How a bank creates money:
You open an account with 1000 USD cash - Bank Balance 1000
A friend contracts a 1000 USD loan - Bank Balance now 2000 (in which 1000 is virtual)
We live in a virtual money world.
Before the great depression, cash was indexed based on gold reserves.
Now cash is just a piece of paper representing what ?
10 years ago when I was still a banking employee encouraged by the CEO's I have bought shares from a Renewable Energy company (EDPR) for which I paid 8€ / share.
During the last 10 years average price was always under 7€.
In the meantime it was bought by a Spanish company which holds EDP owned by the Chinese.
Last Year the company won some contracts in the USA and as rumors on Trump's loosing the elections, they become to rise and on the 7th January they reached 26€ and I didn't sold them. I wanted more !!
Then some USA banks claimed they were overpriced.
They fell during the last days closing at an average 21€, but today they reached 22.9€.
I believe I'll never get the opportunity to sell them at the 26€ price...
Let's wait another 10 years...
Needless to say: It's a News / Political game !!
You open an account with 1000 USD cash - Bank Balance 1000
A friend contracts a 1000 USD loan - Bank Balance now 2000 (in which 1000 is virtual)
We live in a virtual money world.
Before the great depression, cash was indexed based on gold reserves.
Now cash is just a piece of paper representing what ?
10 years ago when I was still a banking employee encouraged by the CEO's I have bought shares from a Renewable Energy company (EDPR) for which I paid 8€ / share.
During the last 10 years average price was always under 7€.
In the meantime it was bought by a Spanish company which holds EDP owned by the Chinese.
Last Year the company won some contracts in the USA and as rumors on Trump's loosing the elections, they become to rise and on the 7th January they reached 26€ and I didn't sold them. I wanted more !!
Then some USA banks claimed they were overpriced.
They fell during the last days closing at an average 21€, but today they reached 22.9€.
I believe I'll never get the opportunity to sell them at the 26€ price...
Let's wait another 10 years...
Needless to say: It's a News / Political game !!
I find it amusing - the power of social media.
A guy checks his guitar in baggage on an airline. They break it. He goes up the chain until some airline manager finally tells him "look pal, we're not going to replace your guitar - sorry"
So he tells said airline he's going to write a song about what happened. They say go right ahead! He posts it in YT. Goes viral. Next thing you know, said airline is in a multi million dollar PR crisis. Serves them right
My take on OP's point -
Young adults like to play on line video and other games, and after a time, they get really good at it. Some of them look at stock trading and see it's a kind of game that also happens "on line". One of them notices that "their store"'s market value regularly takes a beating at the hands of a particular hedge fund with enough power / resources to do that kind of thing...
It gets discussed on social media. Soon some number of them learn the trading game, which is followed by others and still others until it goes viral, with all having the objective of taking control / power away from said hedge fund over "their store". Hedge fund is short on the stock, all the young investors go long in a concerted, connected strategy - by the millions, some with attitudes of "I put in $15k and dont care of I lose it all".
The swarm successfully sticks in the knife, hedge fund now has to go long to cover short losses, finally they break. Serves them right
In today's day and age, you cannot discount the power of social media. Better to say "what if?"...
A guy checks his guitar in baggage on an airline. They break it. He goes up the chain until some airline manager finally tells him "look pal, we're not going to replace your guitar - sorry"
So he tells said airline he's going to write a song about what happened. They say go right ahead! He posts it in YT. Goes viral. Next thing you know, said airline is in a multi million dollar PR crisis. Serves them right
My take on OP's point -
Young adults like to play on line video and other games, and after a time, they get really good at it. Some of them look at stock trading and see it's a kind of game that also happens "on line". One of them notices that "their store"'s market value regularly takes a beating at the hands of a particular hedge fund with enough power / resources to do that kind of thing...
It gets discussed on social media. Soon some number of them learn the trading game, which is followed by others and still others until it goes viral, with all having the objective of taking control / power away from said hedge fund over "their store". Hedge fund is short on the stock, all the young investors go long in a concerted, connected strategy - by the millions, some with attitudes of "I put in $15k and dont care of I lose it all".
The swarm successfully sticks in the knife, hedge fund now has to go long to cover short losses, finally they break. Serves them right
In today's day and age, you cannot discount the power of social media. Better to say "what if?"...
