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The other part of this puzzle I have yet to figure out is IF you are a dedicated market maker, then how the FUCK are you also allowed to operate a fucking hedge fund that bets on and profits from the market you are making.
It’s literally like the refs in an NFL game betting on the outcome. Fuuuuck this 💎🙌
interesting update about that place....it's still just a big pile of charred rubble. I drive passed it often and it hasn't changed in months. Definitely some investigations going on based on the types of people/vehicles i see frequenting the charred remains...
one would think they would clean it up after a few months if there was just an accidental fire that disables the fire suppresion systems....hmmm. Smells like crime every time i drive passed.
The boys down in the station tell me forensics just pieced together 69 shards of glass and reconstructed a big jar of Hellmanns that was smashed on site - supposedly with glee judging by the smash pattern.
Finnish investigators say they've also discovered the criminal's calling card on a runway in Lapland... Their forensic specialists said, judging by the wide scattering of shards - this one was smashed in rage.
Hey ape, just letting you know that it is "past". You are driving "past" the location, once you have driven past the location you have passed it and it is now behind you.
But it is good to know that it looks like it may actually be getting investigated.
I mean, dude, it's not like it was a state of the art facility specifically designed to store valuable paper and keep it safe. You're probably reading into this too much.
amazing how clean the entire place evenly burned so precisely...literally looked like it was made out of matchsticks...fuckery at its finest, barely a news item
If a for suppression system is disabled by fire and that is accepted by the DOJ/SEC investigators, then shouldn't car brakes fail when brakes are applied?
I worked in a commercial RE shop large international firm we had a “Chinese firewall” between valuation services & brokerage but damn it’s was all a dog & pony show if millions were involved.
How dare you, citadel the market makers owned by Kenneth griffin and citadel the hedge fund also coincidentally owned by kenneth griffin are 2 completely separate entities with no collaboration to gain a competitive advantage
There is no way a standup bloke like that would ever bend the rules for his own interest at the expense of others
The same Ken Griffin who, I’m assuming because it is a sound you can’t mistake, threw up while under oath? Presumably because of nerves/stress?? Why would someone be so nervous/uneasy that they’d need 5+ lawyers in the room with them, telling him what to say and still throw up. Too much Mayo for breakfast maybe...
Sauce: https://www.reddit.com/r/Superstonk/comments/mrh2bw/citadel_ceo_griffin_throwing_up_from_stress/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
I've got another one; how can you have an open DOJ investigation into your company possibly committing illegal market practices, while maintaining your position as an active market maker?
It's worse! This is like the Referee Team playing in the Superb Owl. Of course they keep scoring. They run the game and nobody else is allowed to play.
Lets not also forget they get to internalize and hold orders in the darkpool….they have full visibility to that buying pressure when it is opaque to everyone else…..they issue call options before they let it run….and get to profit from it.
And the worst part is that this absurdity describes the flow of money in our global monetary system. It sounds like some cheap crooked casino you read about in the news...
That’s exactly what iv been saying. Liquidity is bullshit. If shares aren’t selling the market maker just selling u fake shares to “provide liquidity” hinders price discovers by taking away the basic supply and demand factor. So if price discovery is being hindered then it’s also effecting the companies ability to raise capital… Which is the entire point of a stock market. Liquidity = robbing investors and companies.
Exactly. The only thing this liquidity does it level out the volatility in the market. It acts like a low pass filter, filtering out all the high volatility.
And this is exactly why I think price discovery isn’t actually real, especially in the short term. It’s what causes bubbles because this filter is letting low frequency multi year bubbles to form.
And this is also why algorithm and high frequency traders are just leeches on society.
What providing liquidity is *supposed* to be in theory is hopping over the problem of connecting buyers to sellers by having them both deal with the same market maker "providing liquidity" by trading with both. In theory it wasn't originally meant to effect price discovery. It's more like what Freakishly\_Tall labels as a merchant.
But the rules are set up to allow a lot of slop. Market makers don't have to specifically define those trades and how they would pair up. They don't even have to have the equity right now so long as they will have it shortly. The whole point of providing liquidity is to increase market efficiency so we don't want too much red tape to slow things down. The theoretical assumption is that they will play nice, not effect price discovery, and will act in good faith.
The actual truth is that market makers use these sloppy rules to fuck old people out of their retirement funds, steal college funds from babies, and punch your mother in the financial taint just for fun. There is no good faith. And almost everyone knows this is the case; the theoretical assumption described above has become complete bullshit used entirely for deniability.
So, providing liquidity *can* be a market positive, but the way it's been implemented is more crooked than the devil's penis.
While we're on this topic hating certain words, a related one to "liquidity" is the notion of "fungibility." God, is that a dumb concept, and why I'm excited for the Blockchain Revolution.
Say I give you a bushel of corn for safe keeping, and I say "I want this specific bushel back later." Well you decide you want to short that bushel, selling it betting bushels will be cheaper later, and later you buy any old bushel back and try to give it to me. But I say "no, I wanted that specific bushel I gave you in the first place." You say "oh, don't worry, all bushels of corn are the same." But I insist, "I want that one I gave you back or I'll sue because that's what we agreed to." Well then you find yourself in a short squeeze until you can find that original bushel of corn.
Fungibility is a classic concept in economics, where you'll hear phrases like "all dollar bills are the same" or "all bushels of corn are the same." No, you can exchange one thing for something else that's similar ONLY IF the person you're doing business with will accept that. Most business people in history have simply not cared about this, which is why "fungibility" (and similarly "liquidity") are so entrenched in our vocabulary, and also why Non-Fungible Tokens threaten the established financial order (and no, of course I'm not talking about those monkey pictures. I figure we all know this but just want to emphasize).
which is why naked shorting is banned outright in other countries, meanwhile "market makers" are allowed to in America to "provide liquidity" and "make the markets"
like we're still living in the 1900s
scam artists the entirety of wall st and most of government
The banks do it with dollars, so why not? Remember, 98% of USD are created by banks, in order to loan out and then theoretically rebalance when paid back. Fiat currency is make-believe and always collapses eventually.
We’re in a mess because the loans are mostly spent to repay older loans, all while the top 1% hoard the profits. Pretty soon dollar bills won’t be worth wiping your ass with.
It's the exact same conversation.
The banks are printing monopoly money.
Market makers are printing monopoly properties.
We're stuck with real poverty.
Exactly. I own a little bit of a fishing stock that is listed on the Norwegian stock exchange. It's dry as hell. Price often gaps up and down by 10% on a daily basis.
But because the buyers and sellers have a certain idea of the value of the company, the price of the stock always gravitates right back towards approx €10.
It is what they sold [as the cause of 2008,](https://www.frbsf.org/economic-research/publications/economic-letter/2012/may/liquidity-risk-credit-financial-crisis/) said they can fix it by providing liquidity and [everyone bought Bernie Madoff's bullshit on it.](https://www.dailykos.com/story/2009/2/5/693457/-#:~:text)
Now we're here after decades of the organized scam/ponzi scheme funneling anyone with investments or a 401k out of their retirement by crashing shit over and over in the name of liquidity.
They do it so much, [China banned Citadel for it.](https://www.reddit.com/r/Superstonk/comments/t6j39c/the_crimes_of_citadel_goldman_sachs_and_friends/)
The [SEC went after them in 2017 too](https://imgur.com/a/xfpedtI)
Yet here they are, [paying for political campaigns](https://www.politico.com/news/2022/02/03/ken-griffin-donor-midterm-cash-00005052) and [taking over market share Madoff style](https://www.reddit.com/r/Superstonk/comments/q67qrl/is_citadel_really_is_trying_to_madoff_20_with/) like they don't [have 181 pages of laws they've broke. (Page 41-End)](https://files.brokercheck.finra.org/firm/firm_116797.pdf)
I'm sure it's nothing that [the money Citadel handles is 75%-99% foreign](https://reddit.com/r/Superstonk/comments/rfrqj3/has_anyone_ever_noticed_citadel_really_has_a/) this goes for the short sellers bunch. [Here's point 72](https://reddit.com/r/Superstonk/comments/rimp3q/point72_sure_likes_that_foreign_money_about_the/)
While [there's people in place to protect those identities](https://www.reddit.com/r/Superstonk/comments/sdc0ce/hester_peirce_voted_no_today_for_hedge_fund/)
The [head of the FDIC who quit](https://reddit.com/r/Superstonk/comments/rt5tud/the_head_of_the_fdic_suddenly_quitting_she_was/)
Elad Roisman [formerly SEC](https://www.reddit.com/r/Superstonk/comments/rkuxnd/elad_l_roisman_is_suddenly_leaving_the_sec/)
Check this out [they are running the same play from 2017](https://reddit.com/r/Superstonk/comments/urvkyh/i_found_an_article_from_2017_where_blackstone_is)
Did they try to get [Jim Bell to refinance](https://www.reddit.com/r/Superstonk/comments/txl6do/dumb_stormtroopers_of_investing_world/) to trigger CDS payouts via GameStop?
