Redditors vs the hedge funds

[Idaho]

People speculating on shit started thousands of years before capitalism.

Hmm... Not so sure about that. The creation of these kinds of investment and money shenanigans are the innovations that marked the transition from the feudal system to the modern age. Short selling was initially illegal in the early stock market of Amsterdam.

 

[The Pale King]

Hmm... Not so sure about that. The creation of these kinds of investment and money shenanigans are the innovations that marked the transition from the feudal system to the modern age. Short selling was initially illegal in the early stock market of Amsterdam.

It's a really interesting question - that's an interesting detail about Amsterdam. If it had to be made illegal suppose it must have been a well-established practice, maybe well known from the Italian merchant cities. I guess it's arguable the futures market emerged at the same time as the trade caravan (people speculating, even informally, on the trip's success and gambling with the anticipated goods that will return?). I think ancient Sumeria possibly had a futures market (in the sense of a wide scale insurance system with standardised records etc, people providing collateral for trade expeditions etc) but I am maybe using the term futures market wrong here. I'm thinking there might be a strong relation to the slave trade here as well in terms of innovative accounting/speculation/derivative markets as well maybe.

 

[ffsear]

Short selling is just another mechanism of speculation. The side of speculation that tries to capitalize on catastrophe.

 

[not-bono-ever]

Naked short selling is not cricket or sensible

 

[two sheds]

Yes whatever the benefits to the economy, they're just trying to make a fast profit from other peoples' misfortune. There are rarely real benefits to things like that.

 

[cantsin]

Life is not a movie. There are no good guys. I just like seeing hedge fund scum being inconvenienced.

and boss of Nasdaq almost looking embarrassed as he quietly suggests.... some re- regulation is needed

 

[magneze]

Regulate social media though, not finance.

 

[Idaho]

It's a really interesting question - that's an interesting detail about Amsterdam. If it had to be made illegal suppose it must have been a well-established practice, maybe well known from the Italian merchant cities. I guess it's arguable the futures market emerged at the same time as the trade caravan (people speculating, even informally, on the trip's success and gambling with the anticipated goods that will return?). I think ancient Sumeria possibly had a futures market (in the sense of a wide scale insurance system with standardised records etc, people providing collateral for trade expeditions etc) but I am maybe using the term futures market wrong here. I'm thinking there might be a strong relation to the slave trade here as well in terms of innovative accounting/speculation/derivative markets as well maybe.

I think you are right that futures are intimately linked to insurance.

 

[two sheds]

I think you are right that futures are intimately linked to insurance.

but with potentially hugely inflated profit margins?

 

[Idaho]

but with potentially hugely inflated profit margins?

I meant more that futures markets are related to risk offsetting, like insurance. But where you have a market for people selling their risk to minimise loss, you must have people buying risk to maximise profit.

 

[ska invita]

massive tiwtter thead here with some interesting posts in amongst it all

 

[teqniq]

 

[ska invita]

reading suggestions that the Reddit investors can be prosecuted as the paper trail for market manipulation is so easily googleable
you're meant to hide that bit basically

though others saying nothing can be done about as it somehow doesn’t fall under the precise definition of fraud

 

[Wolveryeti]

Are there any examples of short selling killing off a verifiable healthy business? Quite often it is a good thing - killing off fraudulent operations like Wirecard before they suck in too much institutional capital (I.e. people's pensions).

 

[ska invita]

it makes my head spin:
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I find this comment below interesting and backs up what Yanis Varoufakis was saying last summer that we are in a new post-capitalist era where by "Financial capitalism has decoupled from the capitalist economy, skyrocketing out of Earth's orbit"

Something remarkable just happened this August: How the pandemic has sped up the passage to postcapitalism - Yanis Varoufakis

In the post-2008 world, speculators don’t actually give a damn about the economy. COVID-19 found capitalism in this zombified state.

diem25.org

The mention of Trump is interesting as theres a definite parallel with the post-Truth thing that is going on.

Not sure what it all means other than the creaking and breaking of old institutions, at least in part because of the power of the internet

ETA: In fact Yanis has proposed this kind of left-gaming of the financial markets before

 

[platinumsage]

Post-capitalist my arse. This sort of stuff has always happened regularly with stock markets.

 

[ska invita]

Post-capitalist my arse. This sort of stuff has always happened regularly with stock markets.

he explicitly says " for the first time in history " in the piece (have you read it?). Id expect some reputational stake to that claim - he is a professional economist after all

but maybe you're right? ive no idea

 

[NoXion]

I think calling the current period "post-capitalist" is seriously over-selling it. But it is obvious that late capitalism is a creaky old dinosaur that develops more cracks with each passing decade.

