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Comment by majormajor | Hacker News Reader

Is there more specific evidence that Melvin would be lying than "look at the overall short interest in the stock"? When the stock has been skyrocketing and creating more and more incentive for other people to take out new short positions?

I'm hardly an expert at shorts and options, but when I see people posting stuff like that, I start thinking that the most plausible explanation for the outrage is that things are more complicated than the "we're gonna put this fund out of business!" crowd expected.

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24 hours ago people never heard of a clearinghouse for trades. Since it's not possible for them to be ignorant, the clearinghouse explanation cannot be believed. Only explanations using terms like hedge fund and collusion which were known prior to yesterday will be believed.

That is a weird assumption to make about wsb types, who have a sizable overlap with the crypto-currency folks - who are keenly aware of counterparty risk and the function of clearinghouses.

A less charitable scenario here is that there's a couple cohorts of WSB folks: a somewhat sophisticated set who got in on the Gamestop frenzy earlier (even last week!), and a less sophisticated set who are buying now. The former make $$$$ off of the latter, and when things go sideways, just have plausible-enough sounding stories to point that second set of angry people at the hedge fund baddies instead of themselves...

If we're speculating about people's motives, let's look at everyone ;)

Well we could continue stacking assumption upon assumption, with regard to conspiracy, but it looks a little goofy. But who knows, maybe this will be one time Wall Street wasn't the one conspiring, and it was in fact a shadowy flash mob puppet master who executed an uncoordinated attack through emergent behavior. And then we'll finally find the Russian hooker piss tapes.

It's certainly not uncoordinated - the coordinated squeeze attempt is literally the whole advertised point!

I'm just amused that the motives of the folks making huge money off of this are going largely unexamined. If you wanted to talk me into buying Gamestop now, you'd have to convince me that it's not just a way of cashing yourself out.

(I also think it's a little dirty, at best, for any experienced investor to be talking newcomers in to buying this shit at this point.)

> ...are going largely unexamined.

I've been hearing plenty of accusations of pump and dump, with no further examination. So I don't think that opinion is underrepresented. It is effectively noise anyway, because the same can be said of any investment.

> (even last week!)

People have been trying to pump this trade since at least September: https://files.catbox.moe/2cp8f9.jpg

> crypto-currency folks - who are keenly aware of counterparty risk and the function of clearinghouses

There are zero (EDIT: very few) clearinghouses in the cryptocurrency world. That's...almost the point.

That isn't entirely the case: https://www.ledgerx.com/clearing

But I found the prior comment about cryptocurrency people having particular expertise here laughable... plus rWSB aggressively prohibits any mention of Bitcoin, I don't think it's accurate to suggest that there is a lot of overlap regardless.

...yes, that is my point. Anyone who deals with crypto is aware of it.

A week ago WSB had 2M subscribers (https://subredditstats.com/r/wallstreetbets), whereas today they have 6M subscribers. The large majority of the people involved here haven't been WSB types for more than a few days, and it seems safe to assume they're new to the financial scene.

I'm one of the 4M new subscribers. I am not new to WSB though. I didn't sub because I didn't want the noise but seeing as this is interesting to me now I subbed. I'm sure there are plenty of others in the same boat.

Well then I'm not sure why they'd find the clearinghouse explanation so hard to believe. Robinhood has a history of poor controls. A year or so ago there was a story about a user who ended up negative a million because they failed to do a proper margin call. DTCC is probably rightfully skeptical that RH has the situation under control.

Because it isn't an either or scenario. I'm sure they are concerned about not having a chair when the music stops. But their relationship with Citadel (who has been fined for thing like frontrunning) can't be ignored. All their incentives go in the opposite direction from their users.

WSB has experienced ~6x growth in the last month. The vast majority of it is people who have no idea what forces are at play, and think that this is some way to dunk on a hedge fund with mechanisms they don't understand. They're a long ways out from even knowing that a clearing house exists.

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