Obscure "Fake" News Entertainment (1 Viewer)

Steve R.

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I don't know how many on this forum follow the US financial markets, but as I write this the DOW Jones market is down by approximately 500 points. The market has been extremely volatile, so by the time I post this and you read it things could be substantially different. So what is behind this negative precipitous reaction?

The fat finger of blame is currently wagging its finger at Game Stop (GME). The stock has moved up today by $130 per share to $278 from a low of approximately $3.00 per share in August of 2020. Based on the pundits scrambling to find excuses, the shorts are being forced to buy the stock to cover their positions. Ironically this is forcing the price of Game Stop ever higher. The shorts, in having to cover their positions in Game Stop, have had to sell other stocks, flooding the market with stocks "for sale", resulting in the current approximate market decline of 500 points. Note: that the stock action with Game Stop is very similar to prior (short) stock actions with Tesla (TSLA) and Eastman Kodak (KODK).

The humorous kicker behind this post, one of the pundits reasonable explained that what is happening is an assumed "coordinated" assault by by retail stock investors to drive the stock price of Game Stop stock up so that the hedge funds would loose money. Apparently that is happening. But he went on to amusingly speculate concerning this market manipulation that is technically illegal: where are the social media "fact checkers" to squelch the market disruption being created?

Market manipulation has always been a concern, but it is very interesting to observe a stock market pundit now raise a concern that social media platforms can be active participants in market manipulation. Usually market manipulation is considered more of a (hidden) corporate activity, so it is groundbreaking to have social media platforms identified as being participants. Social media platforms have probably been involved in market manipulation for some time, but until now it has not been exposed.

The viral spreading of "false" news through social media platforms is not simply limited to politics, but can permeate a whole spectrum of topics. The obvious conclusion, social media platforms will never have the resources to really suppress alleged "fake" news. Furthermore, the definition of "fake" news tends to be highly subjective. As a quick example, how can a stock that was only $3 a share a few month ago, now at $280 a share justify a "buy" recommendation? Who would be a qualified "fact checker"? So how would social media, as one example, evaluate the quality of "buy" and "sell" recommendations, that in itself is a reason for social media platforms to stay out of the censoring game.
 
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Pat Hartman

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Trump and COVID election fraud are pretty easy to suppress since you can just look for a few key words or phrases to identify them. Other fake news can be anything and there is no way of identifying it unless someone points it out and they go looking. But since it won't hurt Trump but it could hurt Biden, their heads are firmly in the sand.
 

Pat Hartman

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These hedge funds have shorted 140% of the outstanding shares!!! How is that possible? We don't know much about the group that decided to make the hedge funds sorry but I'm rooting for them:) I'm sure that the DOJ will seek them out and charge them with something because you can't hurt important people and get away with it.

Have you heard about the reporter that the FBI just arrested? Apparently somebody was offended by some mems he created in 2016. Tucker read the charges and there didn't seem to be a crime anywhere.

Let's start a scorecard:
Reporters arrested:
Trump (4 years) = 0
Biden (1 week) = 1

Who knows how many he's sic'd the IRS on also. That was one of Obama's favorites.
 

Isaac

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It's Trump's fault. He's doing something over there at mar-a-lago to make the stock market bounce around like a basketball. he's turning a Trump Switch or something I think. After the current impeachment we should definitely start a new one and also impeach Reddit.
 

Pat Hartman

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I'm watching the news now and they are talking about RobinHood BLOCKING the purchase of the stocks in play. WHAT the HELL is that all about????? How can they get away with it? Do they think they're Twitter or something?

When did America become Facist?

I was thinking last night about making a big sign and borrowing a friends walker so I could park myself in front of Kohl's today protesting their decision to cancel My Pillow.

I LOVE my "My Pillow" and I love Mike Lindell. His story is very inspirational.

OMG, eTrade and Schwab just started blocking trades also
 
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Pat Hartman

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I just came across a map that highlights the importance of the Electoral College. 43 of our 50 states have a population less than that of LA. Without the Electoral college only the grey places would determine the Presidential election.

