Trading on margin isn’t illegal, but it is more limited now than it was in say 1920. My vague understanding is that the 1929 crash was caused by insane margin trading like 1000%.
I guess what I’m getting as is, can you think of any limit on short sales that would prevent the “stupid” corrupt risk taking by hedge funds? I mean the obvious answer is “don’t bail them out” so they just destroy themselves, but it seems impossible to prevent this sort of political corruption.
Blocking short sales will not prevent corruption. The only solution is "dont bail them out." Banning shorts of common stock has all kinds of really bad consequences for the market and doesn't fix the problem. Its like the NFA. It makes it confusing and hard as hell for law abiding citizens to own a rifle, but does literally nothing to stop criminals.
The fact is, markets go down sometimes, and if you eliminate the ability for people to react to that or profit off of it, you fuck a whole lot of people over and the markets too. The consumer needs to be able to bet against companies as well as for them, or you will have major, major crashes in the market all the time, or you will make it confusing AF as to what a short sale actually is. The reality is that short selling is just regular selling, but you borrowed the stock first, so do you prevent people from borrowing stock? How does that work when our entire economy runs on lending?
Unfortunately the ONLY solution is capitalism and eliminating corruption. Until we do that, we will have cronyism and pseudo-controlled economic dystopia, like some sort of half-asses pussy form of communism that just doesn't suck as much as the real thing but still sucks pretty bad.
Trading on margin, by the way, is a fantastic way for the underclass to break out of poverty, provided you are responsible. Margin is basically required for day trading.
I wasn’t really thinking ban anything, just limit it. I mean one thing that could help is if you broke large funds up just like monopolies should be broken up but are increasingly not broken up. Not only should that be better for competition but it helps eliminate “too big to fail” single points of failure. I just don’t know how anyone can break up a monopoly anymore. Like alphabet/google should have been broken up a long time ago.
China "limits" shortselling. That should tell you everything you need to know. Restricting short selling is an anti-capitalist controlled-economy idea.
Enforcing existing antitrust laws and extending them to large funds capable of market manipulation is not a bad idea, but hard to implement. Easier would be to just not bail them out, and let the ones that are "too big to fail" fail like they deserve to. Too big to fail is bullshit, and it was fucking ridiculous when Obama bailed those companies out. But our government is corrupt and globalist af, so what are you going to do short of an armed revolt? Nothing you can do, and armed revolt is not encouraged.
It is unacceptable that any entity should get special treatment like that and it flies in the face of everything that every American should believe, even the democrats.
Trading on margin isn’t illegal, but it is more limited now than it was in say 1920. My vague understanding is that the 1929 crash was caused by insane margin trading like 1000%.
I guess what I’m getting as is, can you think of any limit on short sales that would prevent the “stupid” corrupt risk taking by hedge funds? I mean the obvious answer is “don’t bail them out” so they just destroy themselves, but it seems impossible to prevent this sort of political corruption.
Blocking short sales will not prevent corruption. The only solution is "dont bail them out." Banning shorts of common stock has all kinds of really bad consequences for the market and doesn't fix the problem. Its like the NFA. It makes it confusing and hard as hell for law abiding citizens to own a rifle, but does literally nothing to stop criminals.
The fact is, markets go down sometimes, and if you eliminate the ability for people to react to that or profit off of it, you fuck a whole lot of people over and the markets too. The consumer needs to be able to bet against companies as well as for them, or you will have major, major crashes in the market all the time, or you will make it confusing AF as to what a short sale actually is. The reality is that short selling is just regular selling, but you borrowed the stock first, so do you prevent people from borrowing stock? How does that work when our entire economy runs on lending?
Unfortunately the ONLY solution is capitalism and eliminating corruption. Until we do that, we will have cronyism and pseudo-controlled economic dystopia, like some sort of half-asses pussy form of communism that just doesn't suck as much as the real thing but still sucks pretty bad.
Trading on margin, by the way, is a fantastic way for the underclass to break out of poverty, provided you are responsible. Margin is basically required for day trading.
I wasn’t really thinking ban anything, just limit it. I mean one thing that could help is if you broke large funds up just like monopolies should be broken up but are increasingly not broken up. Not only should that be better for competition but it helps eliminate “too big to fail” single points of failure. I just don’t know how anyone can break up a monopoly anymore. Like alphabet/google should have been broken up a long time ago.
China "limits" shortselling. That should tell you everything you need to know. Restricting short selling is an anti-capitalist controlled-economy idea.
Enforcing existing antitrust laws and extending them to large funds capable of market manipulation is not a bad idea, but hard to implement. Easier would be to just not bail them out, and let the ones that are "too big to fail" fail like they deserve to. Too big to fail is bullshit, and it was fucking ridiculous when Obama bailed those companies out. But our government is corrupt and globalist af, so what are you going to do short of an armed revolt? Nothing you can do, and armed revolt is not encouraged.
It is unacceptable that any entity should get special treatment like that and it flies in the face of everything that every American should believe, even the democrats.