There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life.
This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.
Everything on WSB states this is a bad investment plan and is more to bankrupt Melvin because they tried to bankrupt Gamestop. Short sellers have been using the down turned economy to collapse struggling companies that hire everyday people.
What's funny is how the HN community tries to defend the firms they've whined about for years. Is what's going on irrational? Yup. But it pulls back the curtain of what the financial firms do to the economy and their own manipulation tactics.
Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge funds or any of that, but just got the impression from the news that hey this stock is going way up and that must mean it is a way to make a quick buck. And those are the people who are actually going to get screwed, not the hedge fund managers, who will be just fine.
And what about all the people who watch MSNBC and CNBC and Cramer, do they need to stop pushing stops as good or bad too? They tell lots of people "who don't care about hedge funds or any of that, but just got the impression from the news that hey this stock is going way up and that must mean it is a way to make a quick buck" too.
None of this could have happened if they weren't shorting GME at 143%+ of float. They were greedy, this is the consequence. In 2006-2008, they ALL were greedy and so the government had to bail them out. No lessons were learned. If the SEC wants to do something, remove these instruments that allow infinite leverage and collapses.
They were greedy, they over leveraged their positions, and when the market called them out on it exactly like it’s supposed to, they just turned the market off. Im almost surprised someone hasn’t been arrested for that move yet.
We let big players partake in risky things like shorting GME above 100% float because we don't care if they lose. It's the same reason we allow them to invest in companies like Theranos. They know the risks they were getting into and will still be fine without a extra 0 in their bank account. Regular followers of WSB are aware of the risks as well, so I'm fine with them attempting a short squeeze. The problem is that they're encouraging regular people to join their crusade against hedge funds who are most likely going to time the market incorrectly. What's worse is that most of the world, including politicians are cheering them on.
Except hedgefunds only trade money from accredited investors, i.e. people who can afford to lose a lot of money. They also typically aren't swayed by TikTok videos and short explainers of how shorts work designed to hype up GSE. The point is that Robinhood investors are being exploited.
I disagreed with the statement about WSB users knowing what they're doing. Upon closer reading I think our larger points are the same. All over the internet I'm seeing sleazy promotions for GameStop stock targeted at young people who are inexperienced with trading. Anyone left holding GameStop stock when this ends will lose a lot, i.e. most of WSB.
Then you haven't been paying attention to WSB. WSB knows full well they will lose everything. We call it Loss Porn and it gets us going. When you see 5,6,7 figures in losses you get desensitised to it. It's a casino, yes we sometimes make money, we call that the first time, you know, the first one is free.
Besides the jokes and the memes, Chamath went on CNBC and argued that WSB provided very good due diligence in some instances. Yes a lot of it is utter garbage, no doubt, but when there are specialists there able to call each other out, you get to see good analysis.
What a lot of you are missing is that this isn't happening within your little WSB playground anymore. It's just a regular stock frenzy now, it's not even really all that relevant anymore how it started.
Haven't been paying attention... It must not be in the news, right? This is more of a niche interest, not getting any attention. Hard to pay attention to. You really have to be focused on WSB subreddit to know what's going on, right? It's really a few key people understand it. Anyways, yeah, GameStop is a great company with a great stock and some evil hedgefund is going to lose billions for trying to manipulate the price!
And that is a straw-man, I never claimed any of what you are accusing. You have nothing to say, so you twist the words. Quite sad actually to see this in Hackernews of all places.
I claimed that if you have your information about WSB from anyone but yourself, you have most likely been duped in some way or another and that is evident by how you talked about WSB, full of ignorance.
> Anyways, yeah, GameStop is a great company with a great stock and some evil hedgefund is going to lose billions for trying to manipulate the price!
Nobody said GME is a great company. What are the odds the proletariat on reddit throwing money into the fire pit in an attempt to hurt the rich is attempting to con you, and what are the odds somebody who stands to lose billions and already lost is?
No one who has been in WSB for a while wants the publicity, believe me. No one who has been around views this as some noble moral crusade. But WSB went from <1M subs in 2019 to 2M by end of 2020, to 6M now. We didn’t magically orchestrate it, they flocked to WSB after every media outlet in the world mentioned it for a week+ straight since Gamestop happened. Its an open forum and we don’t decide who joins, or when, or what they post. When 4M new people show up in a sub of 2M in a week, its Theseus’ ship twice over at warp speed.
