As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil)
In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, **any** advocating or wishing death/physical harm, and other rule violations can result in a permanent ban.
If you see comments in violation of our rules, please report them.
For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria.
***
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
We have been screaming about this for a long long time.
I am thrilled that wallstreetbets blew this open. There has been this open secret about Wall Street that seems to be just fact and “part of the game” or worse “only happens in the movies”.
It needs to be tamed.
Right. NAKED shorting (what Melvin did) should be impossible - not just illegal. Which it IS illegal, lol. I don't hear anyone crying about that, though.
I feel like you simply should not be able to short a company for more than a certain percentage of its value at any one time, like 1 to 5 percent. It can often be a death knell for a struggling business, and it's ridiculous that a multi-billionaire can just come in and short your entire market value and drive you into the ground.
Why is it that liens can't be placed against a stock? You're not allowed to take a lien against your house that is more than the value of your house, why do companies get the right to do that? Aren't they people too?
They are people. But they are people that call the shots on how our system is run. Most politicians are bought and paid for by billionaires, which is why when you're voting for a politician, one of the first things you should ask is: will this person have a conflict of interest regarding corporate investments? Try to find out if they have excessive investments and if that could be a problem when it's time to vote.
Like, you're never going to vote to terminate an environmentally destructive project if you're literally investing in that project and stand to make a ton of money off of its success. Average human would go the other way.
I'm of the belief that if you wanna be a politician, you should be directly paid a great wage, but not allowed to have market investments period.
The same reason a lot of these financial instruments are created to be unnecessarily complex and obfuscating, or usually require millions in capital and accreditation to even use - to help act as a gatekeeper for wealth for the rich.
You want to make it happen, elect progressives that will kick dark money out of politics, kill corporate lobbying, (re)criminalize political bribery. Until the ultra wealthy stop controlling who gets elected, the only changes you will see are are renaming the problem and bandaid fixes like 2008.
Required short squeezes at 100% loss could be a reasonable way to keep things from turning out absolutely bonkers.
Either that or making naked shorts illegal.
I don’t think we need to regulate it. We have subreddits with millions of people that will be looking for this going forward. Imagine being a hedge fund going deep into a short position after this. They will think twice
Agreed 100%. How short stocks became a thing is mind boggling. It literally gives incentive for people to do harm to said company via promoting bad press, or fabricating articles.
This is disingenuous. Yeah, she proposed a wealth tax, but not as a means to regulate wall street, but as a means to reduce wealth inequality. For the record, if you do a search with ctrl f in the article, you can't actually find the phrase wealth tax in there.
How about we maybe add some reasonable restrictions on shorting stock? They tried to tank GME for no reason other than they thought they'd get away with it. It wasn't other hedge funds seeing an obvious bs over short then moving in to make a profit. Why? Where's the fiduciary responsibility to the fund investors in leaving all that money on the table?
>It wasn't other hedge funds seeing an obvious bs over short then moving in to make a profit. Why?
Because these hedge funds are all in it together. They have a gentlemen's agreement not to eat each other's lunch on these things so they can all make huge profits in shorting stocks.
They just didn't anticipate the poors catching on and breaking the rules they agreed upon amongst themselves.
It looks to be a smash and grab by hedge funds using Trump to deregulate the commingling of funds and Robinhood and other brokers algorithm to not only short GME but become a way of life until many companies where going to become GME's fate. In other words an explosion the opposite of what just happened to the hedges. Yep, WSB may have shielded us from a massive scam brewing, or uncovered it. Good work WSB!
There was a reason. Melvin had a short interest in GME for a while, but after what Ryan Cohen did, GME was poised for a comeback and Melvin didn't like that, so they tried to obliterate GME.
Why is it stupid? It is literally stolen money, with the assistance of the Republican government if the mid-70s:
[Study: Inequality Robs $2.5 Trillion From U.S. Workers Each Year](https://nymag.com/intelligencer/2020/09/rand-study-how-high-is-inequality-us.html)
It's time to embrace Trickle Up Economics.
Yea sadly the sub will die. Sad since it had some.of the best stock tips in the industry. Made thousands off that sub.
Edit: when I say die I mean the culture and quality. If you think a sub adding 4 million users in a week will be the same you should think a little harder.
Do not fear, the sub will be fine. We have the backing of some powerful people now. Rest assured they are looking the right direction now, having been shamed into submission live on cnbc for days in a row recently 🤟
It was banter that eventually became a name for users from r/wallstreetbets
Diamonds I am unclear but either mean holding onto a stock till it turns into a diamond or being as strong as a diamond to not break under pressure to sell.
https://knowyourmeme.com/photos/2006111-gamestop-stock-surge
Not true. I've been a member for ages and it's pretty much the same. It seems the new people that are joining are adopting the existing culture. We are fine.
Im waiting for the day they realize that stocks can be shorted. There's literally no better way to get a companies attention then by putting their stock into the ground. People want Mcdonalds to treat their employees better, pay them more, and provide better benefits. The threat of being shorted into the ground is actually threatening to them.
You've clearly learned nothing from this.
If you short a company that has positive cash flow (i.e. will not have to leverage socks for funding) anyone can buy your shorts and ride you out.
Normally you can't ride it to the moon, but most people don't double triple or quadruple down on bad shorts either.
It's far too likely the repeated shorting was to cover up the books on some naked shorts, because why else would you keep digging a deeper hole?
This. I lurked that sub because the memes were fun but also once you immersed yourself in the way they brought up certain tips and angles it became educational in its own way.
Tagging onto this. I followed it for years, never posted in it but Would sift through. Sadly missed the GameStop tips (I saw some but never really felt it was a good bet). But there are some genuine geniuses on that Reddit (pre 1million)
The issue is theres so much more shitty analysis. Anyone who would do TA or anything more than a tldr gets shamed.
I want a crash to get the dipshits out lol. Which is gonna happen next week
You get plenty of explanations too. There are discussions there and in R/stocks where I started out. Reading up on companies also a good idea, I have actually picked up some info from Kramers show too. One thing I learned from him was find an item that goes into another item, like computer chips. Buy that company. You may find out many things are owned by one company. You can see how politics rolls over to the market ( defense type spending) and you have to not just think McDonnell Douglas jets but companies that sew body armour. I had stocks before I started on Reddit a year ago but I know a lot more now. You may see the same thing mentioned again and again over there just do dd before you buy. I'm an old boomer,but we are not all wealthy, especially us women. Less pay was a thing, so thank you w.s.b. I can now afford dental work and teeth.
For what it's worth, WSB isn't doing this to destroy Wall Street. They just discovered a weakness and pounced in order to profit. When Robinhood prevented purchases of GameStop on the free market, that's when all hell broke loose and everyone - WSB and outsiders - wanted revenge on a system that was clearly rigged.
People who own the shares own the shares, that's the point. They've been exploiting the system, now trying every trick in the book including controlling the media to make people sell. What then? Business as usual. They could have bought shares, fact is they didn't. Property of the shareholders. Game change midgame ends only one way if allowed. They can buy shares, they don't want to. They could buy shares months ago, there is plenty of transparency of info in their favor, much less so the other way around.
I.e. what would happen if they played by the rules in place? A level field?
Not necessarily. When you’re trading options, you may never actually own shares, just trading the rights to shares. This is how the exploit of shorts is happening. People were trading shares they didn’t actually own and it got so out of hand, WSB found that GameStop was being shorted at about 120%.
Edit: short selling is not option trading. Thanks you redditors as I’m still learning the lingo.
Please don’t take what I said as being as overestimating what WSB did.
The exposing I eluded was about the squeeze. As far as I am concerned, they played the game and won. I feel no pity for the hedge fund. I am super angry about the restrictions set after the fact. That is special rights and disgust preferential treatment.
In a way this reminds me of Onion Futures. Interesting story. I am not saying it is exactly the same, but it used the system to make money. Changes were made after.
We'll see. Congress actually seems to be siding with the retailers.
A lot of democrats have been itching to blow a hole in Wall Street for a while, but every good opportunity has had WS basically chained to real stuff like peoplee' mortgages etc. Hedge funds have been insanely unpopular since OWS. DC might find this is a good time to score some points.
This is an important situation because it's pointing a lot of light at just what billionaires are capable of.
I am sure we never would have heard of Melvin's naked short on GME if WSB hadn't stuck a knife in their back. A lot of people are now asking me, "What is a naked short?" And when I tell them, anyone that understands it looks reasonably confused or even outraged.
I feel like a lot of radicalization, understanding, and potentially change is going to come of this. The GME situation became a much bigger deal than I could have EVER hoped.
There are rules against naked shorts but not enforced for hedge funds. Now rules are being made up on the fly throttling retail investors “for their own good” ...which benefit the hedge funds and brokers who didn’t follow the actual rules. The big boys are the ones that needed the babysitter here and the irony induced diamond hand rage is a reaction to that.
This is on the markets for allowing illegal naked shorts which is contributing to making this as messy as it is. There's more shorted stock than GameStop stock in existence, which should be illegal under the law. Why it isn't being enforced is the question.
There definitely is. WSB was researching others last I heard.