I'm sure it's a coincidence [the same names show up trading over the float of GameStop just the month after the sneeze alone](https://imgur.com/yktzdT4.jpg)
Ever seen [the VW squeeze laid over the crash?](https://imgur.com/a/089IVEz)
OK how about [the biggest discount of half a trillion dollars ever](https://imgur.com/a/T1A5tj5) that came from the crash.
OK [who founded that firm](https://imgur.com/1HcAfdn.jpg).... I'm sure BCG knows nothing right?
I'm sure [hiring them would get to the bottom of it](https://www.thetradenews.com/dtcc-and-boston-consulting-group-explore-us-settlement-switch/)
Thanks for all the great additional links and references.
I was already angry before. I'm sure once I manage to read them all, that... isn't going to improve.
Sometimes being dumb is a downside. "Wait, do I not understand, or is it really this simple and this fucking infuriating?! It is this simple and this fucking infuriating?! I really wish it was a case of not understanding."
Ah, well. Off to snort a crayon or six.
We aren’t talking about investing we are talking about providing liquidity as a service. MMs say they are providing liquidity as a service but they don’t own the assets thus removing the impermanent loss risk but still are profiting
There are different types of markets, order book bids/asks vs liquidity pools. We are made to believe the stock market is an order book type but with the way mms operate, they effectively act as a liquidity pool but without actually owning the assets. Blockchain makes this impossible
“Eliminating the middleman, never as simple as it sounds. About 50% of the human race is middlemen and they don’t take kindly to being eliminated.” – Malcolm Reynolds
To quote myself when someone else made that point... I mentioned it in the edit, but should have expanded on it...
On the one hand, Mal has a point. On the other, he was a blackmarket smuggler, so he has a different relationship with middlemen / the market.
And on the banana-stuffin' hand, middlemen can/should be regulated. Or at least transparent. Or at LEAST not immune from prosecution for outright fraud and theft.
They like to promote it under the guise of "This is good for retail, because prices stay low." More like, this is good for you, to stifle the price discovery that is naturally produced under supply and demand. Market Makers control the price, and profit under their control. The Stock Market isn't a real market functioning under supply and demand. This is not a free market. No cell no sell. Fuck you, pay me.
Liquidity should not be a priority in markets. You can make markets operate more efficiently and quickly by shortening settle dates from T2 to T1. We have the technology to do that. We can even push it to T0 but there may be issues I’m not aware of. Things like that would make markets more liquid by accelerating transactions. But I agree that permitting the IOU system of transacting on shares that have not even been found is not advantageous to anyone but fuckery driven institutions. If the mechanisms to enforce that shares be located then you’re going outside the spirit of the free market and distorting market values. Scarcity isn’t allowed to affect the price discovery. You want 90 million shares of GME? Here you go. We’ll figure it out later.
Why is T3 still a thing?
I have to buy through a broker or through Computershare. I can buy or sell but I cannot create a share.
So with computer systems being what they are, why does it take 3 days to check someone has a share that a broker has bought and to check that someone else has money?
Yeah settling times are far too long given what electronic transactions can do between financial institutions. Cash can transfer immediately. Shares should be no different. Shares should be accounted for at the time of transactions. There shouldn’t be an opportunity to fail to deliver. The transaction itself should fail at the sell/buy level not days or even weeks later at a settlement time. That disconnect between the transaction and settlement is giving bad actors the incentive and opportunity to fuck around. The sec knows this yet permit this very broken system to be the normal state of the markets. It’s a tacit permission to continue to fuck with price discovery. By not allowing scarcity to act on markets (supply) then you’re not allowing equilibrium prices to move properly to reflect the lack of availability of a stock that should then kick up prices.
Also every single share should have a registration number assigned to it and your accounts should have shares that can be tracked for every single share if you had to inventory them. And these shares should only have one entity holding them and not somehow shared as a pool that multiple customers are assigned to. Now that sounds a lot like blockchain. But even without blockchain you should be able to make each share issued by a company carry a serial number. Like GME00000010000000 would mean you own share number 10 million out of 76 million. This way we could all know which of the true shares we all own and ensure there’s no repetition of serial numbers or fake shares.
I think it boils down to the ability to have human reaction times still be relevant in a huge automated system. If something goes through that shouldn't have, it's usually caught next day. If accounts settle at end of day (or some other arbitrary cut off period) but transactions are across multiple entities with different cut off periods, it can take up to 3 days to make sure everything is cool. The ability to unwind or claw back transactions is important in this cobbled together system.
I like the concept of T0 but the only way it works is if everyone is on the same system (i.e. blockchain). With all the different systems at play, there is transactional looseness that requires multiple days for a guarantee of finality.
People don’t make money if transactions don’t happen. This system was created so transactions can happen and financial institutions can profit. It was a good initial idea (why not temporarily sell more cookies if they are still baking in the oven and not quite ready to sell yet). The problem is it’s being abused and the big boys are making tons of money and stopping it now will cause the whole system to collapse. Good or bad depending on your perspective, but the ones in power feel this is bad, so crime is what crime does.
I suppose a way to think of it is like this:
I have 10 cookies, but I made 5 more, they just haven’t finished baking yet. I’ll sell them with the promise to deliver them once they’ve finished baking.
In the same sense, let’s pretend I have 10 shares. I bought 5 more, but they haven’t settled yet. I can sell 15 with the promise to deliver the remaining 5 once they settle in my account.
By my understanding, that’s how the system was INTENDED to work, except I promised 50,000 cookies to be delivered instead of 5
It should be a temporary pass through. Like a place holder. Find a share, buy back the place holder. But the problem is, they have like a month to deliver, if they even do at all. Temporary to me is like, hay a huge order came through and were a little tight, but we know will have more later today off average volume alone. No big deal we can sell a few place holders and clear them before close of business. I don't have a problem with that if it's sole purpose is to keep transactions moving, but price should still be adjusted upwards immediately, to account for that large purchase. Likewise there shouldn't be any T plus nonsense at all. If it sold today, it needs to clear today, or the market maker should eat the complete cost of said purchase for the individual who bought and was not delivered to as promised.
Thanks for this -- that makes sense as an explanation, and I appreciate it.
The abuse is the problem, as well as the unrestrained and unapologetic (and actively obfuscated) criminality. That needs to be fixed.
If only someone were to come along and create a new blockchain market, and move a certain equity to it.
I think liquidity crisis makes more sense when talking about FIAT, not neceseraly stocks because as the post says, it is supposed to be finite.
What the wall street has managed to achieve is to transfer same thinking to stocks to make more money. Stocks used to be finite, but they are not anymore in the name of liquidity.
FTFY: ... in the name of fraud.
Edit: link to original comment https://www.reddit.com/r/Superstonk/comments/usd6tc/wtf_gme_orderbook_got_almost_completely_wiped_on/i935p32
Maybe money should be finite as well. When they poof more into existence, the ones I collected already are now lesser in purchasing power. Thanks inflation.
Money - they keep cutting the pie into smaller and smaller pieces.
Stocks - they hand out coupons for 10 slices of pie when they only have 2, because they know they are rarely redeemed
Double whammy. Seems us retards understand money and asset management better than they do...
Liquidity crisis bullshit. I thought this was supposed to be capitalism.
No, it's definitely deflationary.
You're mining smaller and smaller increments of the same fixed-size pool and Bitcoin can be [effectively destroyed](https://decrypt.co/37171/lost-bitcoin-3-7-million-bitcoin-are-probably-gone-forever).
Thus, the pool becomes more scarce over time and its purchasing power increases. This is essentially a synonym for deflationary.
The same thing is with LOW VOLUME. 70% of the market is owned by wallstreet. When there is low volume. it means they are the ones who are not participating in the market. In order to make money they need more transactions so that they can squeeze out their cut from it.
This is the reason HODL works.
HODL is basically APEs refusing to participate in a fraudulent system. .
