Stock Market Meltdown Megathread

[MalO]

I'll update this thread as I see things which are relevant, in no particular order.

https://www.sec.gov/rules/sro/nscc/2022/34-96511.pdf

Recent extreme market events, including both the impacts of the COVID-19 pandemic and volatility caused by social media sentiments (referred to as the “meme stock events”), have led NSCC to reconsider the causes and characteristics of idiosyncratic risks that the Gap Risk Measure was designed to mitigate. More specifically, these events have indicated that price changes due to gap risk events seem to occur more frequently and in higher severity; and may not be isolated to issuer events but driven by new mechanisms that drive concurrent market price moves involving unconventionally correlated securities. The Gap Risk Measure provides an insurance against various permutations of idiosyncratic risk moves, however, it is not targeted to capture and cover all such instances, especially when they are extreme, including certain meme stock events. NSCC believes the proposed enhancements to the Gap Risk Measure calculation, described below, would improve its ability to measure and mitigate against these idiosyncratic risks.

It's difficult to follow but the gist of it is that retail investors buying meme stocks poses an idiosyncratic risk to the market and the market is not correctly identifying that risk.

What they're not explicitely saying but very much are saying if you read behind the lines of so many words is that the risk to the market is definitely not the result of the DTCC issuing an infinite number of shares and unlimited naked shorting by banks and hedge funds to manipulate market prices. The idiosyncratic risk is definitely caused by retail investors buying and holding stock because everyone knows that buying stock and refusing to sell it could crash the entire stock market. How dare they. Don't the little people know their place?

XD

 

[MalO]

GME has been at 100% utilization for 101 days continuously.

This means every share that possibly can be borrowed to sell short is being borrowed.

 

[MalO]

For the past 54 days the percentage of sales on GME sold short has been over 60% every day.

That means the majority of transactions on the stock is short selling.

A short sale is a promise to buy the stock later. Of course that's assuming there is stock available to buy. If there isn't it causes a short squeeze, which means the price hits the moon.

Also short interest is self-reported. The penalty for not reporting short positions is a stern warning and a fine of like $3.50.

 

[Rube Reaper]

Markets in general are a huge cancer on society. I’d like to see the money in them moved into something that’s actually worthwhile like a global green energy fund.

 

[MalO]

While Gamestop can't tell their investors to direct register their shares, they can of course report the amount of shares being direct registered in their quarterly earnings reports, which is exactly what Gamestop has been doing.

💎👐 COMPUTERSHARED.NET

has a running calculator of DRS

GME | Stonk-O-Tracker

Track GME stock data. Insights in the call options, borrowed shares availability, shorted volume, fails to deliver and more.

gme.crazyawesomecompany.com

has a running count of the number of shares available to borrow

Interesting fact: FTX was selling tokenized GME. While attached to a crypto ledger these could still count as shares and be still used to open short positions.

When SBF was asked if FTX sold fake meme stock tokens he said he didn't believe that was the case. We should believe him when he said this because SBF tells the truth when it counts.

That was sarcasm.

 

[MalO]

Ken Griffin, CEO of Citadel Securities is both the undisputed king of mayonnaise and also one of the biggest short sellers of GME. Citadel Securities has a "dark pool" where stock transactions are done away from the prying eyes of the rest of the stock market and cannot be seen by regulatory agencies like the SEC, CFTC, or FINRA.

Kenny definitely does not want you buying stock at the transfer agent and moving your shares into a book account. This means those shares no longer have market access and exist only on a ledger at the transfer agent. They cannot be bought, sold, borrowed, or otherwise fucked around with until you choose to move them back into a brokerage account.

While in a book account, you are the sole owner of that stock. Stock in the book account is also fully insured by the FDIC.

What are you waiting for? You can make Kenny feel even more sad today! Have you ever seen a billionaire cry?

