Disclaimer: I am not a financial advisor. This entire post represents my personal views and opinions, and should not be taken as financial advice (or advice of any kind whatsoever). I encourage you to do your own research, take anything I write with a grain of salt, and hold me accountable for any mistakes you may catch. Also, full disclosure, I hold a net long position in GME, but my cost basis is very low (average ~$67--I have to admit, the drop today was too tasty so my cost basis went up from yesterday)/share with my later buys averaged in), and I'm using money I can absolutely lose. My capital at risk and tolerance for risk generally is likely substantially different than yours. In this post I will go a little further and speculate more than I'd normally do in a post due to the questions I've been getting, so fair warning, some of it might be very wrong. I suspect we'll learn some of the truth years from now when some investigative journalist writes a book about it.
Thank you everyone for the comments and questions on the first and second post on this topic.
Today was a study in the power of fear, courage, and the levers you can pull when you wield billions of dollars...
Woops, excuse me. I'm sorry hedge fund guys... I meant trillions of dollars--I just briefly forget you control not just your own but a lot of other peoples' money too for a moment there.
Also, for people still trading this on market-based rationale (as I am), it was a good day to measure the conviction behind your thesis. I like to think I have conviction, but in case you are somehow not yet familiar with the legend of DFV, you need to see these posts (fair warning, nsfw, and some may be offended/triggered by the crude language). The last two posts might be impressive, but you should follow it in chronological order and pay attention to the evolution of sentiment in the comments to experience true enlightenment.
Anyway, I apologize, but this post will be very long--there's just a lot to unpack.

Pre-Market

Disclaimer: given yesterday's pre-market action I didn't even pay attention to the screen until near retail pre-market. I'm less confident in my ability to read what's going on in a historical chart vs the feel I get watching live, but I'll try.
Early in the pre-market it looks to me like some momentum traders are taking profit, discounting the probability that the short-side will give them a deep discount later, which you can reasonably assume given the strategy they ran yesterday. If they're right they can sell some small volume into the pre-market top, wait for the hedge funds try to run the price back down, and then lever up the gains even higher buying the dip. Buy-side here look to me like people FOMOing and YOLOing in at any price to grab their slice of gainz, or what looks to be market history in the making. No way are short-side hedge funds trying to cover anything at these prices.
Mark Cuban--well said! Free markets baby!
Mohamed El-Erian is money in the bank as always. "upgrade in quality" on the pandemic drop was the best, clearest actionable call while most were at peak panic, and boy did it print. Your identifying the bubble as the excessive short (vs blaming retail activity) is money yet again. Also, The PAIN TRADE (sorry, later interview segment I only have on DVR, couldn't find on youtube--maybe someone else can)!
The short attack starts, but I'm hoping no one was panicking this time--we've seen it before. Looks like the momentum guys are minting money buying the double dip into market open.
CNBC, please get a good market technician to explain the market action. Buy-side dominance, sell-side share availability evaporating into nothing (look at day-by-day volume last few days), this thing is now at runaway supercritical mass. There is no changing the trajectory unless you can change the very fabric of the market and the rules behind it (woops, I guess I should have knocked on wood there).
If you know the mechanics, what's happening in the market with GME is not mysterious AT ALL. I feel like you guys are trying to scare retail out early "for their own good" (with all sincerity, to your credit) rather than explain what's happening. Possibly you also fear that explaining it would equate to enabling/encouraging people to keep trying to do it inappropriately (possibly fair point, but at least come out and say that if that's the case). Outside the market, however...wow.

You Thought Yesterday Was Fear? THIS is Fear!