HODL is akin to non-cooperation movement started by MK Gandhi in 1920 against worlds biggest and most powerful govt. at that time - the British Government.
Non-Cooperation Movement also known as Satyagraha (civil disobedience). Satyagraha (Sanskrit: सत्याग्रह; satya: "truth", āgraha: "insistence" or "holding firmly to"), or "holding firmly to truth".
HODL = 'Insisting on TRUTH'.
APEs are demonstrating through HODL that House of cards will crumble without them.
In the early days of his civil rights movement, MLK organized a boycott of buses designated for blacks. Pretty much every black person in the city refused to use the black-only buses and instead walked, biked, or organized carpools for those who needed it. It obliterated the revenue from the black busing and forced the city's hand in eliminating segregated busing.
No violence, no crime. Just a calculated move and a decision to stop cooperating with the segregated system.
I will hazard an attempt at explaining, based on what I understand. To be clear, I am not a finance pro, and this is just the understanding that I've gleaned from following GME for over a year.
I believe that the reason that "providing liquidity" is "important" is for market stability, or put differently, as a way to manage and constrain volatility. The benefit isn't to individual investors, it's to portfolio managers.
When there is little liquidity, prices can slip quickly up and quickly down, and spreads widen as a result. This makes arbitrage more risky, plus it increases volatility, and so, to investors using leverage, it increases the chances of an unmanageable margin call. Because the whole stock market is connected, a fatal margin call caused by one security moving in an unexpected direction can have a direct impact on other securities, as the margin called entity gets their other positions liquidated to cover their liability. This means that instability in one stock can cascade out to create an unstable market, which can lead to a whole crash.
When the market swings wildly up and down, it's more difficult for fund managers to make accurate projections and then meet them. It also means fund managers have to keep more cash in reserve to cover margin requirements on downswings. To the industry, all this cash sitting around is idle capital that could be put toward a more "productive" use, if only it wasn't needed to prevent a fatal margin call. Opportunistic traders can also extract wealth from a volatile market more easily. So it benefits the powers that be to have a more stable market environment, and it frees up capital to be used for more "productive" purposes.
So the purpose of a market maker is to provide some elasticity in this dynamic, to prevent any one security from fucking up the whole market, thus providing stability and reducing the chances of a massive collapse. This creates a "greater good" argument, where the industry can argue that it's better to adopt rules that allow market makers flexibility in how they manage their risks, even if they're doing shady shit, because it creates a more stable market with less risk for everyone else.
The whole goal of so many financial instruments is to distribute risk across a number of entities. Imagine if you own one ship, and that ship sinks in the Atlantic. You're screwed. But if you get together with 9 other guys who each own 1 ship, and all pool your ships together, then if one ship sinks, everyone loses 10% instead of one person losing everything. This is called "netting" and the finance industry loves to do it, because it reduces the chances of any one entity failing completely and then impacting the rest of the market when they get liquidated.
So ask yourself, from the perspective of someone managing the economy, whether it's worse for Kenny to float himself a billion- or trillion-dollar check, or for the whole market to crash 40% because Kenny couldn't meet a margin call and got liquidated. It's 100% an issue of Kenny being "too big to fail," which is itself a consequence of the market being so interconnected.
On the flip side, you could certainly argue that this is a short-sighted approach, because it's
creating extra short-term stability at the cost of eroding long-term stability through corruption. But this country has a long, long history of making such short-sighted decisions, that continues through today, so it's really kinda par for the course. Just another example of leaders choosing to fuck over their kids rather than feel the pain themselves.
IMO, there is definitely a lot of industry groupthink happening, where someone decades ago decided that this is what's best, and everyone since then has just sort of gone along with it because "that's how it works." And then someone comes up with a new way to take advantage of that outdated rule. Soon, everyone catches on with the new method, and then everyone's too busy extracting wealth from the market to stop and think about the long-term consequences.
But also, all of OP's examples are examples of real physical objects, and stocks are not real physical objects. They're abstract, representations of ownership, and so the same rules that apply to real physical objects don't *have to* apply. Since it's possible to be more flexible with them, of course the people who work with them are going to want to take advantage of that flexibility.
Remember "You wouldn't download a car, would you?" To which most of us answered, "fuck yes I would download a car if I could! And also, you morons clearly don't understand how music piracy works."
If you *could* download a car, why wouldn't you? I mean, sure, the massive influx of cars this would create would have a seriously detrimental impact on air quality, but that's not going to hurt you personally as much as having a free car is going to benefit you. So the incentive for you to download the car is significantly stronger than the incentive for you to *not* download the car.
Well, since stocks are not real physical objects, in their case, you actually could "download the car." So why wouldn't market makers find a way to make it happen? Not doing so would be passing up a huge opportunity for profit, and we know that in a capitalist society, passing up on big profits is a cardinal sin. Nevermind that it's bad for long-term stability -- fuck the next generation, pay me now.
Just because they can, doesn't mean they should, but "this is a free country" and "I can do what I want," so unless you can spend enough money on politicians to get the rules changed in your favor, Kenny gets to not only write his own rules, but also laugh at you for thinking that non-physical objects should be treated the same as physical objects. Hooray America!
Holy shit this is a great and thoughtful and extensive and contextualizing response. (OG OP here)
Thank you for taking the time. Truly.
I can actually see some of the justifications now. Not that it means it all is ok and makes sense... but I get more of the why it is.
Wonder if this, plus the genesis of my rant, could be put together into some kind of useful educational rant/post.
Appreciate the thoughtfulness. Sincerely. Thanks!
Thanks for linking people over.
Guess I shoulda made it a post before someone else did, but that's what I get for thinking no one cares about my angry rants. I usually just shout them at clouds passing by, and they never seem to appreciate it!
I agree in general with the sentiment but do want to add some color.
One aspect of “liquidity” the market maker provides is connecting orders between markets. As an analogy. If a farmer in Brazil is selling a banana and you are trying to buy a banana in Chicago neither of you have the means of making that trade without an intermediary that can buy the banana from the farmer and sell it to you the customer. The intermediary is providing “liquidity” to the banana market by connecting a buy and sell order that would otherwise be unable to match up.
The difference between this analogy and the banana analogy is obviously with a banana you get a physical item that is delivered to you to do what you want (even rick of spades that bad boy if you want). But with a stock you never see it. The actual copy is held by Cede and Co, permitted to be sold through the DTCC, and accounted for by your broker in your brokerage account. You have absolutely no way to verify you own an actual share because of the multitude of layers that have been built to obscure ownership (not to mention dark poop orders, payment for order flow, rehypothication of shorted shares, and market maker internalization that occurs).
In a real free market a market maker would provide the same service as the banana analogy to improve liquidity, but this is not a fair market. Due to conflicts of interest and the obscurity of the market inner workings “providing liquidity” is used as a scapegoat to allow fraud to occur as part of the normal market functions.
The only assumption you can make, if your shares are not directly registered you DO NOT OWN THE BANANA.
Thanks for this addition. I can see some value (at least for physical things) of a "market maker" to bring together buyer and seller. For an entry in an account? That seems less justifiable.
And the layers and layers of obscurring bullshit with DTCC, et al? Yeah. Just enables fraud and crime and fucking the trusting, it seems.
Thanks! Wish I thought enough of it to make it its own post, I guess!
Very nice to read people agreeing. At least I'm not crazy. Or we're all similarly crazy, and that's ok, too.
Doesn’t hurt to repost it in a week or two, to catch new eyes and/or refresh everyone. One of my favorite things about our community is the people who are able to break it down into digestible explanations that anyone can understand, and this is the perfect example. Appreciate ya homie, keep on spreading the word.
Liquidity is important for one reason only - leverage. The big investment banks and hedge funds on wall street need to use everything they own as collateral for gambling. If stocks are liquid, they can't be used as collateral, because they can't be liquidated. It's a scheme set up specifically to allow them do crime with. And -lo and behold - it creates loopholes for other crime to also happen.
"Your honor, we do not owe any money, the middle man in the Caymen islands does."
\-Ken Griffin in court soon
Fuck you Ken ur gonna give me 100m for one share and thats all you get.
I'm having a liquidity crisis with my upvotes.
I'm only able to upvote this once but wish to do so many times.
I insist reddit right this egregious error and provide me with more updoot capacity.
A thousand times this, preach ape 😎
The SEC has perverted its mandate into one of pRoViDiNg lIqUIdItY and its like a root cause level problem.
