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Comment by slg | Hacker News Reader

This is why the class warfare elements of the narratives around the whole WSB/GME situation have always seemed naive to me. It isn't that hedge fund people are any greedier than any other group of people, it is just they have greater opportunity to be greedy assholes. You give the WSB people an opportunity and unsurprisingly they turn into greedy assholes too. The people involved on each side are more similar than they are different.

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And for every hedge fund that was short GME, there were several who were long and cashed in. Not exactly a victory for the 99%.

It seems to me the "we'll all get rich sticking it to the hedge funds" stuff was some combination of sincere belief and pure window-dressing to get more people to buy into the pump. And for the people left holding the bag, a way to feel better about their losses.

“We’ll all get rich sticking it to the hedge funds” was comically naïve given that the entire strategy was to hold no matter what and never sell. Every time it would go higher the narrative just adjusted the target price upwards. “$1000 is not a meme” et al. As if the price would go up to infinity dollars.

If you don’t have an actual exit strategy—especially on a time-dependent play like a short squeeze—you’re the sucker who’s losing their investment.

I mean if Robinhood didn't do illegal shit like stopping retail from buying the price would have gone a lot higher.

Maybe you shouldn't get your news from reddit.

Hint: T+2 settlement in a time where a stock price is highly volatile means that brokerages are forced to pony up more collateral. Robinhood is such a bad brokerage, it didn't have the funds to do so and was cut out by the clearinghouses.

Selling of GME would roll back the amount held by Robinhood, lowering collateral.

> was comically naïve given that the entire strategy was to hold no matter what and never sell.

That was ingenious. Since tulip mania mob chased penny stocks in pump and dump schemes in order to make money. Giving class war narrative to the mob was revolutionary.

Yeah it's super sketchy -- I wonder how many of the people encouraging the "class war" thinking had a stake in it, were long on gme -- including possibly institutional investors.

(What, like institutional investors never use social media to manipulate markets? Legal or not? Now you see why it's not crazy for the FTC to investigate wsb, right?)

But I think there is still a story here about why the "class war" narrative was so effective and popular... there is clearly an appetite for some class war... that can be used to manipulate people, or...?

When is there not an appetite for blaming others not in the exact same circumstance as you?

I suspect you are younger than me, if you think the climate has always been like this in the USA.

Trump already did it, next round would be more interesting.

The parts of wall street that lost were part of the 1%. The part of wall street that won were the funds that managed teachers' retirement accounts.

This is the narrative. It doesn't matter which narrative makes the most sense or is the most correct, it only matters which narrative spreads the most and the quickest. The narrative that wins will always be the victory narrative.

> And for every hedge fund that was short GME, there were several who were long and cashed in. Not exactly a victory for the 99%.

Mudrick Capital Management shorted GME at the peak and made at least $200 Million from the whole event. Mudrick Capital also benefited from AMC, to the tune of hundreds-of-millions.

They didn't even punish the shorts: a lot of shorts sold at $300 or $400 and made bank.

>This is why the class warfare elements of the narratives around the whole WSB/GME situation have always seemed naive to me.

None of the original WSB community that initially invested in GME subscribed to that nonsense. It was only ever about making money. The narrative was hijacked by the social media crowd that piled in on the pump two weeks ago and subsequently made the subreddit unreadable, and the media ran with it. It really reminds me a lot of what happened to 4chan in 2007 with "Project Chanology".

Class is defined by wealth and leverage, not by greed. I don't think I've ever seen that definition before.

> they have greater opportunity to be greedy assholes

That is the definition of a different class of people.

The only change I'd make here is by "perceived wealth" instead of "wealth" I know there's plenty of people who look rich and are treated as such that are a bad market turn away from losing everything because they spent all their money on looking rich.