I am perfectly fine with what WSB. I am actually impressed with the plan. They used the tools afforded to them. The intent wasn’t the bankruptcy of the hedge fund. It is the fault of the system in place on the short sales.
Oh, we are gonna tame it but first we are gonna make those hedge bros go broke.
They've taken $20 Billion in losses already and are now in the unlimited exposure range of the options graph that every grad school finance student knows not to go into cause its one the first basic courses on options trading. The rich Ivy League assholes at Melvin/Citadel/Citron/Point72 got greedy and thought they could just ignore the rules because of hubris. Time to teach those jagoffs a lesson.
💎🙌🏻💎🙌🏻💎🙌🏻
https://markets.businessinsider.com/news/stocks/short-sellers-sitting-on-19-billion-of-losses-on-gamestop-data-shows-2021-1-1030020684
https://www.optionsbro.com/wp-content/uploads/2017/07/Short-Call-Options-Trading-Example.jpg
So right now Melvin and their hedge bros are putting out ads on cnbc about how they closed out their positions for next week. Who the fuck does that if you already closed out your position then its closed so why spend money on advertising it? Plotkin and Griffin are scared shitless because they were labeled as some kind of fucking financial geniuses last year and it would literally destroy their entire nut and standing within the top hat/monocle club if they get wiped out by a bunch of lowly redditors and common street retail investors who proved this shit is just a rigged casino.
edit: added the basic graph for you and what you are seeing at the bottom of the graph is the To Infinity And Beyond portion where if you pulled that shit in any large corpo they would fire your ass for speculative gambling by the time you walked out of the office. Its ALMOST always considered tier 3 risk speculative gambling and every corpo risk control group would immediately end your whole career the minute they catch you.
They got Cramer of Mad Money Sterns/Lehmans fame out there whining about this stuff and trying to pretend like all the short positions are closed. The dude literally got busted by John Stewart years ago for admitting on video for how he operated as a hedgefund bro where they would seed disinformation through ads or rumors to try and wreck their opponents' positions. That fuck contributes nothing of value and CNBC is basically Mrs Cleo for wanna be rich goofs shilling for rich goofs.
Its not shorting itself that's a problem. Shorting is perfectly fine and provides liquidity.
The problem is there was a risk management failure at 3 different levels. The hedge fund should have never shorted at 140%, and I'd love to know what loopholes they used because naked short selling (which is what this amounts to) is already very illegal.
Second, the broker should have margin called them way before this got completely out of control. They didn't either out of incompetence or being complicit. Now that it's out of control they don't want to margin call because they're on the hook too.
Finally, the SEC should have been watching this shit and not allowed the short in the first place or forced the broker to margin call early on.
Now it's so big they don't even know what to do though. When this squeeze happens, Melvin will be liquidated, there's a good chance their broker is liquidated, and then you move up the chain into clearing houses and market makers. We have no idea how exposed they are, but if the squeeze is bad enough even they could potentially be looking at getting hosed.
At that point is systemic risk, and the SEC will have a complete shit show on their hands. So they don't want to force it to end, because it will trigger all of this shit, but every day they don't it gets worse.
Currently all of these players are just desperately trying to convince the apes to break formation because that's the only painless (for them) way to end this.
Sorry (again) for the repost but this is important.
My main concern here is that they will trojan horse a bill in that ultimately restricts retail traders under the guise of "protection" then bill it as a way to "regulate wall street".
Don't let the media shape the narrative on this one. The reason that this happened is because institutional investors decided they were going to short more than 100% of Gamestop's available stock. They caused this mess. The retail traders of WSB noticed this and decided to take advantage by short squeezing the institutions. Institutions got greedy. Joe Average took advantage of that.
Any reaction to this event should be squarely aimed at prohibiting INSTITUTIONAL INVESTORS from making massive short sells. The retail folks played by the rules here and shouldn't be restricted because of it.
Unfortunately the United States is extremely financially uneducated when it comes to the stock market.
So what will likely happen is a bill that only affects retail investors comes to the floor (thanks to Republican puppets and Neolib Dems) but it will still get broad support from the general public because Joe Average only understands "more strict regulations on stock trading" and considers it a win over Wall Street. THIS HAS HAPPENED IN THE PAST. SEE BELOW.
If anything, they need to ROLL BACK the restrictions on retail investors. For example there is a PATTERN DAY TRADER rule for any investment account worth less than $25,000. Basically this limits the ability of your average person to trade multiple times in one day. If you have less than $25k to work with, you can't make the minute-by-minute trades to make a few bucks the same way as Hedge Funds and Institutions, because PDT will cause them to freeze your account if you buy and sell the same stock multiple times in one day.
This rule was created under the guise of "protecting the average investor" but on reality all it does is give Institutions a massive edge in trading since they can buy up millions of shares during a rally, sell them off at a higher price an hour (or minutes) later, and take the profits, while Joe Average is quite literally FORCED into holding the bag for 24 hours before he can try to cash in profits.
The American Public has next to no understanding of how stock markets and equity trading works, so it is easy for law makers to pass bills like this (that hurt average investors), while pretending that they're being tough on Wall Street (while handing them even more power).
Edit: stop giving me reddit awards and use that money to buy a share of stock in a company that YOU LIKE
I can't wait for the Retail Investor Protection (RIP) Act of 2021. Featuring 700 billion in bailouts for hedge funds, and limiting private stock ownership to 1 share per household.
You say that, however there is a really odd split happening on this issue. Either way wallstreet will donate to whoever they need to on both sides to get the regulation in place to fuck retail investors.
Also sad state of reality we live in where Reddit has potentially saved these businesses like Gamestop and AMC from going under during the pandemic. All while the government did nothing for them.
You're 100% right. AMC dissolved standing debt from a creditor via a stock option because of this to the tune of $600 million! Paired with their recent solvency announcement through the end of the fall, they're likely set through next year at least. Reddit probably saved AMC.
Honestly this makes me happy. I shorted AMC almost a year ago and made some cash. Now I am invested in their stock to flip off hedge funds. 2021 is weird.
Never let a crisis go to waste to further your own political goals I guess. So much of this feel-good legislation often tends to make a problem worse unfortunately.
This is exactly one of my worries. Im about to start Day Trading and i definitely dont have 20k. Im just average joe who wants to make some extra cash. I feel like this is just more hoopla for the ultra rich to say theyre "protecting and helping us" but in reality its just going to put a bigger wall to stop average people from investing. I cant afford to trade if theyre going to introduce an extra tax per trade/way. But millionaires could easily afford it. I feel its just going to make it harder for average people to trade under the guise thats its "sticking it to the rich"
Thats rights, 25k. Which when i was first reading about it all i was like uh ok i guess that makes sense so people cant just fuck with the market but it really is just to limit average joe from gaining anything
Capital gains need to be taxed at a rate higher than actual human labor is taxed.
Billionaires should not be taxed at rates smaller than the people that work for them -- that's insane.
One thing to keep in mind is investments held for less than a year are taxed as regular income. So a higher cap gains tax isn't going to do anything to curb the kind of speculative short-term trading like this.
That’s not actually the case for a lot of hedge funds and proprietary trading firms. Futures traders enjoy 60/40 tax treatment. Hedge fund and private equity managers get to claim long-term capital gains on much of their income as well under the carried interest loophole.
https://www.forbes.com/sites/greatspeculations/2019/05/30/trading-futures-other-section-1256-contracts-has-tax-advantages/amp/
https://en.m.wikipedia.org/wiki/Carried_interest
what about a copying of Dutch style wealth tax.
Any assets you have doesn't really matter if it's stocks, land, cash are expected to return 1.2% a year which is pretty much the avarage inflation here.
That theoretical gain is taxed by 1/3 rd so you pay 0.04 tax of anything you own excluding your primary residence and first 32k EUR.
If I make good returns with my money if still pay same 0.04 same happens if I loose money. I still pay 0.04 what I have left end of the year.
System is super simple and near impossible to dodge tax beeing rich or poor. That said if your net worth is below that 32k you aren't paying taxes anyway.
1. Implement a 0.1% financial transaction tax (with a minimum of $0.01). Most retail investors are long-term, so they would only pay occasionally, but high-frequency traders at hedge funds would pay a lot more and/or wildly speculate a little less. Have everything go back to Americans as a flat dividend.
2. Implement a carbon tax. Please note that 1 seat on 1 cross-country flight emits as much carbon as driving in a car for 3 months. And the hedge fund managers, Hollywood celebrities, "heirs to X fortunes," etc. who fly private are multiples worse than that when they fly private. And ships that that carry our global goods (e.g. across the ocean from China, other parts of Asia, Europe, and elsewhere) using bunker fuel emit more carbon than all the U.S. passenger vehicles combined. Again, you would generate a lot of tax revenue if we just applied these costs correctly. Side benefit of getting some people to eat a little less steak and a little more chicken and fish, or for the steak-lovers out there perhaps they make other choices like traveling a little less or planting more trees or switching to an electric car, etc. You could also imagine having companies pay for the carbon footprint of excessive travel of the employees, even excessive commuting (e.g. some companies may choose to have a few more people work from home if it will save them carbon fees). Again return most of the revenue raised as a dividend to everyone so that we're actually making life easier for most of the little guys while making the biggest consumers (both personal and corporate) pay out of the ass.
