There are attempts to frame an unprecedented situation that has unfolded over the past week as class warfare and even Reddit's retail investors' revenge. As if they have personal reasons to pay back to the same financial elite that crashed their fathers' generation in 2008. There are different accounts of Redditors' motivations:
https://www.cnn.com/2021/01/29/investing/wallstreetbets-reddit-culture/index.html
No doubt, that Wall Street hedge finds abuse their power and change the rules mid-game. Yet, it would be incorrect to represent the event as the rise of the 'little guy,' as a revolt of the people. There are no just rules in the accelerating process of financial speculations. Redditors' way to skyrocket the price of GameStop is a kind of massive speculative action. It harms several hedge funds, but it does not threaten The Wall-Street's financial order. Do the people claim their right to create fiat money from the state and banks? They do not. In fact, the Redditors' speculation is dependent on the same regulations and mechanisms that allow short-term bets. There are no new instances of the fiat money creation. Maybe the hedge funds will eventually experience the brute losses, but Wall Street will enjoy the further transformation of money of payment into speculative, dematerialized capital.

I've studied alot is in the case of sovereign debt, where solidarity among lending institutions (banks and so forth) simply refuse to lend more to indebted countries in order to enforce austerity and political change (this is basically the story of international finance relations since the 70s, and no one talks about it). This kinda of neoliberal strategy is favoured because it sticks with the script of "open-markets": the state isn't denying anything, it's allowing certain institutions to do stuff (even if that stuff happens to be denying access). It's devolution of power 'outside' the state and 'freedom' to corporate action. — StreetlightX

Following the recent COVID-related drastic increase of America's sovereign debt, there are the newest neoliberal strategies: no austerity (so far), helicopter money instead, and even more dramatic political change. It looks like elites do not care about the debt anymore. (Biden even has proposed an additional 1.9 trillion $ of 'COVID' relief.) Neither debtors nor creditors think of re-paying or reimbursing of debts. With zero interest rates, the accelerating virtualization and dematerialization of money will continue to be the engine and source of the neoliberal financial system's power. It looks like the neoliberal corporate power 'outside' the state will resonate with the power of the state itself.
Do we witness the rise of post-neoliberal order, where the distinction between major
debtors and creditors become insignificant?

Yet, it would be incorrect to represent the event as the rise of the 'little guy,' as a revolt of the people. There are no just rules in the accelerating process of financial speculations. Redditors' way to skyrocket the price of GameStop is a kind of massive speculative action. It harms several hedge funds, but it does not threaten The Wall-Street's financial order. — Number2018

Agreed. This is an interesting event, and some schadenfreude towards the hedge funds in question is perhaps warranted. But to treat this as anything more than a short-lived prank and a lottery jackpot for a few people strikes me as odd. It's not like anything institutional has changed at Wallstreet, or the stock markets in general. I am seeing signs of people buying their own hype and treating GME stock as an investment rather than a lottery ticket. In the end, there'll be at least as many loosers as there are winners.

The best thing this could do is to expose the absurdity of unrestricted speculation. But the myth-making that's already starting will just obscure that message.

Anyone know why these frenzies might hurt brokers? — Kenosha Kid

My understanding is that the problem lies entirely with margin trading, which it seems was Robin Hood's bread-and-butter. When trading on margin, the trader orders the purchase of a security without having (the entirety of) the funds to pay for that security already in their account. The trader does have to deliver those funds eventually, and I gather that with "app" brokerages like Robinhood it maybe initiates a payment transaction right away (I'm not sure, I've never used anything but a real bank, but that's the impression I pick up of these apps), but that still takes time to reach the brokerage's clearing house, even if it's an "immediate" payment (because those somehow still take days to fully clear). Meanwhile, the broker makes the security purchase immediately, with their cash on hand, to grab it at the price it was at that instant instead of whatever price it was when the payment eventually reaches them. In between making the purchase and payment arriving, the broker is basically loaning the trader money.

So lots of people making lots of trades on very volatile stocks means the broker is making lots of loans to people buying those stocks, secured by collateral of very unstable value (the purchased stock, which they can liquidate if the money doesn't show), and meanwhile they're also having to issue immediate payouts to those who are selling that same stock (on the other end of those trades; every purchase is also a sale). So as the price soars, but unstably, the brokerage has to spend increasingly much of their cash on hand on other people's behalf, increasingly unsure if they will be able to collect on the collateral if the money they're owed by the buyers doesn't show in time.

