Last Sane Man on Wall Street
nymag.com
nymag.com
Do you mind elaborating? Just trying to figure out what you meant there.
Are you talking literally about police funding and how it could have been better used for funding SEC? Or are you talking about it in a more metaphorical sense, and questioning why random tax payers are doing the job of catching instances of malicious insider trading instead of SEC doing that?
If it is the latter, then there is one solid incentive - whistleblowers get a reward between 10-30% of the monetary sanctions recovered on that case by SEC, as long as the case was successful and led to over $1mil recovered[0].
0. https://www.sec.gov/whistleblower/frequently-asked-questions
Further, the right to bear arms means nothing as far as the legality of use of force. The so-called monopoly (which basically always has exceptions, anyway—it's a tool for understanding the role of government, not a law of nature) is on the legal use of force—it's not as if folks don't illegally use force all the time, so clearly there's no monopoly on the ability to use force, but on the ability to use force legally.
(Those states where someone can use lethal force if they're being attacked, or feel her/his life is in danger)
> > which basically always has exceptions, anyway
The really important part of the "monopoly on violence" idea is whether a state has the power to claim such a monopoly. It's a measure of state efficacy—a state fails to be fully sovereign in its territory if it cannot claim such a monopoly, that is, if it is unable to effectively quash others' similar claims; or, if its claim to the monopoly lacks credibility. Say, if a cartel claimed the authority to regulate and dispense violence in part of the US and the federal government were unable to re-assert its claim there, that would be an indication of, at the very least, significantly eroded US sovereignty over that territory, if not the complete loss of it.
A state making lethal force in self-defense legal doesn't challenge the state's claim of sovereignty, so isn't what's usually meant by this principle.
That includes defense if their government goes rogue - read the Declaration of Independence.
Asset seizures should still happen, but the seized asset is parked as gov't revenue as escrow until the crime is completely solved, and victims paid out from it (if applicable). Then whatever remains become general tax revenue, rather than funding the police directly.
It doesn’t happen when the whole business was a confidence game, like FTX.
My response is that this isn't just a "belief" kind of thing where if hindenburg doesn't release the report everything is fine. There is actually a fraud occurring, and when a fraud is occurring that means there is a "hole" like a place where people expect there to be money but there isn't. This means eventually it would have manifested at one point or another, and often the nature of these "holes" is that they become exponentially wider probably meaning the fallout is even more intense the longer it goes on
Having read Bloomberg articles about Hindenburg's position, I completely get why he's short - Adani is engaging in fraud.
It’s likely the overseas conglomerate the article says Anderson is currently investigating, whose corporate register in Mauritius he just downloaded is Adani.
Here's a chart of Riot insider stock trades graphed alongside the price of $RIOT: https://www.quiverquant.com/insiders/RIOT
if insiders done know shit about their own stock - what chance does twitter investing newsletter writter have
> especially when driven by the macro environment
The headwind / tailwind of the macro environment is really the biggest factor - this should be the #1 lesson for anyone investing anything.
The interesting thing about short sellers is, we only focus on the short sellers, not the people or companies that are loaning the stocks to them. When the short seller loses, they stand to make a bundle.
i wouldn't really describe it as moral, but more a corrective force to ensure efficiency in the markets. It's neutral (or amoral), rather than moral.
The Big Short (2015) and The China Hustle (2017) both portrayed short sellers as the heroes, for example.
Hindenburg has proven to be well-researched and legit though.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3198384A
I'm going to call a [citation needed] on that. It's already very illegal to spread false information in order to profit from short-selling. In fact, I'd say that shorts are overly scrutinized in comparison to longs. Both are important for price discovery and both have the potential to cause a misallocation of capital if they spread false information in favor of their position, yet people seem to have a positivity bias that makes them more willing to forgive someone who spoke positively of an overhyped stock than someone who spoke negatively of a good stock.
Given short-sellers' importance in exposing "creative accounting" and excessive hype, I worry that the current popular sentiment against them will discourage further shorting even more than the financial incentives already do (a long has an unbounded upside with the downside capped at 100%, while a short has an unbounded downside with the upside capped at 100%).
Doing a bunch of research, publishing it and saying "I'm shorting this stock because of the research I've done, here are the market conditions that would perpetuate the drop I anticipate it will" is completely legal and helps keep markets from believing their own hype too much.
Pump and dumps are sort of the opposite of that. there's usually very little legitimate research and it's stuff that serious investors don't touch.
Regular shorting is what people mean by buying puts/selling calls or selling borrowed stock.
The pump and dump is you getting other people to buy/sell stock by lying about it.
The difference is the fraud, for Americans, false statements of fact are not (always) protected by the first amendment. Depending on the target and the harms caused the supreme court thinks there are some statements that can be made criminal. The court is moving in the direction of expanding the amount of speech that can be prosecuted in this area. If United States v. Alvarez were decided today, it might have a different outcome.
Where the statements are true, they are not just legal, they are encouraged. The more legitimate information there is, the more efficient the market is.
(German series but the dubbing is good)
Given that Ford and GM trade at very low multiple and have not done much in a long time, even decades, this is not that undoable.
I think the survivorship bias with shorting is huge. So many people and firms try and fail. The risks seem to be glossed over by the article. Seeing a few big winners like Nikola one may be under mistaken impression this is a good strategy.
Having a big win is seldom enough to beat the market. If you allocate 5% of your capital for a short and it goes bankrupt, you only increased your total capital by 5%. Making the historical 10% average (including dividends) with an index fund is less risky and more consistent, probably.
1. Presumably that discussion took place pre-FTX.
2. I don’t think he said “1000% in a day”, just in general.
3. The article goes into repeated, extensive detail about how short selling is financially dubious and extremely risky.
4. It goes into his childhood because it’s a profile piece.
I mean this with no offense, only because I’ve been there many times: did you feel personally attacked by this guys takes on crypto/stocks/our world at large?
No one thinks of shorting as a good business strategy.
That’s why when Elon Musk goes on about how shorts are these shadowy super powerful figures you know he’s completely bullshitting because shorts are among the few (only?) actors interested in downward price discovery, while the rest of the world, including governments all over, would much prefer constant price growth with the correction to be suffered by a future generation/government.