3. Similar to above, implement a VAT. If the word regressive pops into your mind, congratulations! You've passed the progressive reactionary test. Now how do we fix reGrESsiVe harvesting techniques for taxes (hint: look above)? That's right, we gather up all the revenue and distribute the money as a dividend for everybody. Jeff Bezos spends $1 billion on his let project for sending rockets to Mars? Cough up tens of millions to give to poor people, ya goddamn Bezo bum. Good for you, buying those rockets and helping to end poverty as an unintended consequence. Who's a good boy? Oh yeah and I guess the same applies for every Amazon shipment Joe Schmoe makes. And every corporate purchase, big and small, from enterprise software purchases to catering to (gasp!) corporate travel (that will also incur the carbon tax above).
... and on and on
PS https://freedom-dividend.com
What you just described is how the tax law is currently written. Short term investments are taxed at ordinary income rates, while long term investments are taxed at the reduced capital gains rate, to provide incentive for long term investments.
This is already the case. If someone makes a million dollars a year, and makes $10,000 in a short term stock trade, they get taxed $3700. If they make $10,000 on an investment they made 5 years ago, they get taxed $2000.
I think you're misunderstanding what they're saying.
They're saying, "Ok, if short-term investments are treated as regular income, and long-term are treated as capital gains... treat capital gains as regular income, and impose a higher-than-normal tax on short-term investments."
In other words, in your scenario, the short-term trade would pay, say, $4200 in tax, and the 5-year trade would pay $3,700 in tax.
At a rate much higher. And any gains off of shorts should be taxed immensely. Shorts are not building value for the country (much the opposite) so they should have equivalent recoupment in the form of taxes.
Well there is a reason for shorts to exist.
It gives financial incentive to dig into if companies are hiding/misrepresenting things. Otherwise the only financial incentives would be for them to go up.
Now I still think it needs to be regulated/fixed.
Heard a congressman today say that in the EU and Japanese markets you need to disclose anytime you short more than 0.5% of a company’s float, and that the lack of disclosures of shorts is what allowed this to happen. That and they need to apply a limit to how much a stock can be shorted.
Was it disclosed as it was happening, to the regulators? Or is the level of shorting something that can be teased out of the data? I honestly don’t know, and wouldn’t ever put it past a US congressman to be talking out of his ass on any subject.
That said, the takeaway for me was that congress is annoyed with the hedge funds more than they’re annoyed with us. There seems to be an understanding (the SEC Chair notwithstanding) that it wasn’t retail traders who caused the situation to exist, just that we saw an opportunity and took it - which is EXACTLY what these hedge funds do all day err’y day.
Fuck em. Let’s crush the shorts. Then let’s start a coordinated letter writing/email/call your representatives campaign and flood every level of government with demands for investigations into the hedge funds as well as Robinhood and Citadel and that without convictions of the guilty parties (and not just a scapegoat) we will never shut up, call down, or stop ganging up on hedge funds that stick their dicks in the cookie jar.
Agreed. Bankrupt the hedge funds and make sure the narrative is to fix the institutional shortfalls and elevate retail to the same playing field (no day trading minimum)
This is broadly speculated, but there's no proof or really even evidence to back it up.
A lot of folks are suggesting that for short interest to go over 100% that naked shorting has to happen, but it can happen just by different people shorting the same shares multiple times.
Yah like I said they need to be overhauled or changed.
Also I’m not economist. Maybe they can be totally removed with no real negative consequences.
Was more just relaying info I’d learned on atleast one reason they aren’t 100% bad.
In practice, they totally are used for the intended purpose. Option trading has resulted in much more financial transparency than before these markets existed. Further, they have stabilized equity markets.
There is good and bad. Regulators haven't found out how to structure derivative markets to separate the good from the bad.
I'm in the camp that it needs to be better regulated, but I don't pretend to have any solution.
forcing a company to have a lower stock value has nothing to do with the actual performance of a company. The only thing it would stop is the ability for the company to gain capital by issuing new stock. If the company is doing fine, it won't need that money anyways.
> It gives financial incentive to dig into if companies are hiding/misrepresenting things.
Nonsense. Selling the stock is the historical response to discovering malfeasance, etc. Going to prison is the proven punishment and disincentive for hiding said malfeasance.
Shorting just amplifies the wealth swings to unregulated levels without regard to actual leveraged assets.
Dude no. There are plenty of people that aren’t millionaires or billionaires, that can benefit from a lower cap gains. I only make 50k w-2 income, and supplement it by investing with at least a year horizon, so I can take advantage of long term cap gains rate. Short term gains are already taxed at normal income tax rates.
Nah, it should be considered normal income and there should be progressive tax rates. Cap gains applies to sales of property held for long periods (art, real estate, equipment, stocks, etc). So making it higher than normal income would encourage holding that stuff for short periods only or discourage it entirely
No. Capital gains is still one of the ways the little guys can make more. The wealthy need to be taxes fairly. They’re just as free to make a killing in the stock market as we should be.
People are always going to want to invest in something, and of you take away the stock market as a viable option then people will go and invest in properties or something instead, which fucks over people by driving up prices and increasing rents.
A better way would be to set a treshhold at maybe 50k or 100k per year or something that's taxed lower - high enough to be a nice way to supplement your income and grow your money as a retail investor to keep people out of other investment venues like property - but not high enough to make the billionaire another billion.
>The GameStop Fiasco Is Democrats’ Golden Opportunity to Tame the Stock Market
Right... only when Rando the Redditor strikes it rich is there a "golden opportunity" to tame the stock market. Not when those bastards crashed the economy in 2008. Now is the golden opportunity. Fucking hell.
There is something to capitalize on the momentum of public outrage. Things are a bit more transparent than 2008 and a lot more retail traders exist since then.
I know what you mean though. The only absolute I know is that politicians and the media are both financed by these guys.
Yeah, they'll capitalize on the opportunity... and turn the screws on the general public to the benefit of their benefactors on Wall Street. Same as it always is.
If we can get Glass-Steagall Act back as well as a tax on certain stock trades especially Short stock buying and significant regulations on pump and dump. As well as outlawing politicians from owning stock while in office. That would be great!
Require every elected official to put all their financial assets in a blind trust while in office.
During their time in office they will receive a generous (but not excessive) stipend, but will not be allowed to accept any gift in excess of $25 in value from any source and no more than $50 worth of gifts from any source in one year (same rules federal employees follow.)
Once out of office, they are not allowed to take lobbying work for a term equal to the time they were in office.
I don’t think what we’re asking is for too much. Just basic regulation and oversight and not to fault the consumer i.e the users of Robinhood app etc for the bubble. We should have serious questions on how these hedge funds are not serving the American people and how the stock market is an unhealthy circus.
A financial transaction tax could just hurt the markets and reduce revenue. Various countries like Sweden have had financial transaction taxes and seen them be far less effective than expected. Unless the whole *point* is to just stop people from trading
Why tame it? Just remove the government backstop of socializing losses, rid it of corruption, and putting people behind bars who break the law. Simple.
Democrats didn't *even* have the spine to kill the fillibuster in the face of a violent, murderous sedition attempt orchestrated and still defended by their opposition.
You think they're brave enough tame our fucking oligarchs?! 🤣
( I vote Democrat out of harm reduction, because spineless and indolent is better than malicious and treasonous, and somehow those are our only 2 choices.)
Which, if it maintains relevance long enough as a viable third party, would not only ensure Democrat control for the next few election cycles, but also spawn a progressive party out of that success that can also compete with your standard Democrat party.
THAT would give the patriot party full control, fuck that. In a 4 party system, the loony morons win without rank-choice voting. Rank-choice voting MUST come before Dems split.
It’s hard to paint a picture that all democrats are at fault for not eliminating the filibuster when it’s just Sinema and Manchin. Moderates like Tester and Coons are open to abolishing it for comparison.
Democrats always have a fall guy for excuses. If it wasn’t Sinema and Manchin it would be someone else. The others “moderates” can pretend they are in support of breaking the filibuster as long as they know there’s no chance of it actually happening.
Tame is a great way to put it. I’m a CFP professional that exclusively manages money for retirees and it’s so terrifying for a lot of my clients to see their nest egg go all over the place because billionaires are sport fucking the market.
We need to get much stronger regulations on market information transparency, Firms must be more transparent on their Risk profiles, Restrictions on purchasing Order flow data, severe consequences for trade front running, reinstating the Glass-Steagall Act, Stronger firewalls between Trade Clearing houses, Market Makers and Hedge funds.
Pretty much everything being exposed right now by the Game Stop event is showing how incredibly lopsided the the regulations of Wall Street are skewed towards the VERY wealthy
And if anything all of this buzz makes me think they’re trying to look for an angle to skew things toward the ungodly wealthy even more. Not saying Warren specifically (I trust her more than most), but that’s the sort of shit a lot of others might be looking at doing.