Welcome to Computershare

We provide transfer agency, employee equity plans, proxy solicitation, entity compliance, stakeholder communications and other diversified financial and governance services. Login to manage your portfolio, buy, sell or transfer shares, and more.

www.computershare.com

 

[shiv]

View attachment 155854

Ken Griffin, CEO of Citadel Securities is both the undisputed king of mayonnaise and also one of the biggest short sellers of GME. Citadel Securities has a "dark pool" where stock transactions are done away from the prying eyes of the rest of the stock market and cannot be seen by regulatory agencies like the SEC, CFTC, or FINRA.

Kenny definitely does not want you buying stock at the transfer agent and moving your shares into a book account. This means those shares no longer have market access and exist only on a ledger at the transfer agent. They cannot be bought, sold, borrowed, or otherwise fucked around with until you choose to move them back into a brokerage account.

While in a book account, you are the sole owner of that stock. Stock in the book account is also fully insured by the FDIC.

What are you waiting for? You can make Kenny feel even more sad today! Have you ever seen a billionaire cry?

Welcome to Computershare

We provide transfer agency, employee equity plans, proxy solicitation, entity compliance, stakeholder communications and other diversified financial and governance services. Login to manage your portfolio, buy, sell or transfer shares, and more.

www.computershare.com

Undisputed king of mayonnaise?

 

[MalO]

Undisputed king of mayonnaise?

Reddit turned this into a meme about 2 years ago when investors on reddit started learning about GME and Citadel Securities. Ken Griffin is the villainous figurehead of that company.

One redditor shared a story. Apparently he works in finance and attended some kind of a meet & greet with Ken Griffin. Apparently there was a sub platter and Kenny had the only dish of mayo. He refused to share it and ate all the mayonnaise himself, making everyone else eat their sandwiches dry.

This was a finance related thing. The people attending were accountants, stock brokers, lawyers, etc. Highly paid people.

Also he got into a nasty divorce with he now ex-wife. He was taking her out to something really expensive (he's a billionaire) and she said that Chicago was so unsophisticated and didn't want to go. Apparently he flew into a rage and threw a bed post at her. So that also created a plethora of Ken Griffin bed post memes.

 

[shiv]

Reddit turned this into a meme about 2 years ago when investors on reddit started learning about GME and Citadel Securities. Ken Griffin is the villainous figurehead of that company.

One redditor shared a story. Apparently he works in finance and attended some kind of a meet & greet with Ken Griffin. Apparently there was a sub platter and Kenny had the only dish of mayo. He refused to share it and ate all the mayonnaise himself, making everyone else eat their sandwiches dry.

This was a finance related thing. The people attending were accountants, stock brokers, lawyers, etc. Highly paid people.

Also he got into a nasty divorce with he now ex-wife. He was taking her out to something really expensive (he's a billionaire) and she said that Chicago was so unsophisticated and didn't want to go. Apparently he flew into a rage and threw a bed post at her. So that also created a plethora of Ken Griffin bed post memes.

This forum is very pro mayonnaise. Only if it is Duke’s brand though. @TopHook @Rebarcock.

Also, thanks for the content. I Look forward to keeping up

 

[MalO]

I found some of the memes.

 

[TopHook]

This forum is very pro mayonnaise. Only if it is Duke’s brand though. @TopHook @Rebarcock.

Also, thanks for the content. I Look forward to keeping up

 

[MalO]

Red are days when GME was shorted more than bought.
Green are days GME was bought more than shorted.

A short sell is when you borrow a share and sell it, with the contractual obligation to buy it back when you close out your short. You keep the difference if the price drops.

But here's the thing: if there are no shares available to buy, you can't close the contract. But you have to close the contract. It's a contract.

What happens? The price goes up. And it keeps going up until someone decides to sell at the price so you can close out your contract.

That's a short squeeze.

https://www.warriortrading.com/volkswagen-short-squeeze/

There have been a number of short squeezes in history. One of the most legendary is the 2008 Volkswagon short squeeze.

If GME is naked shorted like we suspect - meaning there are more shorts than there are shares available in the market - then there is no possible way they could all close now that retail traders are buying up GME and booking them at the transfer agent. This is like a bank run, except it's the stock market.