USPopulationVsLosAngeles.JPG


Along the same lines are the urban populations which strangely enough correspond with where Democrats live.
UsPopulationConcentrations.JPG
 

Steve R.

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Needles to say, the short selling of Game Stop (GME) has been a controversial and hot topic. It's actually been quite difficult trying to get a review of the situation from the perspective that the users of a social media site (even though they are involved in stock manipulation) are being shut-down because they have aggravated the elite. My bare bones analogy, those who pumped Game Stop stock are being ostracized by the financial community in the same manner as conservatives have been ostracized by the likes of Twitter and Facebook. (Note, I am not justifying stock price manipulation. In the Game Stop situation, both sides are involved in it. Unsurprisingly, some of the financial pundits that I have heard seem to think that it is those (the little guy) who used Robinhood to pump Game Stop who should be investigated for stock manipulation, but not the hedge funds (the big guy) even-though, as short sellers they play the disinformation game too. Another case of the little guy facing potential criminal prosecution for the very same activity that is deemed permissible when done by the big guy.)

Rush Limbaugh: GameStop saga mirrors politics as elites attempt to prevent regular people from benefiting
Radio host Rush Limbaugh called the on-going GameStop story "the most fascinating thing" to happen in a long time because it mirrors politics with elites trying to prevent ordinary people from benefiting – just like the political establishment has tried to hold down average Americans.

Meanwhile, a lone investor on Reddit, a social website on which users can discuss news and opinions, was promoting GameStop and suggesting users band together to short squeeze its stock, despite initially getting little interest from other investors, on a forum called WallStreetBets.
From my perspective, this is very similar to how Twitter, Amazon, Facebook, and Google have suppressed conservative thought by banning people under allegations of "disinformation" and "fake news". Well, short-selling frankly tends to be all about "disinformation" and "fake news". When it comes from the hedge funds (Democratic party, New York Times, and Washington Post) it is OK. When it comes from a lone poster on a social media website (Republican) it is not OK and must be censored.
 

AccessBlaster

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When you "hedge" a stock you bet it will continue to lose it's value. When the stock increases in value you owe the initial cost which was "fronted" to you plus you owe the difference. There are estimates the losses could reach a billion. There were many stocks involved including Blackberry, GameStop and others. These trades were high-end stakes not penny-ante, that's probably why they put a halt to the trading.
 

Steve R.

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Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews
Google is actively removing negative reviews of the Robinhood app from the Google Play Store, the company confirmed to The Verge. After some disgruntled Robinhood users organized campaigns to give the app a one-star review on Google’s Play Store and Apple’s App Store — and succeeded in review-bombing it all the way down to a one-star rating — the company has now deleted enough reviews to bring it back up to nearly four stars.
I have no knowledge concerning whether Robinhood is a "good" company or a "bad" company. Additionally, I have no knowledge concerning whether the deleted reviews were either valid or not. Essentially, the purpose for citing "The Verge" article above is to highlight that when members of the public go "rogue", (justified or not) companies and the political establishment clamp down and suppress speech similar to what happened to conservatives using Twitter and/or Facebook.

As a rhetorical sarcastic question: Where are the vaunted "fact checkers" to validate the star rating for the Robinhood app? Does it deserves a 1 star rating or a 5 star rating or something in between?
 

Steve R.

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Unbelievable!!!! As I ended my post above and walked into the other room, Fox News had on Matthew Whitaker (former acting United States Attorney General for a short time) and he was equating the reactions of social media platforms to Robinhood to those actions done by social media platforms to suppress conservative thought. That was unexpected!!

Evidently Facebook just shutdown a Robinghood users group located on the website.
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Fox News (Business) must be on a roll this AM. They had on Lou Basenese who raised a point that I totally missed. He said it is "illegal" for individual companies either individually or in collusion to stop the trading of a company. (Refusing to trade a stock by a compnay is a form of stock price manipulation.) He said that responsibility for a "stop trading" action belongs to the stock exchanges as the regulatory agency. He also reiterated that the retail investors through Robinhood are being punished for the same actions the hedge funds do.
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Looks like my use of "obscure" in the thread title turned out to be wrong!!!! :oops:
 
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Pat Hartman

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The RobinHood platform offers "free" trades. I'm not sure why people believe something is actually free but they do. The reason that the platform can offer "free" trades is because it sells YOUR trading information to the hedge funds. Follow the money. Then follow it to Yellen who earned over $800 thousand for speaking fees from the hedge funds.