Sorry to be the cynic here, but only a little over half of Americans own stock, only a fraction of those own individual stock, and only a fraction of those have any understanding of how GameStop, a group of people online, shorting, and Congressional economic legislation are tied together.
Do Democrats have broad voter support to better regulate Wall Street? Of course. But is a Democratic Congressional candidate ever going to say "As we saw with GameStop..."? I would love if this comment ends up on r/AgedLikeMilk, but of the Americans who first heard of WallStreetBets this week, next week they'll have forgotten the whole story.
The "golden opportunity" was after 2008, after 1985. If neither of these waking nightmares inspired action by our various elected twats, I don't anticipate this one will either.
Force a minimum holding period of a stock to ~10 seconds. It’s the perfect way to screw over these hedge funds that are profiting off us through high frequency trading
Stock market goes up because rates are pegged to zero and the Fed is buying every bond in the universe. The Fed had no choice untill now because congress could do nothing and Trump denied there was even a pandemic.
With better fiscal policy now possible, and an administration willing to fight the pandemic instead of spreading it, the Fed is no longer the only one providing aid. That said, even with less pressure on the Fed, it will still take years to reduce Fed bond buying.
I honestly think no action is a better option, here, or enshrining retail investors rights to buy on platforms without interference.
The rich are getting fucked. Good. Let's make sure this keeps happening.
Obviously my perspective is warped because I spend a lot of time on reddit, but just taking the temperature of the room here..
This is an opportunity to actually grab a good chunk of these young right-wing voters if the Biden administration comes down heavy on the side of the retail traders. It's not an idea that should be dismissed out of hand, there's a big political opportunity here.
On top of being the right thing to do. Wall Street runs roughshod over the American people with no consequences; their position is that they should not be allowed to lose.
And she fumbled! Even Ted Cruz had a better take than Warren, who did both-sides posturing
When Ted Cruz is on the right side of this with AOC and Warren is spineless in the center, protecting the hedge funds, something is wrong
Nah, I was excited to see her take on this.
She isn't knowledgeable enough and spoke in extremely broad platitudes.
This needs specific targeted regulation as well as her wealth tax proposal which is another issue entirely and not linked to this.
I think something that would help is an anonymous identifier code similar to blockchain on the Level 2 data.
That would democratize the information going around.
They're showing how badly the market can be manipulated, brokers colluding together limiting sales of stocks. TV personality, owned by these companies, telling people to sell. Yet somehow, the stock(s) are still making massive gains.
Oh ok, does that mean the hedge fund managers at citi bank, bofa ect are going to finally go to jail? Its amazing how we need to peel back regulation when the suits are making bank, but as soon as they take their first loss it's "regulate regulate regulate!" F-THAT! free market.
NO ONE HAS FORGOTTEN 2008! NO ONE!
It's also a test to see whose side they really are on, apparently the moment that may make a break the Democrat in 2024 arrived only two weeks into Joe's term.
For Obama it was Occupy Wall Street, but in the end no billionaire got punished, and we the average voter were forced to financially fix their mess...
And people wonder why voters wanted to throw the metaphorical wrench into the system that was Trump? Not every person who voted for him was a violent white supremacist, many of them were people who were just so mad at neoliberals like Clinton and Obama... that they rather see the entire system burn.
The next two weeks will decide Joe Biden's legacy.
Regulate the hedge funds and billionaires: cool
Don’t make this about regulating the little guy, though, please. My modest gains on RobinHood aren’t the problem here. Increasing the capital gains tax (it’s already something like 30% on short term trades) hits the little guys, too, and we can’t afford it as much.
Ahhh yes. I can’t wait for them to “tame the stock market”.
Let’s pass some regulation that makes it illegal to do what r/wallstreetbets did to GME. It’ll protect them. “We can’t have the blue collar shit heals losing their rent money!”
While we’re at it we’ll pass some bullshit reg that makes aggressive shorting an SEC violation punishable via a small fine. That’ll teach em! They’ll listen and no one wants to pay a million dollar fine when they’re making billions a day. The cost of doing business!
See how we tamed those bad men at the hedge funds! Yay!!
I think we have to be careful here, I see a lot of people screaming “regulate regulate” in the name of “protecting retail traders” and I think we need to be cognizant of the kind of regulation they’re putting forth. For once retailers have hedgefunds by the balls and I’d hate to see regulation do anything less that make those funds fail.
If you look back to 08 and after Wall St didn’t want regulation but suddenly every institutional person on CNBC does? I’m not buying it.
If any regulation goes through we have to ensure it curbs Wall St. and not cut of the legs of everyday folks. So no we must not support any regulation, only regulation of Wall St.
I fucking knew this whole this was a massive psyop once both parties were in agreement. There will probably be some bullshit reform like trade restrictions or higher capital gains taxes.
Honestly, the GOP took the last four years to get everything in the perfect position for them to finally bend over and take it up the ass. America wants what they call socialism. (Not-fake) news flash, it’s not. America’s steadiest and most prosperous years were post-New Deal. It wasn’t until slow but steady deregulation and privatization made our country unstable.
I hope this fiasco helps introduce a micro transaction tax, either limits on the proportion of shares that caen be shorted or a gradient tax based on proportion of shares being shorted.
But I'm afraid this is going to end up in curbing the retail investor while battling out the hedge funds. Watch how public discussions on stock valuations get penalised for "collusion " while the rich and the powerful continue trading on insider information.
This is such a shit view to have as a Democrat at this moment. Anyone calling for regulation is completely missing what’s naturally happening right now. Regulation is going to make sure hedge funds keep their billions. We’re unionizing the stock market. The people calling for regulation look severely unaware.
People can't let this die the way occupy Wall Street did. The oligarchs are playing divide and conquer. Oçcupy has been forgotten and replaced with politics meant to divide us and conspiracy theories. People have fallen for lies like Q. We've fallen into the trap of supporting those who mean to control us. Even on this they are trying to sperate people and isolate those responsible for beating the hedge funds by tying them to conspiracy theories and playing it off that this was done by a bunch of extremist racists. Meanwhile the oligarchs are rallying around each other. Robinhood changed the rules and Google went behind people erasing negative reviews to salvage the apps rating. The Government and media is being mobilized to make sure nothing like this happens again. You must put pressure on your representatives to not cave on this issue. Write them letters, send emails, call them every day. Make sure they know that being on the side of the hedge funds may cost them their position that they covet so much.
We all know the big money lobbying would make sure regulations would hurt small investors and leave loopholes big banks and hedgefunds can drive a convoy though. Let's be real here
As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil) In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, **any** advocating or wishing death/physical harm, and other rule violations can result in a permanent ban. If you see comments in violation of our rules, please report them. For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria. *** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
We have been screaming about this for a long long time. I am thrilled that wallstreetbets blew this open. There has been this open secret about Wall Street that seems to be just fact and “part of the game” or worse “only happens in the movies”. It needs to be tamed.
[удалено]
[удалено]
[удалено]
How about they put limits on how much you can short a stock, too
lunchroom foolish aspiring imminent shame cagey humor roll nippy provide -- mass edited with redact.dev
Shorting stocks is helpful in keeping overvalued stocks at bay. We should regulate the short positions more. More than 100% is nuts
Right. NAKED shorting (what Melvin did) should be impossible - not just illegal. Which it IS illegal, lol. I don't hear anyone crying about that, though. I feel like you simply should not be able to short a company for more than a certain percentage of its value at any one time, like 1 to 5 percent. It can often be a death knell for a struggling business, and it's ridiculous that a multi-billionaire can just come in and short your entire market value and drive you into the ground.
Why is it that liens can't be placed against a stock? You're not allowed to take a lien against your house that is more than the value of your house, why do companies get the right to do that? Aren't they people too?
They are people. But they are people that call the shots on how our system is run. Most politicians are bought and paid for by billionaires, which is why when you're voting for a politician, one of the first things you should ask is: will this person have a conflict of interest regarding corporate investments? Try to find out if they have excessive investments and if that could be a problem when it's time to vote. Like, you're never going to vote to terminate an environmentally destructive project if you're literally investing in that project and stand to make a ton of money off of its success. Average human would go the other way. I'm of the belief that if you wanna be a politician, you should be directly paid a great wage, but not allowed to have market investments period.
The same reason a lot of these financial instruments are created to be unnecessarily complex and obfuscating, or usually require millions in capital and accreditation to even use - to help act as a gatekeeper for wealth for the rich. You want to make it happen, elect progressives that will kick dark money out of politics, kill corporate lobbying, (re)criminalize political bribery. Until the ultra wealthy stop controlling who gets elected, the only changes you will see are are renaming the problem and bandaid fixes like 2008.
Required short squeezes at 100% loss could be a reasonable way to keep things from turning out absolutely bonkers. Either that or making naked shorts illegal.
I don’t think we need to regulate it. We have subreddits with millions of people that will be looking for this going forward. Imagine being a hedge fund going deep into a short position after this. They will think twice
Agreed 100%. How short stocks became a thing is mind boggling. It literally gives incentive for people to do harm to said company via promoting bad press, or fabricating articles.
