[TigerClaws]

Combine this with the article we posted here earlier where the TradeZero said ten hedge funds have already fallen due to GME....

[CodeToad]

Crash it! The SEC is a criminal enterprise that let’s large money donors violate the law. The stock system is so corrupt as to be nearly useless. It no longer serves its purpose of investing.

[ronnie raygun]

Im out already bye bye

[nathanbedford]

Nathan's maxim: a lot of smart people have gone broke being right at the wrong time.

Many of us believe that the current state of unsustainable national debt, together with uncounted liabilities coupled with the danger of derivatives means that a harsh reckoning for the economy is inevitable. That it will come we do not doubt, but we do not presume to say we know when.

By way of illustration, the stock market has been operating for years now, really since Greenspan, on the assumption that the Fed has assumed moral hazard duties. In other words, so long as the Fed has our back, it will do what is necessary to pour money into the banks to prop the system up. We have learned that as bubbles burst the Fed will step in. So the market keeps playing because it believes the music will play on. Still, many are watching the Fed because the second they espy the mere wisp of an emanation or intimation of increased interest rates they will trample innocent bystanders in their rush out the door.

That a reckoning will come we think we are smart enough to know. But we don't know when nor do we know it's dimensions. If severe enough, it will lead to political as well as cultural disintegration.

Nathan's other maxim: the remedy for failed socialism is not genuine reform restoring capitalism but invariably imposing more socialism.

So we don't know what we are dealing with here, how close we are to the reckoning, the severity of the pain nor the degree of political derangement that will result. There are entirely too many leftists who would welcome a crisis that they would not let go to waste. My own view, we will not emerge more capitalist, more democratic or more constitutional.

[RinaseaofDs]

Here we go: Systemic Risk

From who?

Government Sachs.

They’re not even original.

Nobody, but nobody, preys on people more than GS, including their own customers.

The worst of the worst.

[WildHighlander57]

Ping to reed13k

https://freerepublic.com/focus/f-news/3930455/posts

[huldah1776]

IF they crash the market, will that be the opportunity to back to the gold standard and get rid of the fed? Just wondering.

[moovova]

.

[SaxxonWoods]

It’s amazing to read all the idiotic comments from people who think they won’t be hurt if the entire market crashes because they are in stocks.

You will be the ones most hurt, fools.

[HamiltonJay]

Jeez, melodrama much?!??

A lesson is being learned... you put too much short pressure on a singe stock, you set yourself up to get burned....

There isn’t a hedge fund in existence that would not happily bankrupt another one to make themselves billions if they had the resources and will to do it.

[aMorePerfectUnion]

No sympathy for any foolish hedge fund that failed to close out their short and left it unlimited.

[qaz123]

Haven’t we heard this before?

Generation Zero on YouTube.

https://m.youtube.com/watch?v=dNS0oE5POL4

[ConservativeMind]

The “Market” would not “crash” if the shorts were done by hedge funds owning the stock or having options from owners.

If “naked shorts” are what the economy is built upon, then it really needs to all crash down.

[Mariner]

If there’s THAT much gambling and manipulation in the market, it NEEDS to crash.

Clear out all that dead wood.

[Vaduz]

Hedge funds get beat at their own game about time.

[cranked]

Memo to Goldman: Stock market needs to rid itself of its nefarious ‘capitalistic’ ways of rich-get-richer shorting company’s, eh?

[ConservativeInPA]

I certainly hope this leads to true market reform, but I am doubtful it will happen. I have yet to read a single article that discusses what needs to be done to permanently solve this problem. In the meantime, keep sticking it to Wall Street, Big Banks and Hedge Funds.

With that said, I do have some concrete ideas about how to correct the problem. I trade for a living and my success comes from avoiding certain things. I wish it did not have to be that way, but my avoidance is necessary so that I don't get stomped by institutional traders.

I won't go into the specifics of how I trade because that will take too long and most will not understand. But I will say I only trade derivatives. I utilize leverage. I trade long and short. And I hedge my positions. All of these have existed in markets in some form or another since markets have existed. There is nothing inherently wrong with any of these practices on an equal playing field.

