North American stock market: what's happening?

[StocksAndScares]

Can anyone explain, or point to something that explains, what's happening in the US stock market?

just goes to show you what a bunch of bored people and an iphone can do.
wall street will need to think fast to protect itself.

I’m not sure I agree AllTheCakes (great name). It shouldn’t be the case that UK pension funds are significantly exposed to US hedge funds which are significantly exposed to short positions in just a few stocks, and if they are, then they should rebalance their portfolios.

The sentiment in the US is also different from ours in other countries because of the devastation which followed hedge fund behaviour in 2008 - entire pension funds wiped out, govt bailed out the banks but the banks kept the money. The Big Short was a really good movie but only had a couple of shots suggesting the effect of the banks’ behaviour on the public. So some of the WSB guys are in it for greed and lolz, but many will be in it for a sense of revenge for the loss of houses and pensions.

This is hilarious and also a good explanation - starts at 6:48. m.youtube.com/watch?v=AfK9sb9RQ3s&feature=youtu.be The dollar that Colbert mentions is the option premium.

@Gremlinsateit you’re right the UK pension funds probably aren’t massively exposed to US hedge funds as they will have diversified portfolios invested in a lot more than US equities, but people in the US will be losing out on their own pensions.

Will need to watch the Big Short!

One thing I don't get -

I get the idea of taking a position that the value of shares will fall.
So they borrow shares from a broker - and then sell them at a price - with an agreement to buy them back at the share value they are after a fixed time and return them to the broker.

So the trick is predicting what the value will be.

For it to work, someone has to buy the shares from the person who is short selling and either isn't aware they are short selling or is aware they are short selling and thinks the shares will go up.

So how are the current people on WSB making money out of this? Are they buying physical shares (but not from the short sellers), is there a lot of demand so they are getting the shares from the short sellers and driving the share price up or are they taking positions that the shares will go up in value?

They are buying shares from anyone who's selling- you don't get to know.

There are sets of shares which will be available to sell if they reach price x.

The short sellers buy stock as well, to cover the shares they have to 'return'. It's a vicious spiral driving the prices up, because there are fewer shares than shorts.

Now it's silver metal

www.bbc.co.uk/news/business-55882758

Precious metals are a different beast. Because ultimately there's only so much in existence, the prices aren't a direct reflection of the markets.

However I wonder if it's not so much what particular trade these guys are targeting that will do the damage. If they can manage to burn away the trust traders have in market predictions, they could precipitate a real crisis. Because modern money is only just Wish vouchers.

(If I wanted to plug cryptocurrencies, I'd use a crisis like this ....)

@DGRossetti I keep hearing that's a "hoax".

There was one person on Reddit 3 days ago who made a pretty long in-depth due-diligence post about silver... but he is something of a commodities "guru" on a completely different subreddit (a serious subreddit, not WSB), and he was simply arguing that he thought silver was undervalued and was a sensible long term investment.

I genuinely haven't seen anyone on WSB plugging silver as the next GME (in fact, everyone with any sense is pretty vocal that there is no "next" GME).

So it looks like the media has run with this... and the tinfoil hat part of my brain is obviously wondering why and answering that it's certainly taken publicity away from GME... and who does that benefit, exactly?

@DGRossetti I keep hearing that's a "hoax".

Entirely possible ... my own personal due diligence was "fuck all" since I have "fuck all" intention of investing a single cent in anything I hear about on the internet. Just posted for discussion.

DS says silver is a red herring. The forum is saying no. Citadel would want the price of silver to rise as it holds tons of it. It should be a decent bet long term but it's not a current thing.

Says ds.

Yes, all the subs are saying that the silver push has been astroturfed.

The SLV thing was weird wasn't it? Only posts I saw on forums all saying don't buy because it benefit citadel, then the reddit mods did an analysis and stated that less than 3% posts mentioned it but the press are crowing about how the "reddit army" pushed up the price on monday then lost out as silver crashed on tue & wed. (nope!) The press have been hyping SLV relentlessly, not the forums!

I was cheered by the news that some funds have said they will no longer publish their shorts, that's a win as far as I am concerned.