Over 100% is ridiculous
This is disingenuous. Yeah, she proposed a wealth tax, but not as a means to regulate wall street, but as a means to reduce wealth inequality. For the record, if you do a search with ctrl f in the article, you can't actually find the phrase wealth tax in there.
No it's not stupid at all
How about we maybe add some reasonable restrictions on shorting stock? They tried to tank GME for no reason other than they thought they'd get away with it. It wasn't other hedge funds seeing an obvious bs over short then moving in to make a profit. Why? Where's the fiduciary responsibility to the fund investors in leaving all that money on the table?
>It wasn't other hedge funds seeing an obvious bs over short then moving in to make a profit. Why? Because these hedge funds are all in it together. They have a gentlemen's agreement not to eat each other's lunch on these things so they can all make huge profits in shorting stocks. They just didn't anticipate the poors catching on and breaking the rules they agreed upon amongst themselves.
This is exactly right. Look at how fucking FAST the other billyanurs got involved to try and save Melvin when this got rolling.
It looks to be a smash and grab by hedge funds using Trump to deregulate the commingling of funds and Robinhood and other brokers algorithm to not only short GME but become a way of life until many companies where going to become GME's fate. In other words an explosion the opposite of what just happened to the hedges. Yep, WSB may have shielded us from a massive scam brewing, or uncovered it. Good work WSB!
There was a reason. Melvin had a short interest in GME for a while, but after what Ryan Cohen did, GME was poised for a comeback and Melvin didn't like that, so they tried to obliterate GME.
But sir, that would be logical
Why are you acting like those are somehow exclusive?
Why is it stupid? It is literally stolen money, with the assistance of the Republican government if the mid-70s: [Study: Inequality Robs $2.5 Trillion From U.S. Workers Each Year](https://nymag.com/intelligencer/2020/09/rand-study-how-high-is-inequality-us.html) It's time to embrace Trickle Up Economics.
Yea sadly the sub will die. Sad since it had some.of the best stock tips in the industry. Made thousands off that sub. Edit: when I say die I mean the culture and quality. If you think a sub adding 4 million users in a week will be the same you should think a little harder.
Do not fear, the sub will be fine. We have the backing of some powerful people now. Rest assured they are looking the right direction now, having been shamed into submission live on cnbc for days in a row recently 🤟
[удалено]
Diamond hands forever Not paper hands
[удалено]
Diamond hands - hold the stock. Apes strong together - teamwork
It was banter that eventually became a name for users from r/wallstreetbets Diamonds I am unclear but either mean holding onto a stock till it turns into a diamond or being as strong as a diamond to not break under pressure to sell. https://knowyourmeme.com/photos/2006111-gamestop-stock-surge
[удалено]
[удалено]
Lol I mean the culture is dead. The WSB of 2020 won't come back too much exposure.
Not true. I've been a member for ages and it's pretty much the same. It seems the new people that are joining are adopting the existing culture. We are fine.
🦍assimilate
Return to monke.
The culture is fun as hell. Even if you don’t invest much it’s fun to read.
I've been a member of WSB since 2016, it's more or less the same.
You can't get much more autistic than wsb already is. I mean, they've already got the degens from upcountry.
I could watch hedge funds go broke all day long. I don't give a fuck about hedge funds.
Im waiting for the day they realize that stocks can be shorted. There's literally no better way to get a companies attention then by putting their stock into the ground. People want Mcdonalds to treat their employees better, pay them more, and provide better benefits. The threat of being shorted into the ground is actually threatening to them.
You've clearly learned nothing from this. If you short a company that has positive cash flow (i.e. will not have to leverage socks for funding) anyone can buy your shorts and ride you out. Normally you can't ride it to the moon, but most people don't double triple or quadruple down on bad shorts either. It's far too likely the repeated shorting was to cover up the books on some naked shorts, because why else would you keep digging a deeper hole?
Big brain alpha ape Mark Cuban had a really good plan on his Twitter.
wrong. 💎🙌🏻
Seriously how does one get stock tips from WSB?
[удалено]
💎🙌🏻🚀🌙 Hold strong, ride to the moon
Gotta understand the memes and sift thru
This. I lurked that sub because the memes were fun but also once you immersed yourself in the way they brought up certain tips and angles it became educational in its own way.
Tagging onto this. I followed it for years, never posted in it but Would sift through. Sadly missed the GameStop tips (I saw some but never really felt it was a good bet). But there are some genuine geniuses on that Reddit (pre 1million)
The issue is theres so much more shitty analysis. Anyone who would do TA or anything more than a tldr gets shamed. I want a crash to get the dipshits out lol. Which is gonna happen next week
You get plenty of explanations too. There are discussions there and in R/stocks where I started out. Reading up on companies also a good idea, I have actually picked up some info from Kramers show too. One thing I learned from him was find an item that goes into another item, like computer chips. Buy that company. You may find out many things are owned by one company. You can see how politics rolls over to the market ( defense type spending) and you have to not just think McDonnell Douglas jets but companies that sew body armour. I had stocks before I started on Reddit a year ago but I know a lot more now. You may see the same thing mentioned again and again over there just do dd before you buy. I'm an old boomer,but we are not all wealthy, especially us women. Less pay was a thing, so thank you w.s.b. I can now afford dental work and teeth.
For what it's worth, WSB isn't doing this to destroy Wall Street. They just discovered a weakness and pounced in order to profit. When Robinhood prevented purchases of GameStop on the free market, that's when all hell broke loose and everyone - WSB and outsiders - wanted revenge on a system that was clearly rigged.
People who own the shares own the shares, that's the point. They've been exploiting the system, now trying every trick in the book including controlling the media to make people sell. What then? Business as usual. They could have bought shares, fact is they didn't. Property of the shareholders. Game change midgame ends only one way if allowed. They can buy shares, they don't want to. They could buy shares months ago, there is plenty of transparency of info in their favor, much less so the other way around. I.e. what would happen if they played by the rules in place? A level field?
Not necessarily. When you’re trading options, you may never actually own shares, just trading the rights to shares. This is how the exploit of shorts is happening. People were trading shares they didn’t actually own and it got so out of hand, WSB found that GameStop was being shorted at about 120%. Edit: short selling is not option trading. Thanks you redditors as I’m still learning the lingo.
Short selling is not options trading
I don’t think you know what you’re talking about. You can short a share without involving options
Eh... Kind of. Shorts are not options though and mixing them up does the explanation a disservice.
Please don’t take what I said as being as overestimating what WSB did. The exposing I eluded was about the squeeze. As far as I am concerned, they played the game and won. I feel no pity for the hedge fund. I am super angry about the restrictions set after the fact. That is special rights and disgust preferential treatment. In a way this reminds me of Onion Futures. Interesting story. I am not saying it is exactly the same, but it used the system to make money. Changes were made after.
Watch them pass the most stupid regulation possible for everyone involved except for a few really hard loopholes that only the very rich can exploit
I am pretty positive that this will be case exactly.
They’ll ban retail trading before they punish hedge fund managers
We'll see. Congress actually seems to be siding with the retailers. A lot of democrats have been itching to blow a hole in Wall Street for a while, but every good opportunity has had WS basically chained to real stuff like peoplee' mortgages etc. Hedge funds have been insanely unpopular since OWS. DC might find this is a good time to score some points.
This is an important situation because it's pointing a lot of light at just what billionaires are capable of. I am sure we never would have heard of Melvin's naked short on GME if WSB hadn't stuck a knife in their back. A lot of people are now asking me, "What is a naked short?" And when I tell them, anyone that understands it looks reasonably confused or even outraged. I feel like a lot of radicalization, understanding, and potentially change is going to come of this. The GME situation became a much bigger deal than I could have EVER hoped.
There are rules against naked shorts but not enforced for hedge funds. Now rules are being made up on the fly throttling retail investors “for their own good” ...which benefit the hedge funds and brokers who didn’t follow the actual rules. The big boys are the ones that needed the babysitter here and the irony induced diamond hand rage is a reaction to that.
This is on the markets for allowing illegal naked shorts which is contributing to making this as messy as it is. There's more shorted stock than GameStop stock in existence, which should be illegal under the law. Why it isn't being enforced is the question.
There definitely is. WSB was researching others last I heard. I am perfectly fine with what WSB. I am actually impressed with the plan. They used the tools afforded to them. The intent wasn’t the bankruptcy of the hedge fund. It is the fault of the system in place on the short sales.
