Stock market is a "fully-fledged epic bubble" and will burst

[anonymous-user]

Condi said:

Selling something you don't own is perfectly common in any finance or trading environment.

You've missed the point. I suggested these things are fine for hedging but bad for gambling. Recreational drugs often have a genuine medical application but that doesn't mean everybody should be taking them whenever they please.

Condi said:

I would argue it's very common in the manufacturing and retail worlds as well.

I've spent a long time in those businesses and not seen it.

It's my opinion that stock markets should be primarily about investment, not speculation.

[rodericb]

emicen said:

This is now where it gets dangerous.

The main target of the short squeeze already announced they had closed their position and there were some tremendous numbers being banded about regarding the cash some of their investors had piled in to avoid a bankruptcy.

Right now, unless people genuinely believe the company is worth 8 times what it was 3 weeks ago, why would you make that trade?

There is apparently a fair bit of subterfuge going on with the Establishment trying to weasel out of their predicament. Word somehow being spread that they've closed their position so it's all over and the kiddies can go home now. Folk were continuing to pile into GameStop but the trading platforms seem to be having "technical issues" so can't complete the transaction, some media outlets screeching about it to the defence of the hedge funds....

[BobsPigeon]

rockin said:

Condi said:

Selling something you don't own is perfectly common in any finance or trading environment.

You've missed the point. I suggested these things are fine for hedging but bad for gambling. Recreational drugs often have a genuine medical application but that doesn't mean everybody should be taking them whenever they please.

Condi said:

I would argue it's very common in the manufacturing and retail worlds as well.

I've spent a long time in those businesses and not seen it.

It's my opinion that stock markets should be primarily about investment, not speculation.

Drug dealing and supply is a perfect example of where people borrow goods to sell them on in the hope they can get away with a profit and return the agreed sum to the lender before it all goes a bit Pete Tong.

Hedging strategies akin to short selling do take place in other procurement businesses, it's quite common to sell something before you own it or lend/rent something out in the hope it'll rise in value, or buy something now in the hope the future agreed price will be lower.

[Condi]

fesuvious said:

Is there any danger one or more hedge funds (if their positions are still open) could be brought down by this?

I'm just wondering, if this continues and the losses are huge then what might a ripple effect cause?

I'm presuming this couldn't be a Lehman style canary in the coalmine falling off a perch?

I did wonder this earlier, and came to the conclusion that the answer was probably no.

If one fund goes bust then it's unfortunate for them. They may have to liquidate long positions in other areas - as we are seeing today - but the value of those other companies hasnt really changed, and so while things maybe a bit rocky for a few days, the smart money will buy back into those companies which have value.

Interesting one of the biggest winners from the Gamestop nonsense has been that rather large fund manager Blackrock who own 13% of GME stock. So much for the "little man" winning against Wall Street! The retail investors are likely to be the ones - eventually - who lose, and who will walk away from huge paper profits only to be left holding worthless call options or stock they can't bear selling at a loss. Fundamentally Gamestop is worth no more than it was a week or 3 ago.

[DonkeyApple]

rodericb said:

There is apparently a fair bit of subterfuge going on with the Establishment trying to weasel out of their predicament. Word somehow being spread that they've closed their position so it's all over and the kiddies can go home now. Folk were continuing to pile into GameStop but the trading platforms seem to be having "technical issues" so can't complete the transaction, some media outlets screeching about it to the defence of the hedge funds....

There's no physical stock and the majority of retail punters are trying to go long via bookmakers who don't either typically hedge or sell their flow. There's no credible media pumping anything about funny offshore bookmakers coming to the rescue of a small, irrelevant hedge fund.

This is the stupidity of retail in a nutshell. Declining to understand the basics and desperate to think they're in the midst of a Dan Brown novel. It's why they can be so easily herded to do someone's bidding and make a few people rich. Quick!! look at the evil corporate people!! Now buy this to make me rich.

[anonymous-user]

Seeing some Twitter / Reddit posts suggesting silver is a better target than GameStop

That, imo, would be interesting to see unfold

[DonkeyApple]

JPJPJP said:

Seeing some Twitter / Reddit posts suggesting silver is a better target than GameStop

That, imo, would be interesting to see unfold

It's hard to ramp commode up. The spankers that they tend to go for illiquid rare earths but it's still a relevant sales game really. Illiquid shells are the big winners and if you can find a dead company walking that has some shorting activity then for the last few years you can trigger punters to react quite affordably via social media.

