GameStop = Bidenism
By Mitch Berg
The GameStop tempest-in-a-teapot in one graph:
Why it matters: several on-line stock brokers suddenly and simultaneously changed the rules for little guys. You can use our on-line discount stock brokerage account to sell your valuable stock to the big boys (thus bringing the price down), but you can’t buy more of it (which would have continued to push the price up). The rules which formerly were uniform have now become arbitrary.
Remind you of anything? Several states suddenly and simultaneously declaring house arrest to promote mailed voting? Several states suddenly and simultaneously kicking out election observers so they could count mailed ballots in secret? Social media sites suddenly and simultaneously kicking conservatives who questioned the counting of mailed ballots, off their platforms? And now several brokerages suddenly and simultaneously shutting down purchases of select stocks by select individuals, just when they need to buy them the most.
The big-shots are once again flexing their muscles against the ordinary working class peasants. It’s the hallmark of the new administration – rules for thee but not for me. Bidenism. It’s the way things are done, nowadays.
Oh, naturally, the liars and cheaters have excuses. We had to stop trading for your own good, the market was too volatile, prices were unsustainable, there was misinformation being circulated. Nobody believes any of that (a better lie would have been “we had to stop them, they were price-gouging”). Instead, everybody knows buying was stopped to protect the big-shot investment funds which had made disastrously bad investment decisions. The chart proves the lie.
Congress will harrumph, the White House will deny making phone calls to pressure people, the stock market board will meet to discuss rule changes for big-shots versus peasants, a bunch of investors will lose their shirts and lawyers will make a killing fighting over the scraps. Yawn, the same as always, nothing much will change.Except everything has changed. Another naked emperor was seen, mocked and humiliated and in response, the peasants were punished for revealing the truth. The peasants won’t forget.
Joe Doakes
February 8th, 2021 at 11:02 am
Joe, I’m not a market regulatory reporter. I have no ability to meet your demand that it be proven a clearinghouse has made a capital requirement to a retail broker in the past. It’s my good guess that yes, it’s happened. I doubt there’s a governmental list to be queried that shows all the times it happened. Life is not the Guinness book of world records. It’s a decent question for a regulatory reporter to go back and pursue. You posing this question and not getting a concrete answer from me doesn’t not make the GME/Robinhood situation exactly what it appears to be as explained by contemporary reporting.
February 8th, 2021 at 11:06 am
As Musk said, why is it that you cannot sell a house you do not own? Or a car you do not own? But you can sell stock you do not own? Fuck the hedge funds. Fuck the analysts. Fuck Big Banks and Big Wall Street. It is all rigged for the benefit of the few who play by the rules of their own creation. And g*d forbid the little guy decides to use the same rules! Rules for thee and rules for me. JD is absolutely correct – pure Bidenism. I can’t wait to see what will happen to RH in court – not that I am holding my breath, Yellowen will bail her buddies out, no doubt.
February 8th, 2021 at 11:09 am
^ No one’s said it’s “common practice” except you Joe, who is inaccurately using “common practice” as a true / false test.
Such that clearinghouses haven’t in the past necessarily had to increase capital requirements to brokers, this is explained by understanding the volume r/wallstreetbets stimulated with Robinhood was higher than normal by orders of magnitude. Under the circumstances the clearinghouses needed to demand higher capital thresholds.
February 8th, 2021 at 11:12 am
“Hey, howya doon? Yeah, this is Rocko callin from your clearinghouse. Say, that’s a nice little brokerage ya got there. Be a shame if anything was ta happen to it on account of youse was letting a bunch of yahoos buy up a certain stock, ifyaknowwhadimean. Of course, if they was to stop buying it . . . .”
February 8th, 2021 at 11:14 am
Joe, is it your understanding GME should still be going up, but for the trade suspensions at Robinhood?
Again, I blame Mitch for letting you be a post contributor.
February 8th, 2021 at 11:15 am
“There is a trade ordering critique out there that I guess does make for a reasonable discussion on conflicts of interest, but such that it exists it wasn’t used to unwind Melvin’s bad position.”
LMFAO!!!
Let me lay this out, nice and flat so even a midwit such as yourself can understand it.