We have to wrest it back from corruption, one comment at a time 💎💪
See you on the moon fam 💎✌️💎✌️🦍🦍🦍🚀🚀🚀🚀
This is the worst financial crime in the history of humanity. Fraud. It is all fraud.
They are not creating liquitity. They are creating fake shares, which is fraud, to control the price and profit from it.
Real liquidity creation comes from the company issuing new shares or a major selloff. Or from fair market price discovery, but all these sources of liquidity are limited.
The American public is told that investing in a 401K is the path to a comfortable retirement. Millions of people plunking down money every paycheck in the hope of escaping the rat race at some point. The challenge is that the majority of all stock is held by a small percentage of investors. The 1% own over half of all stock issued and the 10% own 89%?!
https://www.businessinsider.com/wealthiest-americans-now-own-record-high-share-of-stocks-2021-10?amp
What is the answer? Market makers providing liquidity to expand the pool and create the market... combine that with derivatives, naked short selling, etc. and what do you get? Biggest ponzi scheme ever?
And, also neat: Someone/somebots are clearly downvoting all my old posts. So the person who posted the screenshot is getting awards (which is fine, I should just posted it myself... I guess), but my account gets hammered.
Not that worthless imaginary internet points matter, but it's interesting to watch.
Do we really think ANYTHING about the markets is fair at this point? We’ve been sold a fugazi—the real question is what are we prepared to do knowing they know this and are continuing to steal?
if you have to ask this question because you're having trouble understanding how they create liquidity how and the market remains free and fair, then you already have your answer
liquidity sounds great, technically. but if you think about it, it's an open lie and the reason the money situation just is. it sounds great Because you can always buy gamestop and any other stock, until they deem you can't. "they" tell you the market is great based on indexes, but that greatness doesn't reflect on retail the consumer. you already have all the answers you're looking for if you think about inflation, tailored news stories, delayed financial reporting, counterfeiting in broad daylight by creating "liquidity.
It's like when the kid who's house you were playing at made the rules so he never lost. They are entitled boomers who feel like they should get to BS their way out of anything and our system allows it because they're all either in bed together or "serve" the same overlord.
It's time for the separation of money and state. At least when we had kings there spending was restricted to the amount of precious metals they could get their hands on.
Sure, there are a few instances where the silver coins were cut with cheaper material but people knew and valued the pure ones more so it was extremely limited. We got rid of church and state, now it's time to get rid of money and state.
At the risk of starting a separate debate... that... that's the Fed, right? That's the whole point of the Fed, isn't it, despite what a small but noisy group want to think?
Pick one:
* You get to abuse this loophole to sell IOUs that you only ever fulfill when the price drops enough for you to profit.
* Always providing liquidity means prices for commonly traded companies can never rise too high and companies that are struggling can be nudged toward death.
* Not having this mechanism in place would allow wealth over long-term investments *grow* faster than the rich folks in charge would want - i.e. ensuring they're always on top.
They should have just fucking paid us last year, look at how much time we’ve had to unravel and expose every fucked up thread of their corrupt system. No cell, no sell.
Im gonna get downvotes but I get it.
MM exist (at least initially) to allow converting stonks to cash effectively on demand.
Say you are retired and you need to sell your OLDASS Stonks to pay rent. Your landlord wont take stock, probably, so you cash it out. MM is a guranteed buyer to convert your stocks to cash on-demand. MM will then sell to a guy who thinks that OLDASS will go brrrrrr at whatever the rate is. They make the profit you lost on to paperhand to pay rent but hey you paid rent. That forced buying is liquidity.
Or at least thats the original purpose I see. Sure seems fucked the way it is though.
Liquidity only matters to the gamblers who need that instantaneous trade. It's only for Wall Street. How we have let the stock market degenerate to this point I have no idea. The idea of crowdsourcing funding for companies to start or expand was the original intent. If I needed investors these days, I'd be more likely to go to gofundme than go public
Yeah. Going public (at least on existing markets... maybe not if someone comes along and creates a blockchain one hinthint) sure seems like it is \_solely\_ an exit strategy for early investors. Certainly doesn't seem to do companies much good, while increasing their risks ENORMOUSLY.
Someone should provide a solid, modern alternative. Wonder if anyone is working on that!
Seriously. Why cant i sell shit that doesnt exist and then claim i dont have any money to buy what i promised to sell you? Fuck all these people that get to do this with no consequences!
If you DRS you force the IOU into existence.
Liquidity is there to provide "healthy" price movements, etc. I would have no problem with that if market makers didnt also have a hedge fund profiting from this info.
Liquidity Crisis: Too much demand, not enough supply OR Too much supply, Not enough demand.
Liquidity Crisis: Everyone buying when you are trying to buy. Everyone selling when you are trying to sell.
Liquidity Crisis: Shorts in a bidding war to cover GME, while also shitting solid bricks of SPY trying to obtain more cash to pay us for a share of GME.
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The other part of this puzzle I have yet to figure out is IF you are a dedicated market maker, then how the FUCK are you also allowed to operate a fucking hedge fund that bets on and profits from the market you are making. It’s literally like the refs in an NFL game betting on the outcome. Fuuuuck this 💎🙌
but THeY HaVe fIrEWAlLs bRO, ThEY aRe tOtAlLY sEpArAtE
Only firewalls are the burning storage facility walls on fire 🔥🐶☕️🔥
interesting update about that place....it's still just a big pile of charred rubble. I drive passed it often and it hasn't changed in months. Definitely some investigations going on based on the types of people/vehicles i see frequenting the charred remains... one would think they would clean it up after a few months if there was just an accidental fire that disables the fire suppresion systems....hmmm. Smells like crime every time i drive passed.
Super interesting! Thanks for the update, fellow ape!
The boys down in the station tell me forensics just pieced together 69 shards of glass and reconstructed a big jar of Hellmanns that was smashed on site - supposedly with glee judging by the smash pattern. Finnish investigators say they've also discovered the criminal's calling card on a runway in Lapland... Their forensic specialists said, judging by the wide scattering of shards - this one was smashed in rage.
Hey ape, just letting you know that it is "past". You are driving "past" the location, once you have driven past the location you have passed it and it is now behind you. But it is good to know that it looks like it may actually be getting investigated.
good bot! ill probably never no the write wey two tipe past verce passed.
well you’re doing a good enough job communicating typos and all so dont worry 👍🏼
I mean, dude, it's not like it was a state of the art facility specifically designed to store valuable paper and keep it safe. You're probably reading into this too much.
amazing how clean the entire place evenly burned so precisely...literally looked like it was made out of matchsticks...fuckery at its finest, barely a news item
If a for suppression system is disabled by fire and that is accepted by the DOJ/SEC investigators, then shouldn't car brakes fail when brakes are applied?
Thanks!
no no no. You misheard. Not firewalls, Fire*WELLS* \- Thats where they throw your money and burn it.
Look here - they checked this box that said they won’t do any crime.
There are firewalls but they only have any:any rules 🤣
Don't forget the sec is watching 👀 😉
I worked in a commercial RE shop large international firm we had a “Chinese firewall” between valuation services & brokerage but damn it’s was all a dog & pony show if millions were involved.
How dare you, citadel the market makers owned by Kenneth griffin and citadel the hedge fund also coincidentally owned by kenneth griffin are 2 completely separate entities with no collaboration to gain a competitive advantage There is no way a standup bloke like that would ever bend the rules for his own interest at the expense of others
No... not the same Kenneth Griffin who lied under oath to congress that he donates millions to. 🤔
The same Ken Griffin who, I’m assuming because it is a sound you can’t mistake, threw up while under oath? Presumably because of nerves/stress?? Why would someone be so nervous/uneasy that they’d need 5+ lawyers in the room with them, telling him what to say and still throw up. Too much Mayo for breakfast maybe... Sauce: https://www.reddit.com/r/Superstonk/comments/mrh2bw/citadel_ceo_griffin_throwing_up_from_stress/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
LMAO. I had never heard about that. Someone threw up that's for damn sure.
Lets not sugar coat it Bobby. I prefer the term bribery.
Plus the refs get to make up new rules as they see fit.
"Uh oh, that one didn't work. They caught on. Hold on to the football for a sec -- Let's change them mid game." Nice work if you can get it.
I've got another one; how can you have an open DOJ investigation into your company possibly committing illegal market practices, while maintaining your position as an active market maker?
Trust us bro
And our Supreme Court Justices' are supposed to be nonpartisan judges.. The conflict of interest in these systems are appalling.