Financial bulletin boards have been around now for over 20 years and from day one people reaslised the benefit of running profile on them for pushing up stocks. Today it's unbelievable because of the sheer number of punters with bookmaker accounts or flow vendors and their almost unnatural propensity to believe the unbelievable.

[NRS]

DonkeyApple said:

JPJPJP said:

Seeing some Twitter / Reddit posts suggesting silver is a better target than GameStop

That, imo, would be interesting to see unfold

It's hard to ramp commode up. The spankers that they tend to go for illiquid rare earths but it's still a relevant sales game really. Illiquid shells are the big winners and if you can find a dead company walking that has some shorting activity then for the last few years you can trigger punters to react quite affordably via social media.

Financial bulletin boards have been around now for over 20 years and from day one people reaslised the benefit of running profile on them for pushing up stocks. Today it's unbelievable because of the sheer number of punters with bookmaker accounts or flow vendors and their almost unnatural propensity to believe the unbelievable.

How many are idiots and how many are greedy people who are jumping on knowing it is a massive ramp but also trying to make a lot of money on it and get out with a tidy profit?

[egomeister]

NRS said:

How many are idiots and how many are greedy people who are jumping on knowing it is a massive ramp but also trying to make a lot of money on it and get out with a tidy profit?

There's a difference?

[rodericb]

DonkeyApple said:

JPJPJP said:

Seeing some Twitter / Reddit posts suggesting silver is a better target than GameStop

That, imo, would be interesting to see unfold

It's hard to ramp commode up. The spankers that they tend to go for illiquid rare earths but it's still a relevant sales game really. Illiquid shells are the big winners and if you can find a dead company walking that has some shorting activity then for the last few years you can trigger punters to react quite affordably via social media.

Financial bulletin boards have been around now for over 20 years and from day one people reaslised the benefit of running profile on them for pushing up stocks. Today it's unbelievable because of the sheer number of punters with bookmaker accounts or flow vendors and their almost unnatural propensity to believe the unbelievable.

There's an element of protest about "the system" in this GameStop thing. It's that there are people who influence markets to the detriment of the little person - be they those who hold company shares directly or are invested via pension funds and so on. The financial crisis of 2008 and the bailing out of Wall Street being a big marker of that type of thing. You could see it as a protest against late stage capitalism and the extreme wealth of people in the financial sector who are seen to produce little of tangible value to the world.

But the fundamentals of what they're protesting about is in themselves a corrupting influence to those who are protesting. Folk are masturbating furiously about companies like Tesla and Apple but the protesting folk into GME, who also love Tesla, are certainly not the first people to quietly make an absolute motza of money via suckers. The whole securities industry is pretty much based on that premise and regulation is slow to keep up.

Edited by rodericb on Wednesday 27th January 22:55

[DonkeyApple]

NRS said:

How many are idiots and how many are greedy people who are jumping on knowing it is a massive ramp but also trying to make a lot of money on it and get out with a tidy profit?

One in the same. Every time with these events the masses self delude, over extend and fail to exit. A few will win. The stats are in line with all gambling so while most lose a few win.

The chatter though is distorted by the huge number of punters who have lost but claim to have won. That's one of the freebies when seeking to ramp a stock, the people who's money you are seeking to use and take are willing participants who the moment they go long will join you in disseminating lies and distortions. They will only pass on news that benefits them, won't care if it is true or false and will overtly lie about the size of their position and their returns.

Right now there will be no shortage of punters who are heavily under water by life changing amounts but telling everyone that they have big profits. The most common one is that the punter publicly reports on their initial purchases that are in the money but chooses not to report on the later purchases made with borrowed money at a much higher price and size which are now heavily underwater.

The ease at which you can whip up a mob online, the fact that these mobs for the first time have money and also have gambling accounts means the rewards from this classic activity have never been greater. And it is further turbo charged by the immense intolerance, anger and refusal to learn of the two generations, the Boomers and Millenials who fuel it. Gen X is much less involved because it doesn't have the disposable incomes of those two generations either side of it due to commitments such as property and pension.

[DonkeyApple]

fesuvious said:

Is there any danger one or more hedge funds (if their positions are still open) could be brought down by this?

I'm just wondering, if this continues and the losses are huge then what might a ripple effect cause?

I'm presuming this couldn't be a Lehman style canary in the coalmine falling off a perch?

It's a risk that must be factored in today that didn't exist a few years ago. There's always a risk when you've isolated a zombie equity where the numbers show that it's dead in the water that a genuine deal could be struck that changes the numbers etc but historically the risk of a frenzied mob specifically attacking your position wasn't on the radar until recent years.