That's why they made purchases require 100% margin (basically, you have to supply the cash up front, no lending to you). It's probably also why they made shorts require 300% margin (because when they've got a lot of loans out backed by these volatile stocks, they really can't have anyone tanking that collateral unless they're also putting a bunch of other money into the system that the brokerage can use to keep things running until everything settles).

Do they own the stock or is it non—issued stock? I can't find anything in their website because for some reason that's blocked. In any case, they could have some stock at hand that they can sell in the market or put up as collateral. Obviously a high market price is then beneficial to them. I would be surprised if they do though because a company doing bad usually doesn't have done any buy backs or would've sold the stock off before the share price tanked.

What I read about AMC was that the lender they owed had the option to convert the loan balance into stock holdings instead, and as the stock price shot up they elected to do so (and presumably plan to sell it before it tanks again and collect their money back that way), thus relieving AMC of the debt.

That's a debt equity swap which is common for start ups and scale ups.

Thanks Pfhorrest. Perhaps the conspiracy theories are a little premature.

Following the recent COVID-related drastic increase of America's sovereign debt, there are the newest neoliberal strategies: no austerity (so far), helicopter money instead, and even more dramatic political change. It looks like elites do not care about the debt anymore. (Biden even has proposed an additional 1.9 trillion $ of 'COVID' relief.) Neither debtors nor creditors think of re-paying or reimbursing of debts. With zero interest rates, the accelerating virtualization and dematerialization of money will continue to be the engine and source of the neoliberal financial system's power. It looks like the neoliberal corporate power 'outside' the state will resonate with the power of the state itself. — Number2018

Deficits don't matter. Now it's just official.

The Federal Reserve can buy the debt.. .as it has and now is the largest single owner of the debt. Naturally it all can be paid with a keystroke, hence the debts surely can be repaid. The US cannot default on it's own currency.

And with the new gospel is MMT, there isn't any danger with this as a) inflation becomes a problem in full employment, b) the government can control demand-pull inflation, basically the normal thing what happens to prices when demand is larger than supply and c) the whole thing doesn't affect the private sector and it's issuing of bonds. That's the line.

We all believe in the perpetual dominance of King Dollar, right? Nothing to shake that confidence here...

The best thing this could do is to expose the absurdity of unrestricted speculation. But the myth-making that's already starting will just obscure that message. — Echarmion

This event indicates well the resilience of the financial gambling system. Las-Vegas is closed due to
COVID-19, but its model of business has become ubiquitous via WallStreetBets. The myth-making and narration simultaneously obscure and deliver this message.

Las-Vegas is closed due to
COVID-19, but its model of business has become ubiquitous via WallStreetBets. — Number2018

Are you seriously trying to suggest that WallStreetBets are responsible for casino economics? That's hilarious!

I've been following this from afar, having put $5k into stocks two years ago and then making a loss, due to lack of interest in the subject and a feeling of being overwhelmed by the knowledge requirements. ANYWAY, something that nobody has mentioned yet, is how much of the current Wall St boom, this bubble included, is a consequence of the Fed's money-printing program, which it's been doing since 2008. The Australian Broadcasting Corp's analysis notes that 'In a market inflated by trillions of dollars in global stimulus, last week's events have been portrayed as a morality tale, a David versus Goliath battle that has the establishment on the ropes.' However, it goes on to say, it will likely all end in tears, other than for the smart players who got in and out before the smoke cleared.

Deficits don't matter. Now it's just official. — ssu

Yeah, I do wonder about that. We're borrowing from future generations, who are going to have plenty to deal with, what with climate emergencies, resource shortages, and global over-population already. Seems a recipe for collapse to me.

Yet, it would be incorrect to represent the event as the rise of the 'little guy,' as a revolt of the people. There are no just rules in the accelerating process of financial speculations. Redditors' way to skyrocket the price of GameStop is a kind of massive speculative action. It harms several hedge funds, but it does not threaten The Wall-Street's financial order. Do the people claim their right to create fiat money from the state and banks? They do not. In fact, the Redditors' speculation is dependent on the same regulations and mechanisms that allow short-term bets. There are no new instances of the fiat money creation. — Number2018

I think this is a bad political read of the situation. Or at least, a totalizing one that blinds itself from nuance by instituting a single, far-away standard from which these actions are meant to be judged - "whether or not this threatens Wall Street's financial order". In fact, even on that score, it's pretty clear they feel threatened, and, more importantly, are reacting accordingly. The attempt to close ranks and halt buying across multiple platforms is pretty wild, as is the sheer ramping up of propaganda across finance media to portray what's going on as some kind of kiddish trolling - as if these funds do not do the exact same thing only with a suit and a tie on; as if the consequences may not be entirely incommensurate with that portrayal.

