On bewildered Canadians colliding with reality, Reddit causing the Second Great Depression, and a CBC show we're actually sad to see axed. Plus, a major milestone for The Line!
From June 2008 when the TSX topped out at over $15K to October when it dropped to $8900 I decided I should start reading the G&M business section. I'd never spent much time learning how the stock market works but the loss of thousands of $$ of retirement funds got my attention. Reading the "nothing to worry about, don't dump your stocks" journalism of the time, plus discussions with a straight arrow older relative who had been successful in the investment business before hedge funds were even legal made me realize that I was likely not going to win at this game. Discovering Michael Lewis' "The Big Short" and "Flash Boys" confirmed this even more. You can guess that I'm enjoying the rabble trying to crowd source a battle against the Hedge boys. To me the "markets" appear to operate as barely legal casinos. I'd be interested in The Line writers taking a stab at examining so called "business journalism" in the context of the current trend to try to restore the hegemony of the 2008-era gang that never went to jail by beating down the Millenials who happen to have cash.
Matt Levine is the #1 person to read to help make sense of the GameStop insanity. He's spent most of his daily newsletter this week writing about it and, as usual, his writing is both hilarious and spectacular.
It's a bit of a stretch to suggest that extreme volatility in a few small-fry meme stocks like GameStop, AMC, and BlackBerry will (or could) crush retirement next eggs and financial systems or that this will all somehow lead to economic calamity. Even as they're getting pumped to the moon, they remain tiny relative to the vast majority of portfolios and any market participants we need to care about. Even if there were to be some nonlinearities, destructive feedback loops or other knock-on effects in the broader stock market - they tend to be short-lived (e.g. Black Monday in 1987 and the flash crash in 2010).
The people to whom meme stocks substantively matter are basically Redditors YOLO'ing it and a small corner of the hedge fund world who went short, went big, and lost big (#NotAllHedgeFunds?). None of them are systemically relevant and even the retail investors swept up in all this are barely sympathetic.
Some of these retail investors are likely doing what the SEC might view as illegal (albeit hard to prove), and some mania has definitely set in. And there's a valid case to be made that Robinhood in particular (nominally trying to reduce friction and "democratize" financial markets) has evolved into a trading platform enabling retail's worst tendencies. They've made it unprecedentedly easy to speculate with borrowed money and trade options, and those are great ways to lose everything. But the stock market is not the economy, and a couple of hedge funds + some very bored people gambling their personal savings (who mostly can't even do this in a retirement account!) are just not that relevant to the financial system.
Lovely to see a news entity devoted to countering the Rex Murphy-fication "alt" news sources in Canada.
From June 2008 when the TSX topped out at over $15K to October when it dropped to $8900 I decided I should start reading the G&M business section. I'd never spent much time learning how the stock market works but the loss of thousands of $$ of retirement funds got my attention. Reading the "nothing to worry about, don't dump your stocks" journalism of the time, plus discussions with a straight arrow older relative who had been successful in the investment business before hedge funds were even legal made me realize that I was likely not going to win at this game. Discovering Michael Lewis' "The Big Short" and "Flash Boys" confirmed this even more. You can guess that I'm enjoying the rabble trying to crowd source a battle against the Hedge boys. To me the "markets" appear to operate as barely legal casinos. I'd be interested in The Line writers taking a stab at examining so called "business journalism" in the context of the current trend to try to restore the hegemony of the 2008-era gang that never went to jail by beating down the Millenials who happen to have cash.
Matt Levine is the #1 person to read to help make sense of the GameStop insanity. He's spent most of his daily newsletter this week writing about it and, as usual, his writing is both hilarious and spectacular.
It's a bit of a stretch to suggest that extreme volatility in a few small-fry meme stocks like GameStop, AMC, and BlackBerry will (or could) crush retirement next eggs and financial systems or that this will all somehow lead to economic calamity. Even as they're getting pumped to the moon, they remain tiny relative to the vast majority of portfolios and any market participants we need to care about. Even if there were to be some nonlinearities, destructive feedback loops or other knock-on effects in the broader stock market - they tend to be short-lived (e.g. Black Monday in 1987 and the flash crash in 2010).
The people to whom meme stocks substantively matter are basically Redditors YOLO'ing it and a small corner of the hedge fund world who went short, went big, and lost big (#NotAllHedgeFunds?). None of them are systemically relevant and even the retail investors swept up in all this are barely sympathetic.
Some of these retail investors are likely doing what the SEC might view as illegal (albeit hard to prove), and some mania has definitely set in. And there's a valid case to be made that Robinhood in particular (nominally trying to reduce friction and "democratize" financial markets) has evolved into a trading platform enabling retail's worst tendencies. They've made it unprecedentedly easy to speculate with borrowed money and trade options, and those are great ways to lose everything. But the stock market is not the economy, and a couple of hedge funds + some very bored people gambling their personal savings (who mostly can't even do this in a retirement account!) are just not that relevant to the financial system.