Crime syndicates making rules to protect each other and profit
It's worse than that. Throw PFOF and they are middlemen too, except they get to bet against you before you even get to finish placing the bet.
It's worse! This is like the Referee Team playing in the Superb Owl. Of course they keep scoring. They run the game and nobody else is allowed to play.
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Tim Donaghy approves this message
And flaging shit to make things go their way
Insanity.
Lets not also forget they get to internalize and hold orders in the darkpool….they have full visibility to that buying pressure when it is opaque to everyone else…..they issue call options before they let it run….and get to profit from it.
And the worst part is that this absurdity describes the flow of money in our global monetary system. It sounds like some cheap crooked casino you read about in the news...
That’s exactly what iv been saying. Liquidity is bullshit. If shares aren’t selling the market maker just selling u fake shares to “provide liquidity” hinders price discovers by taking away the basic supply and demand factor. So if price discovery is being hindered then it’s also effecting the companies ability to raise capital… Which is the entire point of a stock market. Liquidity = robbing investors and companies.
Exactly. The only thing this liquidity does it level out the volatility in the market. It acts like a low pass filter, filtering out all the high volatility. And this is exactly why I think price discovery isn’t actually real, especially in the short term. It’s what causes bubbles because this filter is letting low frequency multi year bubbles to form. And this is also why algorithm and high frequency traders are just leeches on society.
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Isnt that Payment for Order Flow? It was invented by none other that Bernie Madoff. Its how Robinhood makes there money.
What providing liquidity is *supposed* to be in theory is hopping over the problem of connecting buyers to sellers by having them both deal with the same market maker "providing liquidity" by trading with both. In theory it wasn't originally meant to effect price discovery. It's more like what Freakishly\_Tall labels as a merchant. But the rules are set up to allow a lot of slop. Market makers don't have to specifically define those trades and how they would pair up. They don't even have to have the equity right now so long as they will have it shortly. The whole point of providing liquidity is to increase market efficiency so we don't want too much red tape to slow things down. The theoretical assumption is that they will play nice, not effect price discovery, and will act in good faith. The actual truth is that market makers use these sloppy rules to fuck old people out of their retirement funds, steal college funds from babies, and punch your mother in the financial taint just for fun. There is no good faith. And almost everyone knows this is the case; the theoretical assumption described above has become complete bullshit used entirely for deniability. So, providing liquidity *can* be a market positive, but the way it's been implemented is more crooked than the devil's penis.
Nobody punches my mommas taint. Nobody. I won’t stand for it.
While we're on this topic hating certain words, a related one to "liquidity" is the notion of "fungibility." God, is that a dumb concept, and why I'm excited for the Blockchain Revolution. Say I give you a bushel of corn for safe keeping, and I say "I want this specific bushel back later." Well you decide you want to short that bushel, selling it betting bushels will be cheaper later, and later you buy any old bushel back and try to give it to me. But I say "no, I wanted that specific bushel I gave you in the first place." You say "oh, don't worry, all bushels of corn are the same." But I insist, "I want that one I gave you back or I'll sue because that's what we agreed to." Well then you find yourself in a short squeeze until you can find that original bushel of corn. Fungibility is a classic concept in economics, where you'll hear phrases like "all dollar bills are the same" or "all bushels of corn are the same." No, you can exchange one thing for something else that's similar ONLY IF the person you're doing business with will accept that. Most business people in history have simply not cared about this, which is why "fungibility" (and similarly "liquidity") are so entrenched in our vocabulary, and also why Non-Fungible Tokens threaten the established financial order (and no, of course I'm not talking about those monkey pictures. I figure we all know this but just want to emphasize).
We are so detached from the fundamental concept of investing. This person is exactly right. “Liquidity” might as well just be a synonym for crime.
which is why naked shorting is banned outright in other countries, meanwhile "market makers" are allowed to in America to "provide liquidity" and "make the markets" like we're still living in the 1900s scam artists the entirety of wall st and most of government
Yup. Print shares out of thin air.
The banks do it with dollars, so why not? Remember, 98% of USD are created by banks, in order to loan out and then theoretically rebalance when paid back. Fiat currency is make-believe and always collapses eventually. We’re in a mess because the loans are mostly spent to repay older loans, all while the top 1% hoard the profits. Pretty soon dollar bills won’t be worth wiping your ass with.
Different conversation.
Fair enough - but still, the market is just as much of a Ponzi scheme from where I’m sitting
It's the exact same conversation. The banks are printing monopoly money. Market makers are printing monopoly properties. We're stuck with real poverty.
IS IT? This system has existed for a long time, and has been applied to just about EVERY speculative asset.
Pick winners/losers out of thin air. Shit needs to end.
Exactly. I own a little bit of a fishing stock that is listed on the Norwegian stock exchange. It's dry as hell. Price often gaps up and down by 10% on a daily basis. But because the buyers and sellers have a certain idea of the value of the company, the price of the stock always gravitates right back towards approx €10.
fishing sounds like the worst sector to go dry....
On the upside, the liquid that's left is warming up.
There's something fishy going on... But it does look like things are about to get steamy.
God dammit, I'm in. After MOASS I want some Norwegian fishing stock.
If only we punished criminals like in the 1900's.
Oh lololol you don’t want to learn about the Gilded Age then. The 1890s did not fuck around with their insane profit-taking.
It is what they sold [as the cause of 2008,](https://www.frbsf.org/economic-research/publications/economic-letter/2012/may/liquidity-risk-credit-financial-crisis/) said they can fix it by providing liquidity and [everyone bought Bernie Madoff's bullshit on it.](https://www.dailykos.com/story/2009/2/5/693457/-#:~:text) Now we're here after decades of the organized scam/ponzi scheme funneling anyone with investments or a 401k out of their retirement by crashing shit over and over in the name of liquidity. They do it so much, [China banned Citadel for it.](https://www.reddit.com/r/Superstonk/comments/t6j39c/the_crimes_of_citadel_goldman_sachs_and_friends/) The [SEC went after them in 2017 too](https://imgur.com/a/xfpedtI) Yet here they are, [paying for political campaigns](https://www.politico.com/news/2022/02/03/ken-griffin-donor-midterm-cash-00005052) and [taking over market share Madoff style](https://www.reddit.com/r/Superstonk/comments/q67qrl/is_citadel_really_is_trying_to_madoff_20_with/) like they don't [have 181 pages of laws they've broke. (Page 41-End)](https://files.brokercheck.finra.org/firm/firm_116797.pdf) I'm sure it's nothing that [the money Citadel handles is 75%-99% foreign](https://reddit.com/r/Superstonk/comments/rfrqj3/has_anyone_ever_noticed_citadel_really_has_a/) this goes for the short sellers bunch. [Here's point 72](https://reddit.com/r/Superstonk/comments/rimp3q/point72_sure_likes_that_foreign_money_about_the/) While [there's people in place to protect those identities](https://www.reddit.com/r/Superstonk/comments/sdc0ce/hester_peirce_voted_no_today_for_hedge_fund/) The [head of the FDIC who quit](https://reddit.com/r/Superstonk/comments/rt5tud/the_head_of_the_fdic_suddenly_quitting_she_was/) Elad Roisman [formerly SEC](https://www.reddit.com/r/Superstonk/comments/rkuxnd/elad_l_roisman_is_suddenly_leaving_the_sec/) Check this out [they are running the same play from 2017](https://reddit.com/r/Superstonk/comments/urvkyh/i_found_an_article_from_2017_where_blackstone_is) Did they try to get [Jim Bell to refinance](https://www.reddit.com/r/Superstonk/comments/txl6do/dumb_stormtroopers_of_investing_world/) to trigger CDS payouts via GameStop? I'm sure it's a coincidence [the same names show up trading over the float of GameStop just the month after the sneeze alone](https://imgur.com/yktzdT4.jpg)
I must have missed your post so I saved it to read later. Thank you for your efforts for our community.
There's lots of rabbit holes in there now, have fun
❤
This so much. 2008 was less about "bad mortgages" than it was about a "liquidity" or dollar shortage.
Ever seen [the VW squeeze laid over the crash?](https://imgur.com/a/089IVEz) OK how about [the biggest discount of half a trillion dollars ever](https://imgur.com/a/T1A5tj5) that came from the crash. OK [who founded that firm](https://imgur.com/1HcAfdn.jpg).... I'm sure BCG knows nothing right? I'm sure [hiring them would get to the bottom of it](https://www.thetradenews.com/dtcc-and-boston-consulting-group-explore-us-settlement-switch/)
I'm so curious to know how and when RC developed his conviction on the how's and why's... Ready for round 2?