Now this mob is fully weaponised, naturally intollerant, hate filled and evangelical it is a powerful resource to point at something and release to your advantage.

So while a fund may trawl the accounts of companies looking for fraud and failure you have other funds that are looking for them and waiting for them to take their short position for their game to begin which is to quietly stake build and to then trigger the mob to irrationally smash the price up and trigger the target buying event which is for the big short position to have to close out. They then supply the volume for that event and walk away leaving the retail carnage behind them.

If a fund goes belly up as a result of a single shorting failure then it's important for that fund to have been killed as it was weak and badly run. Plus, there is no upside from attacking a well funded, well managed fund as you want to trigger that forced sell event so part of the need is to find the smaller fund, with lower quality people in it and taking risks far too big for its book.

Edited by DonkeyApple on Thursday 28th January 07:55

[DonkeyApple]

rodericb said:

There's an element of protest about "the system" in this GameStop thing. It's that there are people who influence markets to the detriment of the little person - be they those who hold company shares directly or are invested via pension funds and so on. The financial crisis of 2008 and the bailing out of Wall Street being a big marker of that type of thing. You could see it as a protest against late stage capitalism and the extreme wealth of people in the financial sector who are seen to produce little of tangible value to the world.

But the fundamentals of what they're protesting about is in themselves a corrupting influence to those who are protesting. Folk are masturbating furiously about companies like Tesla and Apple but the protesting folk into GME, who also love Tesla, are certainly not the first people to quietly make an absolute motza of money via suckers. The whole securities industry is pretty much based on that premise and regulation is slow to keep up.

Edited by rodericb on Wednesday 27th January 22:55

Yup. It's renta mob stuff. Pick up a history book and look at who it is that rouses the rabble and the economic state of that rabble after it has been used.

The irony being in the 21st century that the super wealthy's wealth is coming from the billions of consumers who can't stop shopping and are borrowing as much as they can to buy as much as possible. And that the masses are impoverishing themselves because they can't stop shopping.

The rate of gambling has gone through the roof in recent years as part of that shopping frenzy.

And through it all is the ever present subtext that it's all the fault of the 'money lenders'. Historically the Jews. It's never the fault of the person whose home is full of objects they have no specific need of and were acquired using money that they hadn't yet earned.

How can business owners not become abnormally wealthy when billions of consumers are borrowing more and more money to hurl relentlessly at goods and services? And how can the masses not move further into poverty when they borrow and spend on consumables of no value.

One of the issues to arise in recent years is the investment delusion. It's always been there but it is now so dominant that gamblers genuinely don't know what gambling is any more and betting portals such as Robinhood are genuinely beloved to be investment tools.

The big trigger was probably crypto. No regulation, coinciding with no barriers to entry for opening a gambling account and zero honesty from the clients who rationalised their beliefs under a new religion of 'The Man'.

It's hardly surprising that this has emanated from the US as this is the route to gambling for punters in a country where punters have lots of disposable cash but where traditional gambling is heavily inhibited. Day trading was always the big outlet for gamblers. The reason it was never as popular over here was because we have always had bookies on every high street, casinos in every time and moved traditional gaming online rapidly and freely. But in the US that was all inhibited so the gamblers needed other mechanisms and day trading was always a key one.

The arrival of crypto also solved another problem. US gamblers were prohibited from gaming overseas via KYC mandates on their banks as well as prohibition on transfers. Suddenly, cryptos bypassed this mechanism and the floodgates opened.

Today you have this global mob of $100 accounts that have no restriction on what they do and the controllers can not only be instantly reached through social media but easily steered in a desired direction. It's a very powerful institutional tool, made more so by the punters not realising that they are under the influence of the very thing they believe they are fighting.

[DaveA8]

Short selling has probably saved a lot of people a lot of money over the years, anybody who has ever invested in a vehicle that invests in a Hedge Fund will have been long/short.
For me the Short sellers here, if they have suffered, only suffered because they were greedy or had poor controls.
The writing was on the wall early last week and if Citron didn't think expansively then, they're not much good.
There is enough instruments and options in US stocks to cover, if they acted quickly and decisively.
This is a superb lesson for us all both long and short,

a stitch in time saves 9

[anonymous-user]

Somewhere in there you have made what is, I believe the key point - namely that straight gambling on stocks in not the same as investment in stocks.

[Condi]

rockin said:

Somewhere in there you have made what is, I believe the key point - namely that straight gambling on stocks in not the same as investment in stocks.

You could argue that they are both looking for value but over different time horizons.

You could also argue this was an inevitable consequence of giving everybody cheap and easy access to the world's biggest casino.