Melvin Capital is getting creamed. The CEO sends an SOS to his mentor running Citadel, who not only immediately bails Plotkin out financially, he puts pressure on a key player in the squeeze, who also happens to be a subordinate business partner, to halt trades on the stocks Melvin is squeezing.
Boom!
Squeeze crushed.
It seems I, Dr. Pete Strunk (respect the title, asshole) got my assholes mixed up. It was Citadel’s CEO, Steve Cohen, who trolled the Reddit kids after he bailed out his pal:
“Steve Cohen of Mets removes his Twitter after GameStop’s tweet”
“Another thing he put out:” Hey, stock jockey, bring it.”
https://newyorknewstimes.com/steve-cohen-of-mets-removes-his-twitter-after-gamestops-tweet/98703/
When a guy is surrounded by gaping assholes, it’s easy to confuse who is who. Nonetheless, I stand corrected.
Indeed, when you *are* an asshole, it’s hard to remember whose comments you’re responding to, isn’t it Fapliar?
February 8th, 2021 at 11:22 am
^ Citadel loaning Melvin money isn’t really to be understood as more malevolent or sneaky. It’s a loan for which interest is charged. Its business. If Melvin defaults, Citadel gets their assets. They know each other, Citadel has the capacity to make a judgment there with proper due diligence. It’s a nothing detail that does not speak to ‘conspiracy’.
February 8th, 2021 at 11:25 am
How high do you Shit in the Dark Wall Street experts think GME should have gone but for the Robinhood suspension? Was it supposed to have gone up forever?
February 8th, 2021 at 11:25 am
Stock trading WAS halted
This may have occurred, but I don’t know it. What I do know is that the *purchases* of GME (which would push the price higher) were, in fact, halted, while sales were allowed (to push down the price and give those with short positions a lower price to make the call). Note well. When a short position takes a margin call, it must *buy* that stock (and push the price higher). I am also not aware that the margin calls were suspended either so the hedge funds could both buy and sell at will.
February 8th, 2021 at 11:32 am
^ GME purchases were halted at Robinhood and maybe say TD. It was not everywhere. GME continued to trade on the market, with with some volatility breakpoints that do apply to all stocks, and were applied to upside and downside movements.
February 8th, 2021 at 11:33 am
Citadel loaning Melvin money isn’t really to be understood as more malevolent or sneaky.
“There was nothing odd about a Michigan SOS vehicle delivering 61 boxes of ballots to the counting room at 3:30am. The conspiracy theories have been debunked, so we’re not going to discuss it any further. Also, your account is now shut down.”
Wall Street scumbags or reprobate Democrats…who’s the bigger threat to the country?
It all depends on who’s getting plooked, I guess. Small investors or 1/2 the country.
February 8th, 2021 at 11:42 am
*purchases* of GME (which would push the price higher) were, in fact, halted
I stand corrected.
February 8th, 2021 at 11:43 am
John K., your 11:09 said: “No one’s said it’s “common practice” except you Joe, who is inaccurately using “common practice” as a true / false test.”
I’m engaging in a logical argument called “Affirming the Consequent.”
If there’s an intruder, my dog would bark.
My dog didn’t bark; therefore,
There is no intruder.
You probably remember this from “The Adventure of the Silver Blaze,” a Sherlock Holmes mystery.
I reason that if margin calls immediately followed by a broker stopping buying (but not selling) during a short squeeze were a common practice and a normal method of taming market volitility, all those financial articles you linked would have said so. The reporters would have pointed out the dozens of times this exact thing occurred, which is why it’s no big deal and the small-timers complaining about an unprecedented intervention in the market for the benefit of rich, well-connected players, is simply wrong.
That dog didn’t bark. No reporter mentioned it. You can’t find a link to a single instance of it. Even Wikipedia’s entry “Short Squeeze” doesn’t mention any prior instance (although it does mention a few historical short squeezes which make this one look petty). That’s because there is no evidence this intervention into the market was normal or ordinary. On the contrary, every indication is this intervention was abnormal and extraordinary and it occurred for the benefit of rich, well-connected players such as the ones who paid Biden Administration official Janet Yellen $7 million.