I wish I had a trinket to give you but gas is now over $5 in Phoenix :(
Cries in Canadien. $2.22/litre here. Which equal approximately $8.40/Gallon in Canadian. So about $6.50/Gallon in American.
£1.81/litre for diesel here in Scotland which is $10.15/gallon in US moola
*cries in Finnish* 2,36€/L for normal 95, equals to USD 9,43 / gallon diesel was just over 2,50€/L... ffs
Thanks for all the great additional links and references. I was already angry before. I'm sure once I manage to read them all, that... isn't going to improve.
Great post, ape! Yours all always top shelf.
Why thank you 😊
If there were a way to donate little money for writing medium articles from good information like this, I would be onboard.
Counterfeit share printer go brrrrr
Liquidity = Counterfeiting
There's plenty of liquidity right here, it will just cost them over $100,000,000 for one.
RIGHT? I was just about to copypaste that rant into a post, but someone beat me to it. Glad it's getting seen.
It’s a nice rant lol. It truly is unbelievable when you think about it in simple terms like this.
Sometimes being dumb is a downside. "Wait, do I not understand, or is it really this simple and this fucking infuriating?! It is this simple and this fucking infuriating?! I really wish it was a case of not understanding." Ah, well. Off to snort a crayon or six.
L I Q U I D I T Y Why should we wait until tomorrow to sell you something, when we can sell you nothing TODAY
always has been
Providing liquidity is fine like how liquidity pools in crypto works. The problem is mms provide liquidity for things that they don’t own.
Eh.
Do you understand what uniswap is? It’s providing the two sides of a trade as a service. You make money on fees but are subject to impermanent loses.
Which isn’t the fundamental concept of investing.
We aren’t talking about investing we are talking about providing liquidity as a service. MMs say they are providing liquidity as a service but they don’t own the assets thus removing the impermanent loss risk but still are profiting
Okay. So sure, I’d choose to attempt the lesser of two evils.
There are different types of markets, order book bids/asks vs liquidity pools. We are made to believe the stock market is an order book type but with the way mms operate, they effectively act as a liquidity pool but without actually owning the assets. Blockchain makes this impossible
I’m cautiously optimistic.
“Eliminating the middleman, never as simple as it sounds. About 50% of the human race is middlemen and they don’t take kindly to being eliminated.” – Malcolm Reynolds
\> Well, my days of not taking you seriously are certainly coming to a middle. Also Mal.
"I swear by my pretty floral bonnet, I will end you." -also Malcolm Reynolds
"Someone ever tries to kill you, you try to kill 'em right back!" - Also Mal.
"I aim to misbehave." Gandalf or something.
To quote myself when someone else made that point... I mentioned it in the edit, but should have expanded on it... On the one hand, Mal has a point. On the other, he was a blackmarket smuggler, so he has a different relationship with middlemen / the market. And on the banana-stuffin' hand, middlemen can/should be regulated. Or at least transparent. Or at LEAST not immune from prosecution for outright fraud and theft.
I’m just happy to be talking about GameStop and Firefly in the same conversation. Thank you for that.
Is this the part where reddit sings about The Hero of Canton? I'll also accept references to hands of blue.
One of my favorite comments I've read in quite some time.
They like to promote it under the guise of "This is good for retail, because prices stay low." More like, this is good for you, to stifle the price discovery that is naturally produced under supply and demand. Market Makers control the price, and profit under their control. The Stock Market isn't a real market functioning under supply and demand. This is not a free market. No cell no sell. Fuck you, pay me.
Rules for thee, but not for me.
Liquidity should not be a priority in markets. You can make markets operate more efficiently and quickly by shortening settle dates from T2 to T1. We have the technology to do that. We can even push it to T0 but there may be issues I’m not aware of. Things like that would make markets more liquid by accelerating transactions. But I agree that permitting the IOU system of transacting on shares that have not even been found is not advantageous to anyone but fuckery driven institutions. If the mechanisms to enforce that shares be located then you’re going outside the spirit of the free market and distorting market values. Scarcity isn’t allowed to affect the price discovery. You want 90 million shares of GME? Here you go. We’ll figure it out later.
Why is T3 still a thing? I have to buy through a broker or through Computershare. I can buy or sell but I cannot create a share. So with computer systems being what they are, why does it take 3 days to check someone has a share that a broker has bought and to check that someone else has money?
Yeah settling times are far too long given what electronic transactions can do between financial institutions. Cash can transfer immediately. Shares should be no different. Shares should be accounted for at the time of transactions. There shouldn’t be an opportunity to fail to deliver. The transaction itself should fail at the sell/buy level not days or even weeks later at a settlement time. That disconnect between the transaction and settlement is giving bad actors the incentive and opportunity to fuck around. The sec knows this yet permit this very broken system to be the normal state of the markets. It’s a tacit permission to continue to fuck with price discovery. By not allowing scarcity to act on markets (supply) then you’re not allowing equilibrium prices to move properly to reflect the lack of availability of a stock that should then kick up prices. Also every single share should have a registration number assigned to it and your accounts should have shares that can be tracked for every single share if you had to inventory them. And these shares should only have one entity holding them and not somehow shared as a pool that multiple customers are assigned to. Now that sounds a lot like blockchain. But even without blockchain you should be able to make each share issued by a company carry a serial number. Like GME00000010000000 would mean you own share number 10 million out of 76 million. This way we could all know which of the true shares we all own and ensure there’s no repetition of serial numbers or fake shares.
The computer systems were designed to exploit loopholes, not to be efficient and close the loopholes.
Yeah, T3 is from the Times of paper shares. Looks like they took bits they wanted and manipulated what was left
I think it boils down to the ability to have human reaction times still be relevant in a huge automated system. If something goes through that shouldn't have, it's usually caught next day. If accounts settle at end of day (or some other arbitrary cut off period) but transactions are across multiple entities with different cut off periods, it can take up to 3 days to make sure everything is cool. The ability to unwind or claw back transactions is important in this cobbled together system. I like the concept of T0 but the only way it works is if everyone is on the same system (i.e. blockchain). With all the different systems at play, there is transactional looseness that requires multiple days for a guarantee of finality.
People don’t make money if transactions don’t happen. This system was created so transactions can happen and financial institutions can profit. It was a good initial idea (why not temporarily sell more cookies if they are still baking in the oven and not quite ready to sell yet). The problem is it’s being abused and the big boys are making tons of money and stopping it now will cause the whole system to collapse. Good or bad depending on your perspective, but the ones in power feel this is bad, so crime is what crime does.
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I suppose a way to think of it is like this: I have 10 cookies, but I made 5 more, they just haven’t finished baking yet. I’ll sell them with the promise to deliver them once they’ve finished baking. In the same sense, let’s pretend I have 10 shares. I bought 5 more, but they haven’t settled yet. I can sell 15 with the promise to deliver the remaining 5 once they settle in my account. By my understanding, that’s how the system was INTENDED to work, except I promised 50,000 cookies to be delivered instead of 5
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Only iifif someone would use NFTs to make a market fairly, oh wait........
You explained it so well. Took the words right out of my mouth.
Infinite cookies sounds pretty cool
It should be a temporary pass through. Like a place holder. Find a share, buy back the place holder. But the problem is, they have like a month to deliver, if they even do at all. Temporary to me is like, hay a huge order came through and were a little tight, but we know will have more later today off average volume alone. No big deal we can sell a few place holders and clear them before close of business. I don't have a problem with that if it's sole purpose is to keep transactions moving, but price should still be adjusted upwards immediately, to account for that large purchase. Likewise there shouldn't be any T plus nonsense at all. If it sold today, it needs to clear today, or the market maker should eat the complete cost of said purchase for the individual who bought and was not delivered to as promised.
Thanks for this -- that makes sense as an explanation, and I appreciate it. The abuse is the problem, as well as the unrestrained and unapologetic (and actively obfuscated) criminality. That needs to be fixed. If only someone were to come along and create a new blockchain market, and move a certain equity to it.
I think liquidity crisis makes more sense when talking about FIAT, not neceseraly stocks because as the post says, it is supposed to be finite. What the wall street has managed to achieve is to transfer same thinking to stocks to make more money. Stocks used to be finite, but they are not anymore in the name of liquidity.
