes they provide liquidity and price discovery. But it's a risky move, and when it blows up on you it's on you and nobody should have to bail you out.
But also naked shorts should not be allowed, I don't understand how it has become an acceptable or permitted practice
I’m a bit torn. I agree with the free market and don’t like the sec shutting things down. But this type of artificial “pump and dump” type of market manipulation is not what the market was created to do - which is invest in companies and help them raise capital.
This is no more "pump and dump" than what hedge funds do all day every day: buy huge short positions and then shout to anyone willing to listen, "hey, we just took this great big short position because the stock is way overvalued and you should short it too, oh and if you have a long position on it, now's a good time to get out of it." Only now the retail investor has recognized the value of taking the other side of that bet.
The /Wallstreetbets crowd have done the markets a huge favor by illustrating how shorting 140% of a company's total outstanding shares is a fantastically stupid and risky thing to do. You can bet the institutional investors will tread more cautiously going forward, and maybe they won't be so gleeful about pulverizing struggling companies into powder for their own material gain.
That being said, isn't a group of individuals collaborating (reddit) together to drive a stock up , also market manipulation ?
Insider trading / collaboration by the big guys bankrolling the Casino / stock market already happens. It's why we hear stories of large cash outs by investors before Pandemic outbreak news is made public or before large corporate scandals are made public etc. etc.
The Casino bankrollers even collaborate amongst themselves regarding shorts and buying and selling stocks in bulk. They are usually (up until recently with the retail investors) the only ones with enough capital to make significant stock price moves and in return fight (invest more) or flight of other investors. They also have sophisticated algorithms that know and make moves before you or I are even fast enough to move our mouse.
Now that the retail investors (you and I - the little fish) worked as a school of fish in the great big fish pond (stock market) against the sharks (industry investors), the sharks got taken to the cleaners and manipulated platforms such as Robinhood to stop allowing buys (or even listing) on certain certain stocks.
The Casino mob bosses/ sharks got beat at their own game and what they did with their power is took their ball and temporarily went home.
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