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The hedge fund made a massive bet on a stock value going down, which is essentially a bet on a company to fail

Gamers got wind of the fact that it was one of the "their" companies and decided to take matters into their own hands, and self-organize to hammer the hedge fund for shorting Gamestop stock, at least partially to "stick it to the man" and also because they felt like a bunch of hedge fund robber barons who bring literally -zero- value to the investment world (shorting stocks is all about making money for your investor and not at all about trying to improve a company's long-term health or prospects) were screwing with a place they all had deep personal connections to.


Gamers *VERY* quickly figured out the rules of the game, kicked the hedge fund's ass at it, and caused a multi-billion dollar hedge fund (that makes their living on betting that companies will fail) to go bankrupt.

Those hedge fund twats are in the singular business of generating paper wealth for their investors on the backs of someone else's suffering, so no, they don't get a pass on this one, and yes, they do get to suck long and hard, just like Connery told Trebek on Celebrity Jeopardy.


They created a game that should've never existed (betting on failure) and they lost their shirts a million times over. Now they're whining that someone better at their game beat them. Too bad.


If nothing else, perhaps this entire exercise will have been worth it if only to get rid of the idea of short-selling.

ORIGINAL: bayonetbrant

If nothing else, perhaps this entire exercise will have been worth it if only to get rid of the idea of short-selling.

warspite1

Mmmm... can I get a credit default swap on a collateralised debt obligation with that? [:)]

[Deleted by Admins]

Robinhood didn't change the rules to protect Wall Street; brokerages must have enough cash reserves on hand to pay their customers who are owed money on trades and post additional cash to its clearing facility to protect its trading partners from potential losses. These rules have been in place since at least the 1930s. Yesterday afternoon (Thursday), Robinhood had to draw on a line of credit from six banks, borrowing more than $500M to meet margin requirements from its central clearing facility. In addition, last night it had to raise more than $1B in additional investment from its own shareholders to cover further trading today (its shareholders include the private equity firms Sequoia Capital and Ribbit Capital). As a result, Robinhood was able to ease the trading restrictions this afternoon on Gamestop and several other companies nearing death's door.

Considering that the Reddit traders were piling into companies like Nokia, one business commentator opined that next week's hot stocks would include Pan American Airways and Studebaker.

So it's okay to pull down the entire planets economy to the brink of a great depression but it's not okay for some kids to play the market in a risky way. Got it. [;)]

ORIGINAL: Lobster

So it's okay to pull down the entire planets economy to the brink of a great depression but it's not okay for some kids to play the market in a risky way. Got it. [;)]

I don't see how this could bring the entire planet's economy to the brink of a great depression and it is not illegal to play the market in a risky way.

Did you know that there were people from the United States of America invading Big Canada Land in the hopes of starting a WAR[:-] and they were not prosecuted for it? [X(] You see, they broke no laws.[8|]

ORIGINAL: RangerJoe

ORIGINAL: Lobster

So it's okay to pull down the entire planets economy to the brink of a great depression but it's not okay for some kids to play the market in a risky way. Got it. [;)]

I don't see how this could bring the entire planet's economy to the brink of a great depression and it is not illegal to play the market in a risky way.

Did you know that there were people from the United States of America invading Big Canada Land in the hopes of starting a WAR[:-] and they were not prosecuted for it? [X(] You see, they broke no laws.[8|]

OMG...I didn't say it would. [8|]
And what the heck are you talking about? Canada, invasion, war? I thought we were talking about the stock market and investors!! [8|][8|]

ORIGINAL: Lobster

ORIGINAL: RangerJoe

ORIGINAL: Lobster

So it's okay to pull down the entire planets economy to the brink of a great depression but it's not okay for some kids to play the market in a risky way. Got it. [;)]

I don't see how this could bring the entire planet's economy to the brink of a great depression and it is not illegal to play the market in a risky way.

Did you know that there were people from the United States of America invading Big Canada Land in the hopes of starting a WAR[:-] and they were not prosecuted for it? [X(] You see, they broke no laws.[8|]

OMG...I didn't say it would. [8|]
And what the heck are you talking about? Canada, invasion, war? I thought we were talking about the stock market and investors!! [8|][8|]

Well, you are referring to playing the market in a risky way that could affect the entire world economy so how about a war with the United Kingdom and the United States in the later 1860s right after having many American men trained in military matters who are also highly experienced?

ORIGINAL: warspite1

ORIGINAL: bayonetbrant

If nothing else, perhaps this entire exercise will have been worth it if only to get rid of the idea of short-selling.

warspite1

Mmmm... can I get a credit default swap on a collateralised debt obligation with that? [:)]

I might agree if I knew what the hell you are saying [&:][:D][;)]

ORIGINAL: Pvt_Grunt

ORIGINAL: warspite1

ORIGINAL: bayonetbrant

If nothing else, perhaps this entire exercise will have been worth it if only to get rid of the idea of short-selling.

warspite1

Mmmm... can I get a credit default swap on a collateralised debt obligation with that? [:)]

I might agree if I knew what the hell you are saying [&:][:D][;)]

warspite1

The problem was that in 2008 many of those dealing in such exotic nonsense (or in charge of those who did) didn't know either...... [X(]

ORIGINAL: warspite1

ORIGINAL: Pvt_Grunt

ORIGINAL: warspite1


warspite1

Mmmm... can I get a credit default swap on a collateralised debt obligation with that? [:)]

I might agree if I knew what the hell you are saying [&:][:D][;)]

warspite1

The problem was that in 2008 many of those dealing in such exotic nonsense (or in charge of those who did) didn't know either...... [X(]

Which should have lead to the solution of: If you don't know or understand what it is, don't do it!

