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DATE | 2021-01-29 |
FROM | Ruben Safir
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SUBJECT | Subject: [Hangout - NYLXS] you are watching a repeat of the 1929 stoclk
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From hangout-bounces-at-nylxs.com Fri Jan 29 10:28:50 2021 Return-Path: X-Original-To: archive-at-mrbrklyn.com Delivered-To: archive-at-mrbrklyn.com Received: from www2.mrbrklyn.com (www2.mrbrklyn.com [96.57.23.82]) by mrbrklyn.com (Postfix) with ESMTP id 8343F163FB7; Fri, 29 Jan 2021 10:28:48 -0500 (EST) X-Original-To: hangout-at-nylxs.com Delivered-To: hangout-at-nylxs.com Received: from mailbackend.panix.com (mailbackend.panix.com [166.84.1.89]) by mrbrklyn.com (Postfix) with ESMTP id E558D163FB0 for ; Fri, 29 Jan 2021 10:28:43 -0500 (EST) Received: from [10.0.0.62] (www3.mrbrklyn.com [96.57.23.83]) by mailbackend.panix.com (Postfix) with ESMTPSA id 4DS1T71N7hzT4V; Fri, 29 Jan 2021 10:28:43 -0500 (EST) DKIM-Signature: v=1; a=rsa-sha256; c=simple/simple; d=panix.com; s=panix; t=1611934123; bh=Flq6tI5L78W52UTXZCPIxBlnG7sHB2xo1R0v9VOh7Ko=; h=Subject:To:References:From:Date:In-Reply-To; b=g9ZIySE6OkTlK5GOIC5NS/b++tGFx83138CxPVRcBXBm2IZqIBZijTcV6PwoZM/+E NT2+FBMZy+Pn7Yb510ix7xOwjjHmwc8Hm4sJbr1zsb5KZLcWuTAnRgUiBfHEZodLMJ H+vIW2ekpqxyQVQJShME63te8nbIPyGohXR/U5GA= To: hangout-at-nylxs.com, "Wuhan(COVID)-19 Discussion and Medical Professionals" References: From: Ruben Safir Message-ID: <0fa9dc60-3e10-3cd5-5c77-600ab82efa1d-at-panix.com> Date: Fri, 29 Jan 2021 10:27:36 -0500 User-Agent: Mozilla/5.0 (X11; Linux x86_64; rv:78.0) Gecko/20100101 Thunderbird/78.7.0 MIME-Version: 1.0 In-Reply-To: Content-Language: en-US Subject: [Hangout - NYLXS] you are watching a repeat of the 1929 stoclk market crash right before your eyes X-BeenThere: hangout-at-nylxs.com X-Mailman-Version: 2.1.30rc1 Precedence: list List-Id: NYLXS Tech Talk and Politics List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , Content-Type: text/plain; charset="windows-1252" Content-Transfer-Encoding: quoted-printable Errors-To: hangout-bounces-at-nylxs.com Sender: "Hangout"
> It is a tinderbox, brought to you by your 24/7 need to be on your cellpho= ne. > =
GameStop, Bitcoin and QAnon: How the Wisdom of Crowds Became the Anarchy of the Mob Christopher Mims 9-12 minutes
This was the week that the stock market became the stonks market. For those of you unaware, =93stonks=94 is an internet meme, an absurdist play on the word =93stock=94 that=92s now almost unavoidable on social media. On Ja= n. 26, Elon Musk, recently the world=92s richest man, tweeted =93Gamestonk!!= =94, and received more than 200,000 likes. It included a link to the WallStreetBets forum on the internet message-board platform, Reddit.
WallStreetBets has become the communications hub for a phalanx of bored-at-home, stick-it-to-the-man retail traders who have cast themselves as the heroes in a David-vs.-Goliath battle against hedge funds, big banks and other avatars of America=92s elite. These include the =93blue checks=94 on Twitter, talking heads on CNBC, even Robinhood, the trading platform on which many of them had been buying options, until it halted some of those trades Thursday morning. (The financial machinations of this battle have been described in fascinating detail by my colleagues, including an interview with the man who started, then subsequently lost control of, WallStreetBets.)
But this is a tale of something much bigger and more consequential than the fate of a single stonk, I mean stock, or even, as homebound day traders look for other quick wins, a handful of them. What=92s happening on WallStreetBets is of a piece with other internet phenomena, from bitcoin mania to the online conspiracy theories of QAnon, and the events leading up to the Capitol riot.
Research on how innovation happens has revealed that small groups of people, not large networks of them, are often the best at incubating new ideas, which only later spread to the world at large. But in the case of recent collective manias, people are developing ideas that may carry a kernel of truth, but are largely fictions, often crafted in defiance of authorities=97and of authoritative information.
Once cultivated in small, anything-goes online forums, these fringe ideas-turned-movements are amplified by a powerful complex of social-media giants, including Facebook, Twitter, TikTok and YouTube. The algorithms on these platforms that select for the most engaging content=97that is, content that moves, inspires and/or terrifies us=97push these notions in front of as many people as possible, and eventually into the mainstream.
Whereas these phenomena might have once remained virtual, bounded by the internet, they=92re now breaking into the =93real world.=94 What begins as idle forum chatter now has the power to rock political and financial power centers, at least temporarily.
The process, in its current form, privileges a kind of gleeful anarchy, whether it=92s the blow-up-Washington populism that led some to participate in the Capitol riot, the end-the-global-monetary-system mind-set of some bitcoin enthusiasts, or the idea that by continuing to buy and hold GameStop stock and call options, an army of keyboard warriors could simultaneously end wealth inequality and bring down =93predatory=94 hedge funds.