Yep, this is my point, not that it's necessarily WSB's fault that a bunch of regular people are jumping on a bandwagon and going to get screwed, just that it is happening and is bad. I think it is more the fault of mainstream news editors and Elon Musk than of WSB regulars.
You're mushing together two separate issues. Shorting GME at 100+ is not in itself a problem. (There's an argument that it dilutes the stock, makes it harder for the underlying company to turn around, because market sentiment is already against them, see investment reflexivity theory, etc.)
There's a problem with bailing out big companies again and again. While not bailing out small investors (directly).
Every stock trading app/site/service requires submitting tons of "risk declaration" forms. (Sure, all of it is next next finish. It's the EULA/TOS all again, but with money.) And that's the problem.
I haven’t watched Cramer regularly in a long time, but unless he changed, this isn’t what he does.
He has an entertainment component, but fundamentally encourages people to educate themselves and manage a portfolio of stocks who choose to do so.
The mob bullshit we’re seeing now is just the new normal - brigades of internet idiots, motivated by profit or ignorance to run around like a drunken monkey. It’s no different than the political drama we’ve seen fomented by irresponsible social media like Twitter, Facebook, Reddit, etc.
CNBC / Cramer type stuff is pretty bad too IMO, but way less mainstream than network news talking about how a single stock is a rocket ship and making all these regular joes (just like you!) oodles of cash.
Greed is really only a problem when your actions ultimately hurt someone else.
In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued.
So, yea, the fact that GME had 143% of its shares shorted is a function of greed. But, no, greed in this case was not a problem so long as GME's share price was fairly valued.
So it's WSB fault that the news outlets spun the narrative to confuse people?
Sorry, but hasn't the news spinning and generally misconstruing news stories to the benefit of their advertisers and financiers agendas been the issue the past few years?
What narrative? I've seen every possible article on the topic in the last two days. Every single narrative exists. Brilliant retail investors. David and Goliath. Idiotic YOLOing. Claims that Robinhood, etc are in cahoots to sabotage people. Claims that this isn't about the money and actually it is about screwing the rich. The squeeze is illegal/legal. The trading halts are illegal/legal.
There is clearly no coordinated agenda among news agencies here. It is a compelling story and a bunch of people wrote their hot takes on the topic.
What about my comment seems to say that it is WSB's fault? I didn't comment on whose fault it is and I don't care, I just think pretty much everyone is acting like the only two parties involved are WSB memers and hedge funds. And maybe that was true for awhile. But it isn't now, there are lots of unsophisticated people who have bought into the frenzy and in a few months all the stories will be about how those people got screwed. Meanwhile, both the WSB folks and the hedge funds will be doing just fine.
Nobody cares about the people who are "unsophistocated people who have bought into the frenzy", especially if they get screwed. Further, they shouldn't care about them because anyone who doesn't understand what's going on deserves to get whatever happens to them. Stock trading is high risk, high reward, and that should be clear to everyone.
The problem is that hedge funds constantly benefit from a much lower risk due to market structures designed to stabilize the market. Many of the WSB people are willing to risk a big large loss in order to reveal this flaw of the system. Many of them will not be fine, and, if they're successful, some hedge funds will be bankrupt and all of them will be scared moving forward.
> Nobody cares about the people who are "unsophistocated people who have bought into the frenzy", especially if they get screwed.
This is in fact exactly who most people care about, in this situation. It may not be who the extremely-online people that this board is mostly comprised of care about, but they are not most people.
> Further, they shouldn't care about them because anyone who doesn't understand what's going on deserves to get whatever happens to them.
This is directly at odds with how markets are regulated, because there is a long history of this thinking leading to widespread scams and cons.
The news has a long history of prevaricating. “Remember the Maine.” It is only recently that folks are waking up to what Chomsky spent a lifetime explaining. The awakening is accelerating. Assange and Snowden, the naked media lying in the 2020 election, and now Wall Street manipulation is being exposed. We never had a reckoning after 2008. If this becomes an infinite runaway squeeze. Who will get bailed out?
I know people at work joining Slack conversations about this and asking how to set up an account and how to buy the stock, while fully admitting they don't know anything about stock and have never bought any before. From their comments, it seems like they just want to throw their money at this since it seems like a good bet.
