She's absolutely right. Ro Khanna on the other hand is just throwing spaghetti at the wall to see if it sticks by suggesting [0] a
> financial transaction tax on hedge fund shorting
In practice, that would reduce market functionality because lots of shorts are used to reduce/hedge risk. Two basic examples are short SPY versus long single name and short underlying stock versus long calls.
Really we need limits on short sales beyond a certain % of float (or a certain borrow rate), as well as 13F transparency for institutional short positions.
> Really we need limits on short sales beyond a certain % of float.
The market seemed to be doing a fine job of correcting. Not sure we need a regulation to prevent sophisticated investors from throwing their money away. Transparency sounds good though. Also, my impression is that short interest data has a high delay/low frequency of publishing; more transparency there could be useful too.
The market can't really correct for this; it's essentially equivalent to lending the same thing to several people...like going to Avis and renting a car from them, only to turn around and rent it to someone else.
There exist listed and over-the-counter derivatives for the purpose of institutional levering, but if you can double-borrow shares, you're essentially adding instability to the asset market in a way that is not immediately discoverable. That makes prices unstable and (as evidenced) makes it harder for the price to equilibrate. In a normal market, you have damping -- as the price impact goes further, there's more resistance to further impact. This is not so in an unstable market (either due to shorts covering or to short option gamma) because you end up with inverse price elasticity of demand. In other words, as the price goes up you get more demand rather than less.
If you're hedging delta by hand on a short-gamma position, you can feel the stock run away from you. In these situations, sometimes the best way to reduce your delta is to trade the other way and let the gamma offset the shares that you trade. I have traded options positions of this sort, and it is unsafe because it incentivizes shorts to double down in order to send the price back lower.
In my opinion, the existing requirement for a locate (presently, you have to know where the shares can be borrowed from before you're allowed to sell short) should be interpreted to preclude recursive rehypothecation, on a first-come-first-served basis. Furthermore, a firm should not be able to buy back or otherwise retire its stock when short interest equals 100% of the float.
Institutional traders already have several different restrictions that don't make much sense. Much of this is because regulators don't always understand the mechanics of how a trading business operates. This rule on the other hand would IMO make markets run better by forcing leveraged bearish bets into the options market where risk monitoring is more thorough and product sophistication is a barrier to entry.
I've always wondered how a "post-growth" economy can be financialized, i.e. how the "menu" of short and long positions/instruments would actually be symmetrical. Anyone know?
I understand how people are viewing this as some kind of David vs Goliath, and in a way it is. However, the freaking Goliath is made of pension funds money and David is a few hundred traders. It is very unlikely that the guy who runs Melvin will suffer significant personal financial consequences if the firm goes boom. What is going to happen when this thing escalates to citadel and whoever is backing them and whoever else who up the chain. There are no good guys here, just an incredibly screwed up and fragile system.
The logical implication would be that Plotkin is shorting video game developers and retailers with pensioners' money.
The only practical way for market forces to disincentivize that kind of irresponsible and unsuitable risk-taking would be for him to publicly suffer losses.
If that happens, the pension funds withdraw their money.
If they withdraw their money, Plotkin's take-home pay and social status diminish.
So as they say, all roads lead to Rome. No matter where his trading assets came from, he suffers personal financial consequences from the loss and the resulting fallout.
They will have to sell their long bets to cover loses on shorts. The financial system is incredibly interconnected, no one knows what happens when 12b fund goes out of business and how that escalates up. Just like during the housing crash- bad mortgage- bad tranche - bad MBS - bad synthetics- bad insurance. I wouldn’t be too worried about one year take home pay and social status.
It's unfortunate that the one time someone from the opposing party agrees with her she calls back on something they don't agree on (and refuses to work with them because of it).
> she calls back on something they don't agree on (and refuses to work with them because of it).
Sure, complicity in a violent, deadly attack on one's workplace (even when it isn't the national Capitol and part of a coup attempt) is the kind of thing most people would just brush off and not let get in the way of working with people: actions have no consequences whatsoever.
