Mystery Economic Theater 2021

Dr Sardonicus · 2021-01-15, 12:59

Trump Regulator's Rule Would Force Banks To Lend To Gun-Makers And Oil Drillers

Quote:

The Trump administration is trying to push through a last-minute rule that could force banks to offer loans to gun-makers and oil exploration companies or to finance high-cost payday lenders.

The move follows announcements by the biggest U.S. banks that there are some industries and activities they don't want to finance, such as drilling for oil in Alaska's Arctic National Wildlife Refuge or making loans to gun manufacturers who make assault-style weapons. Some major banks have sworn off making those loans.

axn · 2021-01-15, 13:29

Wouldn't this run into forced speech / first amendment issues?

Dr Sardonicus · 2021-01-15, 13:37

Quote:

Originally Posted by axn

Wouldn't this run into forced speech / first amendment issues?

I'm not sure about free speech, but I imagine it will run into some legal issues. Possibly something based on "substantive due process," which basically means that laws should forward the legitimate aims of government.

But my guess is, the new Administration will deep-six the new rule.

bsquared · 2021-01-26, 22:01

Is anyone else following the insanity that is GME (GameStop) stock right now? I have no stake in it one way or another, but I've been following the story for a while now and it is simply historic.

masser · 2021-01-26, 22:21

Quote:

Originally Posted by bsquared

Is anyone else following the insanity that is GME (GameStop) stock right now? I have no stake in it one way or another, but I've been following the story for a while now and it is simply historic.

The madness of crowds. It'll be painful when the party ends.

Dr Sardonicus · 2021-01-27, 00:33

Quote:

Originally Posted by bsquared

Is anyone else following the insanity that is GME (GameStop) stock right now? I have no stake in it one way or another, but I've been following the story for a while now and it is simply historic.

Gamestop. Huh, never heard. [Google Google]

Hmm, it seems the same shenanigans are being played with a number of stocks.

Fascinating. A group of investors on the the WallStreetBets subreddit of Reddit manages to create enough demand to drive a stock higher though the company's prospects are not rosy, the vultures have begun to circle, and its stock is being sold short.

As I understand it, a short sale is usually of borrowed shares. The broker who loaned the shares for the short sale can and will will step in and close the short position if the price moves too far the wrong way too fast, and the short seller then has to pay up. So if a stock expected to fall rises rapidly instead, it creates a "short squeeze," in which the short sellers scramble to buy back their borrowed shares before the price goes too high and they lose their shirts. And this increased demand helps drive the price up further.

So one thing is, these folks driving up stocks despite the companies' prospects are sticking it to short sellers.

Once all the current short positions are closed out, my guess is, the company's actual prospects come back into view, and it's "look out below!"

LaurV · 2021-01-27, 03:50

You can only sell short on an uptick. When it falls, it falls hard.

retina · 2021-01-27, 05:02

The real WTF here is that huge casino everyone refers to as the stock market.

masser · 2021-01-27, 17:34

Quote:

Originally Posted by Dr Sardonicus

Once all the current short positions are closed out, my guess is, the company's actual prospects come back into view, and it's "look out below!"

Here's the take of a cryptocurrency dude: recent political radicalism is bleeding into finance. The crazy short-squeezing in GME is just one more item in the list of "symptoms of growing inequality."

bsquared · 2021-01-27, 18:03

Quote:

Originally Posted by masser

Here's the take of a cryptocurrency dude: recent political radicalism is bleeding into finance. The crazy short-squeezing in GME is just one more item in the list of "symptoms of growing inequality."

Sounds about right. Browse through r/WSB right now and you'll see a lot of hate directed toward "the man". Some seem less interested in making money than they are in taking down the establishment.

xilman · 2021-01-27, 18:23

Quote:

Originally Posted by bsquared

Some seem less interested in making money than they are in taking down the establishment.

So what else is new?

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2021-01-15, 13:29	#2
axn Jun 2003 2×3³×7×13 Posts	Wouldn't this run into forced speech / first amendment issues?

2021-01-26, 22:01	#4
bsquared "Ben" Feb 2007 2²·23·37 Posts	Is anyone else following the insanity that is GME (GameStop) stock right now? I have no stake in it one way or another, but I've been following the story for a while now and it is simply historic.

2021-01-27, 03:50	#7
LaurV Romulan Interpreter Jun 2011 Thailand 3³·347 Posts	You can only sell short on an uptick. When it falls, it falls hard.

2021-01-27, 05:02	#8
retina Undefined "The unspeakable one" Jun 2006 My evil lair 17E7₁₆ Posts	The real WTF here is that huge casino everyone refers to as the stock market.