My work here is done.
February 8th, 2021 at 11:44 am
Heh. The number and velocity of comments to this post (and each other) is similar to the price of GME during those fun-filled days in late January.
February 8th, 2021 at 11:45 am
I stand corrected
I was correcting you to make your argument stronger 😉
February 8th, 2021 at 11:46 am
^ there was no market wide suspension of GME trading except for some volatility circuit breakers. Circuit breakers are not that rare.
February 8th, 2021 at 11:58 am
I would also like to add that this stock market kerfuffle brought together Rep AOC and Sen. Cruz in an unusual agreement. At least until AOC sensing the dangers of having a conservative Republican, much less a Republican, agree with you, managed to discover that Sen Cruz’s agreement had murderous intent (literally).
February 8th, 2021 at 12:00 pm
When a short position takes a margin call, it must *buy* that stock (and push the price higher). I am also not aware that the margin calls were suspended either so the hedge funds could both buy and sell at will.
When a trader gets a margin call on its short, it needs to put up more collateral or close its position (and it needs the $ to do so of course). The margin calls don’t get suspended for anybody. Even Citadel is subject to a bigger fish that’s going to enforce a margin requirement.
February 8th, 2021 at 12:12 pm
The hedge funds got it wrong and should have known better, so no sympathy for them. The early long investors were smart when they spotted the situation, so good luck to them. What feels wrong to me was that on the Reddit forum some of the early investors stirred up passions Trump style, and led a lot of young investors into putting their savings and even rent money into the shares when the prices had already escalated. They were even shamed if they suggested selling. “Paper hands” “Traitors” etc. Worse still, some high profile people like Elon Musk stoked the situation. I’m sure a lot of the investors who were swept up by the band wagon will have learned some painful lessons, hopefully one will be that they were manipulated.
There’s no wrong or right here. There’s simply a position and risk management. Melvin had a position but no risk management. There’s nothing wrong with being short GameStop and losing money but when you lose 53% of your fund, that’s simply hubris. They broke one of the primary tenets of trading — never get married to a view. If you do, prepare for an ugly divorce.
February 8th, 2021 at 12:24 pm
Cohen is MAGA, Joe. He’s a Trump supporter who’s donated a lot of money. Quite a bit many of these hedge funders are, and he is. So your undocumented assertion to Biden is for shit.
So give us another asserted excuse why the GME con is a Biden or (D) phenomena.
February 8th, 2021 at 12:29 pm
Mitch, I think with me, I have a rooting interest in you such that I admired your temperament and sensibilities over the years on the blog. And… I’m disappointed…given the higher bar of the past. You really do have to explain yourself with this Doakes. You can not possibly be intellectually aligned with a great many of the things he writes as a matter of analysis and quality.
February 8th, 2021 at 12:30 pm
I mean… its filler, right….
February 8th, 2021 at 12:59 pm
“It’s a nothing detail that does not speak to ‘conspiracy’.”
(CNN) — What’s a nothing burger? Imagine biting into what you think is a thick, juicy, hot half-pound of wagyu on a kaiser only to come away with a mouthful of…nothing.
It’s the hype without the payoff. It’s a promise that never delivers. It’s a bag of hot air ensconced in a deceptively delicious coating.
And, for some reason, it’s the hottest new political insult.
Lawmakers and influencers of every stripe have been lobbing the slang, which has been firmly rooted in internet culture for years, to discount or dismiss the warring conspiracies, investigations and controversies swirling around in the giant tornado that is our current political discourse
Of course, this is CNN when it (and ABC, CBS, MSNBC, WaPo WSJ etc.) was pushing the Russian collusion hoax and Trump’s people were calling it a nothingburger. Which, as it turns out, it was.
That was then, this is now.
The reprobates spend 2 years and millions of dollars trying to prove collusion between Trump and Russian operatives. All they came up with was collusion between the Clintons, the Obama FBI and DOJ.
So let’s dig into this nothingburger.
February 8th, 2021 at 1:05 pm
Swift I hesitate to engage you seriously but you’re in your 50’s and have a generation of business experience under your belt. How is it not exactly as I expressed it?