Second, you seem to be holding on to some idea of purity with respect to the instruments involved, as if any challenge to the financial order must appear ex nihilio from a place of unsullied soil of virginal revolution. But this is messianic fantasy. If the instruments used to maim the master belong to the master then so be it. In fact, all the better. I hope people use their regulation against them, I hope people turn their speculation against them. That this stuff is finally happening on their own turf is an occasion for delight, not pessimism.

And more than that, this stuff has raised more class consciousness than the entirety of BLM and Occupy combined. Is it opportunistic? Hell yeah. But politics is opportunistic, and anyone on the left who pooh-poohs opportunism for high-minded purity is reactionary. You take what Kairos offers. And not also to talk about the decentralized, democratic aspects of this - no leaders, relatively low buy-in. And just to be clear, I don't want to overly romanticize this - this could break horribly and everything could end in tears (as if it doesn't already end in tears, all the time, everywhere). In fact, it's more likely than not going to end just so. But anyone who wants risk-free challenge is again, a reactionary in disguise.

Neither debtors nor creditors think of re-paying or reimbursing of debts. With zero interest rates, the accelerating virtualization and dematerialization of money will continue to be the engine and source of the neoliberal financial system's power. It looks like the neoliberal corporate power 'outside' the state will resonate with the power of the state itself.... Do we witness the rise of post-neoliberal order, where the distinction between major debtors and creditors become insignificant? — Number2018

Debt has only ever been an instrument of sovereign and subjective discipline - there is no reason to think that these people will not pick and choose who to enforce debts upon, as and when it suits them. Don't give them that credit.

BlackRock made billions off the GameStop Ordeal, Wall Street as a whole isn't threatened. Rich people win and lose all the time in the market, a particular spiked event isn't an indication of a threat to class interests, the key issue with neoliberalism is wealth inequality, the upward distribution of wealth and power over labor. Although yes, we could catch and convince people who are angry about Robinhood and such, that's probably the greatest value of it.

The whole incident has been a net negative for GameStop workers.

“...The GameStop workers I spoke to described a company that offers little support to its shops and is on the precipice of laying more of them off (the company closed more than 460 stores in 2020). None saw any way that the rising shares would alleviate chronic issues like the insufficient stocking of products, overworked employees, and low pay.”

“...If anything, shop-level employees are concerned that the GameStop’s whirlwind rally will convince the company to give them even less support. Some of the momentum behind the stock comes from Redditors believing that Ryan Cohen, a well-known investor and former CEO of the e-commerce pet supplies company Chewy who joined GameStop’s board of directors in November, will successfully reorient the business around online sales rather than its brick-and-mortar shops. (It’s likely that more of the retail investors are well-aware that they’re helping to overvalue GameStop stock.) Some employees expressed concerned that these retail GameStop investors are essentially rooting for the company to close down their locations. “I don’t really think having Cohen on our board will change much of anything,” said the Pennsylvania assistant store leader. “If anything, it simply means we’ll lose our jobs faster, because he wants to close the majority of our stores.” An assistant store leader who has been working at GameStop for five years in Oklahoma said that her store leader was initially optimistic that the rising stock “meant good things for us,” and she hoped that it would lead to unfreezing raises, but then everyone at the store started to worry upon discovering why investors were excited about the company.”

https://slate.com/technology/2021/01/gamestop-employees-stock-retail.html?fbclid=IwAR35kynu7HuKNxz-Ka1N21pkHn9sxwdSOI8LKX6jsBwIgab99LU5DBPg-8A

No one's under any illusions about this being about 'saving' Gamestop or whathaveyou. Hell, scratch a company operating under modern capitalism and a find a maggot infested nest, you're always going to be able to dig up some dirt. Nor will you not find companies or funds who will profit off any kind of action, be it Blackrock or whatever. Cooption by these forces isn't an argument, it's the operating environment, the inescapable ambience. Again, forget purity. I don't care that not every single firm in Wall St is hurting. Anyone after that right now is chasing shadows.

