The growing fire and coming terror

in LeoFinance3 months ago (edited)

By now, you have likely heard about what happened with GameStop stocks and how an active community of retail investors on Reddit, banded together to undermine the hedge funds to the tune of billions - putting some in a very awkward financial position. The response to this has been varied, but the Wall Street and official positions have been unanimous - this is not right.

But, what this has proven is how a social community can coordinate their actions and cause targeted havoc on the financial markets, with the ability to pool resources and work as one. Will the short sellers be as keen to take the risks post-Gamestop, or will they be once bitten, twice shy? And I think that this is where it is going to get interesting.

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However, firstly, there are other things to contend with. For example, the trading platform Robinhood shut down trading on the affected stocks, even though what was happening was not illegal, essentially manipulating the market to favor the institutions and try to put a halt to the bull raid.

A raid is an attack, right?

And I think that this is where it is going to lead. At some point, this is going to be called "Financial Terrorism" and this kind of collusion within a community will be made illegal. As we know, once something gets labelled terrorism, it will come under various types of laws that will extend the reach of government to pry into the activities, which includes the communities themselves, to expose "threats" to the economy.

What is interesting is that the biggest threat to the economy as we know it is a change in behavior of the largest group of participants, the consumers themselves. Retail investors are part of that consumer base, even though they are generally at the higher end of the spectrum financially.

Because of supply and demand, the threat to the status quo comes when consumers change their buying habits. This isn't much of a threat previously, as what they are buying is from a narrow pool of suppliers, so the suppliers just adapt to the new trends to capture market value. The consumer class are "endusers" in the economy, not owners, meaning that whatever they buy is going to drive value to those who profit from the purchase. However, technology has changed and now consumers have alternate products to consume through a diverse range of mediums - things like Bitcoin.

Not only that, the internet itself has become a resource and the institutions have made massive gains by leveraging the capabilities, by being able to expand cheaply across the globe with low barriers to market, and lower the costs of service delivery, without having to lower their fees. The cost to transfer money for a private citizen across the globe through banks can take five days and cost 13% of the total.... on the internet. That is ludicrous, considering on that 5 day journey, not one person is involved, other than the sender who transfers and receiver who withdraws.

But, these same technologies have had their own barriers of entry lowered to the point that a community of relatively basic users, can get to the point where they can build an economy that they find valuable, tokenize it with a digital currency and transact that currency around the world among each other, even taking it out through gateways into the traditional controlled economies. This lowering of barriers creates an opportunity for not only more participants to take part, but more opportunities to behave differently.

Just like all of the post-apocalyptic stories, society is slowly getting populated by divergent behavior, but the central authority will label it, deviant behavior, as it challenges their organizational structure - their regime. At first, there will be the negative labelling of divergent players, then there will be the call for the "normals" to hunt them down for their own security, then the punishment and exile, then the return to prove that the way of the divergent is the new normal.

I skipped a few steps, but you know the plot.

I think that there are many roads leading to a point in the not too distant future, where there is a changing tide against the authorities. One example that comes to mind is the public attitude toward whistleblowers and those who release data dumps of classified material. While they are criminals in the eyes of the law, many people are starting to recognize that what they are being criminalized for, is bringing transparency on the wrongdoings of governments and corporations, the people who should effectively be irreproachable. Governments and publicly listed companies should have a degree of transparency and there should not be any skeletons in the closet, but the likes of Edward Snowden and Wikileaks has shown this not to be true.

Through the same channels, we also know that financial institutions have a few skeletons, again proven, if you remember the release of the Panama Papers - but are asking yourself now - "what happened with that in the end?" You have to account for every dollar you earn with full transparency, but when it gets into the millions, billions and trillions, there is little transparency needed.

Slowly, slowly... people are waking up and even though it happens like spot lightning strike events such as with GameStop, once the fire is alight, it begins to spread and the heat will shift behavior, to spread the flames further afield and into new locations. This time it was GameStop, but what will it be next, which market? Once the retail raiders get into the groove, what will be the defense against multiple groups spread globally?

Legislation? Punishment for participants? Will it be social profiling and algorithms to identify and strip the assets away from those who were involved in the forums? What will the response of the people be, considering that those involved aren't the downtrodden poor, they are the middleclass and up, movers and shakers?

This puts the authorities in a precarious position, because this is the group of people they have been milking for years, driving their wealth up the pyramid at an increasing rate, into the hands of fewer people at the insanely high point. But, the more this happens, the more power the group claws back and in time, the momentum of the pendulum will stop and start to swing back in the other direction.

Essentially, what is happening now is no only do we have the skills and technology to organize and gather, we also are able to participate in the creation of new financial vehicles and practices that were previously only created by centralized authority and institution. This means that for the first time in globalized history, we have the ability to empower ourselves and our own communities, creating products and services to generate and transfer our wealth that we own, outside of the control of the traditional authorities.