Citadel is big, they have a lot of money. They finance Wall Street shit. Melvin is somewhat smaller, started by a guy in their orbit. They’re lending the Melvin guy money, at interest, with collateral conditions.
JFC man, it is what it is.
February 8th, 2021 at 1:07 pm
It’s actually pretty amusing to watch leftist midwits defend hedge fund billionaires…”It’s just business”. LMFAO
Whatever the media is peddling, these morons can be counted on to slop it up and regurgitate it.
Now that America-hating degenerates are in charge, and Pedo Joe signing anything they put under his nose, I fully expect to start reading about how dictatorships are actually good for people.
“At least the light rail is running on time”
February 8th, 2021 at 1:12 pm
It is in fact just business. You not being worldly to it in South Carolina doesn’t make it not fairly mundane business within its ecosystem.
February 8th, 2021 at 1:47 pm
JK wrote: “You [MBerg] can not possibly be intellectually aligned with a great many of the things he writes as a matter of analysis and quality.”
When you or I question whether MBerg should condemn/condone the crazy conspiracy theorists in his ranks. I can imagine it’s tough because condemning them would upset the largest group creating SiTD clicks — you have a problem beyond one crazy conspiracy theorist in your ranks.
February 8th, 2021 at 2:02 pm
South Carolina? I don’t know where you’re getting your intel, Fapliar, but I’m up looking for signs of Reek on the birkie. Your excuses are laughable anywhere.
February 8th, 2021 at 3:19 pm
When Liberals argue, they follow a pattern. It’s remarkably consistent.
First, they say: “You don’t agree with me but that’s because you are ignorant. I graciously condescend to educate you so that you can begin to agree with me.”
Second: “I explained it but you still don’t agree. Plainly, you are too stupid to understand the explanation.”
Third: “Okay, maybe you’re not ignorant and maybe you’re not stupid. But you still won’t agree with me so you can’t really mean it. You’re playing some game, like the Devil’s Advocate. You must be, as no educated and intelligent person could possibly come to a conclusion which differs from mine.”
Fourth: “I’m worried for you. You are an educated, intelligent person who sincerely believes something which is simply wrong. Can’t you see that nobody else agrees with you and therefore you must be wrong? I’m afraid you are delusional, mentally ill. I think you need professional help.”
Fifth: “I hate you. An educated, intelligent, person of clear mind who holds a opinion which differs from mine can only be motivated by Evil. You must be destroyed so that your heresy cannot lead innocent minds into error and sin and damnation. I demand you be de-platformed.”
At that point, I generally walk away as there’s no point in further discussion. My conversation with John K ended with his 12:29 post.
I’m done here.
February 8th, 2021 at 3:32 pm
I’m not terribly liberal Joe. As an adult I voted for Clinton, Dole, Bush, Bush, McCain, Romney. Respect for guns and libertarian economics had a great deal to do with that.
Yeah Joe, I’m not actually gaslighting or playing rhetorical games. You’re supposed to be a JD. I really don’t expect that someone who’s completed a JD is prevented from seeing reality by obtuseness and confirmation bias like you are. And is lacking in knowledge frameworks the way you are as an adult that you’d think had worked white collar jobs in complex topics. So my astonishment is real. I really do think you’re dumb, and that you’d do well to address your blind spots.
I’d be quite contradicted if Mitch joined the conversation and claimed you were smart in some way, but I’d bet against him doing that. Because its absurd on its face.
February 8th, 2021 at 4:37 pm
JD, you called it. But what you did not call is the libturd ability to address all five stages in one post!
February 8th, 2021 at 4:51 pm
Emery Incognito on February 8, 2021 at 1:47 pm said:
JK wrote: “You [MBerg] can not possibly be intellectually aligned with a great many of the things he writes as a matter of analysis and quality.”
When you or I question whether MBerg should condemn/condone the crazy conspiracy theorists in his ranks.
. . .
Sez Emery, the guy who pushed, again and again the utterly disproven conspiracy theory that Trump colluded with Russia to steal the 2016 election.
February 9th, 2021 at 8:54 am
why is it that you cannot sell a house you do not own?
That’s a faulty analogy for short-selling.