Eventually it's going to blow up.

 

[MalO]

Trimbath knows what she's talking about. She's pushed direct stock registration for decades.

 

[MalO]

That Joel Haver short came out at exactly the right time.

I've been holding GME since January 2021. Up doesn't matter. Down doesn't matter. All I think about is DRS and short sales.

The squeeze is inevitable.

If I have to hold a few more years, that's fine.

If these wall street criminals keep kicking the can until I grow old and die, my name will stay on my direct registered shares forever.

 

[MalO]

Also in the wake of FTX, Binance is losing billions. Crypto traders don't trust centralized exchanges anymore and want their crypto in their own wallets.

Could Binance crash and burn next?

Is this a game of dominoes? Who crashes next?

 

[Rebarcock.]

This forum is very pro mayonnaise. Only if it is Duke’s brand though. @TopHook @Rebarcock.

Also, thanks for the content. I Look forward to keeping up

Boiled peanut futures are through the roof and Duke's is growing at a 8.5% yoy

 

[Rebarcock.]

I found some of the memes.View attachment 155857View attachment 155858View attachment 155859View attachment 155860

Hellmans is Satan cum

 

[Rebarcock.]

Undisputed king of mayonnaise?

Duke's is southern

 

[MortgageHorn]

Markets in general are a huge cancer on society. I’d like to see the money in them moved into something that’s actually worthwhile like a global green energy fund.

And exactly how would that make investors money?

 

[MalO]

Kenny getting trolled on Twitter.

 

[MalO]

This is about the EU trying to pass a law to stop mandatory buy-ins when shorts expire.

The USA doesn't have that and that's why shorts aren't closing. Short selling is supposed to be high risk high reward but right now it carries little to no risk for our institutions because they find ways to not close and don't buy the stock like they're supposed to.

If the EU puts a stop to mandatory buy-ins, then shorting EU stocks will be virtually risk-free. This means assholes could open mass short positions on a stock, causing the price to plummet, and then walk away with all this money and never close out their contracts.

Removing the risk from short selling simply allows assholes to bankrupt companies for profit.

Short selling should never have been legal in the first place. Sensible markets don't allow it. But if we are to allow it, then the USA needs mandatory buy-ins.

And the EU certainly shouldn't be trying to do away with it.

What we are seeing right now is the wolves writing all the laws for the chickens. Of course EU politicians don't want mandatory buy-ins. It's costing them and all their rich friends money when they have to close out shorts.

 

[BurntJ]

Markets in general are a huge cancer on society. I’d like to see the money in them moved into something that’s actually worthwhile like a global green energy fund.

Thanks for proving yore a fraud!

The money should be funneled to Leo D if you really were concerned. He could buy a bigger jet to get him to more “green meetings and parties!” Sever tone knows he is the answer to the worlds “Green Energy issues”.

Maybe step back from trolling and start really committing to the cause you POS.

 

[MalO]

That's 140,413 deep out of money puts (DOOMPs) at $0.25 on GME.

These can't possibly ever be exercised. Gamestop would have to go bankrupt for that to happen and they can't. You have to be in debt to go bankrupt and Gamestop has over a billion dollars cash on hand, no debt, positive cash flow, and stated on their last earnings call that they are looking at the possibility of making an acquisition (buying another company).

So why would anyone open 140,000 options with no hope of ever being able to exercise them?

Options fukkery. For the institution who is short GME and needs shares to close, but doesn't want the stock price to go up by actually buying shares, they can "buy" options instead. Because if you're a multi-billion dollar hedge fund you can push beans around on a piece of paper and say that options are just as good as shares! The fact that the rest of us know that's not true is irrelevant. We are little people and we just don't understand big boy business.

*Also in case you aren't familiar with options: each option represents 100 shares of stock. So 140,000 puts is worth 14 million shares.

 

[Rube Reaper]

And exactly how would that make investors money?

Who cares? Greedy capitalism has distorted what our goals should be as humans in society. We need to start taking care of Gaia and each other!