This is a major threat to their existence, which will likely be met with resistance, not compromise. Rather than seeing this as an evolution of economic practice and a changing of standards to be more robust and inclusive, they will attempt to hold onto their power through the tools at their disposal. The tools that can drive their subjects to support them into going to war or, allowing them to bail out their banker friends once again. In the past, there was little other choice but to let them rule, but the past is rapidly becoming a future where there are alternatives.

Many of those alternatives are going to be built on blockchain and crypto, leveraging to power of decentralization for security and distribution, as well as the place where innovation can be born and communities can form.

The fires are growing.

Taraz
[ Gen1: Hive ]

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There's a lot going on with the Gamestop 'situation', probably too much to discuss in one or even 100 posts.

There is the uber exciting community take over of the system. A system that sucks, I might add. It's shortsellers that are taking it in the chops here, and it's really for the general public to work up much sympathy to the blood suckers of the stock market. Short sellers really aren't selling anything, and they aren't really buying anything either. They are just playing the wall street slot machine with their pervasive bet that a stock is going to go down. Then when it does the (generally institutional) player makes a nice return for the shareholders at the expense of the companies that they short.

Let's be realistic here: The three monster hedge funds that are getting burned by 'community trading' could buy and sell all of gamestop stock 10 times and not feel a serious dent in their total value.

It's going to take an incredibly huge pile of money to get the 'community traders' stopped. The hedge funds will probably look bad doing it, and appearance is much more important than propriety to the funds.

Which isn't to say they won't get it stopped. The very best way to make a really enormous pile of money disappear is to wave a taste to the regulators in the US. Carly Simon sang a great song about their ability to disappear money, in fact. Nobody Does It Better.

Will this lead to a fundamental shift? Probably not. It may well lead to a modest shift in the market and the way things are done. Community Trading might become regulated and taxed, but I suspect that the genie is far enough from the bottle that it won't entirely go back.

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They are just playing the wall street slot machine with their pervasive bet that a stock is going to go down. Then when it does the (generally institutional) player makes a nice return for the shareholders at the expense of the companies that they short.

It is quite a strange "investment" as it is generative on the degeneration of something else. Rather than investing into something that adds value and grows, this seems counter-productive to what we would consider good for society.

Community Trading might become regulated and taxed, but I suspect that the genie is far enough from the bottle that it won't entirely go back.

I hope the genie is out. Then, I hope that the wealth the community has generated gets put into crypto. Have the hedge funds finance the move :)

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I do feel a shift, as if everything has sped up.

I think it is going to be exponential - where more and more join the fire and as they link up, it will increase in speed again.

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With gamestop the question will be was it a small fire, brush fire, or will it grow into a wild fire. I think the days of shorts may well be numbered, but I don't know very much about the markets other that what I read about this story, and it seems it was the short market manipulators that really caused the issue and it was their actions that was causing the problems for gamestop.

I find shorting a strange concept, as it doesn't seem like a healthy habit for a society, just a cash grab on the misfortune of others. I hope that it will be a spot fire that ignites another.

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Such a fire is already raging here with the revelations in the media from the Zondo Commission, about how billions were stolen by the persons that we are supposed to trust my friend.
Skeletons falling out of the cupboards all over the place.

Something urgent has to be done about this, but big money supports the denials and it is the normal legal defences, but this time round it will not work, as the people are starting to stir which can lead to nightmares if justice is not done.

I have always maintained that big money will protect itself and its gains, even if it comes to invading and trying to control the blockchain with legislation to secure the establishments and even to gain profits via taxes.

Interesting times ahead!

In analogies to natural laws I put my hopes and trust. Slow and calm landslides and avalanches look before critical mass has shifted but then it's...you know. The more you want to control, the more delusional you must become.

In general, states meddling into the economy is a recipe for disaster. Some govs maintained the illusion of control for decades but the results were hidden bankruptcy. And not it's the other side of The Wall that is heading towards the same illusion. Stuff like UBI, SRDs, etc could bog down billions into...I was about to say dependency but that has been true for ever, anyway.

It's consumers' habits that matter the most. And it's always a psychological game to make certain things desirable. Not tricked into desiring it, not sold. Ideologies and policies as well.

Iy is the very same natural laws that will also result into a total avalanche in our case here.
No matter how they try to camouflage their corruption here, some insiders will always decided that truth is better than lies and they are singining like canaries at the commission.
Some totally unbelievable stories about control and theft of billions are being told. Money's always leave a trail and to get them the money trail is being followed.
As light is stronger than darkness, just so the the truth is stronger than deception.

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It definitely makes you wonder how many more coordinated events like this are going to happen in the future. I have no doubt that wall street is probably going to try to put some stops in place to keep it from happening again. I don't know what those will look at, but the big players have too much money at stake for them to allow something like this to happen again. I don't think they realize how resourceful the masses are. They will probably adapt and find a new way to stick it to them.

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