A better one might be “why can’t one do things with proceeds from an interest-bearing loan?”
Clearly, one can. We do it all the time. We buy, live in and sell houses that are “owned” via mortgages. We buy and sell cars on which we have loans. In both cases, the loans get paid off first, or there are consequences.
Short selling is trading an equity that is borrowed, subject (as I understand it) to the terms of what is basically a loan agreement, including interest payments. I borrow 100 shares of stock from you that are worth $10 a pop for one year at 6% interest? One way or another, you get ten shares and $60 cash out of the deal.
As long as you get your shares and your interest, everyone’s happy – right?
As to your take on hedge funds ? Let’s separate the idea from the people. Hedge Fund management has a “wall street bro” vibe about it that inspires hate – and I get that.
The funds themselves? Like people, they vary – but most of them serve some useful purpose in the free market that created them (or at least created the concept).
February 9th, 2021 at 9:42 am
Perhaps the way to look at these large, complex financial transactions is that they have both a “rule” content and a “social” content.
Most rules are written so their is some leeway, especially given to the party with exposure to greater loss. Banks can call in loans, but many times that is a matter of discretion. The lender may decide that it is to his advantage to NOT call in a loan for many reasons.
If there were only written, known rules, computers could do every job in finance.
February 9th, 2021 at 9:49 am
A share of stock has three prices, bid, ask, and last. Bid is what someone is willing to pay for it. Ask is what someone is willing to sell it for. And last is the last price that it traded at. If a buyer fails to deliver $10 for a $10 share then the middleman can sell the share to another buyer for $10. The “spread” in this artificial case is zero. Imagine though if the bid is $7 and the ask is $14. If the buyer fails to deliver $14 to pay for the stock the middleman is going to sell to another buyer a $7 and take a $7 loss. A NASDAQ market maker is an entity that agrees to buy a stock at one price and sell it at another—to make a market. To protect themselves in a volatile market they will raise the ask and lower the bid. They increase the spread. This allows another market maker (if there is one) to step in with a higher bid and lower ask. The market makers are experienced. If Citadel increased its spread so probably did the others. They do this all of the time but unless you have NASDAQ Level 2 where you can see all of the market makers’ bids and asks you will not be aware of this.
February 9th, 2021 at 10:28 am
^ I’ll nitpick a little for clarity on various things… I don’t understand Citadel as a market maker. But it’s possible… they might be in that business here and there.
Another useful thing to understand is Robinhood might have stopped buys from their firm on GME at times, but the market makers were still out there trading the stock. Joe probably doesn’t understand this, but his conspiracy theory depends a bit on the cessation of buys from Robinhood alone tanking the stock so that the shorts could stabilize their positions. We don’t know that’s the case at all, that the r/wallstreetbets crowd overwhelmingly execute with Robinhood.
February 9th, 2021 at 10:35 am
That’s a faulty analogy for short-selling.
No, it is your logic that is faulty. You cannot go and borrow deed on a house from a bank to sell it to another person, and then wait until the house goes down in price so you can buy it back. Go ahead, try it! Your reasoning for a faulty analogy hinges on the premise that the same machination occurs in the housing and car lending markets. Can you show instances where this had occurred? Just because it theoretically can be done, does NOT invalidate my logic but puts yours in cross-hairs.
And it is not a “bro” feel that is so off-putting. It is the blatant way analysts, banks, brokers and hedge fund (some, not all) manipulate the market to enrich their own coffers at expense of others. Next thing you are going to tell us there is no conflict of interest for somebody to analyze stock they hold. Or that short ladders are perfectly legal. Well, you would be correct there because the rules and laws are written by the people who do this – no conflict of interest, no sirreebob. And now we have come full cirlce to JD’s Bidenism.
February 9th, 2021 at 10:43 am
Jpa, here’s the deal…. stocks can be shorted whether or not Elon Musk or you think there’s a metaphor containing divine truth that would obviate that fact. It just is, so deal with as a matter of mental elasticity. Anyway, the reason: stocks are quite a bit more fungible than houses, and the market figured out a securitization arrangement where they can be borrowed and sold quite a few generations ago.
You don’t want shorting? I’m sure AOC and Elizabeth Warren will welcome you into their camp.