Anyway, bad start to today for even "safe" stocks which are not being ramped by hormonal teenagers, mediums, and porn stars. Maybe Prudential need to get Mia Khalifa to TikTok about her long position....

[DonkeyApple]

DaveA8 said:

Short selling has probably saved a lot of people a lot of money over the years, anybody who has ever invested in a vehicle that invests in a Hedge Fund will have been long/short.
For me the Short sellers here, if they have suffered, only suffered because they were greedy or had poor controls.
The writing was on the wall early last week and if Citron didn't think expansively then, they're not much good.
There is enough instruments and options in US stocks to cover, if they acted quickly and decisively.
This is a superb lesson for us all both long and short,

a stitch in time saves 9

I agree. In simple terms in order to trigger the speeding up of what was believed to be an inevitable result they took in size that was beyond their risk capabilities.

[eps]

The other issue is betting on the market, off market, which then forces those companies that facilitate that to purchase or sell stock to hedge their position. This puts real pressure (both upwards and downwards) on a stock price by an invented means.

Gamestop is fascinating - sure short selling can be good, but being able to sell circa 140% of a companies stock - that just doesn't sound right to me.

Gamestop could still end badly for PIs... Sorry will.

Surely it's a millionaire/billionaire vs millionaire/billionaire situation with a few PIs thrown in for good measure.

[DonkeyApple]

eps said:

The other issue is betting on the market, off market, which then forces those companies that facilitate that to purchase or sell stock to hedge their position. This puts real pressure (both upwards and downwards) on a stock price by an invented means.

Gamestop is fascinating - sure short selling can be good, but being able to sell circa 140% of a companies stock - that just doesn't sound right to me.

Gamestop could still end badly for PIs... Sorry will.

Surely it's a millionaire/billionaire vs millionaire/billionaire situation with a few PIs thrown in for good measure.

It's not 140% of the issued stock, but of the free float of that stock. Given the volatility of that stock it suggests the free float is very small.

The short equity positions are facilitated by borrowing outside of the free float from the long term holders who receive premium for lending.

This is why Musk wasn't being entirely kosher when he was complaining about people shorting his company as he was on the other side lending them his stock to do so. He was the one facilitating the shorting. But because he had assigned his stock in a debt deal because he had no cash he wasn't able to stop it as he had also assigned the rights to lend for income over to the bank that had collateralised his stock to give him enough cash to finance his debts. It was a problem of his own making but he was on a soapbox whipping up the rabble to get the blame pointed away from him.

Edited by DonkeyApple on Thursday 28th January 10:17

[Clive Milk]

DonkeyApple said:

eps said:

The other issue is betting on the market, off market, which then forces those companies that facilitate that to purchase or sell stock to hedge their position. This puts real pressure (both upwards and downwards) on a stock price by an invented means.

Gamestop is fascinating - sure short selling can be good, but being able to sell circa 140% of a companies stock - that just doesn't sound right to me.

Gamestop could still end badly for PIs... Sorry will.

Surely it's a millionaire/billionaire vs millionaire/billionaire situation with a few PIs thrown in for good measure.

It's not 140% of the issued stock, but of the free float of that stock. Given the volatility of that stock it suggests the free float is very small.

Round 3 today, looks like although some hedge funds have retreated badly beaten others think the time is right and have stepped into the battle. Have they gone in to early?

I see futures in GME went down overnight as the reddit subreddit got made private, but it is up again and the futures in GME are back near to the closing price. For a watcher this is better than next weeks superbowl

It's just like this:-



Will the attacking reddit day traders let the hedgers live ?

I'm not sure why the SEC and the Biden administration is getting involved. For years hedge funds have done insider dealing etc, such as SAC, etc and then been fined and then come back, this is all out in the open, the information is known and the day traders are simply using how the market works.

What is different here is that people are using social media to pass information quickly and do a group buy, but it has the authorities worried about stability. Rather than castigate the day traders why not change the way short selling works? After all, the authorities occasionally stop short selling, how is that not "fixing" the market a lot more than this is? It certainly is, and that is by the authorities. This is my anarchist side coming out.....

I have been watching a chap on youtube who bought the stock at $4 earlier in the year for honourable reasons, he thought they were undervalued and the management would turn the ship around. He is now living through the most intense week of his life poor sod ! He didn't post yesterday, he may have had to visit the doctors for some calming medicine Hopefully he will make a good profit and get his life back, he has put money into shares ethically and deserves a win.

Edited by Clive Milk on Thursday 28th January 10:26