Yep, of course that's what is happening. There is a story all over the news that reads to most people as exactly this: "this stock is going up and making everyone rich, you are missing out".
> But now it is people who saw the story on Good Morning America
Most of those people don't own stock and don't know how to buy stock.
And I would guess most of them tune out stories about stocks going up or down like they tune out commercial breaks or the business segment of news shows.
They don't know how to buy stock until they see the mainstream news say "download this app called Robinhood in order to buy this stock that will make you rich", which is why Robinhood rocketed to the top of the app store charts this week.
Most people do not tune out stories of the form "do this simple thing to get rich". It's the same reason endless coverage of the lottery gets good ratings.
Your mental model of how stock bubbles work is not accurate.
Why would shorting Gamestop mean making it to go bankrupt? The falling stock price of a company doesn't cause a company to go bankrupt, the causality is in the other direction. Putting downward pressure on price is useful only if you want to do a hostile takeover.
Because Gamestop is a business that is in the process of adapting to changing market conditions, which generally requires capital, and when market analysts go big on shorting in public it depresses stock price, and issuing stock is a major common method by which businesses raise capital.
As another example, lots of people assume Elon Musk got mad at short sellers because he took it personally, when in fact they were fucking with his ability to raise money he needed to ramp up production and meet manufacturing goals.
These things don't happen in a vacuum. Large funds making public bets against a company have a material impact on that company's liquidity.
Short-sellers are part of the free market. They are how the equation balances itself when trying to find the "true value" of a concern, or at least an approximation thereof.
Obviously the person who owns stock, or is set to earn billions when the share price reaches a certain level is going to be adversarial to someone whose actions result in the share price being depressed - even if that is the fair value.
> Large funds making public bets against a company have a material impact on that company's liquidity.
There are always bigger fish - and if the public bet is wrong, someone can, and will earn money at the funds' cost.
Edit: shareholders dislike shorts the same way employers dislike employees sharing salary information; it's a losing proposition for them, but a fair one.
I would like you to show me where this free market is, because it certainly isn't NYSE. The minute anything unexpected happens we're hit with trading halts, brokers riding the line of insolvency, SEC investigations, and congressional freakouts.
This narrative that GameStop is actually a good company and it's turning around despite all the short interest is pure bologna. Worse, it's intentionally misleading and often espoused by people who have a financial interest in the company. It's crazy to see people in this forum, who are typically tech forward, hype up the business model of selling physical copies of video games.
This is a common reaction to people who haven't followed Gamestop for a while. Cohen and RC Ventures bought in a while ago and have been pushing for the company to pivot out of the brick-and-mortar focus. This is why 'people who have a financial interest' are talking this way. Everyone involved recognized this would be an expensive proposition. Then the short sellers showed up.
I think focusing on how it hurt GameStop isn’t the right perspective here. I think it’s more about how greedy and over-leveraged the short holders were. When average Joe goes crazy over-leveraged, the entire world says “well duhh, you took a risk and now you have to pay.” But when a hedge fund does it, they get to just make a call to turn the market off for a few hours and try to bail out their shorts? The hypocrisy is stunning.
"Over leveraged" typically means you traded too much on credit in proportion to how much collateral you have, not that the trade is risky. A very large short position is reasonable for a company that is likely to go out of business.
I understand what over leveraged means. This was /also/ an incredibly risky short to start. I’m not convinced that GameStop was ready to go out of business. Struggling, sure, pandemic and all that, and that would justify a put position, but the market also reacted exactly how it’s allowed to and called out a short positions bluff.
I believe I learned the term Short Squeeze while holding Maxwell (MXWL) shares. I sold that position years before Tesla bought them, but one thing I recall is that there were a few people on the message boards that were pointing out how silly-high the short interest was, and that was, IIRC, in the 30% of float range.
As we all know, MXWL wasn't bankrupted, but neither did they thrive on their own. GME also has 4 times the short interest that those people were talking about. It also lacks a trove of patents that are worth something even in a fire sale. In fact the only thing they really have, IMO, is ThinkGeek, and the last time I looked they had fucked that up by merging its catalog into their own hamfisted storefront.