Ok short-side people, my hat is off to you. Just when I thought shouting fire in a locked theater was fear mongering poetry in motion, you went and took it to 11. What's even better? Yelling fire in a theater with only one exit. That way people can cause the financial equivalent of stampede casualties. Absolutely brilliant.
Robin Hood disables buying of GME, AMC, and a few of the other WSB favorites. Other brokerages do the same. Even for people on 0% margin. Man, and here I thought I had seen it all yesterday.
Side note: I will give a shout out to TD Ameritrade. You guys got erroneously lumped together with RH during an early CNBC segment, but you telegraphed the volatility risk management changes and gradually ramped up margin requirements over the past week. No one on your platform should have been surprised if they were paying attention. And you didn't stop anyone from trading their own money at any point in time. My account balance thanks you. I heard others may have had problems, but I'll give you the benefit of the doubt given the DDOS attacks that were flyiing around
Robin Hood. Seriously WTF. I'm sure it was TOTALLY coincidence that your big announcements happen almost precisely when what has to be one of the best and most aggressive short ladder attacks of all time starts painting the tape, what looked like a DDOS attack on Reddit's CDN infrastructure (pretty certain it was the CDN because other stuff got taken out at the same time too), and a flood of bots hit social media (ok, short-side, this last one is getting old).
Taking out a large-scale cloud CDN is real big boy stuff though, so I wouldn't entirely rule out nation state type action--those guys are good at sniffing out opportunities to foment social unrest.
Anyway, at this point, as the market dives, I have to admit I was worried for a moment. Not that somehow the short-side would win (hah! the long-side whales in the pond know what's up), but that a lot of retail would get hurt in the action. That concern subsided quite a bit on the third halt on that slide. But first...
A side lesson on market orders
Someone printed bonus bank big time (and someone lost--I feel your pain, whoever you are).
During the face-ripping volatility my play money account briefly ascended to rarified heights of 7 figures. It took me a second to realize it, then another second to process it. Then, as soon as it clicked, that one, glorious moment in time was gone.
What happened?
During the insane chop of the short ladder attack, someone decided to sweep the 29 Jan 21 115 Call contracts, but they couldn't get a grip on the price, which was going coast to coast as IV blew up and the price was being slammed around. So whoever was trying to buy said "F it, MARKET ORDER" (i.e. buy up to $X,XXX,XXX worth of contracts at any price). This is referred to as a sweep if funded to buy all/most of the contracts on offer (HFT shops snipe every contract at each specific price with a shotgun of limit orders, which is far safer, but something only near-market compute resources can do really well). For retail, or old-tech pros, if you want all the contracts quickly, you drop a market order loaded with big bucks and see what you get... BUT, some clever shark had contracts available for the reasonable sum of... $4,400, or something around that. I was too stunned to grab a screencap. The buy market order swept the book clean and ran right into that glorious, nigh-obscene backstop limit. So someone got nearly $440,000 PER CONTRACT that was, at the time theoretically priced at around $15,000. $425,000 loss... PER CONTRACT. Maybe I'm not giving the buyer enough credit.. you can get sniped like that even if you try to do a safety check of the order book first, but, especially in low liquidity environments, if a HFT can peak into your order flow (or maybe just observes a high volume of sweeps occurring), they can end up front running your sweep, pick off the reasonable contracts, and slam a ridiculous limit sell order into place before your order makes it to the exchange. Either way, I hope that sweep wasn't loaded for bear into the millions. If so... OUCH. Someone got cleaned out.
So, the lesson here folks... in a super high volatility, low-liquidity market, a market order will just run up the ladder into the first sell order it can find, and some very brutal people will put limit sells like that out there just in case they hit the jackpot. And someone did. If you're on the winning side, great. It can basically bankrupt you if you're on the losing side. My recommendation: Just don't try it. I wouldn't be surprised if really shady shenanigans were involved in this, but no way to know (normally that's crazy-type talk, but after today....peeking at order flow and sniping sweeps is one of the fastest, most financially devastating ways to bleed big long-side players, just sayin').
edit *so while I was too busy trying not to spit out my coffee to grab a screenshot, piddlesthethug was faster on the draw and captured this: https://imgur.com/gallery/RI1WOuu
Ok, so I guess my in-the-moment mental math was off by about 10%. Man, that hurts just thinking about the guy who lost on that trade.*
Back to the market action..