How is she keeping him accountable by refusing to work with him? This seems wrong on 2 ways:
- It encourages others to do the same; someone doesn't agree with you on an important issue (pro life?) - just refuse to work with them. This furthers the divide in US politics and is (imo) an overall negative.
- It hurts her own cause by removing support she already has - is this what a representative is supposed to do?
Not working with supporters of the deadly insurrection in which people were targeting her is not a mere "difference of political opinion". That's nowhere near the same ballpark.
Although true this is hyperbole. We're not talking about the "deadly protests" for BLM so why did the capitol protest become a "deadly insurrection"?
A lot of people are calling for Donald Trump to go to prison/etc; does that mean (if he was still president) he should stop talking to anyone saying so?
In the same tweet she says she’ll work with (almost) any republican on this issue. Just not Ted Cruz (and presumably Hawley and the others pushing election disinformation).
I think your fist point is making this into something more than it really is.
The much more obvious and likely reason is it's because she was fearing rape and possibly murder just a few weeks ago, when the Capitol was stormed. As it was later revealed, there were people targeting AOC and Pelosi specifically. And those extremists are constantly egged on by Cruz and his ilk. Blaming this on cancel culture is just.. Odd
> She should be sued for that. She's claiming that Ted Cruz is actually trying to get her killed.
Ted Cruz would have to prove, by a preponderance of the evidence, that he not only was not doing so, but that AOC actually knew, or reasonably should have known, he was not. Given that the specific notional basis for her accusations is her knowledge (and not only from public sources) of his involvement with the Jan. 6 insurrection, that’s probably not something he wants publicly litigated in a court of law, since it's something he desperately wants to erase from the minds of everyone not actually sympathetic to the insurrection, while still staying on the good side of the pro-insurrectionists.
Were he to file a civil lawsuit for defamation, he would have to prove the required elements of that case. In defamation law in the US, falsity is an element (in some other places truth is a defense, which is somewhat different), and for defamation against public figures, in the US, so is actual malice.
Note that both of those requirements have been found by the courts to be necessary to preserve Constitutional freedom of speech.
> There's a huge difference between trying to get someone killed and calling for an election audit or objecting against the election results.
Sure, and in court Cruz would have the opportunity show that he was only doing what you described and neither trying to get anyone killed nor doing anything that might reasonably be mistaken for that. But that's not something Cruz probably wants litigated in court of law, which is why he won't file and litigate a defamation claim.
That's not what she's claiming. She said previously that during the capitol riot, there was a moment when she thought she might be killed (don't know more than that). She blames Ted Cruz for his role in creating that situation.
The present tense here is misleading without the additional context.
She used the past tense. Not sure if there is any problem getting sued though. It's all public record and well known. Not even sure what it would be for, defamation? Not likely when it's pointing out what occurred.
No, “any other X not doing Y” indicates that the one being addressed is also an X not doing Y.
So, it reads like she thinks Cruz should resign becauss he tried to kill her in the past, but isn't currently trying that, while other GOP members are (or at least may be) still trying to do that.
If you come to me asking to work together and I tell you no because I don't work with people that are trying to get me killed, it's pretty obvious what I mean.
> If you come to me asking to work together and I tell you no because I don't work with people that are trying to get me killed, it's pretty obvious what I mean.
But that's not what she said, even as a summary.
She said (summarized at the same level):
1. You tried to get me killed recently.
2. So, you need to quit.
3. Still, I am willing to work with almost anyone else in your party who isn't trying to get me killed.
Her unwillingness to work with Cruz was expressly predicated on his perceived recent past, not present, efforts to have her killed.
It's topical to many people beyond hipsters. Huge hedge funds, the backlash against companies controlling too much of online discourse/transactions, institutional control, rigged games for retail investors, and so on.
> financial transaction tax on hedge fund shorting
In practice, that would reduce market functionality because lots of shorts are used to reduce/hedge risk. Two basic examples are short SPY versus long single name and short underlying stock versus long calls.
Really we need limits on short sales beyond a certain % of float (or a certain borrow rate), as well as 13F transparency for institutional short positions.
[0] https://mobile.twitter.com/RoKhanna/status/13548356492500787...