To me, this really exposes how corrupt Wall Street is and how the house always wins just like at the Casino.
If you are a regular Joe and manage to beat the billionarares and their hedge funds they just change the rules of the game so they still win.
Pathetic! Little guy has a slim chance.
Only a naive person would think that anything other than money rules this country. The worst aspect of it is that the Republican Party has not just the rich folks but also a whole lot of the poor folks convinced that that's the way it should be. Look at how many working class people have become Trump zombies!
I gotta admit, you have some serious mojo going when the very people you're screwing over are willing to march on the Capitol for you. The fat cats, meanwhile, are rolling on the floor, laughing.
I dont think the motivations behind it were malign or geared to favor the hedge funds. My understanding is it was an issue of liquidity and Robinhood not having enough money to fund the massive transactions taking place by the thousands on margin (with borrowed money). They just got overloaded.
Make no mistake, the little guys won here - at least the ones that were able to get out at the top.
There's also this narrative going around that the short sellers are some nefarious group of elitists trying to manipulate the market. Dont forget it was the short sellers in 2008 that blew the lid off the corrupt housing bubble being inflated by banks and their faulty mortage products. The shorts were the good guys then. There's a great movie about it...
Originally posted by: PJ Stroh
I dont think the motivations behind it were malign or geared to favor the hedge funds. My understanding is it was an issue of liquidity and Robinhood not having enough money to fund the massive transactions taking place by the thousands on margin (with borrowed money). They just got overloaded.
Make no mistake, the little guys won here - at least the ones that were able to get out at the top.
There's also this narrative going around that the short sellers are some nefarious group of elitists trying to manipulate the market. Dont forget it was the short sellers in 2008 that blew the lid off the corrupt housing bubble being inflated by banks and their faulty mortage products. The shorts were the good guys then. There's a great movie about it...
I don't think the issue is short-selling or even (legally) manipulating markets. After all, the Reddit group is manipulating the market.
The problem is that everyone believes in the free market......UNTIL the very wealthy begin to lose money. Then it's always time for an intervention or some regulation, right?
Originally posted by: MisterPicture
I don't think the issue is short-selling or even (legally) manipulating markets. After all, the Reddit group is manipulating the market.
The problem is that everyone believes in the free market......UNTIL the very wealthy begin to lose money. Then it's always time for an intervention or some regulation, right?
Maybe - but that was not what prompted Robinhood to stop trading.
I have a Robinhood account. THis is the message they sent out to their customers today addressing the shutdown.
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It’s been a tough day, and we’re grateful to you for being a Robinhood customer. In light of the extraordinary market conditions this week, we temporarily limited buying for certain securities this morning. Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.
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This was a temporary decision made to best continue serving you, and was not an easy one to make. We know it’s led to frustration and confusion, and wanted to provide some clarity.
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As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.
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To be clear, this decision was not made on the direction of any market maker we route to or other market participants.
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The past year in particular has shown us that the financial markets are for everyone—not just institutional investors and hedge funds. We’ve seen a new generation enter the market, and they’re sparking conversations about what it means to be an investor. We stand in support of you, our customers. Democratizing finance for all means giving more people access, not less.
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We’ll keep monitoring market conditions and will update this Help Center article with the latest changes. We also published a blog post regarding today’s events.
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Thank you again for being a Robinhood customer. We’re so grateful for your support."
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I have only a token investment in the stock market, since I've been burned in the past. I loaded up on tech stocks just before the dot.com bust (strike 1); I bought mutual funds just in time for the Dubya recession (strike 2), and I made some more mutual fund buys as the bailouts began (strike 3). It was a slow-moving disaster.
The market is completely irrational and stock prices have no relationship to the values of companies or their financial prospects. Case in point: during the abovementioned bailout period, I anticipated that Ford Motor Co would receive massive bailout funds, so I bought 1000 shares at 8 1/2. The bailout was approved--and the stock immediately fell below 2. Irrational!
Today is another example. Stocks tanked because of hedge fund activity and short positions being covered. What does that shit have to do with the value of stocks? Yet, if your timing was bad, you lost money. It's as if what is being traded is Bitcoin or tulip bulbs---little or no intrinsic value. The stock market is like a casino in a fun house.
Add to that the unhinged freakouts about individual stocks, and you have to conclude that you might as well just close your eyes and throw darts at the Wall Street Journal stock pages than try to make any kind of informed decision re investments, The wise guys and the big players know so much more than you do, anyway.