A Ray of Light Through the Darkness

So I was worried watching the crazy downward movement for two different reasons.
On the one hand, I was worried the momentum pros would get the best discounts on the dip (I'll admit, I FOMO'd in too early, unnecessarily raising my cost basis).
On the other hand, I was worried for the retail people on Robin Hood who might be bailing out into incredibly steep losses because they had only two options: Watch the slide, or bail. All while dealing with what looked to me like a broad-based cloud CDN outage as they tried to get info from WSB HQ, and wondering if the insta-flood of bot messages were actually real people this time, and that everyone else was bailing on them to leave them holding the bag.
But I saw the retail flag flying high on the 3rd market halt (IIRC), and I knew most would be ok. What did I see, you ask? Why, the glorious $211.00 / $5,000 bid/ask spread. WSB Reddit is down? Those crazy mofos give you the finger right on the ticker tape. I've been asked many times in the last few hours about why I was so sure shorts weren't covering on the down move. THIS is how I knew. For sure. It's in the market data itself.
edit So, there's feedback in the comments that this is likely more of a technical glitch. Man, at least it was hilarious in the moment. But also now I know maybe not to trust price updates when the spread between orders being posted is so wide. Maybe a technical limitation of TOS
I'll admit, I tried to one-up those bros with a 4206.90 limit sell order, but it never made it through. I'm impressed that the HFT guys at the hedge fund must have realized really quickly what a morale booster that kind of thing would have been, and kept a lower backstop ask in place almost continuously from then on I'm sure others tried the same thing. Occasionally $1,000 and other high-dollar asks would peak through from time to time from then on, which told me the long-side HFTs were probably successfully sniping the backstops regularly.
So, translating for those of you who found that confusing. First, such a high ask is basically a FU to the short-side (who, as you remember, need to eventually buy shares to cover their short positions). More importantly, as an indicator of retail sentiment, it meant that NO ONE ELSE WAS TRYING TO SELL AT ANY PRICE LOWER THAN $5,000. Absolutely no one was bailing out.
I laughed for a minute, then started getting a little worried. Holy cow.. NO retail selling into the fear? How are they resisting that kind of price move??
The answer, as we all know now... they weren't afraid... they weren't even worried. They were F*CKING PISSED.
Meanwhile the momentum guys and long-side HFTs keep gobbling up the generously donated shares that the short-side are plowing into their ladder attack. Lots of HFT duels going on as long-side HFTs try to intercept shares meant to travel between short-side HFT accounts for their ladder. You can tell when you see prices like $227.0001 constantly flying across the tape. Retail can't even attempt to enter an order like that--those are for the big boys with privileged low-latency access.
The fact that you can even see that on the tape with human eyes is really bad for the short-side people.
Why, you ask? Because it means liquidity is drying up, and fast.

The Liquidity Tide is Flowing Out Quickly. Who's Naked (short)?

Market technicals time. I still wish this sub would allow pictures so I could throw up a chart, but I guess a table will do fine.
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Date	Volume	Price at US Market Close
Friday, 1/22/21	197,157,196	$65.01
Monday, 1/25/21	177,874,00	$76.79
Tuesday, 1/26/21	178,587,974	$147.98
Wednesday, 1/27/21	93,396,666	$347.51
Thursday, 1/28/21	58,815,805	$193.60