ORIGINAL: RangerJoe
Which should have lead to the solution of: If you don't know or understand what it is, don't do it!

Easier said than done. It is literally true that many (or most in fact) of the top professionals themselves did not understand these sophisticated kafkaesque "products". But they knew they could make a killing. Which they did.

ORIGINAL: RangerJoe

ORIGINAL: warspite1

ORIGINAL: Pvt_Grunt



I might agree if I knew what the hell you are saying [&:][:D][;)]

warspite1

The problem was that in 2008 many of those dealing in such exotic nonsense (or in charge of those who did) didn't know either...... [X(]

Which should have lead to the solution of: If you don't know or understand what it is, don't do it!

warspite1

Where is the emoji for ROFL?

Question: What has 'should have lead' got to do with humans, stupidity and greed? [;)]

ORIGINAL: TulliusDetritus

ORIGINAL: RangerJoe
Which should have lead to the solution of: If you don't know or understand what it is, don't do it!

Easier said than done. It is literally true that many (or most in fact) of the top professionals themselves did not understand these sophisticated kafkaesque "products". But they knew they could make a killing. Which they did.

The leadership could have either put in a simple rule of "If you don't understand it, don't do it!" or say "Explain what you are doing so I can understand it." If the leadership did not get a clear explanation, then it should not have been done.

ORIGINAL: RangerJoe

ORIGINAL: TulliusDetritus

ORIGINAL: RangerJoe
Which should have lead to the solution of: If you don't know or understand what it is, don't do it!

Easier said than done. It is literally true that many (or most in fact) of the top professionals themselves did not understand these sophisticated kafkaesque "products". But they knew they could make a killing. Which they did.

The leadership could have either put in a simple rule of "If you don't understand it, don't do it!" or say "Explain what you are doing so I can understand it." If the leadership did not get a clear explanation, then it should not have been done.

warspite1

But real life and being human gets in the way.

Look at the collapse of Barings Bank long before the crash in 2007/08.

Nick Leeson was making trades that were earning the bank an absolute fortune. The top brass didn't understand it, hell, Leeson's superiors didn't understand it - but who in that position is going to be the one to stick his head above the parapet and order a halt to a bonus making cash-cow?

Not least because, profits aside, it can be kind of embarrassing (not to mention ruinous for one's career) to be telling your boss you don't actually understand what your subordinate is doing; that means you lack effective management control, you're not as smart as they thought and it kind of leads to questions like why is your superior employing you in the first place?

ORIGINAL: RangerJoe
"Explain what you are doing so I can understand it."

They did 🤣 with mega utter sophisticated mathematical models and equations... that almost nobody understood either 🤣🤣🤣 But hey, "mathematics here, my friend... this is sum serious stuff... you're gunna win lots of moneys!"

ORIGINAL: RangerJoe

"Explain what you are doing so I can understand it." If the leadership did not get a clear explanation, then it should not have been done.

warspite1

Leeson did tell them. But here is the problem. Having received an explanation some still didn't understand - and who is going to admit to that? Easier to just nod sagely and pretend you know what is going on.

Some did understand the theory - BUT they still didn't join the dots and understand the actual RISK - you know, the thing that every bank has a team of people seeking to mitigate [:)]

Three wise monkeys springs to mind...

Sometimes, it is better to admit that you don't understand something than to pretend that you do understand something.

How about this: If you men are married now or ever were, please explain how women are motivated to do what they do, how they act, and so on. Please explain how you actually understand women![:D]

ORIGINAL: warspite1

ORIGINAL: RangerJoe

"Explain what you are doing so I can understand it." If the leadership did not get a clear explanation, then it should not have been done.

warspite1

Leeson did tell them. But here is the problem. Having received an explanation some still didn't understand - and who is going to admit to that? Easier to just nod sagely and pretend you know what is going on.

Some did understand the theory - BUT they still didn't join the dots and understand the actual RISK - you know, the thing that every bank has a team of people seeking to mitigate [:)]

Three wise monkeys springs to mind...

*nods*

I understand.

ORIGINAL: RangerJoe

Sometimes, it is better to admit that you don't understand something than to pretend that you do understand something.

Has anyone here seen "Margin Call"?
https://www.imdb.com/title/tt1615147/?ref_=fn_al_tt_1

It is a movie with exactly this at his core: only those "in the trenches" have the instruments needed to understand what is happening. The more you climb the food chain in a big financial institution, the more "Oh, come on! You know that I never understood this!" becomes the norm.

Great movie, great script, great cast, great acting. It is not based on real events, but the script tries to stay true to the realities of the financial sector by offering a realistic "what if?" on the eve of the 2008 crash (The father of the director spent his life in this world, and helped with the script and the language).