Honestly, given the current generation of consoles, I think they may be better off rebranding as ThinkGeek and having a Gamestop section at each store. We'll see if the new guy has any ideas like that.
Well your average Joe buying stocks with his hard earned money and then doing whatever he wants with them is not illegal too, but that's being debated by the parties with the appropriate interests.
I think what really turned up the anger level on this specific instance is that they just turned the market off when it didn’t go their way. That’s just such a colossal breach of trust.
> What's funny is how the HN community tries to defend the firms they've whined about for years.
Aren't you over-generalizing just slightly? Even in a post with many comments, only a small number of community members (if this is a community at all) post anything. And not a huge number vote, either.
I noticed this recent trend of stuff turning annoying political in that sub. There is so much trash being posted now drowning out useful DD. I think at the end of the day, the original WSB crowd cares way less about political statements and solely making money.
Correct me if my understanding is wrong, but more than a political statement, this seems to be indeed a way to make the most money possible. Political tones are a satisfying sprinkle for many, but what everyone understands there is the more they hold, the higher the value gets. We will be able to judge by the result shortly.
According to the best evidence, Melvin has no short position (they may even actually be long now). So the entire WSB narrative is a lie being used to pump up the stock. The subtleties matter here.
My Facebook feed is filled with people talking about this. These are friends I have know for years who have never mentioned stocks before but now are talking about "holding the line".
It is FOMO for sure, but the real emotions I get from talking with people are outrage and revenge. Everyone feels like the system (economic and political) is rigged against the public. The dopamine hit from sticking it to the man is palpable.
That would be useful if they were actually sticking it to the man. But that isn't what's happening here. What's happening is a big bubble where most of these regular people are gonna lose lots of money while the hedge funds end up closing out their position for a manageable loss and come out just fine.
For sure. This is a terrible way to "stick it to the man" and i've encouraged everyone i've talked to about this to stay far away. Unfortunately emotions have really taken hold. Greed is a hard one to talk people down from but doable. Anger and outrage pretty much impossible.
... not to mention the few smarter hedge funds and mutual funds that quickly jumped in an out of this and made substantial gains, leaving everyone who thinks they are "holding the line" even more "on the line".
Ehh, the short ratio is still over 100%, and I guarantee you those aren't retail investors. So plenty of institutional investments to stick it to left.
You don't know when those shorts got in. The price is clearly too high now, so it makes sense that sophisticated investors (probably other hedge funds) would be entering short positions at the recent prices. And those recent entrants will not be squeezed unless the price goes up by another ludicrous amount, which it is less likely to do now that the initial surge of enthusiasm is running its course. So lots of retail traders who got into the frenzy late with normal stock purchases at these absurd prices will get screwed during the inevitable crash, while the recent shorters will make a killing.
I don't think the initial surge of enthusiasm has run its course. Most are stuck trying to find another place to buy in due to RobinHood closing off purchases.
I see it too and I think the idea of making money is mixed up in the concept of revenge, like “finally I’m going to trick Wall Street out of some money instead of the other way around.” But it’s not going to happen that way for most people.
I see the idea parroted a lot that if everyone holds the line, the shorts will have to buy every outstanding share of GME stock at whatever inflated price it’s at. They won’t, though. The bubble will pop.
It strikes me that the outrage is free-floating and waiting to be weaponised by whoever finds the words to trigger it and point it at a target. Until very recently this was the pro-Trump faction; having stormed the Capitol and got some of their leaders arrested that has gone quiet. So there must be a new disinformation magnet on the internet - and this is it.
> These are friends I have know for years who have never mentioned stocks before but now are talking about "holding the line".
In these times it’s revealing that there seems to be a severe lack of solidarity and trust. In a crisis it is paramount that everyone does their best and that the strong carry the weak. That’s a very fundamental property of a community. But instead the inequality rises and many fear for their livelihoods. This erodes trust and can turn fear into anger.
At some point in the future there will be the last straw. It might be the financial crisis, the environment, war or everything at the same time. The kinds of problems cannot be explained away; excuses and lies won’t help. Only a sharp turn towards solidarity and sustainability can avert it.
That's not the sense I'm getting at all. Oh im sure there are those involved who fit the description. But for most, it isn't about making money at all. Its about financial warfare with "the man".
The overwhelming majority of examples I have seen so far are only concerned with causing hedges funds to collapse and to put brokers out of business, personal losses be damned.