What do I see? I see the shares available to trade dropping so fast that all the near-exchange compute power in the world won't let the short-side HFTs maintain order flow volume for their attacks. Many retail people asking me questions thought today was the heaviest trading. Nope--it was just the craziest.
What about the price dropping on Thursday? Is that a sign that the short-side pulled a miracle out and pushed price down against a parabolic move on even less volume than Wednesday? Is the long side running out of capital?
Nope. It means the short-side hedge funds are just about finished.
But wait, I thought the price needed to be higher for them to be taken out? How is it that price being lower is bad for them? Won't that allow them to cover at a lower price?
No, the volume is so low that they can't cover any meaningful fraction of their position without spiking the price parabolic almost instantly. Just not enough shares on offer at reasonable prices (especially when WSB keeps flashing you 6942.00s).
It's true, a higher price hurts, but the interest charge for one more day is just noise at this point. The only tick that will REALLY count is the last tick of trading on Friday.
In the meantime, the price drop (and watching the sparring in real time) tells me that the long-side whales and their HFT quants are so certain of the squeeze that they're no longer worried AT ALL about whether it will happen, and they aren't even worried at all about retail morale to help carry the water anymore.
Instead, they're now really, really worried about how CHEAPLY they can make it happen.
They are wondering if they can't edge out just a sliver more alpha out of what will already be a blow-out trade for the history books (probably). You see, to make it happen they just have to keep hoovering up shares. It doesn't matter what those shares cost. If you're certain that the squeeze is now locked in, why push the price up and pay more than you have to? Just keep pressing hard enough to force short-side to keep sending those tasty shares your way, but not so much you move the price. Short-side realizes this and doesn't try to drive price down too aggressively. They can't afford to let price run away, so they have to keep some pressure on at the lowest volume they can manage, but they don't want to push down too hard and give the long-side HFTs too deep of a discount and bleed their ammo out even faster. That dynamic keeps price within a narrow (for GME today, anyway) trading range for the rest of the day into the close.
Good plan guys, but those after market people are pushing the price up again. Damnit WSB bros and Euros, you're costing those poor long-side whales their extra 0.0000001% of alpha on this trade just so you can run up your green rockets... See, that's the kind of nonsense that just validates Lee Cooperman's concerns.
On a totally unrelated note, I have to say that I appreciate the shift in CNBC's reporting. Much more thoughtful and informed. Just please get a good market technician in there who will be willing to talk about what is going on under the hood if possible. A lot of people watching on the sidelines are far more terrified than they need to be because it all looks random to them. And they're worried that you guys look confused and worried--and if the experts on the news are worried....??!
You should be able to find one who has access to the really good data that we retailers can only guess at, who can explain it to us unwashed masses.