 

[MalO]

Japan is raising rates. Supposedly this is going to cause a chain reaction of consequences through the international market.

The rumor over at reddit is that the Fed is eventually going to give up on raising rates and begin "QE Infinity" sometimes in 2023. The next time they start QE again they won't be able to stop or it will crash the market.

Of course QE Infinity is just another word for hyperinflation. So the market is doomed either way.

 

[dirtytoeddawg]

 

[MalO]

Oh in case you guys haven't seen it, about a year ago a drone operator caught employees at Citadel Securities snorting cocaine through a hi-rise window.



^ The guy operating this drone got slapped with a cease and desist order and hasn't been seen on reddit since.

Catching rich people snorting cocaine through hi-rise windows is NOT ALLOWED.

 

[dirtytoeddawg]

Metals exchanges continue to be outstripped as central banks & squeeze trolls take physical possession in lieu of paper.

 

[MalO]

As investors DRS shares and book them, fewer shares are available to borrow in the market causing borrow rates to increase.

You would think the shorts would see what's coming and consider minimizing their losses by closing their shorts sooner rather than later. You would be wrong. In their arrogance they think they can still somehow salvage this.

 

[MalO]

Great video. Wells Fargo just got fined over 3 billion dollars for robbing their customers. They charged excess interest which caused customers to lose their homes and their cars.

Like the guy said, the fine is a fraction of what the bank actually made by the robbery. This is status quo for fines on Wall Street. Cime is profitable and when you get caught, you simply pay the authorities a cut of what you made.

 

[MalO]

PolitiFact - Biden’s $36 billion to save Teamsters fund from insolvency is largest-ever private pension bailout

When President Joe Biden directed $36 billion to a Teamsters pension fund, he said it would prevent drastic cuts in pens

www.politifact.com

Biden’s $36 billion to save Teamsters fund from insolvency is largest-ever private pension bailout​

Central States Pension Fund and its condition
The $36 billion goes to the Central States Pension Fund, which provides pensions to nearly 360,000 union workers and retirees, primarily members of the International Brotherhood of Teamsters union.

The workers are employed in trucking, warehousing, food processing and other industries. Members are mostly in Midwestern states, such as Illinois and Ohio, but they’re also in Texas and Florida.

Central States said in its application that its pension plan had been certified by its actuary to be in "critical and declining status." After being awarded the money, Central States said the "legislative rescue" allows it to avoid insolvency in 2025.

The White House called the $36 billion "the largest ever award of federal financial support for worker and retiree pension security."

The money is a bailout
Several experts told PolitiFact they know of no funding for a private pension fund on the scope of Biden’s plan. They agreed the term "bailout" applies.

Andrew Biggs, a senior fellow at the American Enterprise Institute, said that typically when a private sector pension becomes insolvent, the plan is frozen, participants are switched to a new plan and remaining benefits are paid up to a limit. The Biden plan is "completely different, in that benefits will be paid in full, and new benefits will continue to be accrued. I have no doubt that this is the largest pension bailout in history," he said.

I would like to know what this fund was invested in.

Were they shorting stocks?

 

[hmt5000]

You have to think the Labor dept lying about adding over 1 million jobs is going to hurt a bunch.

 

[MalO]

A lot of redditors are comparing Citadel Securities to Enron right now.

It's not a bad comparison.

Enron Scandal: The Fall of a Wall Street Darling

Enron management hid substantial financial losses, leading to the collapse of one of America’s largest corporations of the time.

www.investopedia.com

New Regulations After Scandal​

Enron’s collapse and the financial havoc that it wreaked on its shareholders and employees led to new regulations and legislation to promote the accuracy of financial reporting for publicly held companies. In July 2002, then-President George W. Bush signed into law the Sarbanes–Oxley Act. The act heightened the consequences for destroying, altering, or fabricating financial statements and for trying to defraud shareholders.