But one or two are, publicly, by a decentralized, mass action driven by both greed and schadenfreude effecting some measure of wealth redistribution and by God lets co-opt the shit out of it. More 'fuck Wall Streets' and more 'the game is rigged' - I don't even care about the motivations. We keep whining about corporations coopting action, and when there's a chance to do just that at the level of narrative we whine about how impure it is. If we leave copting to capital, the left is less than useless. The right don't give a shit and frankly neither should we. Politicize, divide, agitate - even if it's just narrative.

Trading 212 have stopped all CFD buys on stocks. Good thing I haven't switched over to real money yet. I need to find an alternative platform that won't do things like this. Are there any others with zero fees and commissions?

Try Vanguard. It's not a high-tech trading platform or anything, but it'll get the job done. Zero fees and commissions too.

Also anyone getting inundated with headlines to buy silver? WSB is saying this is a false flag.

Is there a UK app for iOS? Can't seem to find it on the App Store.

I've never actually used the app and I've heard it isn't great. I just access Vanguard through chrome on my laptop.

EDIT: I think you need to be a US resident to use Vanguard.

Also anyone getting inundated with headlines to buy silver? — BitconnectCarlos

Yes.

WSB is saying this is a false flag.

I doubt that it's a conspiracy? The only way it makes sense as a conspiracy would be if:

Media attention on silver was intended to divert people from buying GME onto buying silver.

The rise in silver is mirrored by a rise in the other precious metals. Precious metals are seen to function as a hedge in volatile market conditions, so if people are buying into precious metals all it means is that either investors have no fucking idea what is going on, that they're trying to avoid the effects of a crash they're anticipating, or both.

I think it would require an enormous amount of coordination in order for the rise in precious metal prices over the last week to be a result of a proportional change in retail investor spending patterns caused by a media management strategy by hedge funds- I think it's better explained by investors panicking that the stock market is going to crash and hedging against it.

I think the reasoning behind the conspiracy is that Citadel are the fifth largest investor in silver, and they're looking to offset their losses on GME.

I think the reasoning behind the conspiracy is that Citadel are the fifth largest investor in silver, and they're looking to raise the value of that to offset their losses on GME. — Michael

I'd heard that. I don't think it suffices. I'm sure they would attempt to raise the price if they could; where's the evidence that they have. I'm suspicious that the framing of the increase of prices of precious metals in these stories has nothing to do with investors hedging for a volatile market/crash, when that's usually what precious metal prices going up is said to mean! Now it's "redditors taking an eye on silver", not "investors pivoting into precious metals in anticipation of financial crisis"! But I don't think my vague suspicions are enough to say "it's a media manipulation by Citadel" - and I've not seen anything that supports more than vague suspicions?

The rise in silver is mirrored by a rise in the other precious metals. Precious metals are seen to function as a hedge in volatile market conditions, so if people are buying into precious metals all it means is that either investors have no fucking idea what is going on, that they're trying to avoid the effects of a crash, or both. — fdrake

This is in most cases not a hedge. In these situations people usually divest stock and invest in precious metals and AAA bonds, a "flight to safety". To the extent these assets are inversely correlated to stock value and precious metals are bought as a strategy of diversifying risk, then it is a hedge.

This is in most cases not a hedge. — Benkei

Why isn't a change in investment strategy (the "flight to safety") that aims to buy things that aren't effected by these ruinous market shenanigans a hedge? I don't understand.

I'm not saying that I'm 100% onboard with the "conspiracy" view, but it is worth noting that silver is up over 8% on the daily which far outstrips over precious metals. Gold & Palladium are barely up today. Platinum is doing well today, but only around half as well as silver.

In any case I did pick up some AMC and GME today and I'm fully preparing to get utterly wrecked. I'm already down over 20% today but it's nice to play a part.

they feel threatened, and, more importantly, are reacting accordingly. The attempt to close ranks and halt buying across multiple platforms is pretty wild, as is the sheer ramping up of propaganda across finance media to portray what's going on as some kind of kiddish trolling - as if these funds do not do the exact same thing only with a suit and a tie on; as if the consequences may not be entirely incommensurate with that portrayal.