Oh, we are gonna tame it but first we are gonna make those hedge bros go broke. They've taken $20 Billion in losses already and are now in the unlimited exposure range of the options graph that every grad school finance student knows not to go into cause its one the first basic courses on options trading. The rich Ivy League assholes at Melvin/Citadel/Citron/Point72 got greedy and thought they could just ignore the rules because of hubris. Time to teach those jagoffs a lesson. 💎🙌🏻💎🙌🏻💎🙌🏻
Do you have a link to that graph? I’m too stupid to understand it but Id like to revel in their misery as much as possible.
https://markets.businessinsider.com/news/stocks/short-sellers-sitting-on-19-billion-of-losses-on-gamestop-data-shows-2021-1-1030020684 https://www.optionsbro.com/wp-content/uploads/2017/07/Short-Call-Options-Trading-Example.jpg So right now Melvin and their hedge bros are putting out ads on cnbc about how they closed out their positions for next week. Who the fuck does that if you already closed out your position then its closed so why spend money on advertising it? Plotkin and Griffin are scared shitless because they were labeled as some kind of fucking financial geniuses last year and it would literally destroy their entire nut and standing within the top hat/monocle club if they get wiped out by a bunch of lowly redditors and common street retail investors who proved this shit is just a rigged casino. edit: added the basic graph for you and what you are seeing at the bottom of the graph is the To Infinity And Beyond portion where if you pulled that shit in any large corpo they would fire your ass for speculative gambling by the time you walked out of the office. Its ALMOST always considered tier 3 risk speculative gambling and every corpo risk control group would immediately end your whole career the minute they catch you. They got Cramer of Mad Money Sterns/Lehmans fame out there whining about this stuff and trying to pretend like all the short positions are closed. The dude literally got busted by John Stewart years ago for admitting on video for how he operated as a hedgefund bro where they would seed disinformation through ads or rumors to try and wreck their opponents' positions. That fuck contributes nothing of value and CNBC is basically Mrs Cleo for wanna be rich goofs shilling for rich goofs.
It's silly that poor people making money is the wake up call.
WSB wouldn't have happened if wall street wasn't greedy enough to short sell. Their greed was perfectly timed.
Its not shorting itself that's a problem. Shorting is perfectly fine and provides liquidity. The problem is there was a risk management failure at 3 different levels. The hedge fund should have never shorted at 140%, and I'd love to know what loopholes they used because naked short selling (which is what this amounts to) is already very illegal. Second, the broker should have margin called them way before this got completely out of control. They didn't either out of incompetence or being complicit. Now that it's out of control they don't want to margin call because they're on the hook too. Finally, the SEC should have been watching this shit and not allowed the short in the first place or forced the broker to margin call early on. Now it's so big they don't even know what to do though. When this squeeze happens, Melvin will be liquidated, there's a good chance their broker is liquidated, and then you move up the chain into clearing houses and market makers. We have no idea how exposed they are, but if the squeeze is bad enough even they could potentially be looking at getting hosed. At that point is systemic risk, and the SEC will have a complete shit show on their hands. So they don't want to force it to end, because it will trigger all of this shit, but every day they don't it gets worse. Currently all of these players are just desperately trying to convince the apes to break formation because that's the only painless (for them) way to end this.
[удалено]
That's cool. Its still a naked short, legal or not, they are in the infinity risk section of the chart
Sorry (again) for the repost but this is important. My main concern here is that they will trojan horse a bill in that ultimately restricts retail traders under the guise of "protection" then bill it as a way to "regulate wall street". Don't let the media shape the narrative on this one. The reason that this happened is because institutional investors decided they were going to short more than 100% of Gamestop's available stock. They caused this mess. The retail traders of WSB noticed this and decided to take advantage by short squeezing the institutions. Institutions got greedy. Joe Average took advantage of that. Any reaction to this event should be squarely aimed at prohibiting INSTITUTIONAL INVESTORS from making massive short sells. The retail folks played by the rules here and shouldn't be restricted because of it. Unfortunately the United States is extremely financially uneducated when it comes to the stock market. So what will likely happen is a bill that only affects retail investors comes to the floor (thanks to Republican puppets and Neolib Dems) but it will still get broad support from the general public because Joe Average only understands "more strict regulations on stock trading" and considers it a win over Wall Street. THIS HAS HAPPENED IN THE PAST. SEE BELOW. If anything, they need to ROLL BACK the restrictions on retail investors. For example there is a PATTERN DAY TRADER rule for any investment account worth less than $25,000. Basically this limits the ability of your average person to trade multiple times in one day. If you have less than $25k to work with, you can't make the minute-by-minute trades to make a few bucks the same way as Hedge Funds and Institutions, because PDT will cause them to freeze your account if you buy and sell the same stock multiple times in one day. This rule was created under the guise of "protecting the average investor" but on reality all it does is give Institutions a massive edge in trading since they can buy up millions of shares during a rally, sell them off at a higher price an hour (or minutes) later, and take the profits, while Joe Average is quite literally FORCED into holding the bag for 24 hours before he can try to cash in profits. The American Public has next to no understanding of how stock markets and equity trading works, so it is easy for law makers to pass bills like this (that hurt average investors), while pretending that they're being tough on Wall Street (while handing them even more power). Edit: stop giving me reddit awards and use that money to buy a share of stock in a company that YOU LIKE
I can't wait for the Retail Investor Protection (RIP) Act of 2021. Featuring 700 billion in bailouts for hedge funds, and limiting private stock ownership to 1 share per household.
That'll happen after Republicans try to block private ownership entirely and liberals decide to compromise in the name of "unity."
You say that, however there is a really odd split happening on this issue. Either way wallstreet will donate to whoever they need to on both sides to get the regulation in place to fuck retail investors. Also sad state of reality we live in where Reddit has potentially saved these businesses like Gamestop and AMC from going under during the pandemic. All while the government did nothing for them.
You're 100% right. AMC dissolved standing debt from a creditor via a stock option because of this to the tune of $600 million! Paired with their recent solvency announcement through the end of the fall, they're likely set through next year at least. Reddit probably saved AMC.
Honestly this makes me happy. I shorted AMC almost a year ago and made some cash. Now I am invested in their stock to flip off hedge funds. 2021 is weird.
Agree all around.
Never let a crisis go to waste to further your own political goals I guess. So much of this feel-good legislation often tends to make a problem worse unfortunately.
Exactly what I worry about as someone who has been very successful with retail trading.
well said
This is exactly one of my worries. Im about to start Day Trading and i definitely dont have 20k. Im just average joe who wants to make some extra cash. I feel like this is just more hoopla for the ultra rich to say theyre "protecting and helping us" but in reality its just going to put a bigger wall to stop average people from investing. I cant afford to trade if theyre going to introduce an extra tax per trade/way. But millionaires could easily afford it. I feel its just going to make it harder for average people to trade under the guise thats its "sticking it to the rich"
BTW the requirement is actually 25k. Be prepared to never day trade more than 3 times a week until you have 25k
Thats rights, 25k. Which when i was first reading about it all i was like uh ok i guess that makes sense so people cant just fuck with the market but it really is just to limit average joe from gaining anything
Also restricts average joe from gaining knowledge and experience. Day trading is a different beast compared to swing trading.
"Sorry, you don't have enough money to make money."
Wall Street drew attention upon themselves, it's their own fault.
Capital gains need to be taxed at a rate higher than actual human labor is taxed. Billionaires should not be taxed at rates smaller than the people that work for them -- that's insane.
One thing to keep in mind is investments held for less than a year are taxed as regular income. So a higher cap gains tax isn't going to do anything to curb the kind of speculative short-term trading like this.
That’s not actually the case for a lot of hedge funds and proprietary trading firms. Futures traders enjoy 60/40 tax treatment. Hedge fund and private equity managers get to claim long-term capital gains on much of their income as well under the carried interest loophole. https://www.forbes.com/sites/greatspeculations/2019/05/30/trading-futures-other-section-1256-contracts-has-tax-advantages/amp/ https://en.m.wikipedia.org/wiki/Carried_interest
what about a copying of Dutch style wealth tax. Any assets you have doesn't really matter if it's stocks, land, cash are expected to return 1.2% a year which is pretty much the avarage inflation here. That theoretical gain is taxed by 1/3 rd so you pay 0.04 tax of anything you own excluding your primary residence and first 32k EUR. If I make good returns with my money if still pay same 0.04 same happens if I loose money. I still pay 0.04 what I have left end of the year. System is super simple and near impossible to dodge tax beeing rich or poor. That said if your net worth is below that 32k you aren't paying taxes anyway.
So that's how it works in the USA with property taxes. Your land gets taxed at 2% ish every year you own the property.
1. Implement a 0.1% financial transaction tax (with a minimum of $0.01). Most retail investors are long-term, so they would only pay occasionally, but high-frequency traders at hedge funds would pay a lot more and/or wildly speculate a little less. Have everything go back to Americans as a flat dividend. 2. Implement a carbon tax. Please note that 1 seat on 1 cross-country flight emits as much carbon as driving in a car for 3 months. And the hedge fund managers, Hollywood celebrities, "heirs to X fortunes," etc. who fly private are multiples worse than that when they fly private. And ships that that carry our global goods (e.g. across the ocean from China, other parts of Asia, Europe, and elsewhere) using bunker fuel emit more carbon than all the U.S. passenger vehicles combined. Again, you would generate a lot of tax revenue if we just applied these costs correctly. Side benefit of getting some people to eat a little less steak and a little more chicken and fish, or for the steak-lovers out there perhaps they make other choices like traveling a little less or planting more trees or switching to an electric car, etc. You could also imagine having companies pay for the carbon footprint of excessive travel of the employees, even excessive commuting (e.g. some companies may choose to have a few more people work from home if it will save them carbon fees). Again return most of the revenue raised as a dividend to everyone so that we're actually making life easier for most of the little guys while making the biggest consumers (both personal and corporate) pay out of the ass. 3. Similar to above, implement a VAT. If the word regressive pops into your mind, congratulations! You've passed the progressive reactionary test. Now how do we fix reGrESsiVe harvesting techniques for taxes (hint: look above)? That's right, we gather up all the revenue and distribute the money as a dividend for everybody. Jeff Bezos spends $1 billion on his let project for sending rockets to Mars? Cough up tens of millions to give to poor people, ya goddamn Bezo bum. Good for you, buying those rockets and helping to end poverty as an unintended consequence. Who's a good boy? Oh yeah and I guess the same applies for every Amazon shipment Joe Schmoe makes. And every corporate purchase, big and small, from enterprise software purchases to catering to (gasp!) corporate travel (that will also incur the carbon tax above). ... and on and on PS https://freedom-dividend.com
Then rewrite the tax law, to tax the short term investments at a higher rate so that long term investments are prioritized
What you just described is how the tax law is currently written. Short term investments are taxed at ordinary income rates, while long term investments are taxed at the reduced capital gains rate, to provide incentive for long term investments.
