https://markets.businessinsider.com/amp/news/steve-cohen-ken-griffin-invest-3-billion-gamestop-short-seller-2021-1-1030003305?__twitter_impression=true
Wall street and bailouts. Name a more iconic duo.
Supposedly yesterday's movement just ate that 2.7B up entirely. Note the date on that article is yesterday morning before opening. So, lol.
But also, yeah.
Unfortunately to right-"libertarians" and classical liberals this will only reinforce the notion that the problem is interference in what would otherwise be a free market, rather than the absurdity of free market capitalism.
I don't even understand how this could be considered interference? Like how does a lib rationalize this?
I guess that's why I'm confused because what are credentials here? If you buy a stock you now have the credentials necessary to participate in the stock market lol they're just mad
The whole privatizing profits and socializing losses thing is supposedly proof to the market fundamentalist libs that capitalism as it currently exists can't be Real Capitalism because it's not Free Market^TM capitalism, but "socialism for the rich" or Corporatism or Crony Capitalism. Under a truly Free Market^TM the people who took short positions on Gamestop simply eat the loss without a bailout and divest from those short positions, and the /r/WSB noisemakers and distorters would have been too atomistic to influence the price of the stock to begin with. The lack of rational behavior and lack of Walrasian outcomes is evidence enough of this.
The root of the problem here is ultimately a lack of class consciousness and rejection of Marxist economics in favor of neoclassical (effectively neoliberal) ideology. These libs recognize the problems with oligopoly but they fail to take into consideration the role of imperialism in reinforcing oligopolistic and irrational outcomes like this. They fail to recognize what's obvious to Marxists and Keynesians, that oligopoly is the inevitable result of the initial free market conditions that arguably sort of existed when Smith, Mill, and Ricardo were alive, so the wonkiest of them (usually actual economists and other educated PMC libs) who only partially recognize these contradictions fall in line behind trust-busting and similar Warren-esque policies that otherwise completely preserve market conditions. Meanwhile the true believer ideologues put their head in the sand and simultaneously believe there's a corporatism/crony capitalism problem while also somehow believing that privatization is the solution.
Yeah, but they think that they can control the rules so that no one breaks it.
They glorify calculated risk-taking by the petty bourgeoisie and insist that business owners who got lucky deserve the reward for taking risks and putting their asses on the line (setting aside that the downsides of risk can easily be offloaded onto employees, e.g. wage cuts and layoffs during lean years).
Yeah this is definitely what they would argue instead of acknowledging this is what happens to capitalism in reality. I've seen them do it on reddit a trillion times.
That money will actually trickle down when they have to cover these shorts on Friday.
can someone explain what happened? I know wsb bought a shit ton of stocks but why are these people being bailed out?
If they don't get bailed out, they'll be forced to liquidize assets to cover their short (buy back the borrowed stock) which will cause the price to skyrocket and for them to lose billions of dollars.
Bailout isn't really a good term for it. Other billionaires are giving Melvin money in exchange for revenue shares. This isn't a gift, it's a purchase. Melvin does a lot of short selling, and has been extremely profitable for the last 6 years. Due to WSB and other investors buying against shorted positions, Melvin is now losing significant amounts of money. Melvin needs money quickly, which means they are more willing to sell revenue shares at a lower price. Billionaires like Steve Cohen see this as a buy-low opportunity. The idea is that Melvin is likely to become profitable again in the future (a decent bet, as WSB will probably not be able to successfully fuck with shorted positions forever). Basically, his hedge fun thinks that it is a profitable decision to invest in this hedge fund.
Just a reminder that billionaires don't solve every problem in the world, not because they aren't willing to give away their money, they just don't consider people starving to be a serious problem.
they already lost it the chain reaction has begone. Buy Cinemark it's the next bubble.
Can someone explain to me why this is making these ghouls upset? Like how is this hurting them? Btw I have like no knowledge on how stocks work
Imagine that someone is borrows 5 bananas to sell, under the impression that the price of bananas will go down, so they will ultimately make a profit when they return 5 bananas to the lender. But then others buy ALL the bananas, and make the value of bananas go up ridiculously, like into the thousands. This becomes a problem for the guy who borrowed bananas, because he has to buy bananas from the guys charging thousands for them in order to pay back his 5 bananas.
The fun part about this post is that they've already lost that money on the same shorts