February 9th, 2021 at 10:46 am
^ Joe did make an admission that his tie to “Bidenism” was weak or non-existent. So we are not full circle on that, akshully.
February 9th, 2021 at 11:19 am
Well, if you think about it widening the bid offer spread to $0-$300 would be the equivalent of stopping trading. A NASDAQ market maker is different from a stock exchange specialist who must maintain an orderly market. If GME was listed on the NYSE in 30 years ago and this happened the specialist would have declared an order imbalance and the Quotron would have shown something like GME 200 210 100000×100. 100000 shares bid at 200 100 shares offered at 210. Trading would be halted until all of the open bids and offers were matched. The problem now is there are too many venues where the stock trades. One thing the Robin Hood customers might do is comparison shop with other brokers even if it means paying a commission. Also, thinking back to an earlier time, day trading firms like Schonfeld Securities would have cut you off for bidding up what should be a thinly traded stock. If it is thinly traded what do you do if you have to unload it? To make a plumbing analogy, the GME pipe is too narrow to handle the volume it was asked to. That is a function of the GME float not the market makers.
February 9th, 2021 at 11:39 am
I admitted I can’t trace his 10% to The Big Guy, yet.
The original margin call demand was $3 billion. They could only raise $2 billion. They stopped trading and the margin call dropped to $1.4 billion. That leaves $600,000 unaccounted for. Maybe The Big Guy got his cut from some of that? Don’t know and therefore we must have a thorough investigation.
“Even though there is no evidence, the seriousness of the charge is what matters. The seriousness of the charge mandates that we investigate this.”
February 9th, 2021 at 12:01 pm
I’m kidding about the investigation, obviously. That’s a quote from long ago used to illustrate the hypocrisy of double standards.
As for trading, Robinhood, TD Ameritrade and Charles Schwab all imposed restrictions on trading certain stocks. The fact other brokerages allowed trading is a logical fallacy known as “red herring.” The discount brokerages were the ones being used by the amateur day traders engaged in the short squeeze. It’s like saying “True, Wells Fargo froze all of John K.’s accounts, but TCF was still open.” Yes, but John K. doesn’t bank at TCF so what TCF does is irrelevent.
And Gamestop wasn’t just ‘shorted,’ it was over-shorted. There were 71 million shares sold short but only 69 million shares available. It was the short-sellers’ extreme position that made the short squeeze not only possible, but insanely profitable for the people who were allowed to buy the stock which everyone knew the short-sellers were going to be forced to buy.
There’s a concept in investment law of a ‘sophisticated investor’ who is charged with having greater knowledge and therefore greater responsibility and allowed to take greater risk. Certain investment vehicles are not available to amateur investors like me, those investment vehicles are reserved for sophisticated investors, smart people, experienced people, big shots at hedge funds, the people who were getting their sophisticated butts kicked by amateurs like me . . . until somebody stepped in to save them from their mistakes, which has never happened before the current administration.
February 9th, 2021 at 12:03 pm
But lemme tellya, we’re all relieved that a great legal mind such as yours is working on it, Joe.
By the way, the money requirement made from the clearinghouses to the brokers is a ‘capital requirement’, not a ‘margin call’. Different things there.
February 9th, 2021 at 12:05 pm
‘Everyone’ didn’t know shit, Joe. Most of what happened was ‘ride the lightning’.
February 9th, 2021 at 12:05 pm
Joe I take it as truth that you got a JD. Michelle MacDonald got one FCS. Are you working as an attorney?
February 9th, 2021 at 12:35 pm
There’s a concept in investment law of a ‘sophisticated investor’ who is charged with having greater knowledge and therefore greater responsibility and allowed to take greater risk. Certain investment vehicles are not available to amateur investors like me, those investment vehicles are reserved for sophisticated investors, smart people, experienced people, big shots at hedge funds, the people who were getting their sophisticated butts kicked by amateurs like me . . . until somebody stepped in to save them from their mistakes, which has never happened before the current administration.