And I see little reason to doubt this. Everyone knows Gamestop is a company with an obsolete business model, a bad reputation and little chance of turning things around. Everyone knows that there is little to no chance of making any money on holding. But $500 isn't a lot of money. 3 million people each putting $500 in to GME is. Obviously there are some who are putting in far more. Current market cap is $24 billion. Its coming from somewhere. I suspect once this is all over we will find that some major players got involved as well and put a lot of money into GME to topple their rivals. But that isn't the main narrative and most of the people buying in are doing so to make a statement.
This has started a discussion. A lot of people are getting a 101 education on how the stock market really works and they are learning just how little it actually has to do with real value and the economy. I predict there will be serious public pressure for regulatory reform. People are going to want to make shorting and high speed trading illegal.
> A lot of people are getting a 101 education on how the stock market really works and they are learning just how little it actually has to do with real value and the economy.
I don’t see how you can draw this conclusion from these events. If this level of price volatility was commonly caused by market participants, then it would be such big news when it happens. They’re not common at all, they represent a small number of events where a small number of shares were traded overvalue for very short periods of time. Nobody is concerned that stocks are overvalued because short squeezes are just happening all the time. Squeezes are also short sellers getting punished for trying to profit off somebody else’s losses, which as far as I can tell most people think is very morally righteous. The only time they’re controversial is when intervention occurs to rescue the short seller.
It's kind of depressing when you look at these crazy success stories of lottery winners. You realize even a small bet at the right time could be life-changing.
Let's say instead of buying a Latte every working days at starbucks over the last five years you had invested it in tesla stocks. Or maybe for every starbucks latte you drank, you invested the same amount in ETF and in Tesla (pay 3 latte, drink one). Where would your life be? Would you still be at your 9-to-5 or would you go work for that non-profit? Or would you just be lazing around on the sofa or at the beach sipping pina-coladas?
Anyway, sometimes it takes a lot of energy to deal with the KIMO (Know I Missed Out).
Totally know what you mean. What I do is just assume I'm going to have to work until I die, and keep angling toward work I tolerate better. I try to invest wisely, maintain a few months of cash savings, etcetera, but don't think about it otherwise. Money is imaginary and anything could happen to it at any moment.
If once in a while I want to use some of my disposable income to spin a roulette wheel or buy GME, and can keep it under control, I see no problem. If I win, it's a nice surprise. But if I don't feel like playing, of course I won't win anything.
Despite having watched it since Monday or before, I don't think about what I could've won on GME this week any more than what I could've won at some dog track. I decided not to play, and that's that. My life continues on as normal.
It's funny, because I was visiting Gamestop's website last November trying to find a Pink 3DS and remember thinking, 'oof, Gamestop's website is in bad shape'.
When I get the FOMO urge I think about how BBY just sucks as a store, how much better Netflix is than AMC, and how airlines regularly go bankrupt.
I believe that GameStop has a future as they have a lot of mind share and goodwill. But they need to get rid of their brick and mortar stores.
This doesn't seem to be saying anything about those companies though. It's just that you will do better financially if you invest money instead of spending it.
The "their" in your sentence can be read as ambiguous as to which parties its referring to, aptly.
With crud like rwsb posters asking if letting their deep in-the-money calls expire unassigned will screw the funds more-- it may well be the case that it isn't fund blood in the water that you see in this feeding frenzy, at least not anymore.
I bunged in $50 into GME this morning because why the hell not. If pubs ever reopen I can spend another $50 on a round of drinks with mates and legitimately say "we took on the wall street parasites". The truth doesn't matter, the end doesn't matter, the tale is the reward.
I don't get this. I can't imagine the professional investor class is still blindly following their shorts. They're all out by now, aren't they? If the "little guys" are making money I tend to think it's coming from other little guys.
The truth of the matter is that hedge funds and institutions are quietly the ones actually pumping these stocks. Reddit likes to paint a narrative that they are in control, but when their messiah has 50MM max of securities and options, meanwhile single trades are going through worth over 700MM, the narrative just doesn't make sense. This is a battle of Wall Street vs Wall Street with some retailers playing along as pawns. Most likely, starry eyed retailers are going to be the ones holding the bag when it all comes down because they're playing a game without even knowing who they're up against.