 

[platinumsage]

"late capitalism" is another phrase that's popped up on the left recently that appears to have no academic basis, it's just something that sounds good.

A brief look at this history of money and markets shows this is just capitalism-as-usual.

 

[Flavour]

I think it's all very funny. Many of the reddit investors are far from being poor schmucks throwing their stimulus checks at the market; many of them are already very rich indeed but operating in this hive mind of wallstreetbets which essentially just a talking shop for so-called retail investors, and they're actively fighting against the established investment banks.

 

[platinumsage]

he explicitly says " for the first time in history " in the piece (have you read it?). Id expect some reputational stake to that claim - he is a professional economist after all

but maybe you're right? ive no idea

Yes he says "In the post-2008 world, speculators — for the first time in history — don’t actually give a damn about the economy."

When did they ever?

"Professional economist"

 

[NoXion]

"late capitalism" is another phrase that's popped up on the left recently that appears to have no academic basis, it's just something that sounds good.

Do all political terms have to be approved by middle-class professionals who went to uni before you'll take them seriously?

A brief look at this history of money and markets shows this is just capitalism-as-usual.

Look at the wider context. Business as usual my arse.

 

[platinumsage]

Do all political terms have to be approved by middle-class professionals who went to uni before you'll take them seriously?

They need to have some reasoned basis, otherwise it's just throwing words around. I may as well say this speculation is indicative of the pre-global-communism decade.

Look at the wider context. Business as usual my arse.

It's always different this time, except it never is.

 

[salem]

I think it's all very funny. Many of the reddit investors are far from being poor schmucks throwing their stimulus checks at the market; many of them are already very rich indeed but operating in this hive mind of wallstreetbets which essentially just a talking shop for so-called retail investors, and they're actively fighting against the established investment banks.

Yeah I came here to post this, I have a bad feeling about this and I have a fear a lot of regular people will lose a lot of money they can't afford when this goes pop. I've followed WSB for a while and it's a bit like the_donald in it's early days where it's hard to distinguish the line between the joke and reality and it feels like the joke is becoming reality.

A lot of the jokes are about making big trades on margin and I could see this turning and people getting wiped out.

 

[redsquirrel]

he explicitly says " for the first time in history " in the piece (have you read it?). Id expect some reputational stake to that claim - he is a professional economist after all

Exactly why what he says should be viewed with suspicion. This new astrology is the problem! Before Pluto was discovered everything was ok.

 

[AmateurAgitator]

 

[platinumsage]

NoXion - On the "late capitalism" meme:

“Late capitalism” often seems more like “the latest in capitalism...”

 

[two sheds]

GameStop's three largest shareholders earn over $2bn amid stock surge

Shares rise as video game retailer is at the center of a frenzied duel between Wall Street and small investors

www.theguardian.com

The three largest shareholders in GameStop, the video game retailer at the center of a frenzied dual between Wall Street and small investors, have made more than $2bn from the company’s astronomic recent share rise.

...

Other winners include Donald Foss, the 76-year-old founder and former CEO of Credit Acceptance Corp, a subprime auto lender. Foss bought 5% of GameStop early last year for around $12m. His stake is now worth more than $500m.

GameStop chief executive George Sherman has seen his 3.4% stake jump to a value of about $350m.

...

But some in Wall Street are also making huge gains. BlackRock, the world’s largest asset manager, owned 9.2m shares in GameStop at the end of December, according to a regulatory filing. If it still holds all those shares, they were worth more than $3bn on Wednesday.

It's really going to plummet again when people decide they want to cash their winnings isn't it. Feels a bit like bitcoin.

 

[Brainaddict]

Yeah, it's clearly a silly speculative bubble but quite funny watching redditors force hedge funds to borrow billions to stay afloat.

 

[ska invita]

Yes he says "In the post-2008 world, speculators — for the first time in history — don’t actually give a damn about the economy."

When did they ever?

you stopped the quote there devoiding it of meaning - "give a damn" in context means, for example, for reasons of self-interest caring about what a company is actually worth and acting accordingly. the point made here is that objective value is no longer particularly relevant to financial capitalists, that "financial capitalism finally broke with the world of real people, including capitalists antiquated enough to try to profit from producing goods and services."
he thinks this is new, you're saying its always been like this

"Professional economist"

he has a long career as an economic academic and held office as a Minister of Finance - not sure what else to call him