AB, the exchange stopped trading on the securities a couple of times but what Steve is talking about is RobinHood, eTrade, and Schaub all shutting down BUYs for the stocks in motion. It only allowed sell orders. THAT is what was illegal.

The hedge funds shorted 140% of the shares!!! They deserved to get creamed. "Hedge" funds are supposed to HEDGE. Where was their hedge?

Follow the money. People need to go to jail over this
 
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AccessBlaster

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Where was their hedge?
The hedge fund mangers are allowed to go on financial programs and bad mouth poor performing stocks, then turn around and bet the stock will fall. This ruins many business that are older and now struggling to perform.

This is not new. BTW, did you think the ruling class would allow a disruption in this behavior with billions on the line.
 

AccessBlaster

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Lets say I buy heating oil in the summer when heating oil shares are relatively low due to less demand. Then I sell in mid winter when the cost has risen do to a higher demand of heating oil. Am I a smart investor or a monster taking advantage of the misery of others?
 

Pat Hartman

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No, you are a smart investor. But that's because you don't go on TV and tell the world that this is going to be the warmest winter on record to drive down the price of oil BEFORE you buy.

Short selling isn't evil in and of itself. However it is very dangerous to sell something you don't own and it is downright stupid to sell 140% of something you don't own. But these Hedge funds were trying to drive down the price of GameStop to nothing so they could buy it cheaply. They got caught with their pants down so they called mommy and she came to their rescue and made THREE trading platforms break the law. Now people need to go to jail including Yellen if it can be proven that she put her thumb on the scale to help out the hedge fund buddies who pay her so much money. Only the Exchanges or the SEC can stop trading, period! Brokerage houses cannot interfere with trading in any way. To do so is actually a crime.
 

Steve R.

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Concerning @AccessBlaster hypothetical. He appears to be speaking of taking a long position of actually holding the physical asset "heating oil" in the form of a stock, not implementing a short strategy were you borrow shares that you don't own but sell them hoping to buy them back at a lower price at a later date.
 

AccessBlaster

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However it is very dangerous to sell something you don't own and it is downright stupid to sell 140% of something you don't own.
That is the crux of this issue, selling something you don't own. Thank you!
 

Isaac

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Once my son wondered if he could advertise for sale on Craigslist things he didn't own, but could see were available for sale, and advertise them at a higher price. If anyone was dumb enough to agree to buy the thing, he'd buy it from where it was for sale and sell it for the agreed upon higher price.

I told him the worst that will probably happen is you might have to cancel a sale for inability to organize things tightly enough to deliver, but technically I didn't see anything wrong with it.
 

Pat Hartman

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It would have been fine for your son because he didn't have a contract to sell at a given price. If he couldn't find an item for a price that worked, he could get out of the deal. The shorts are actual contracts. I will sell you x shares of y for z dollars on some future date. If the price of the stock is less than z on the strike date, the owner would not exercise the option since that would cause him an immediate loss. He could just buy the stock at the ticker price on the open market. However, if the street price were higher, he would exercise the option and his immediate gain would be the spread minus the transaction cost. The crazy thing here is this is all taking place using fake money. People are buying on margin and hoping to sell before they have to come up with the cash. This is an extremely dangerous game of musical chairs.

The margin aspect might have been what triggered the brokerages to take the action they did. A better solution and one that would have been legal would have been to lower their margin amounts given that it would be the brokerage on the hook for the money if the buyers defaulted.

I occasionally write covered calls (offering to sell a stock I own) from my brokerage account but don't have the nerve or insider knowledge to write naked calls (offering to sell a stock I don't own). And I've only used my margin account a couple of times and just for a very short term if I want to buy something right now and don't want to wait to move the money into the account.

Naked Call Definition (investopedia.com)
Margin Call Definition (investopedia.com)
 
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