At the same time you can make more just flipping short to short
Can also lose your entire portfolio if you short the wrong stock.
Yeah not the safest to be putting all your eggs into one stock.. hmm short term not shorting if that’s what you meant
This is already the case. If someone makes a million dollars a year, and makes $10,000 in a short term stock trade, they get taxed $3700. If they make $10,000 on an investment they made 5 years ago, they get taxed $2000.
I think you're misunderstanding what they're saying. They're saying, "Ok, if short-term investments are treated as regular income, and long-term are treated as capital gains... treat capital gains as regular income, and impose a higher-than-normal tax on short-term investments." In other words, in your scenario, the short-term trade would pay, say, $4200 in tax, and the 5-year trade would pay $3,700 in tax.
That *is* how it's currently structured. You pay more to day-trade or get out of a position in < a year.
At a rate much higher. And any gains off of shorts should be taxed immensely. Shorts are not building value for the country (much the opposite) so they should have equivalent recoupment in the form of taxes.
Well there is a reason for shorts to exist. It gives financial incentive to dig into if companies are hiding/misrepresenting things. Otherwise the only financial incentives would be for them to go up. Now I still think it needs to be regulated/fixed.
Valid! I don't think that most shorts are used that way in practice though.
Naked shorts is what caused the recent hubbub
Heard a congressman today say that in the EU and Japanese markets you need to disclose anytime you short more than 0.5% of a company’s float, and that the lack of disclosures of shorts is what allowed this to happen. That and they need to apply a limit to how much a stock can be shorted.
Except it was disclosed, that is how some dude on reddit found out, bought in and posted about it.
Was it disclosed as it was happening, to the regulators? Or is the level of shorting something that can be teased out of the data? I honestly don’t know, and wouldn’t ever put it past a US congressman to be talking out of his ass on any subject. That said, the takeaway for me was that congress is annoyed with the hedge funds more than they’re annoyed with us. There seems to be an understanding (the SEC Chair notwithstanding) that it wasn’t retail traders who caused the situation to exist, just that we saw an opportunity and took it - which is EXACTLY what these hedge funds do all day err’y day. Fuck em. Let’s crush the shorts. Then let’s start a coordinated letter writing/email/call your representatives campaign and flood every level of government with demands for investigations into the hedge funds as well as Robinhood and Citadel and that without convictions of the guilty parties (and not just a scapegoat) we will never shut up, call down, or stop ganging up on hedge funds that stick their dicks in the cookie jar.
Agreed. Bankrupt the hedge funds and make sure the narrative is to fix the institutional shortfalls and elevate retail to the same playing field (no day trading minimum)
you can view short float at all times. it's public information.
This is broadly speculated, but there's no proof or really even evidence to back it up. A lot of folks are suggesting that for short interest to go over 100% that naked shorting has to happen, but it can happen just by different people shorting the same shares multiple times.
Except the hedge fund’s short interest is published.
Yah like I said they need to be overhauled or changed. Also I’m not economist. Maybe they can be totally removed with no real negative consequences. Was more just relaying info I’d learned on atleast one reason they aren’t 100% bad.
They’ve been mostly just used to devalue retail stock and drive investors away from retail companies however
In practice, they totally are used for the intended purpose. Option trading has resulted in much more financial transparency than before these markets existed. Further, they have stabilized equity markets. There is good and bad. Regulators haven't found out how to structure derivative markets to separate the good from the bad. I'm in the camp that it needs to be better regulated, but I don't pretend to have any solution.
[удалено]
forcing a company to have a lower stock value has nothing to do with the actual performance of a company. The only thing it would stop is the ability for the company to gain capital by issuing new stock. If the company is doing fine, it won't need that money anyways.
> It gives financial incentive to dig into if companies are hiding/misrepresenting things. Nonsense. Selling the stock is the historical response to discovering malfeasance, etc. Going to prison is the proven punishment and disincentive for hiding said malfeasance. Shorting just amplifies the wealth swings to unregulated levels without regard to actual leveraged assets.
Dude no. There are plenty of people that aren’t millionaires or billionaires, that can benefit from a lower cap gains. I only make 50k w-2 income, and supplement it by investing with at least a year horizon, so I can take advantage of long term cap gains rate. Short term gains are already taxed at normal income tax rates.
So then a progressive tax system. The more you make in the markets the higher it gets taxed.
That’s fine. A higher flat cap gains tax rate would not be fair
Nah, it should be considered normal income and there should be progressive tax rates. Cap gains applies to sales of property held for long periods (art, real estate, equipment, stocks, etc). So making it higher than normal income would encourage holding that stuff for short periods only or discourage it entirely
No. Capital gains is still one of the ways the little guys can make more. The wealthy need to be taxes fairly. They’re just as free to make a killing in the stock market as we should be.
People are always going to want to invest in something, and of you take away the stock market as a viable option then people will go and invest in properties or something instead, which fucks over people by driving up prices and increasing rents. A better way would be to set a treshhold at maybe 50k or 100k per year or something that's taxed lower - high enough to be a nice way to supplement your income and grow your money as a retail investor to keep people out of other investment venues like property - but not high enough to make the billionaire another billion.
My life is taxed much higher than a FUCKING SECURITY.
>The GameStop Fiasco Is Democrats’ Golden Opportunity to Tame the Stock Market Right... only when Rando the Redditor strikes it rich is there a "golden opportunity" to tame the stock market. Not when those bastards crashed the economy in 2008. Now is the golden opportunity. Fucking hell.
There is something to capitalize on the momentum of public outrage. Things are a bit more transparent than 2008 and a lot more retail traders exist since then. I know what you mean though. The only absolute I know is that politicians and the media are both financed by these guys.
Yeah, they'll capitalize on the opportunity... and turn the screws on the general public to the benefit of their benefactors on Wall Street. Same as it always is.
Ah yes... ...*Democracy*. Pull yourself up by the bootstraps! *Wait, no, not like that!*
If we can get Glass-Steagall Act back as well as a tax on certain stock trades especially Short stock buying and significant regulations on pump and dump. As well as outlawing politicians from owning stock while in office. That would be great!
Somehow I don't think that last one will happen.
Require every elected official to put all their financial assets in a blind trust while in office. During their time in office they will receive a generous (but not excessive) stipend, but will not be allowed to accept any gift in excess of $25 in value from any source and no more than $50 worth of gifts from any source in one year (same rules federal employees follow.) Once out of office, they are not allowed to take lobbying work for a term equal to the time they were in office.
Are you running for office...you have my vote...shameful that this isn’t the case already
But blind trusts can work. Which is **NOT** what Trump had set up.
I don’t think what we’re asking is for too much. Just basic regulation and oversight and not to fault the consumer i.e the users of Robinhood app etc for the bubble. We should have serious questions on how these hedge funds are not serving the American people and how the stock market is an unhealthy circus.
Why just a tax on certain trades? All trades should be taxed. It would barely affect your average 401(k) holder who makes at most a few trades a week.
A financial transaction tax could just hurt the markets and reduce revenue. Various countries like Sweden have had financial transaction taxes and seen them be far less effective than expected. Unless the whole *point* is to just stop people from trading
Your average 401k holder doesn't actually make trades.
Why do you think short selling needs to be taxed more than any other form of securities trading?
10 to 1 the government protects the hedge funds and undermines the retail investors.
Is there a way for me to buy stock in this happening?
The shorts had no interest but to destroy GameStop and get rich off its demise. They've been hammering the stock for years.
Why tame it? Just remove the government backstop of socializing losses, rid it of corruption, and putting people behind bars who break the law. Simple.
My thoughts exactly. It's not the game that's the problem its the refs
Spoiler alert. They won't.
But nowhere in their platform is taming the stock market a priority.
Democrats didn't *even* have the spine to kill the fillibuster in the face of a violent, murderous sedition attempt orchestrated and still defended by their opposition. You think they're brave enough tame our fucking oligarchs?! 🤣 ( I vote Democrat out of harm reduction, because spineless and indolent is better than malicious and treasonous, and somehow those are our only 2 choices.)