Yes, you are right that is how class is traditionally defined. However that doesn't match what is often observed in the dialogue on WSB and other places that are trying to engage in class warfare against the rich. The focus is usually on greed that helped the rich accumulate wealth, motivates them to want to hold on to that wealth, and how the less wealthy people's desire for a piece of that wealth is somehow more noble.

"The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."

-George Orwell, Animal Farm

Not necessarily. Attempting to force a sea change in the proportion of capital ownership is undoubtedly class warfare, and further, perusal of WSB will find most GME posters expressing some variation of an intent to hold their shares until they're either absolutely worthless or are in a position to force the aforementioned sea change (e.g., mass sells as prices that would ruin not only the hedge funds, but also brokerages and possibly banks).

A popular (and not altogether unbelievable) narrative is that the DTCC forced the shutdown of share buys through its "margin call" on brokerages' collateral requirements (a sudden shift despite a week of unprecedented volatility in GME et al.) on the precipice of just such an "infinite short" scenario.

The priorities of each group on the other side of a victory are clearly different: entrenched money will continue on as always. WSB would have paid off their consumer debt, donated to worthy causes, or invested directly in themselves or new ventures, without the limitation of interest-bearing loans or the judgment of denial-happy lenders.

I think your entire comment is inaccurate in this context.

The class warfare narrative is complete nonsense for another reason.

There is nothing inherently wrong with being short a stock - and even if there were, shorts create new long positions, when they are opened! A stock that's 130% shorted has 230% of its shares held by long positions. If long positions are so virtuous, then short sellers should be commended for creating so many of them.

Shorts are a market way to deflate bubbles before they grow too big. I understand that people who only want to see the numbers of their positions grow are displeased by any negative sentiment about them, but people who want to buy into long positions benefit from lower prices.

Shorts just make a lot of people very upset. You'd never see /r/WSB trying to crash a stock price to kill a hedge fund, because sticking it to the shorts doesn't tickle the brains of people who think that shorting is somehow worse than all the other stuff that hedge funds do.

The class warfare argument reeked of after-the-fact reasoning to me.

WSB made Martin Shkreli an honorary mod after he became infamous for jacking up the price on that medicine. They are self acknowledging greedy assholes and always were.

The WSB definition of class warfare seems to be trying to pull the guy on the rung above them down whilst simultaneously kicking the guy a rung below them in the face.

It is basically a viral/social media version of John Nash's So long sucker[1]

[1]: https://en.m.wikipedia.org/wiki/So_Long_Sucker

> it is just they have greater opportunity to be greedy assholes

I think that's the whole issue though. They wealthy have held on to a monopoly on ... wealth.

But not really. There is income inequality but wealthy people go broke all the time as do non-wealthy people get rich. The wealthy are a moving target.

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But they achieved their goal! The price increased incredibly due to the collective pressure. But of course nobody can keep the price of a stock at such levels for a long time. Even if everyone who bought GME had hold their shares, the prices were destined to fall to more sustainable levels.

The squeeze was actually cut short, because trades from Robinhood were halted for GME as well as some other brokers (all at the same time). Nobody knows how high it would've gone, but it's certainly significantly higher.

https://finance.yahoo.com/news/robinhood-bars-users-from-buy...

You can also look at trading volume. It would have gone a lot higher had there been no intervention from Robinhood. I am not claiming there is a conspiracy here - I realize Robinhood didn't have the cashflow for these deals and had to halt trading.

How long do people expect a short squeeze to last? It came and lots of working class people made millions. Those who came in after the fact and held “with diamond hands” expecting to stick it to institutional money lost out because they became over zealous. Robinhood also cut short due to liquidity reasons but even if that wasn’t the case, Robinhood has been blocking buys of highly volatile stocks since before I quit using it in 2017. Most of those were penny stocks, sure, but the point remains there was nothing special about GME except for it being expensive and in the news.

> How long do people expect a short squeeze to last?

I don't think anything in my comment implied the short squeeze hasn't already ended. I said it was cut short, not that it's still going.

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