That is the origin of the problem - an equal playing field for small investors and institutional investors. The biggest advantage institutional investors have is information. I'm not talking about information on a company's fundamentals or what is classically called insider information. Sure, some of that exists and there will always be insider trading. There are laws and regulations against that and there is little more that can be done other than enforcing those laws.

I write of a different type of information. Institutional traders have access to market data that small investors do not. Institutional traders know the disposition of all trades. They know who is long and who is short. They know where people have their stop losses. This occurs because Big Banks are also brokers. They get that information from the brokerage side of the business. The larger the brokerage business the better information they have because they have a larger sampling of retail and small investor trades. That sampling aligns to what is happening overall in the market. I am writing of information that is of better quality and detail than any small investor can get from level II quotes.

The banking side of the business uses that information and their vast amount of money to move price where they want without regards to fundamentals. They take out small investors' stop loses, accumulating positions and then executing an about face taking the price in the complete opposite direction that may or may not be based on fundamentals. It most certainly is based on what is profitable to institutional investors. That is just one example of many tactics and strategies employed by institutional investors. All their methods utilize information that small investors do not have.

The only way a small guy can defend himself is avoiding the most precarious financial instruments because of manipulation. That is basically saying, trade things the Big Banks have little interest in manipulating, or trade things that you can survive some manipulation and still profit. By the way, if you trade on your own, it is best you fully understand this if you want to continue to trade. As the rules stand today it is critical to survival.

There are many things that can be done to correct markets and protecting the little guy. However, it should not deny the little guy access to certain financial instruments. It should not require the little guy to limit the number of trades he can make in a week because his brokerage account is small. It should not limit the types of transactions the little guy can make, short or long, hedging or not. It should not limit the little guy the use of leverage as long as it is within the little guy's means to cover losses. None of these limits protect the little guy. In fact, it dooms his success. It is also the same type of regulation included in past legislation such and Dodd-Frank.

What is needed is a democratization of market data so the little guy knows the same information as institutional investors. This can be achieved in two steps. 1.) The banking side and brokerage side of businesses need to be completely separate. That means broken up and separated, without any transfer of market information through any on-going agreements. 2.) All market data, including price, number of shares/contracts, trade types, stop losses, etc. needs to be instantly and uniformly available to all investors regardless of size. This information should be available for free or at cost. It is technically achievable, because the information is already there. It just is not shared with small investors.

These are not some draconian regulations that are askew with free market capitalism and competition. In fact, in economic terms, "perfect information" is one of the pillars of pure competition. It was recognized in the past that perfect information was not possible because it just wasn't possible to convey that information to everyone in a market. Today it is very feasible to convey more perfect information because it does exist and it does get used; but only by a select few. That is the crux of the problem. Solving it does not create a perfect market, but it is step in the right direction.

Taking away small investors ability to trade in the same way as institutional investors does not fix the market. The only difference between large and small investors is how much capital they have to work with. That is an inequity that will always exist and is a fact of life. The little guy should be offered a chance to operate on a mostly equal playing field so he too can become on of the big guys one day.

[Jonny7797]

Sounds like this is a scare tactic to get everoyone to sell.

[myerson]

The “market” is a house of cards held together by an obscene amount of paper fiat money. Let it fall. Do whatever it takes to return the wonders of savings and compound interest to the people.

[Oatka]

I remember when the real estate bubble burst - the Congressmen were called into a meeting and told if the banks weren’t bailed out, civilization as it was known would cease to be.

This warning by GS has the same tinge of hysteria, and I suspect calls for a bailout will arise. When the government allowed naked shorting again, an idiot could predict the end result Evidently, although naked shorting wasn’t the only culprit, we have to relearn 1929.

[Jim from C-Town]

Horse Shit!

Hold the fund managers & their partners personally responsible to cover the losses of their financial malfeasance . Liquidate their personal assets & have them ‘Learn to code’!

We can sell them to China on the cheap. Just like they have been selling us out to China on the cheap for decades!

Screw them! Golden Slacks band of pirates right along with them!

NO BAILOUTS!