[throwaway333444]

The problem with this theory is that it wasn’t just Robinhood. There were literally like a dozen or so firms that halted buying. Some of which were well known long established firms (Merrill, etrade).

These firms should have had no problem continuing allowing purchasing.

[soared]

> These firms should have had no problem continuing allowing purchasing.

Their costs increased 50x overnight - so they definitely should have had problems. DTC required a few percent collateral, and then overnight required 100% collateral on $GME. No business (well, fidelity and a few others weathered it) is able to increase short term liquidity 50x overnight.

[Rebelgecko]

Couldn't they just add a requirement that GME can only be purchased with settled funds? That seems like it would solve the issues mentioned above

[Dma54rhs]

Settled funds means two days that is longer than the whole situation. It was mainly new money anyway so the accusations and anger would be the same?

[criddell]

Their CEO went on CNN and stated there were no liquidity problems at RH.

[astrange]

He said they’d used their credit lines, just that there wasn’t enough of a liquidity problem to affect the rest of the business. And then they got another $1B the next day.

[nverno]

The article discusses this- excess buys and market volatility lead to increased capital requirements by clearing houses, so it wasn't necessarily specific to robinhood.

[Hacker29382]

When powerful people need to bend the rules, they don't do it outright. They find cover. And if there's any discretion in how much liquidity clearinghouses require, that's what they'll modify.

You'll see similar things when influence is sold. Speakers are given huge fees for basic speeches and then they know what they should do. Nothing is spelled out, because that would be dumb.

[astrange]

If you gave me a lot of money, I wouldn’t need to do anything for you because I’ve already got your money ;)

[Hacker29382]

Are you saying that influence either isn't sold or is spelled out in explicit terms when it is? Why do pharm reps take medical residents out to expensive dinners in nice parts of town (pre-covid), are they just nice people?

[astrange]

Giving someone a nice dinner isn’t giving them a lot of money, though. You get influence by not paying people enough that they can leave, but making it seem like you might in the future.

And yes, most marketing spending is pointless, and that’s just another kind of marketing.

[JumpCrisscross]

> There were literally like a dozen or so firms that halted buying

My understanding is these firms halted buying on margin. Did anyone else halt for non-margin accounts?

[thefounder]

They halted buy on stocks(no margin) on Interactive Brokers which powers most of the retail apps in Europe. I think the other brokers did the same. If you listen to this guy it's pretty clear he'a protecting the hedge funds.

"If our customers loose money we have to put ours" https://m.youtube.com/watch?v=7RH4XKP55fM

[rusticpenn]

Looks more like he is trying to protect his company. ( If the Hedge fund or clearance house fails, the broker would loose a lot of money).

[thefounder]

Yeah, better let the retailers loose..not market manipulation, just driving the stock to the right price where both the broker and the hedge wins. I wouldn't call this a free market.

[tonfa]

Is your underlying theory that with no intervention the stock would have no choice but to go to the moon?

Seems pretty bogus to me, there's still liquidity (so that's nothing like VW squeeze, where 75% of the market was cornered by porsche and 20% was held by a german state, leaving only 5% available for shorts to rebuy). Also current shorts were likely made at a much higher level.

And GME could do like AMC and AAL and issue more stock (why wouldn't they, it's like free money).

[thefounder]

>> Is your underlying theory that with no intervention the stock would have no choice but to go to the moon?

If the retailers hold the line they will squeeze the shorters. They already did it but the bulk of the juice is still there. VW is not the only example. Tesla is a more recent one. Of course GME could issue new stock. Many executives liquidated/sold their positions. AMC already issued new stock. These are different issues.

Restrict the buying of any given stock(i.e Tesla), halt it intermitently and then announce that you are banning it because it's too volatile and speculative.

What's the expected result? I could bet its goes down and that's the whole point I'm making: the brokers and hedge fund managers collude to the drive the price down. They decided what the stock is worth or better said what the price should be at the expense of the buy side/retail investors. This is a predatory environment not a free market. Imagine if the brokers would suddenly liquidate the hedge funds shorts due the volatility.

[midasuni]

EToro in U.K. halted it - no margin account, we have instant transfers of cash.

Managed to buy $beermoney worth in the end to say I was there, although that was at 20% higher than I tried to (not that it matters)

[iamacyborg]

They’re a cfd broker aren’t they?

[pengaru]

No, I have no margin on my e-trade account and was abruptly blocked from all GME-related trades without warning on Thursday. Plain old cash buying.