As for the shorts, Melvin and Citron are out but new shorters get in every day. The higher the price goes the more incentive there is to short. Most will probably lose money as the bubble inflates. But a few will make out like kings when it pops.
The "short" (haha) answer is that we just don't know what the funds have done during the last week. They're incentivized to mislead the public about closing their positions. But the technical reasons the gamma squeeze happened and possible short squeeze today could happen still make sense: the equity has oversubscribed short interest and a skyrocketing price.
I'm kind of amazed how little transparency there is in the stock market. Everyone seems to be guessing. The unequal amount of information for regular people is really unfair and seems like an easy situation for corruption to take place
Believe it or not there is strong evidence that more shorts are being added.
Consider a potential attitude that Citadel is going to get away with this blocking. I mean, maybe ... just maybe ... they'll get an SEC fine of a few hundred million (while protecting many hedge funds from billions in losses). In a worst case scenario a sacrificial scapegoat or two goes to a minimum security country club or house arrest for 6 months/1 year. But that will take a few months/years to come to pass and public sentiment will be much less hot. So they're probably gonna force the price down to unwind existing shorts.
So, since there is a potential that the price will be pushed down due to the above ... doesn't it make sense to open a new short position?
Your gain in delta (due to the stock moving) will be offset by your loss in vega (due to the volatility coming off after the impending crash). Option fair value is a function of both underlying price and volatility, which is currently at unprecedentedly high values.
Of course! Many are living hand-to-mouth in dismal conditions and unable to afford basic necessary expenses, while they see robber barons making a killing by putting thousands of already-poor people out of work.
It can be rational to hate those who actively seek to harm you. Emotion isn't necessarily irrational, so long as the reasons for emotion are well-founded.
When hindsight points out the opportunities that you overlooked which would have giving you that comfortable life it infects all future decision making.
Is there a spoiler tag on HN ? These ones still hurt:
There is a lot of thing one could have done "for the LULz" but decided to browse HN, Imgur or Reddit instead.
- Bitcoin. I heard about it when it was still possible to mint it on CPU, but chose to run SETI@Home instead.
- Bitcoin when it was at merely $9000.
- Ethereum when it was going under $1.
- Dogecoin like anytime before yesterday (up 6x or something today).
- #GME when options where pennies on the dollar, or even the stock at $20 in early January.
- $Tesla in January, February, March of 2020 or anytime before the split.
- $Tesla instead of putting down $1000 to reserve a slot to buy a model 3 at its announcement, put it in the stock, or even better, in long dated calls.
- $Amazon or $Apple last march or anytime before that.
- $SPCE after it crashed in March (a WSB hyped stock)
The key to managing this FOMO for me is really committing emotionally to the concept of hindsight bias.
We remember the winners we missed way more than the losers, because the winners are still present in our lives today, whereas the losers never became noteworthy (because they lost).
But it’s extremely difficult to tell them apart ahead of time. So current me needs to give past me a pass... past me failed at something that is very difficult; no shame in that. Wistful regret, maybe, in a “what if...” kind of way, but I think everyone has those in their life, and not just about money.
A mental exercise I do to manage FOMO is to try and remember duds that I pondered might be the next BTC. Admittedly, it's hard because the brain really tries to forget about those. Keeping a diary is probably the key here.
And then you get the ones like Dogecoin that were supposed to be a dud, and it's still around more than 5 years later and just had a massive spike today until RH decided to restrict the use of instant deposits to buy it.
> There's no limit on the number of coins. Mining is designed to be forever-easy. The coin is _designed_ for rapid deflation.
Yes, but the increase in coins is constant. So as a percentage of available supply, the inflation rate approaches 0%.
Right now, there are 128,000,000,000 DOGE in circulation. The block target for Doge is 1 minute, with a reward of 10,000 DOGE, which gives a yearly minting of 5,256,000,000 doge, which gives and inflation rate of 4.11%. Next year, another 5.256T gets added, which is an inflation of 3.94%.
And of course, since it's a cryptocurrency, there are bound to be permanent losses in the supply because of people losing their wallet files. This is difficult to track because even with a public ledger, there's no way to be sure if unspent DOGE is simply not being spent, or if the private key to spend it was lost.