Ok, So.. Questions

There is no market justification for this. How can you tell me is this fundamentally sound and not just straight throwing money away irresponsibly?? (side note: not that that should matter--if you want to throw your money away why shouldn't you be allowed to?)
We're not trading in your securities pricing model. This isn't irrational just because your model says long and short positions are the same thing. The model is not a real market. There is asymmetrical counterparty risk here given the shorts are on the hook for all the money they have, and possibly all the money their brokers have, and possibly anyone with exposure to the broker too! You may want people to trade by the rules you want them to follow. But the rest of us trade in the real market as it is actually implemented. Remember? That's what you tell the retailers who take their accounts to zero. Remember what you told the KBIO short-squeezed people? They had fair warning that short positions carry infinite risk, including more than your initial investment. You guys know this. It's literally part of your job to know this.
But-but-the systemic risk!! This is Madness!
...Madness?
THIS. IS. THE MARKET!!! *Retail kicks the short-side hedge funds down an infinity loss black hole\*.
Ok, seriously though, that is actually a fundamentally sound, and properly profit-driven answer at least as justifiable as the hedge funds' justification for going >100% of float short. If they can be allowed to gamble INFINITE LOSSES because they expect to make profit on the possibility the company goes bankrupt, can't others do the inverse on the possibility the company I don't know.. doesn't go bankrupt and gets a better strategy from the team that created what is now a $43bn market cap company (CHWY) that does exactly some of the things GME needs to do (digital revenue growth) maybe? I mean, I first bought in on that fundamental value thesis in the 30s and then upped my cost basis given the asymmetry of risk in the technical analysis as an obvious no-brainer momentum trade. The squeeze is just, as WSB people might say, tendies raining down from on high as an added bonus.
I get that you disagree on the fundamental viability of GME. Great. Isn't that what makes a market?
Regarding the consequences of a squeeze, in practice my expectation was maybe at worst some kind of ex-market settlement after liquidation of the funds with exposure to keep things nice and orderly for the rest of the market. I mean, they handled the VW thing somehow right? I see now that I just underestimated elite hedge fund managers though--those guys are so hardcore (I'll explain why I think so a bit lower down).
If hedge fund people are so hardcore, how did the retail long side ever have a chance of winning this squeeze trade they're talking about?
Because it's an asymmetrical battle once you have short interest cornered. And the risk is also crazily asymmetrical in favor of the long side if short interest is what it is in GME. In fact, the hedge funds essentially cornered themselves without anyone even doing anything. They just dug themselves right in there. Kind of impressive really, in a weird way.
What does the short side need to cover? They need the price to be low, and they need to buy shares.
How does price move lower? You have to push share volume such that supply overwhelms demand and price therefore goes down (man, I knew econ 101 would come in handy someday).
But wait... if you have to sell shares to push the price down.. won't you just undo all your work when you have to buy it back to actually cover?
The trick is you have to push price down so hard, so fast, so unpredictably, that you SCARE OTHER PEOPLE into selling their shares too, because they're scared of taking losses. Their sales help push the price down for free! and then you scoop them up at discount price! Also, there are ways to make people scared other than price movement and fear of losses, when you get right down to it. So, you know, you just need to get really, really, really good at making people scared. Remember to add a line item to your budget to make sure you can really do it right.
On the other hand..
What does the long side need to do? They need to own as much of the shares as they can get their hands on. And then they need to hold on to them. They can't be weak hands either. They need to be hands that will hold even under the most intense heat of battle, and the immense pressure of mind-numbing fear... they need to be as if they were made of... diamond... (oh wow, maybe those WSB people kind of have a point here).
Why does this matter? Because at some point the sell side will eventually run out of shares to borrow. They simply won't be there, because they'll be safely tucked away in the long-side's accounts. Once you run out of shares to borrow and sell, you have no way to move the price anymore. You can't just drop a fat stack--excuse me, I mean suitcase (we're talking hedge fund money here after all)--of Benjamins on the ticker tape directly. Only shares. No more shares, no way to have any direct effect on the price whatsoever.
Ok, doesn't that just mean trading stops? Can't you just out-wait the long side then?
Well, you could.. until someone on the long side puts 1 share up on a 69420 ask, and an even crazier person actually buys at that price on the last tick on a Friday. Let's just say it gets really bad at that point.
Ok.. but how do the retail people actually get paid?
Well, to be quite honest, it's entirely up to each of them individually. You've seen the volumes being thrown around the past week+. I guarantee you every single retailer out there could have printed money multiple times trading that flow. If they choose to, and time it well. Or they could lose it all--this is the market. Some of them apparently seem to have some plan, or an implicit trust in certain individuals to help them know when to punch out. Maybe it works out, but maybe not. There will be financial casualties on the field for sure--this is the bare-knuckled capitalist jungle after all, remember? But everyone ponied up to the table with their own money somehow, so they all get to play in the big leagues just like everyone else. In theory, anyway.
And now, Probably the #1 question I've been asked on all of these posts has been: So what happens next? Do we get the infinity squeeze? Do the hedge funds go down?
Great questions. I don't know. No one does. That's what I've said every time, but I get that's a frustrating answer, so I'll write a bit more and speculate further. Please again understand these are my opinions with a degree of speculation I wouldn't normally put in a post.