I know your denseness precludes you from getting this Joe, but the shorts who had to close out their GME positions at 50, and 100, and 150, and 250, and 300, and 350, and 400, weren’t ‘saved’ by Robinhood not letting some portion of the Redditors buy in long at those prices. The shorts all had to put up money to do the buyback they needed to close their gap. That’s a loss. And Cohen/Citadel backstopping Melvin/Plotkin to unwind a position at an astounding loss isn’t ‘saving’ him in any meaningful way.
Your whole crap thesis depends a lot on trades by various entities happening right when Robinhood had their halts, and this is probably not the reality of the timeline. Why don’t ya prove it instead of assuming.
BTW, again, how high do you think GME should have gotten rather than the price it got to had Robinhood not stopped? You don’t think the shorts would have been out by then? I mean, you don’t get this at all, is the thing.
You’re link to Bidenism is pure ipso facto.
But again, its Mitch that’s to blame for posting your inane carp.
February 9th, 2021 at 12:41 pm
Ah, the No True Scotsman logical fallacy raises its head again. You’re on a roll today. My academic credentials do not determine whether there is an appearance of impropriety to the actions taken to save the short-sellers from their mistakes.
I’ve been thinking about you, John, and I’d like to offer some thoughts. Please don’t take personal offense at these. I may be entirely incorrect and way off base, but hear me out.
I speculate that like most Americans of a certain age, you have lived your entire life believing that certain institutions are trustworthy: your teachers at school, the news anchor on the television, the reporter writing for the paper. You see the same story in the Wall Street Journal, the New York Times, Forbes, and on CNN, all saying that what happened with GameStop was right and just and proper so you figure, well, they’re trustworthy sources, I believe them. Nothing wrong with that, everybody does it.
Let me suggest an alternate possibility, not like it’s The Truth handed down by angels from on high, but just as a possibility. Maybe a billion-dollar investment firm could afford to hire top-notch public relations consultants to take financial reporters to lunch and spin them a tale which makes the investment firm look like the poor innocent victim of those mean old amateurs who are probably Trump supporters living in fly-over states and don’t even have MBAs. I don’t know what appeal would work with big-city big-publication writers because I’m not a PR spinner. But if a really good flak sold a really good tale to a financial writer who was predisposed to believe it, working under an editor who knows where the advertising revenue came from, is it possible . . . even barely possible . . . that the information that you received from the institution you have trusted all your life might be . . . wrong?
That’s all I’m asking, just consider the possibility.
February 9th, 2021 at 12:44 pm
Who knew financial dialogue could steer comments into moderation..
Let me give it another attempt. To make a plumbing analogy, the GME pipe is too narrow to handle the volume it was asked to. That is a function of the GME float not the market makers.
The three billion dollar cash collateral demand on Robinhood on January 28th would imply an outstanding but not yet settled purchase of several million shares.
GME is not a three billion dollar company. Buyer’s remorse here is inevitable and the DTCC knows it so if reddit users or whomever have it in their collective heads that it is a three billion dollar company they should pony up the three billion so that DTCC is not stuck with it.
Enclosed link has some helpful insights.
https://fortune.com/2021/02/02/robinhood-gamestop-restricted-trading-meme-stocks-gme-amc-vlad-tenev-nscc/
February 9th, 2021 at 12:46 pm
I speculate that like most Americans of a certain age, you have lived your entire life believing that certain institutions are trustworthy: your teachers at school, the news anchor on the television, the reporter writing for the paper. You see the same story in the Wall Street Journal, the New York Times, Forbes, and on CNN, all saying that what happened with GameStop was right and just and proper so you figure, well, they’re trustworthy sources, I believe them. Nothing wrong with that, everybody does it.
Nope-ity nope nope.
Lots of distrust. Of Democrats. Try me. As a matter of sentiment, I am in line with the Shit in the Darkers here on COVID and global warming, and I’m certain a few other things.
I know you’re wrong about this because I size you up as an amateur to that ecosystem, and I’m not. I’m experienced in it, and know that things happen for reasons explainable and mundane.
February 9th, 2021 at 12:55 pm
There were 71 million shares sold short but only 69 million shares available.
Perfectly legal… But only for the chosen few. More proof of Bidenism. You nailed it, JD. Just like you did with the 5 stages of trollbot responses.