Financial topics

[John]

** 28-Jan-2021 World View: SEC Pump 'n' Dump

The SEC is opening a market manipulation case. The target would
not be Gamestop or Reddit. The targets would be the people on
Reddit who have been talking up Gamestop -- i.e., a pump and
dump scheme.

[Cool Breeze]

Haha, wall street and DC are never the problem

it's always these "Domestic insurgents" lol

[aeden]

https://www.zerohedge.com/political/uk- ... ournalists

[aeden]

Global Digital Totalitarianism solution, you've been warned.

δοκιμάζετε τὰ πνεύματα

https://www.zerohedge.com/political/uk- ... ournalists

viewtopic.php?p=16562#p16562

[aeden]

Haha, wall street and DC are never the problem

it's always these "Domestic insurgents" lol

“Do not blame Caesar, blame the people of Rome who have rejoiced in their loss of freedom,
who hail him when he speaks in the forum of more security, more living fatly at the expense of the industrious: Cicero.”

To be ignorant of what occurred before you were born is to remain always a child.

[Cool Breeze]

Even a child knows that accountability doesn't stop with age.

[ihatecnbc2000]

** 28-Jan-2021 World View: Reddit Pump 'n' Dump

I spent a little time on Reddit today to see what's going on.

I'm not familiar with Reddit, but the first thread I stumbled on was a
joke thread:

https://www.reddit.com/r/funny/

I spent 10-15 very enjoyable minutes reading this thread. If you need
a break, I recommend it.

Then I finally figured out where the stock market thread is:

https://www.reddit.com/r/wallstreetbets/

Reading through this thread was definitely not enjoyable. The
following is a fairly typical post:

> "I will be acquiring more shares today. I have 17.7k
> liquid money in my TD. Bought 15 shares @327. Waiting for
> another dip to yolo 12.7k into the rest. I have 18 shares holding
> on RH with average cost of $112. 10000EOD Boys. Fuck the shorts,
> fuck the establishment. Melvin and friends can such my fat
> diamond encrusted cock."

There is a lot of this hostility by children like this towards their
parents' generation on this thread. However, I believe these children
are actually criminals.

There are a lot of posts encouraging people to buy, buy, buy. Some
commentators say that it looks like a "pump and dump" scheme, and I
would have to agree with that. The way that normally works is that
the criminals buy up lots of shares of worthless stock for almost
nothing, then send out thousands of e-mail messages saying that this
stock will be the next big winner, and that you should buy while you
have the chance. That's the "pump" phase. Once the stock is at a
plateau high, they enter the "dump" phase and sell all their worthless
stock at the inflated price. The criminals make a great deal of money
at the expense of the suckers who acted on the e-mail messages, and
the suckers lose all their savings.

So that looks like what going on at Reddit. There seem to be a few
people posting similar messages encouraging people to buy, not only to
make a lot of money, but also to screw the establishment. I assume
that these messages are being posted by a small group of criminals
with multiple Reddit accounts, pumping up the price of the stock.
They purchased a lot of Gamestop stock when it was at a low, and at
some point they'll dump everything, and cause the price to crash to
its former low level.

A pump and dump scheme normally does not affect the market as a whole,
but this one seems to be a pump and dump scheme on a grand scale.
It's even possible that the criminal activity extends beyond simply
waiting to dump stock. The criminals may be targeting the hedge funds
that shorted the stock, in order to gain further results, or perhaps
even force some hedge fund to close. I'm not sure how this would
work, but there's certainly a suspicion that something more is going
on.

After you finish reading this, go back to the joke thread. It's much
more enjoyable.

Your thoughts on the reddit posters are an interesting contrast to this guy
https://t.co/39jxvGhdyY

Seems like the group was smart enough to create their own synthetic hedge fund and create a gamma short squeeze in effect beating the hedge funds at their own game.

[Higgenbotham]

Bot pecking results from yesterday.

[Higgenbotham]

** 28-Jan-2021 World View: SEC Pump 'n' Dump

The SEC is opening a market manipulation case. The target would
not be Gamestop or Reddit. The targets would be the people on
Reddit who have been talking up Gamestop -- i.e., a pump and
dump scheme.

Gamestop is a lot more complicated than what the SEC would like to call it. I believe the SEC is just trying to do something expedient to plug the dike. I think forgotten in all this was perhaps how it all started, at least my understanding of the history of what transpired with Gamestop. To begin with, Michel Burry was asked to weigh in a few quarters ago about current market issues, probably because it was felt the market was a bubble and his opinion on such matters is thought to be of interest, given his history of identifying and profiting on previous bubbles as they burst. As an aside, along those lines, he has recently talked about shorting Tesla, which would be an early indication that he thinks the bubble may break sooner rather than later. Anyway, back at that time he talked about the index funds and their contribution to the bubble, he talked about value stocks, and maybe he talked about Gamestop or maybe it was revealed through required SEC reporting that he was long a lot of Gamestop. My guess is that he didn't comment specifically on Gamestop and I don't have time to review that. But somehow or another everyone who is in this game knew he was long a lot of Gamestop (and I mean a lot) from around $3 and that fit in with what he was saying in the sense that Gamestop was at that point understood to be a value stock. The stock started to rise in fits and starts and at that point, I stopped being interested. I did buy and sell some Gamestop. I can imagine from there at some point Gamestop started being considered a momentum stock, something like Tesla. I can't imagine how people that are pumping Tesla, which includes Wall Street, are any different from the crowd that are pumping Gamestop. How is that any different? I can't come up with anything except for the fact that Wall Street has been pumping Tesla too, but they missed out on Gamestop, and Tesla was a longer, slower, but equally outrageous pump. Both will be poster children for discussing the bubble long after it breaks.

[Higgenbotham]

In the Fed press conference of a couple days ago, the first question to Powell was about Gamestop, and he declined to answer.

I'm not super interested in Gamestop, except for one thing. I want to see some extremely close scrutiny of whether Powell did anything in the slightest to aid the hedge funds that got into trouble with Gamestop.