IMHO the time to ask that question was when Congress reversed the rules allowing them to trade stocks.
Or when it was decided it was okay for Wall St to spy on limits and front run the trades of retail investors by having their order flows sold to Wall St through the only accessible means of trading
Or when you have the entire SEC staffed through a revolving door of Wall St insiders that won't prosecute anyone
Or when Wall St gets bailed out for creating a bubble while 5 million people get kicked out of their homes
> allowing themselves to participate in mob psychology
By your definition are democratic elections "mob psychology"? If thousands of common folk decide they like GameStop and want them to succeed suddenly that's a problem but none of the above is?
With all due respect your perspective on what's going on is totally backwards. It is a GOOD thing. The masses SHOULD have control over the markets.
I don’t see how in this case. If anything it’s revealing the casino that is a huge percentage of our economy as what it is. There are trillions of dollars being bet every day, and frankly this is taking money from hedge funds who “always win no matter what”. Robin Hood indeed.
90% of the stock market is owned by 1% of the population. We have the highest wealth gap in the countries history except maybe the 1920s. Those who benefit from the system control the system - I’ll personally sit here and cheer for the people who managed to get a piece.
And @ your point - you want a rational system where prices are set per the real value of the company, or its future value. This has not been the case since at minimum 1980. The market is currently a casino that happens to capitalize companies, and with 0% interest rates it’s a economy wide Ponzi scheme because everyone with money has to buy high risk stocks to get a real return. WSB or not I do not think a depression due to a financial or currency collapse is almost likely at this point.
Are you sure you are up to date with what happened?
My understanding, and in layman's terms, is that a hedge fund shorted more GME stocks than they are available. Redditors noticed and correctly thought that if they buy all the stocks available, when the shorts expire and the hedge funds will be forced to buy, they(redditors) can dictate the price.
They just beat them at their own game and rules.
Want a fix? Make shorting illegal.
Short sellers profit from exposing fraud (like those that researched Enron and Wirecard). Making the only market participants with financial incentive to put downward pressure on stock prices illegal seems like a bad idea.
Shorting is illegal in Australia, Germany, Italy, Spain, Portugal and a few other countries with large financial markets. The US has the most "open" policies on shorting in the world. Short selling was an extremely large contributor to the 1929 stock market crash.
At the end of the day though...a lot of people are going to be left with a lot of worthless stock that they paid a lot for.
It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too.
It is well documented that authoritarian governments, including Russia and China, have invested heavily in these techniques. I don't know the source of the GameStop bubble, but if Russia/China didn't see the potential to attack U.S. society and financial markets before, they see it now and will use it.
The question is, what will we do? How do we maintain an open society, which is essential, and protect against this manipulation?
I think an essential part of the solution is the power of critical thinking and reason, the very foundations of the Enlightenment, and that the well-educated (not only them, but definitely them) have to take the lead in applying those skills, and start a social media movement in that direction. The people reading this should be leaders; unfortunately, I see them again and again allowing themselves to participate in mob psychology. The response to these events is particularly chilling. Where is the forum of intellect, knowledge and facts? Almost everything I see is misinformation and conspiracy theories.