In this case, their method was buying shares and options of GameStop in order to squeeze short sellers who were betting the stock would drop. The result was a buying frenzy that lofted the stock=92s value into the stratosphere, well beyond any price at which it reflected a plausible future for the fundamentals of GameStop=92s business.
That might sound like hyperbole, but it=92s precisely the hyperbole that, for the past few days, has been splashed all over the WallStreetBets forum, the Discord chat server associated with it (before it was shut down for what Discord said was repeated hate-speech violations), Twitter, and corners of TikTok and YouTube.
Thousands, perhaps tens of thousands, of the retail traders behind the rally in the price of GameStop=92s and other stocks clearly see themselves as revolutionaries. And their fervor is so intense that politicians like Rep. Alexandria Ocasio-Cortez, member of the House Financial Services Committee, declared her sympathy with them. When Robinhood and the other trading platforms that had enabled this run-up in the value of GameStop disabled the ability of traders to continue buying it, Ms. Ocasio-Cortez called for an investigation. Sen. Ted Cruz, rarely a fan of Rep. Ocasio-Cortez=92s policy prescriptions, tweeted =93Fully agree=94 in respon= se to her declaration. (Donald Trump Jr. and Sen. Elizabeth Warren have also sounded off=97on the same side of the topic.)
=93I do think this is a seminal moment. I don=92t think we go back to a world before this because these communities, they=92re a byproduct of the connected internet,=94 Reddit co-founder Alexis Ohanian said in an interview with CNBC on Thursday. =93Whether it=92s one platform or another, this is the new normal,=94 he added.
As GameStop=92s stock price continued to climb, these investors egged one another on to continue buying and holding the stock, posting screenshots of their gains, jibes about the consternation their mania was inspiring among Wall Street traders and career stock-market observers, and memes borrowed from Batman and Lord of the Rings.
On WallStreetBets, one popular post, typical of the genre, urged investors to =93Buy High, Sell Never,=94 a subversion of standard investing wisdom that was reminiscent of the Bitcoin ideology =93HODL=94 (a meme variation on =93hold=94). Some cryptocurrency investors believe the key to getting rich from bitcoin is never to cash out, since its value will only appreciate in the long run. In line with that thinking, another popular WallStreetBets post declared that at its current rate of appreciation, GameStop=92s stock, which had been trading at less than $20 a share at the beginning of January, would eventually be worth $5,000.
The way in which WallStreetBets members convinced themselves that their quest was just and good echoes the logic, if not the sentiment, found in QAnon forums. Both are what philosophers call =93closed epistemic systems,=94 worldviews that are unaffected by information that contradicts them. It=92s confirmation bias on steroids. It=92s also the logic of a cult, achieved with some of the same psychological tricks.
Those tricks are amplified by the mediums on which they spread. Ample research has described the addictive potential of social media, and apps like Robinhood, which make trading stocks feel like gambling, also have the same potential. Put the two together, drop them into a stew of sensation-seeking young people with limited entertainment options during a pandemic, and it=92s hardly surprising that all of this has come to pass. Share Your Thoughts
Are social media platforms doing enough to manage the rise of large subcultures that reject traditional authority and expertise in favor of alternate views? Join the conversation below.
That the price of GameStop=92s stock would likely peak and even crash, leaving some of these gung-ho investors with heavy losses, was not a headline that made it to the top of WallStreetBets. Commentators who brought it up in other forums were attacked. The usual mechanisms of online harassment=97trolling on social media, even menacing and sharing the contact information and addresses of short sellers and their families=97have also come into play.
Meanwhile, as the GameStop buzz built, attention seekers with large followings but no particular qualifications piled on, from a self-described =93verified nobody=94 with over 200,000 followers to rapper and failed Fyre Festival impresario Ja Rule. In unison they amplified the message that what was going on was a popular rebellion, and anyone who said otherwise was a shill for the systems that oppress the majority of Americans.
In a meme recently appropriated by the WallStreetBets crowd, the Joker, portrayed by the late Heath Ledger, sets fire to an enormous pile of cash. =93It=92s not about the money,=94 he says. =93It=92s about sending a = message.=94
As we see internet-fueled, alternate-reality manias continue to proliferate, the lesson is this: These freak outbursts are not going away. From the Rohingya ethnic cleansing in Myanmar and WhatsApp-related killings in India to the Capitol riot and the stock-market takeover, these individual phenomena are each unlikely, but social media all but guarantees more of them. The leverage the algorithms provide for those who wish to spread these ideas, however extreme, gives them the ability to reach us all.
How Options-Trading Redditors Fed the GameStop Frenzy
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How Options-Trading Redditors Fed the GameStop Frenzy
How Options-Trading Redditors Fed the GameStop Frenzy Wall Street is in an uproar over GameStop shares this week, after members of Reddit=92s popular WallStreetBets forum encouraged bets on the video game retailer. WSJ explains how options trading is driving the action and what=92s at stake.
For more WSJ Technology analysis, reviews, advice and headlines, sign up for our weekly newsletter.
Write to Christopher Mims at christopher.mims-at-wsj.com
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DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002 http://www.nylxs.com - Leadership Development in Free Software http://www2.mrbrklyn.com/resources - Unpublished Archive http://www.coinhangout.com - coins! http://www.brooklyn-living.com
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