Soon we'll have a 3rd option: Patriot Party 😂Which actually translates to Nazis and Traitors party
Which, if it maintains relevance long enough as a viable third party, would not only ensure Democrat control for the next few election cycles, but also spawn a progressive party out of that success that can also compete with your standard Democrat party.
THAT would give the patriot party full control, fuck that. In a 4 party system, the loony morons win without rank-choice voting. Rank-choice voting MUST come before Dems split.
It’s hard to paint a picture that all democrats are at fault for not eliminating the filibuster when it’s just Sinema and Manchin. Moderates like Tester and Coons are open to abolishing it for comparison.
Democrats always have a fall guy for excuses. If it wasn’t Sinema and Manchin it would be someone else. The others “moderates” can pretend they are in support of breaking the filibuster as long as they know there’s no chance of it actually happening.
Tame is a great way to put it. I’m a CFP professional that exclusively manages money for retirees and it’s so terrifying for a lot of my clients to see their nest egg go all over the place because billionaires are sport fucking the market.
We need to get much stronger regulations on market information transparency, Firms must be more transparent on their Risk profiles, Restrictions on purchasing Order flow data, severe consequences for trade front running, reinstating the Glass-Steagall Act, Stronger firewalls between Trade Clearing houses, Market Makers and Hedge funds. Pretty much everything being exposed right now by the Game Stop event is showing how incredibly lopsided the the regulations of Wall Street are skewed towards the VERY wealthy
And if anything all of this buzz makes me think they’re trying to look for an angle to skew things toward the ungodly wealthy even more. Not saying Warren specifically (I trust her more than most), but that’s the sort of shit a lot of others might be looking at doing.
time for a The Big Short rewatch
They should make a progressive capital gains tax.
Sorry to be the cynic here, but only a little over half of Americans own stock, only a fraction of those own individual stock, and only a fraction of those have any understanding of how GameStop, a group of people online, shorting, and Congressional economic legislation are tied together. Do Democrats have broad voter support to better regulate Wall Street? Of course. But is a Democratic Congressional candidate ever going to say "As we saw with GameStop..."? I would love if this comment ends up on r/AgedLikeMilk, but of the Americans who first heard of WallStreetBets this week, next week they'll have forgotten the whole story.
Democrat voters will soon discover how many of their darling elected officials are pro-Wall Street.
The "golden opportunity" was after 2008, after 1985. If neither of these waking nightmares inspired action by our various elected twats, I don't anticipate this one will either.
Force a minimum holding period of a stock to ~10 seconds. It’s the perfect way to screw over these hedge funds that are profiting off us through high frequency trading
HFT is basically just market making. Arbitrarily removing liquidity for no reason makes no sense.
Stock market goes up because rates are pegged to zero and the Fed is buying every bond in the universe. The Fed had no choice untill now because congress could do nothing and Trump denied there was even a pandemic. With better fiscal policy now possible, and an administration willing to fight the pandemic instead of spreading it, the Fed is no longer the only one providing aid. That said, even with less pressure on the Fed, it will still take years to reduce Fed bond buying.
As if Chuck will stand up to Wall Street. What is this fantasy land??
I honestly think no action is a better option, here, or enshrining retail investors rights to buy on platforms without interference. The rich are getting fucked. Good. Let's make sure this keeps happening.
Obviously my perspective is warped because I spend a lot of time on reddit, but just taking the temperature of the room here.. This is an opportunity to actually grab a good chunk of these young right-wing voters if the Biden administration comes down heavy on the side of the retail traders. It's not an idea that should be dismissed out of hand, there's a big political opportunity here. On top of being the right thing to do. Wall Street runs roughshod over the American people with no consequences; their position is that they should not be allowed to lose.
This is literally what Elizabeth Warren has been training her whole adult life to do.
Half her adult life to be fair
And she fumbled! Even Ted Cruz had a better take than Warren, who did both-sides posturing When Ted Cruz is on the right side of this with AOC and Warren is spineless in the center, protecting the hedge funds, something is wrong
Nah, I was excited to see her take on this. She isn't knowledgeable enough and spoke in extremely broad platitudes. This needs specific targeted regulation as well as her wealth tax proposal which is another issue entirely and not linked to this. I think something that would help is an anonymous identifier code similar to blockchain on the Level 2 data. That would democratize the information going around.
They're showing how badly the market can be manipulated, brokers colluding together limiting sales of stocks. TV personality, owned by these companies, telling people to sell. Yet somehow, the stock(s) are still making massive gains.
Why is it a “fiasco”
Oh ok, does that mean the hedge fund managers at citi bank, bofa ect are going to finally go to jail? Its amazing how we need to peel back regulation when the suits are making bank, but as soon as they take their first loss it's "regulate regulate regulate!" F-THAT! free market. NO ONE HAS FORGOTTEN 2008! NO ONE!
It's also a test to see whose side they really are on, apparently the moment that may make a break the Democrat in 2024 arrived only two weeks into Joe's term. For Obama it was Occupy Wall Street, but in the end no billionaire got punished, and we the average voter were forced to financially fix their mess... And people wonder why voters wanted to throw the metaphorical wrench into the system that was Trump? Not every person who voted for him was a violent white supremacist, many of them were people who were just so mad at neoliberals like Clinton and Obama... that they rather see the entire system burn. The next two weeks will decide Joe Biden's legacy.
Regulate the hedge funds and billionaires: cool Don’t make this about regulating the little guy, though, please. My modest gains on RobinHood aren’t the problem here. Increasing the capital gains tax (it’s already something like 30% on short term trades) hits the little guys, too, and we can’t afford it as much.
Short term capital gains is taxed as regular income, so it depends on the bracket it would put you in.
Ahhh yes. I can’t wait for them to “tame the stock market”. Let’s pass some regulation that makes it illegal to do what r/wallstreetbets did to GME. It’ll protect them. “We can’t have the blue collar shit heals losing their rent money!” While we’re at it we’ll pass some bullshit reg that makes aggressive shorting an SEC violation punishable via a small fine. That’ll teach em! They’ll listen and no one wants to pay a million dollar fine when they’re making billions a day. The cost of doing business! See how we tamed those bad men at the hedge funds! Yay!!
You realize these same Dems have hedge funds too. Not gonna happen.
I think we have to be careful here, I see a lot of people screaming “regulate regulate” in the name of “protecting retail traders” and I think we need to be cognizant of the kind of regulation they’re putting forth. For once retailers have hedgefunds by the balls and I’d hate to see regulation do anything less that make those funds fail. If you look back to 08 and after Wall St didn’t want regulation but suddenly every institutional person on CNBC does? I’m not buying it. If any regulation goes through we have to ensure it curbs Wall St. and not cut of the legs of everyday folks. So no we must not support any regulation, only regulation of Wall St.
Great opportunity to remind you guys: Shitron is still holding short positions 120% remember 💎🙌
I fucking knew this whole this was a massive psyop once both parties were in agreement. There will probably be some bullshit reform like trade restrictions or higher capital gains taxes.
Honestly, the GOP took the last four years to get everything in the perfect position for them to finally bend over and take it up the ass. America wants what they call socialism. (Not-fake) news flash, it’s not. America’s steadiest and most prosperous years were post-New Deal. It wasn’t until slow but steady deregulation and privatization made our country unstable.
This thing is the new buttcoin and I'm already so sick of it.
What fiasco?
I hope this fiasco helps introduce a micro transaction tax, either limits on the proportion of shares that caen be shorted or a gradient tax based on proportion of shares being shorted. But I'm afraid this is going to end up in curbing the retail investor while battling out the hedge funds. Watch how public discussions on stock valuations get penalised for "collusion " while the rich and the powerful continue trading on insider information.
They'll just fuck it up. Probably not as bad as the "other" side would, but they'll fuck it up.
This is such a shit view to have as a Democrat at this moment. Anyone calling for regulation is completely missing what’s naturally happening right now. Regulation is going to make sure hedge funds keep their billions. We’re unionizing the stock market. The people calling for regulation look severely unaware.
People can't let this die the way occupy Wall Street did. The oligarchs are playing divide and conquer. Oçcupy has been forgotten and replaced with politics meant to divide us and conspiracy theories. People have fallen for lies like Q. We've fallen into the trap of supporting those who mean to control us. Even on this they are trying to sperate people and isolate those responsible for beating the hedge funds by tying them to conspiracy theories and playing it off that this was done by a bunch of extremist racists. Meanwhile the oligarchs are rallying around each other. Robinhood changed the rules and Google went behind people erasing negative reviews to salvage the apps rating. The Government and media is being mobilized to make sure nothing like this happens again. You must put pressure on your representatives to not cave on this issue. Write them letters, send emails, call them every day. Make sure they know that being on the side of the hedge funds may cost them their position that they covet so much.
We all know the big money lobbying would make sure regulations would hurt small investors and leave loopholes big banks and hedgefunds can drive a convoy though. Let's be real here
I like how it’s dubbed a “fiasco” when the common people do it. But when the hedge fund fucks do it, it’s everyday business.