Care to cite evidence of this conspiracy?
1,008 karma · joined July 17, 2014
Whether you think it and it’s constituent parts are good metric for measuring inflation is a different conversation. But that doesn’t make it “rigged”.
Learn more about the calculation here: https://www.bls.gov/news.release/archives/cpi_04132021.htm
But if you put them on continuously in front of a young kid (or at least my kid) and you can almost see their gray matter being systematically obliterated.
I think its childhood equivalent of mindless doomscrolling.
There is a strain of video (below) on there that is just like perceptual candy to kids. And there are LOADS of these videos in slightly different versions.
My own anecdote:
Our 2 year old found these videos (3 years ago): https://www.youtube.com/watch?v=V7IsNFDtG4U&list=PLHZrFxrJbt...
At first we were like "seems fine, colors and shapes...keeps him engaged". After a month or two he could just stare slack jawed at these videos for hours, it was like he was being lobotomized, and begged for them constantly. It was clear that they didn't actually teach him anything, and he couldn't even remember anything salient from watching them. We turned them off and haven't let him watch since. Even things like watching looney toons is infinitely better because there is some base narrative, characters, problems etc.
By all means, choose not to like it as an individual...but spouting off some purity test for making and experiencing art is literally the opposite of making and experiencing art, and you sound exactly like the people you’re criticizing.
On the other hand, WSB is basically saying, "So what? We don't care about the argument, we don't care about the true value here, we're just exploiting a market dynamic (probably illegally), and collectively interfering with the ability of hte market to price this efficiently, and we just want the number on the price to move so we can cash out."
The history of financial markets is littered with the bodies of unsophisticated investors participating for non-fundamental reasons. Tulips, .com, real estate bubble. Every mania in history follows this pattern of being driven more by the emotion and inertia of the game vs. the underlying fundamentals, this looks no different to me.
It’s also illegal, which seems to have been left out of all the conversations.
“ The rush by short sellers to cover produces additional upward pressure on the price of the stock, which then can cause an even greater squeeze. Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal.”
If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors.
But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this.
In a different life, I worked for a well known discount brokerage in 2005 processing corporate actions. Mergers, splits, divided payments, proxy voting, exercising bond contract provisions, warrants, short covering etc.for retail customers. Not glamorous work to be sure.
I can tell you unequivocally that to deliver the simplicity, affordability, and transaction efficiency we now take for granted, many MANY layers of broker/dealer process and manpower are built on top of pretty archaic systems and processes and regs. I’m sure that’s something most HN readers would roll their eyes at because of how low tech and antiquated it was. But that’s how the market actually functionally works for retail investors. And those regs are often granular and exist because of historical failure.
Just being able to buy stock, and not worry about getting the literal paper stock in your own name is an innovation we take for granted by having securities held in street name. We in fact had some paper stock in a safe because some clients insisted having in their name.
When we processed shorts we literally would hold the short against a specific humans named account or go borrow shares by picking up the phone and calling another broker. Shorts don’t happen out of thin air. It’s someone else stock you’re selling.
In 2005 I would log into a black screen DTC terminal and pull money down at a firm level by manually typing the values in (lord knows what happens if this gets messed up).
If accounts went over minimum margin requirements we would pick up the phone and call them to explain why they needed to close positions or add collateral. One time we closed the entire account an mailed them a check for the balance because they kept ignoring.
When corporate action transactions settled (T+5) we would manually allocate them to accounts, and then print out the accounts affected for manual QA. The print out went into a filing cabinet for compliance reasons.
All of this is to say...it seems like HN model of how retail financial markets work is like super efficient APIs that transact like magic plumbing. In reality it’s more like an anthill built on top of a Rube Goldberg machine. You may not want to believe that RH and other brokerages have to abide by insanely complex and Byzantine rules and regs and systems and interactions because they make a drop dead simple experience in their app...but they almost certainly do.
Tune will change when RSUs and 401ks get effected.
Short sales can be good. Downward pressure can be healthy. If you think a company is overvalued because its fundamentals are misjudged, the short is a corrective force in an overly optimistic market
You may disagree with the outcomes of short pressure, or private equity actions etc., thats fine, but I think there is an important distinction between actors in the market doing something profitable because they actually believe it, and the hysteria of a mob just randomly committing financial mayham because they can.
I don't think we want to live in a world where markets are increasingly led by irrational forces simply amplified by media and misinformation...its not good in media right now, I shudder to think what happens if that behavior gets a foothold in markets.
And for all those that say "well Wall St has been doing that for years"...fine, let's address that too. Financial regulations are essentially a history lesson of past failure we've tried to correct. Let's be consistent.
With capital markets...there absolutely is a goal, and it’s not speculation/gambling. The goal is to have a place where corporations can raise capital and investors can hold them accountable for how they return value to them...and then a billion rules to make that as fair and functional (not equitable) as possible.
I don’t get the argument that what these guys are doing is somehow noble, or to be encouraged. Completely unregulated non-purposeful markets are not helpful....we did that 100 years ago...thats why we have all the rules we do to make markets function to the end.
Nor is every goal of our existence is about “building stuff”, it can also be about just living a just and considered life.
These types of boorish egotistical statements from tech talking heads masquerading as cerebral contrarian thought are much of what’s contributed to our current mess.
I routinely stay up too late just to have some quiet, waking conscious alone time after a full day of work and time with the kids (which are now hopelessly intertwined).
Been fascinating and disheartening to watch the elevation of the Swedish approach in the States as one of secret knowledge about “how to do it right” when even a cursory analysis seems to prove otherwise.
Problem is, people in the US didn’t get the memo. They (we) think Sweden just rolled down the windows and put the pedal to the medal.
So both the perception and the report from various news outlets here has been pretty shoddy.
My two year old son ended up breaking his leg stepping off a short stool a couple years ago. My wife thought nothing of his crying but after ten minutes or so she called me while I was upstairs working. I immediately came down and sensed unordinary danger, triaged his leg and concluded it was a broken bone in about 20 seconds, and was off to the ER a minute later (he's fine!). But there is something that just kicks in and says "SOLVE THIS NOW".
This hard pull towards conspiracy theories is happening in contrast to a period of about 100 or so years of relative enlightenment supported by mainly centralized liberal institutions(not saying that doesn’t have a cost), but this pattern is as old as civilization itself.
But why now? IMO it’s modern day mythology created by a tremendous lack of trust in fragmented and unreliable cultural and political institutions. Authority and expertise to explain and deal with the events around us been either drowned out by false prophets or ignored after committing enough reputation suicide as to be rendered untrustworthy.
It’s hard to see the path out of this dark forest.