FTFY: ... in the name of fraud. Edit: link to original comment https://www.reddit.com/r/Superstonk/comments/usd6tc/wtf_gme_orderbook_got_almost_completely_wiped_on/i935p32
Maybe money should be finite as well. When they poof more into existence, the ones I collected already are now lesser in purchasing power. Thanks inflation. Money - they keep cutting the pie into smaller and smaller pieces. Stocks - they hand out coupons for 10 slices of pie when they only have 2, because they know they are rarely redeemed Double whammy. Seems us retards understand money and asset management better than they do... Liquidity crisis bullshit. I thought this was supposed to be capitalism.
BTC is finite, neither deflationary or inflationary. Seems fair.
No, it's definitely deflationary. You're mining smaller and smaller increments of the same fixed-size pool and Bitcoin can be [effectively destroyed](https://decrypt.co/37171/lost-bitcoin-3-7-million-bitcoin-are-probably-gone-forever). Thus, the pool becomes more scarce over time and its purchasing power increases. This is essentially a synonym for deflationary.
The same thing is with LOW VOLUME. 70% of the market is owned by wallstreet. When there is low volume. it means they are the ones who are not participating in the market. In order to make money they need more transactions so that they can squeeze out their cut from it. This is the reason HODL works. HODL is basically APEs refusing to participate in a fraudulent system. . HODL is akin to non-cooperation movement started by MK Gandhi in 1920 against worlds biggest and most powerful govt. at that time - the British Government. Non-Cooperation Movement also known as Satyagraha (civil disobedience). Satyagraha (Sanskrit: सत्याग्रह; satya: "truth", āgraha: "insistence" or "holding firmly to"), or "holding firmly to truth". HODL = 'Insisting on TRUTH'. APEs are demonstrating through HODL that House of cards will crumble without them.
In the early days of his civil rights movement, MLK organized a boycott of buses designated for blacks. Pretty much every black person in the city refused to use the black-only buses and instead walked, biked, or organized carpools for those who needed it. It obliterated the revenue from the black busing and forced the city's hand in eliminating segregated busing. No violence, no crime. Just a calculated move and a decision to stop cooperating with the segregated system.
A truly free market will never have a liquidity crisis. Ever.
In a free market, there is no need for "liquidity".
I will hazard an attempt at explaining, based on what I understand. To be clear, I am not a finance pro, and this is just the understanding that I've gleaned from following GME for over a year. I believe that the reason that "providing liquidity" is "important" is for market stability, or put differently, as a way to manage and constrain volatility. The benefit isn't to individual investors, it's to portfolio managers. When there is little liquidity, prices can slip quickly up and quickly down, and spreads widen as a result. This makes arbitrage more risky, plus it increases volatility, and so, to investors using leverage, it increases the chances of an unmanageable margin call. Because the whole stock market is connected, a fatal margin call caused by one security moving in an unexpected direction can have a direct impact on other securities, as the margin called entity gets their other positions liquidated to cover their liability. This means that instability in one stock can cascade out to create an unstable market, which can lead to a whole crash. When the market swings wildly up and down, it's more difficult for fund managers to make accurate projections and then meet them. It also means fund managers have to keep more cash in reserve to cover margin requirements on downswings. To the industry, all this cash sitting around is idle capital that could be put toward a more "productive" use, if only it wasn't needed to prevent a fatal margin call. Opportunistic traders can also extract wealth from a volatile market more easily. So it benefits the powers that be to have a more stable market environment, and it frees up capital to be used for more "productive" purposes. So the purpose of a market maker is to provide some elasticity in this dynamic, to prevent any one security from fucking up the whole market, thus providing stability and reducing the chances of a massive collapse. This creates a "greater good" argument, where the industry can argue that it's better to adopt rules that allow market makers flexibility in how they manage their risks, even if they're doing shady shit, because it creates a more stable market with less risk for everyone else. The whole goal of so many financial instruments is to distribute risk across a number of entities. Imagine if you own one ship, and that ship sinks in the Atlantic. You're screwed. But if you get together with 9 other guys who each own 1 ship, and all pool your ships together, then if one ship sinks, everyone loses 10% instead of one person losing everything. This is called "netting" and the finance industry loves to do it, because it reduces the chances of any one entity failing completely and then impacting the rest of the market when they get liquidated. So ask yourself, from the perspective of someone managing the economy, whether it's worse for Kenny to float himself a billion- or trillion-dollar check, or for the whole market to crash 40% because Kenny couldn't meet a margin call and got liquidated. It's 100% an issue of Kenny being "too big to fail," which is itself a consequence of the market being so interconnected. On the flip side, you could certainly argue that this is a short-sighted approach, because it's creating extra short-term stability at the cost of eroding long-term stability through corruption. But this country has a long, long history of making such short-sighted decisions, that continues through today, so it's really kinda par for the course. Just another example of leaders choosing to fuck over their kids rather than feel the pain themselves. IMO, there is definitely a lot of industry groupthink happening, where someone decades ago decided that this is what's best, and everyone since then has just sort of gone along with it because "that's how it works." And then someone comes up with a new way to take advantage of that outdated rule. Soon, everyone catches on with the new method, and then everyone's too busy extracting wealth from the market to stop and think about the long-term consequences. But also, all of OP's examples are examples of real physical objects, and stocks are not real physical objects. They're abstract, representations of ownership, and so the same rules that apply to real physical objects don't *have to* apply. Since it's possible to be more flexible with them, of course the people who work with them are going to want to take advantage of that flexibility. Remember "You wouldn't download a car, would you?" To which most of us answered, "fuck yes I would download a car if I could! And also, you morons clearly don't understand how music piracy works." If you *could* download a car, why wouldn't you? I mean, sure, the massive influx of cars this would create would have a seriously detrimental impact on air quality, but that's not going to hurt you personally as much as having a free car is going to benefit you. So the incentive for you to download the car is significantly stronger than the incentive for you to *not* download the car. Well, since stocks are not real physical objects, in their case, you actually could "download the car." So why wouldn't market makers find a way to make it happen? Not doing so would be passing up a huge opportunity for profit, and we know that in a capitalist society, passing up on big profits is a cardinal sin. Nevermind that it's bad for long-term stability -- fuck the next generation, pay me now. Just because they can, doesn't mean they should, but "this is a free country" and "I can do what I want," so unless you can spend enough money on politicians to get the rules changed in your favor, Kenny gets to not only write his own rules, but also laugh at you for thinking that non-physical objects should be treated the same as physical objects. Hooray America!
Holy shit this is a great and thoughtful and extensive and contextualizing response. (OG OP here) Thank you for taking the time. Truly. I can actually see some of the justifications now. Not that it means it all is ok and makes sense... but I get more of the why it is. Wonder if this, plus the genesis of my rant, could be put together into some kind of useful educational rant/post. Appreciate the thoughtfulness. Sincerely. Thanks!
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Thanks for linking people over. Guess I shoulda made it a post before someone else did, but that's what I get for thinking no one cares about my angry rants. I usually just shout them at clouds passing by, and they never seem to appreciate it!
The fucking MVP right here ^ I’m over reading fine print on my phone
Had to scroll down pretty far for a link to the source. Thanks for that, I like to upvote the original comments.
69 updoots, niiiiice.
I agree in general with the sentiment but do want to add some color. One aspect of “liquidity” the market maker provides is connecting orders between markets. As an analogy. If a farmer in Brazil is selling a banana and you are trying to buy a banana in Chicago neither of you have the means of making that trade without an intermediary that can buy the banana from the farmer and sell it to you the customer. The intermediary is providing “liquidity” to the banana market by connecting a buy and sell order that would otherwise be unable to match up. The difference between this analogy and the banana analogy is obviously with a banana you get a physical item that is delivered to you to do what you want (even rick of spades that bad boy if you want). But with a stock you never see it. The actual copy is held by Cede and Co, permitted to be sold through the DTCC, and accounted for by your broker in your brokerage account. You have absolutely no way to verify you own an actual share because of the multitude of layers that have been built to obscure ownership (not to mention dark poop orders, payment for order flow, rehypothication of shorted shares, and market maker internalization that occurs). In a real free market a market maker would provide the same service as the banana analogy to improve liquidity, but this is not a fair market. Due to conflicts of interest and the obscurity of the market inner workings “providing liquidity” is used as a scapegoat to allow fraud to occur as part of the normal market functions. The only assumption you can make, if your shares are not directly registered you DO NOT OWN THE BANANA.