I really have no idea, but your question suggests its own answer: fiat currencies are also designed for eternal inflation (I think you swapped inflation with deflation) and many people consider that a boon.
When too much fiat is printed, it decreases its value and is called inflation.
But when assets lose value, it is called deflation.
So, do you call cryptocurrency a fiat currency or a speculative asset? Because falling value will happen, it will be just termed inflation or deflation.
Yeah, but (don't) think about where your life would be today if you had done those thing earlier. It's like you knew the winning numbers to the Powerball and just didn't tick the numbers at the shop. It just sometimes when life gets you down these thoughts just poke at you.
At least Doge has a small transaction fee. 2¢ For Doge vs like $7 for Bitcoin. Might actually be useful as a currency like Satoshi intended in his paper (lower transaction cost than credit cards). But of course those low fees are because it’s not popular.
You can rest easy knowing that most of these things provide practically no utility to anyone (or even negative utility), and they are simply speculative bubbles.
We are going to find out what will happen soon. As looking at the trade volumes people seem to have stopped selling or buying looking at the stock prices and the trades it looks like hf traders rather than retail
The rally will continue as long as there are buyers given the price and the neural pathways have been fully mapped out.
What I'm worried about is that there were more than one Melvin Capital with several banks now involved who do not own enough shares to cover the shorts.
Which means we are literally witnessing a money printer go brrr situation where as long as there are people buying in due to FOMO or some us-vs-them politics, the prices will rally.
The most shocking part is how exposed not only the brokers are but now the banks are also exposed. We are literally seeing a repeat of 1929.
I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move the shorts are losing more and more is actually causing this bubble.
Let's say the average bet is 1-5k into this the average Robinhood user invests around 5k), it only takes 200k-1M buying in to move $1B into the stock. When you start with a $200M market cap on a heavily shorted stock, you easily end up where we are today
Matt Levine's email today estimates retail investors to be about 30% of total volume (with actual data from Citadel), but retail was net selling on Tuesday, Wednesday, and Thursday. So theoretically retail is enough to move the price if they were truly united, but that isn't actually the case. It's just not sexy to say "I bought in for a couple days and am taking my gains" in a public forum.
> It boggles the mind people think hedge funds can't profit off a mad rush like this...
How exactly would they do it? Shorting it again would involve calling the top for a stock whose price recently has been unpredictable, but very high.
Writing options seems nuts for something this volatile. I guess they could "buy volatility" with a straddle but again what would the numbers have to be on this where they turn a profit? It's not like the rest of the market is underestimating the volatility, it's evident to everyone.
Volatility makes the HFT's money. Hundreds of millions of shares are flying around the past few days. Thats not from a bunch of people buying and holding. They make money on fractions of a percent swings. They can make a lot of money on 50% swings.
The other thing is, the price WILL go down eventually. Even if not today. A fund with billions of dollars can afford to sit on a short of GME at $400 for a long time. Longer than the upward pressure will last. The narrative was that the short squeeze will happen today, and prices will skyrocket. You only had to be in it for a little while. Now the narrative is changing, and it will maybe be next week, or even farther out. Sure the meme is to hold forever, but anyone holding any amount that will maybe make a difference are going to see that life changing number and sell eventually.
One of my neighborhood friends is a HFT guy and he says he makes bank off fractions of a dollar. Not all trading is equal obviously. But he said sometimes it's like 3,4,5 decimals places deep that he is watching the stock prices and trading
I would be completely out of my depth implying I understand all the creative ways different hedge funds make money, but there's a lot more tricks in the bag than "short it" and "write options"
Just look at Citadel... how much money do you think they've made off early access to majority of retail orders for GME as RH exploded?
And how much more money will they make on an ongoing basis after this from all the new users?
The volume has been insane, someone is making money besides retail investors, and they won't be the ones left holding the bag after the musical chairs stop...
hedge funds put in some money. They lost. Yeah. But automated trading solutions quickly flip things around. If they are smart. Losing money is literally part of what they do. Some they lose some they win. The success is winning a bit more than you lose, and very frequently.
> This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.
Highly unlikely. It doesn’t matter how rich the rich are if you’re poor and want to gamble your way out. The problem is with poverty, which is completely unrelated to wealth disparity.
One you can fix by making life worse for everyone, the other you can fix by making life better for the poor.
There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life.
This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.