A Flock of Bernies

Then came a quiet morning when Mr. Biden opened a door on the north side. A warm draft of rising air blew softly through the Capitol cellar. The baby Bernies felt the warm updraft. One Bernie climbed to the top of the security fence. Then it did something that came as a great surprise to Wilbur.

The Bernie stood on its head, pointed its mittens in the air, and let loose a cloud of thick yarn. The yarn formed a balloon. As Wilbur watched, the Bernie let go of the fence and rose into the air.

“Good-bye!” it said, as it sailed past the Washington Monument.

“Wait a minute!” screamed Wilbur. “Where do you think you’re going?”

But the Bernie was already out of sight. Then another baby Bernie crawled to the top of the fence, stood on its head, made a yarn balloon, and sailed away. Then another Bernie. Then another. The air was soon filled with tiny yarn balloons, each balloon carrying a Bernie.

Wilbur was frantic. America’s Bernies were disappearing at a great rate.

“Come back, Bernies!” he cried.

“Good-bye!” the Bernies called. “Good-bye, good-bye!”

At last one little Bernie took time enough to stop and talk to Wilbur before making its yarn balloon.

“We’re leaving here on the warm updraft. This is our moment for setting forth. We are ideas and we are going out into the world to make content for ourselves.”

“But where?” asked Wilbur.

“Wherever the Internet takes us. High, low. Near, far. East, west. North, south. We take to the breeze, we meme as we please.”

18 Comments

Sure will be fun when the next Ebola hits, and the anti-sanity, anti-vax, Republinazi anti-maskers scream “MAH FREEDUMBS!!!” seconds before their internal organs liquify and their fugly ass faces melt off Indiana Jones-style.
Wow, those videos’ll really spread virally.
“You’re ownd libs blaaaahhghghgh!!!”

Regarding the blurb – I was cheering until I learned that Robin Hood starts everyone with a margin account. That is very shady.

@JNOV: The business model, as I understand it, is to shovel data to hedge funds milliseconds before executing a trade, giving them a jump on any trends. Not sure how margin accounts factor into this, but I guess it encourages impulse trades?

@nojo:
Basically this gives the hedges and other heavy hitters the time to react to or counter any moves done by retail aka “suckers”.

It kind of explains why I mostly got soaked on buying stocks.

To be fair, I bought Blackberry several months ago as a long term buy, but rode the crazy train till I got the price I wanted. Thanks WSB.

@nojo: Yup.The stock market is basically a measure of the short-term optimism of very, very rich people that they will be richer in the next six months. Period. It doesn’t jibe with economic health or anything that means anything beside the short distance the super rich can see beyond the tips of their noses. RH allows options trading through margin accounts and <i>doesn’t charge a fee </i> each time someone makes a trade. The fee can often dampen traders’ glee. Unrestricted trading? Not so much. As soon as someone opens a RH account, people can borrow stock without having cash on hand to cover the value of their bets if the price drops and they are forced to sell. Most (all?) brokerage houses make you apply for a margin account, but RH allows people to trade immediately without charging any brokerage fees. It’s like borrowing money to play with in a casino hoping you’ll hit it big so you can pay it back.

The house always wins. Unsophisticated investors (I hate the description, but it’s used by the SEC), have no business betting with money they don’t have (leverage), and this was a HUGE short squeeze — people were inflating the price of a poorly-performing company, a company without any prospects of performing better. Remember when Elon Musk lost his shit when hedge funds were shorting Tesla because they were expecting and hoping that it will fail? He took it personally, flipped out with his taking Tesla private “funding secure” tweet, and eventually was removed from the board and paid a fine because that crazy ass tweetstorm moved the market. Currently Tesla stock is less volatile because Mr. Crazy Pants is off the board for I can’t remember how long — long enough for investors to relax a bit. RH and Game Stop traders created a bubble. The bubble will burst, and the people who borrowed stock options with money they do not have will owe a lot of money if they don’t get out while the getting is good and RH issues a margin call. If a trader can’t cover their losses, RH can sell of alllllll of their other securities to cover the call. No one knows when the getting is good because options trading is so volatile, plus Robin Hood didn’t have enough cash on hand to cover all of the leverage they provided traders. That’s what caused the evening halt while they begged investors for a cash infusion of approximately $1B. RH makes money by shady behavior – they get what I’d call a finder’s fee by passing along sales to brokerage houses and getting a cut based on the amount of transactions they create. Their business model is to direct unsophisticated investors into the riskiest area of trading – options trading – and I hope they get the shit kicked out of them for doing so. Institutional investors can cover their losses. People like Warren Buffet can move markets. But Joe Schmo should not be playing with his savings and borrowing more stock than he can afford to lose.Can’t proofread right now. Someone with more knowledge please feel free to chime in and correct anything I wrote that is wrong. Corporate Finance was supposed to be my gig 20 years ago, and a lot has changed since.

@JNOV:
Long term it still is, but not at $30 CDN or even $17 CDN or even $12 CDN.

/lying in wait to make a move and buy when the price is ‘right’/

Oh! One of the hedge funds that had shorted Game Stop had to exit its position and lost over half of its portfolio! Why do I love this and hate RH?

@ JNOV,

My favorite metric is the Shiller PE Ratio, which measures equity prices as a ratio of their earnings. Equities are now the *second* most expensive they’ve ever been in the last 150 years–meaning completely disconnected from actual earnings–and one doesn’t need a PhD in eCONomics to see what’s coming next.

https://www.multpl.com/shiller-pe

@ JNOV, I can’t see how Robin Hood will stay in business offering what are effectively open-door wrap accounts. Someone has to pay all of the ticket charges for the trades, which traditionally are marked up and charged to the investor. Do they charge huge annual account maintenance fees? I’m too lazy to google it.

@¡Andrew!: They don’t charge the investors anything ever, essentially creating frictionless trading.  If investors were charged $10 for each trade, they might think twice before going buck wild. RH gets a kick back from the clearinghouses that process their trades. RH has negotiated to collect significantly more for each trade than other online brokers and THAT is how they make their money as long as they can cover the trades, which is the mess they find themselves in now. RH received another cash infusion over the weekend, this time $2.4B. Annnnd Elon Musk has decided to be anti RH when he was pro RH last week.

I watched “The Big Short” on the weekend in honor of this.

@ JNOV,

I can’t see how that business model could possibly be viable because it would require infinite, exponential client acquisition, but sure, why not. The investment industry gave up on any pretense of making sense around 2012. Fuck it. “Markets can stay irrational far longer than you can stay solvent,” as Keynes lamented.

Also, Elon Musk is an obtuse cunt that should’ve been canceled a long time ago. If only there were some way to just filter that shithead out of daily life.

@¡Andrew!: yup  @ManchuCandidate: I should, too! I just saw a Blackberry on an Amazon show. Might be time to buy.

RH’s business model is to keep tapping VC until they go public, cash in, become VCs. Remember Theranos and George Schultz of all people?

@ JNOV,
I’m such an inveterate houseaholic that I always read that as Restoration Hardware.

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