Less than a year ago:





The reason for the document warehouse fire? After the fire chief inspected the site, he concluded that a shelf fell on top of the sprinkler system and disabled it, thus causing the fire that destroyed the entire facility. (which was designed to store paper documents and never burn down)

After reaching this conclusion, the site was quickly cleaned up so no further investigations could be made.

100% stand up man, that fire chief. It's good that we have quality people like him on the job. Always make sure you don't have shelves up above the sprinkler system in the ceiling. It could be a highly flammable situation.

 

[MalO]

The borrow rate for GME rose to over 20% last night. This has happened twice before and both times the price spiked afterwards.

Today the S3 squeeze score for GME is 100. This is a metric that predicts the liklihood of a short squeeze.

 

[shiv]

View attachment 156251

As investors DRS shares and book them, fewer shares are available to borrow in the market causing borrow rates to increase.

You would think the shorts would see what's coming and consider minimizing their losses by closing their shorts sooner rather than later. You would be wrong. In their arrogance they think they can still somehow salvage this.

DRS?

 

[MalO]

DRS?

Direct Registration of Shares. It is when you either transfer shares to or buy shares at the transfer agent.

Shares held in a broker are held in "street name" which means the broker owns the shares. You are not the legal owner only the beneficiary.

Shares held at the transfer agent are held in your name, and you are the legal owner of those shares.

When shares are moved into a book account at the transfer agent they are removed from the market. They can't be loaned out anymore for short selling. If you have shares in a broker they may not actually have those shares in your account they may be lending them out to short sellers because they get a small fee for loaning out shares.

Now what happens if your broker loans out your shares, and the person or institution borrowing those shares short sells them, and then the person who bought those shares from the short seller direct registers those shares?

In this scenario the only person who actually owns shares is the person who direct registered the shares. Everyone else is in debt. The short seller has to buy shares back, the broker has to somehow acquire shares they owe to their customer, and the customer is owed shares from the broker which the broker doesn't actually have.

Only the person holding shares at the transfer agent is squared away.

 

[MalO]

Loaning out shares is very common and completely legal. It's also a conflict of interest.

The broker loaning out your shares to hedge funds knows that they will likely be used for short selling, and short selling causes stock prices to drop. The broker doesn't care.

The broker will make money loaning out your shares, and they know that most retail investors don't hold stock long term. Most retail investors get scared and sell when they see a stock dropping.

So that actually works out for the broker if they loaned out your shares. What they will do is give you the lower price when you get scared and sell, and they keep the difference, plus the fee for loaning out your shares. From the broker's standpoint they are playing both the retail investor and the hedge fund. It's very lucrative.

But then diamond-handed apes came along and starting buying a heavily shorted stock for 2 years straight and direct registered them all.

Now the company is a rising titan and has no chance of going into bankruptcy. This will be the biggest short squeeze in history.

 

[shiv]

Direct Registration of Shares. It is when you either transfer shares to or buy shares at the transfer agent.

Shares held in a broker are held in "street name" which means the broker owns the shares. You are not the legal owner only the beneficiary.

Shares held at the transfer agent are held in your name, and you are the legal owner of those shares.

When shares are moved into a book account at the transfer agent they are removed from the market. They can't be loaned out anymore for short selling. If you have shares in a broker they may not actually have those shares in your account they may be lending them out to short sellers because they get a small fee for loaning out shares.

Now what happens if your broker loans out your shares, and the person or institution borrowing those shares short sells them, and then the person who bought those shares from the short seller direct registers those shares?

In this scenario the only person who actually owns shares is the person who direct registered the shares. Everyone else is in debt. The short seller has to buy shares back, the broker has to somehow acquire shares they owe to their customer, and the customer is owed shares from the broker which the broker doesn't actually have.

Only the person holding shares at the transfer agent is squared away.

Oh wow ok. Thanks for the explanation

It’s a concept that I’ve never really thought about because all I’ve ever known is buying through a brokerage

 

[quickfeet]

They must have some morons running that company to be performing like shit during the modern “deliver everything” world

 

[quickfeet]

Great thread @kek