FTSE & DOW slide because of Reddit users!

Cus

The whole thing seems like your regular pyramid scheme, with those last in taking the pain. 
This notion that it's the small man sticking it to the corrupt institutions of Wall Street is rubbish in my opinion. The ones on the message boards who generate this movement are just as greedy, and none of them are left holding the bag...

BananaRepublic

Cus said:

The whole thing seems like your regular pyramid scheme, with those last in taking the pain. 
This notion that it's the small man sticking it to the corrupt institutions of Wall Street is rubbish in my opinion. The ones on the message boards who generate this movement are just as greedy, and none of them are left holding the bag...

The chief business correspondent of the Times said the same today. Collusion between investors is illegal, which means that this online forum behaviour is illegal. Obviously recommending shares is fine, but this is manipulating the markets knowing the shares are overpriced. 

Type_45

I'm normally completely against the establishment. But as a shares holder, I'm all for them!

And the establishment will have the last say on all this.

RolandFlagg

It's the funds causing this. Retail only owns 15% of Gamestop. The rest is mainly Vanguard and Blackrock. Funds that are long and short are manipulating the price. Some reddit users will get very rich, some very poor, but the rich will get richer either way.

Linton

RolandFlagg said:

It's the funds causing this. Retail only owns 15% of Gamestop. The rest is mainly Vanguard and Blackrock. Funds that are long and short are manipulating the price. Some reddit users will get very rich, some very poor, but the rich will get richer either way.

Retail is perfectly capable of disrupting the market on its own as what is important is not the total number of investors but rather the number of investors active in the market particularly if they all decide to buy.  I cant see Vanguard, who are mainly in index funds, and blackrock playing games with such a small company.

talexuser

BananaRepublic said:

Derivatives have a valuable roll to play but traders who mess around with them don’t deserve any sympathy. A few years back basic food prices were sky high causing huge problems for poor countries, all due to speculators. Not that they gave a monkeys. 

I defer to Warren Buffer, who knows more than me, who called them financial instruments of mass destruction and a time bomb. After all the credit crunch was caused by rolling up all those worthless debts into derivatives and selling them on again and again. If the debts would have been on the banks balance sheets I don't think it could have escalated the way it did without someone noticing well before implosion point. And hedge funds are a big market for derivatives.

BananaRepublic

talexuser said:

BananaRepublic said:

Derivatives have a valuable roll to play but traders who mess around with them don’t deserve any sympathy. A few years back basic food prices were sky high causing huge problems for poor countries, all due to speculators. Not that they gave a monkeys. 

I defer to Warren Buffer, who knows more than me, who called them financial instruments of mass destruction and a time bomb. After all the credit crunch was caused by rolling up all those worthless debts into derivatives and selling them on again and again. If the debts would have been on the banks balance sheets I don't think it could have escalated the way it did without someone noticing well before implosion point. And hedge funds are a big market for derivatives.

Indeed. And don’t forget Long Term Capital Management, that could have been very serious. 

Thrugelmir

RolandFlagg said:

It's the funds causing this. Retail only owns 15% of Gamestop. The rest is mainly Vanguard and Blackrock. Funds that are long and short are manipulating the price. Some reddit users will get very rich, some very poor, but the rich will get richer either way.

It's retail. Call options were being taken out on the stock in large volumes. This requires very little upfront capital. Only the numpties late to the party will be buying physical stock. Likely to be the unfortunate ones holding it when the music stops. 

talexuser

AlanP_2 said:

John Authers from Bloomberg has been discussing this in some of his recent articles and he made the interesting observation that those people using shorting pre the 2008 crash are regarded as "heroes" and have had a film made about them (The Big Short en.wikipedia.org/wiki/The_Big_Short_(film) )

They were not portrayed as heroes for shorting, that was the by product, but for recognising the whole thing was a house of cards and trying to warn everyone else, the supposed "masters of the universe", who paid no attention because blinded by greed (and fraud).