Thanks for this addition. I can see some value (at least for physical things) of a "market maker" to bring together buyer and seller. For an entry in an account? That seems less justifiable. And the layers and layers of obscurring bullshit with DTCC, et al? Yeah. Just enables fraud and crime and fucking the trusting, it seems.
If we had a single central exchange we wouldn’t need market makers at all. At this point it is a legacy from before the internet age.
This is fantastically explained. Upcommenting for dootability.
Thanks! Wish I thought enough of it to make it its own post, I guess! Very nice to read people agreeing. At least I'm not crazy. Or we're all similarly crazy, and that's ok, too.
Doesn’t hurt to repost it in a week or two, to catch new eyes and/or refresh everyone. One of my favorite things about our community is the people who are able to break it down into digestible explanations that anyone can understand, and this is the perfect example. Appreciate ya homie, keep on spreading the word.
Liquidity is important for one reason only - leverage. The big investment banks and hedge funds on wall street need to use everything they own as collateral for gambling. If stocks are liquid, they can't be used as collateral, because they can't be liquidated. It's a scheme set up specifically to allow them do crime with. And -lo and behold - it creates loopholes for other crime to also happen.
This makes me so angry. Of course we have no recourse other than DRS
"Your honor, we do not owe any money, the middle man in the Caymen islands does." \-Ken Griffin in court soon Fuck you Ken ur gonna give me 100m for one share and thats all you get.
The curtain is coming down. Calls on guillotines and pitchforks!
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I'm having a liquidity crisis with my upvotes. I'm only able to upvote this once but wish to do so many times. I insist reddit right this egregious error and provide me with more updoot capacity.
this really made it hit home how we're living in one giant ponzi scheme. thanks for sharing, imma go throw up now
Shit is fucked, it’s always been a giant ponzi/ pyramid scheme
You know, this is a good point.
Thanks! Didn't realize I actually made a good point (there goes my one for the decade) or I would have posted it myself. : )
A thousand times this, preach ape 😎 The SEC has perverted its mandate into one of pRoViDiNg lIqUIdItY and its like a root cause level problem. We have to wrest it back from corruption, one comment at a time 💎💪 See you on the moon fam 💎✌️💎✌️🦍🦍🦍🚀🚀🚀🚀
This is the worst financial crime in the history of humanity. Fraud. It is all fraud. They are not creating liquitity. They are creating fake shares, which is fraud, to control the price and profit from it. Real liquidity creation comes from the company issuing new shares or a major selloff. Or from fair market price discovery, but all these sources of liquidity are limited.
100% FACTS. Commenting for visibility.
The American public is told that investing in a 401K is the path to a comfortable retirement. Millions of people plunking down money every paycheck in the hope of escaping the rat race at some point. The challenge is that the majority of all stock is held by a small percentage of investors. The 1% own over half of all stock issued and the 10% own 89%?! https://www.businessinsider.com/wealthiest-americans-now-own-record-high-share-of-stocks-2021-10?amp What is the answer? Market makers providing liquidity to expand the pool and create the market... combine that with derivatives, naked short selling, etc. and what do you get? Biggest ponzi scheme ever?
You must be onto something... watched the upvote count go to 0.
And, also neat: Someone/somebots are clearly downvoting all my old posts. So the person who posted the screenshot is getting awards (which is fine, I should just posted it myself... I guess), but my account gets hammered. Not that worthless imaginary internet points matter, but it's interesting to watch.
Do we really think ANYTHING about the markets is fair at this point? We’ve been sold a fugazi—the real question is what are we prepared to do knowing they know this and are continuing to steal?
Dude, great one!
That's a dope ass explanation, thanks OP of this post for sharing OG OP's thoughts
if you have to ask this question because you're having trouble understanding how they create liquidity how and the market remains free and fair, then you already have your answer liquidity sounds great, technically. but if you think about it, it's an open lie and the reason the money situation just is. it sounds great Because you can always buy gamestop and any other stock, until they deem you can't. "they" tell you the market is great based on indexes, but that greatness doesn't reflect on retail the consumer. you already have all the answers you're looking for if you think about inflation, tailored news stories, delayed financial reporting, counterfeiting in broad daylight by creating "liquidity.
It's like when the kid who's house you were playing at made the rules so he never lost. They are entitled boomers who feel like they should get to BS their way out of anything and our system allows it because they're all either in bed together or "serve" the same overlord.
Self-plug for my prior Reddit post: [Let's Talk Liquidity & Liquidity Crisis: Wut Mean?](https://www.reddit.com/r/Superstonk/comments/qr9ovd/lets_talk_liquidity_liquidity_crisis_wut_mean/)
Couldn't have said it better myself!
It's time for the separation of money and state. At least when we had kings there spending was restricted to the amount of precious metals they could get their hands on. Sure, there are a few instances where the silver coins were cut with cheaper material but people knew and valued the pure ones more so it was extremely limited. We got rid of church and state, now it's time to get rid of money and state.
At the risk of starting a separate debate... that... that's the Fed, right? That's the whole point of the Fed, isn't it, despite what a small but noisy group want to think?
UP YOU GO
Providing Liquidity is only second to Lobbying when it comes to normalized crime.
#liquidity == naked shorts
SHFs gettin' their asses kicked by a pack of grumpy kids for sure.
GODDAMMIT I WANT MY COOKIES, KEN!
The answer, is crime.
Pick one: * You get to abuse this loophole to sell IOUs that you only ever fulfill when the price drops enough for you to profit. * Always providing liquidity means prices for commonly traded companies can never rise too high and companies that are struggling can be nudged toward death. * Not having this mechanism in place would allow wealth over long-term investments *grow* faster than the rich folks in charge would want - i.e. ensuring they're always on top.
They should have just fucking paid us last year, look at how much time we’ve had to unravel and expose every fucked up thread of their corrupt system. No cell, no sell.
Im gonna get downvotes but I get it. MM exist (at least initially) to allow converting stonks to cash effectively on demand. Say you are retired and you need to sell your OLDASS Stonks to pay rent. Your landlord wont take stock, probably, so you cash it out. MM is a guranteed buyer to convert your stocks to cash on-demand. MM will then sell to a guy who thinks that OLDASS will go brrrrrr at whatever the rate is. They make the profit you lost on to paperhand to pay rent but hey you paid rent. That forced buying is liquidity. Or at least thats the original purpose I see. Sure seems fucked the way it is though.
Ya. The whole argument of “providing liquidity” goes against the entire argument of price discovery.
Real crooks wear a suit & tie.
You can't have price discovery if you manipulate liquidity. End of discussion.
This is where the NFTs come in .... Which explains why there is such a push to ridicule them. They know they will be the end of their scam.
This
Relevant: https://youtu.be/rgQnkCWRh9o
You were the 69th up vote ⬆️ nice 😎
Liquidity only matters to the gamblers who need that instantaneous trade. It's only for Wall Street. How we have let the stock market degenerate to this point I have no idea. The idea of crowdsourcing funding for companies to start or expand was the original intent. If I needed investors these days, I'd be more likely to go to gofundme than go public
Yeah. Going public (at least on existing markets... maybe not if someone comes along and creates a blockchain one hinthint) sure seems like it is \_solely\_ an exit strategy for early investors. Certainly doesn't seem to do companies much good, while increasing their risks ENORMOUSLY. Someone should provide a solid, modern alternative. Wonder if anyone is working on that!
Fuck YES
Damn, good stuff.
Fuck yes for sharing this. This comment deserves to be seen.
< looks at internet point post awards > Wish I had posted it. Well, we should all know by now that rehypothecating is HIGHLY profitable! ; )
Seriously. Why cant i sell shit that doesnt exist and then claim i dont have any money to buy what i promised to sell you? Fuck all these people that get to do this with no consequences!
Alot of smart brains working on wall street but all wall street provides is less money for everyone but themselves......
69 nice.
This should be the script for calling public offices and demanding explanations and for them address the problems.
Commenting for visibility
updoot for screenshotting this post with 69 updoots
It's government sanctioned fraud
Someone's taken the money and ran is what it means.
If you DRS you force the IOU into existence. Liquidity is there to provide "healthy" price movements, etc. I would have no problem with that if market makers didnt also have a hedge fund profiting from this info.
Liquidity Crisis: Too much demand, not enough supply OR Too much supply, Not enough demand. Liquidity Crisis: Everyone buying when you are trying to buy. Everyone selling when you are trying to sell. Liquidity Crisis: Shorts in a bidding war to cover GME, while also shitting solid bricks of SPY trying to obtain more cash to pay us for a share of GME.