Second, you seem to be holding on to some idea of purity with respect to the instruments involved, as if any challenge to the financial order must appear ex nihilio from a place of unsullied soil of virginal revolution. But this is messianic fantasy. If the instruments used to maim the master belong to the master then so be it. In fact, all the better. I hope people use their regulation against them, I hope people turn their speculation against them. That this stuff is finally happening on their own turf is an occasion for delight, not pessimism. — StreetlightX

I agree that I could miss a few critical nuances. No doubt, what is unfolding right now possesses the features of an event. It is unpredictable, and it could help to expose the nasty side of hedge fund speculations. There is indeed a threat. But this threat is no more than one of the crises that are regularly generated by the capitalistic financial system itself and are resolved by this system and its further development. The threatening effects were caused by implementing the newest apps and platforms, constituting the medium for Redditors’ collective action. They are not just technical means. You may underestimate the role of the medium in creating a sense of participation and what you call ‘solidarity.’ It could be incorrect to say that institutions and corporations that control the digital medium also control ‘solidarity,’ but digitalized affective flows of images and information that we deal with in the GameStop’s crisis are unseparated from the very flows that ground contemporary capitalism.

this stuff has raised more class consciousness than the entirety of BLM and Occupy combined. — StreetlightX

“The current prosthetization of counsciousness, the systematic industrialization of the entirety of retentional devices, is an obstacle to the very individuation process of which consciousness consists.” ( Bernard Stiegler, ‘ Technics and Time').Today, the use of the concept of consciousness, as well as of class consciousness looks problematic. Their constitutive processes are ultimately dependent on external digital retentional networks. Compared to The Occupy Movement, the concerted and autopoietic action of Redditors has become completely digitalized. It should be studied how contemporary ‘virtual digitalized solidarity’ impacts collective social agency and the people’s ability to act in-concert.

Debt has only ever been an instrument of sovereign and subjective discipline - there is no reason to think that these people will not pick and choose who to enforce debts upon, as and when it suits them. Don't give them that credit. — StreetlightX

The enormous latest COVID-relief packages in the US express the accelerating ability to create unlimited amounts of money. It may become possible due to the neoliberal elite's newest reorganizations. As Biden’s administration shows, the global elite is simultaneously in charge of the state, the leading corporations, international financial institutions, and has close reciprocal relations with the most significant creditors. Remarkably, according to numerous reports, a considerable portion of the money that Redditors operate comes from the recent US relief packages. Swiftly closing the short circuit, money goes back to the site of its origin.

I underemphasized it in my previous comment, but I agree we should co-opt the message, and I don't care about purity. But this to me seems more like a Shock Doctrine kind of opportunity, more about a chance to get a lot of public opinion attention.

I think it would require an enormous amount of coordination in order for the rise in precious metal prices over the last week to be a result of a proportional change in retail investor spending patterns caused by a media management strategy by hedge funds- I think it's better explained by investors panicking that the stock market is going to crash and hedging against it. — fdrake

Precious metals are at best in the long term a somewhat good hedge, but basically the spot prices are are controlled with paper. Hence if the market makers cannot deliver the actual metal, they can simply give back cash.

Yet as we saw with negative oil prices, nearly everything if not everything has been made a vehicle for speculation.

But what else could we assume when the owners of the US Central Bank are the speculating Wall Street banks themselves.

I think it's better explained by investors panicking that the stock market is going to crash and hedging against it. — fdrake

Well, A crash could be something that could happen.

Likely at first that would have an deflationary effect...everything going down against the currency, before the trusty plunge-protection-team comes to the rescue of the banks.

In any case I did pick up some AMC and GME today and I'm fully preparing to get utterly wrecked. — BitconnectCarlos

Can I ask why?

I actually like AMC as a company; they're a nice chain in the US and I've been to AMC theaters countless times and would love to see them reopen after the pandemic. Buying $GME isn't so much about making profit - I don't have any price targets or stop losses with my gamestop buy - At the end of the day, what's wrong with a bunch of retail investors coming together and deciding to help out a struggling company? I've been a Gamestop customer plenty of times. If certain hedge funds who were ultra-short Gamestop feel a little pain then that's not my problem. Hedge funds already have enormous advantages over the average retail investor.

I also only threw like 1% of my portfolio at this so it's not like failure is the end of the world.