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Short selling should be banned, the whole market is just a ponzi scheme. Physically taken A and adding B and making C and selling the physical item is what create value, speculation doesn't create money it just steals it from people who actually produce 'stuff or consume 'stuff.
No, not really. In a first approximation, the stock market is a zero sum gain (my win equals your loss). In reality, is a slightly negative sum game, since there are costs involved in transactions. The problem is how to place yourself on the plus size, and there are legitimate ways to do it (stock analysis based on past performance and future projections, etc... all intended to minimize the risks, but these strategies won't make you rich over night) and dirty ways to do it (manipulating the market, death spirals, insider trades (they are of course illegal if caught 😀) at which hedge funds traditionally excel, and now the Reddit crowd matched them. Which doesn't make the situation acceptable, two bads don't make it right. One may feel the sweet taste of revenge, but eventually we are all going to pay the price. Rather sooner than later.
I don’t want to go to the political but it’s a clear comment on the ridiculousness of our “system” when at the first sign of small traders getting success at the game they are restricted and it’s called manipulation while the large hedge funds are still being allowed to use the same strategies with the same stocks.
Evan, there's no speakers in your gallery! Was expecting to see; Chair, Table, Built-In, 10 petal, 2" entry conical Horn in Rosewood, Chest, Stool, Vanity...
;')
;')
I would love to stick every hedge fund manager. Bastards stole my mother's pension by buying up a profitable company, loading it with debt and running away with the money.
Moving money to innovation is a good but it feels like the markets have morphed into another way for the powerful to extract wealth from the rest.
Moving money to innovation is a good but it feels like the markets have morphed into another way for the powerful to extract wealth from the rest.
The whole system began its downhill career when they took out the gold standard as a backup for the money to be issued.
I've been quietly watching this all unfold. I'm not an investor, but I think it's fair to say that nobody is "unaffected" by the stock market.
Right now it's kind of like being on a racing sailboat in a squall, leading the fleet. At the same time, you're thinking to yourself "This was never designed for this". One part of you is excited- you're having the ride of your life. The other part of you is thinking about what's going to happen when the mast comes down.
Right now it's kind of like being on a racing sailboat in a squall, leading the fleet. At the same time, you're thinking to yourself "This was never designed for this". One part of you is excited- you're having the ride of your life. The other part of you is thinking about what's going to happen when the mast comes down.
Folks, there are already a good article:
https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment
Are you ready to talk about?
https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment
Are you ready to talk about?
I can understand this.
I worked in a company under Private Equity management for about 4 years. Let’s not get started on them either.
The whole system needs a complete reset.
I know this is not the forum for this but I really don't understand how private equity behaviour can be legal. Certainly immoral. It seems that a significant chunk of the bricks and mortar retail problems were caused by debt loading.
Has anyone here read "the creature from Jekyll Island" quite appropriate at the moment. I am also not going to panic, my funds are in companies with an intrinsic value and real sales.
It is curious that the "Federal Reserve" is neither Federal or a reserve!
It is curious that the "Federal Reserve" is neither Federal or a reserve!
I find it fascinating, and alarming on two fronts. One of my Reddit savvy co-workers got in GameStop at 90 with some play money and has decided to go for the "$1000/share or $0.01/share" strategy and revels in the idea of putting the squeeze on hedge funds in their abstract.
I'm alarmed by the destabilizing effect this is having on the market, in a mob finance kind of way, and what sort of cascading effects that may trigger. I'm also alarmed by the financial world's response which puts a public exclamation point on how manipulated and have-vs-have-not the market is. My hope is this materially affects a change in at least the US regulatory space. It's hard to argue that our system here isn't abstracted in unhealthy ways.
I'm alarmed by the destabilizing effect this is having on the market, in a mob finance kind of way, and what sort of cascading effects that may trigger. I'm also alarmed by the financial world's response which puts a public exclamation point on how manipulated and have-vs-have-not the market is. My hope is this materially affects a change in at least the US regulatory space. It's hard to argue that our system here isn't abstracted in unhealthy ways.
I think this mentality is a bit, well, martyr-istic...
You should explain to your friend any Hedge fund Manager worth his weight in salt got out of their short position already, and has now started a new short position, as the actual stock value really "worth" 1/10 of current trading price.
In the end, your friend will lose all their investment, and the Hedge Fund Manager will laugh all the way to the bank.
If your friend really wants to stick it to these managers, GETTING OUT NOW would be the best thing!