The Market and the Economy. Main Street, Wall Street, and Washington

The pandemic has hurt so many people that it's hard to comprehend. Honestly, I don't even pretend to be able to. I have been crazy fortunate enough to almost not be affected at all. Honestly, it is a little unnerving to me how great the disconnect is between people who are doing fine (or better than fine, looking at my IRA) versus the people who are on the opposite side of the ever-widening divide that, let's be honest, has been growing wider since long before the pandemic.
People on the other side--who have been told they cannot work even if they want to, who wonder if congress will get it together to at least keep them from getting thrown out of their house if they have to keep taking one for the team for the good of all, are wondering if they're even living in the same reality.
Because all they see on the news each day is that the stock market is at record highs, or some amazing tech stocks have 10x'd in the last 6 months. How can that be happening during a pandemic? Because The Market is not The Economy. The Market looks forward to that brighter future that Economy types just need to wait for. Don't worry--it'll be here sometime before the end of the year. We think. We're making money on that assumption right now, anyway. Oh, by the way, if you're in The Market, you get to get richer as a minor, unearned side-effect of the solutions our governments have come up with to fight the pandemic.
Wow. That sounds amazing. How do I get to part of that world?
Retail fintech, baby. Physical assets like real estate might be a bit out of reach at the moment, but stocks will do. I can even buy fractional shares of BRK/A LOL.
Finally, I can trade for my own slice of heaven, watching that balance go up (and up--go stonks!!). Now I too get to dream the dream. I get to feel connected to that mythical world, The Market, rather than being stuck in the plain old Economy. Sure, I might blow up my account, but that's because it's the jungle. Bare-knuckled, big league capitalism going on right here, and at least I get to show up an put my shares on the table with everyone else. At least I'm playing the same game. Everyone has to start somewhere--at least now I get to start, even if I have to learn my lesson by zeroing my account a few times. I've basically had to deal with what felt like my life zeroing out a few times before. This is number on a screen going to 0 is nothing.
Laugh or cry, right? I'll post my losses on WSB and at least get some laughs.
Geez, some of the people here are making bank. I better learn from them and see if they'll let me in on their trades. Wow... this actually might work. I don't understand yet, but I trust these guys telling me to hold onto this crazy trade. I don't understand it, but all the memes say it's going to be big.
...WOW... I can pay off my credit card with this number. Do I punch out now? No? Hold?... Ok, getting nervous watching the number go down but I trust you freaks. We're still in the jungle, but at least I'm in with with my posse now. Market open tomorrow--we ride the rocket baby! And if it goes down, at least I'm going down with my crew. At least if that happens the memes will be so hilarious I'll forget to cry.
Wow.. I can't believe it... we might actually pull this off. Laugh at us now, "pros"!
We're in The Market now, and Market rules tell us what is going to happen. We're getting all that hedge fund money Right? Right?
Maybe.
First, I say maybe because nothing is ever guaranteed until it clears. Secondly, because the rules of The Market are not as perfectly enforced as we would like to assume. We are also finding out they may not be perfectly fair. The Market most experts are willing to talk about is really more like the ideal The Market is supposed to be. This is the version of the market I make my trading decisions in. However, the Real Market gets strange and unpredictable at the edges, when things are taken to extremes, or rules are pushed beyond the breaking point, or some of the mechanics deep in the guts of the Real Market get stretched. GME ticks basically all of those boxes, which is why so many people are getting nervous (aside from the crazy money they might lose). It's also important to remember that the sheer amount of money flowing through the market has distorting power unto itself. Because it's money, and people really, really, really like their money--especially when they're used to having a lot of it, and rules involving that kind of money tend to look more... flexible, shall we say.
Ok, back to GME. If this situation with GME is allowed to play out to its conclusion in The Market, we'll see what happens. I think all the long-side people get the chance to be paid (what, I'm not sure--and remember, you have to actually sell your position at some point or it's all still just numbers on your screen), but no one knows for certain.
But this might legitimately get so big that it spills out of The Market and back into The Economy.
Geez, and here I thought the point of all of this was so that we all get to make so much money we wouldn't ever have to think and worry about that thing again.
Unfortunately, while he's kind of a buzzkill, Thomas Petterfy has a point. This could be a serious problem.
It might blow out The Market, which will definitely crap on The Economy, which as we all know from hard experience, will seriously crush Main Street.
If it's that big a deal, we may even need Washington to be involved. Once that happens, who knows what to expect.. this kind of scenario being possible is why I've been saying I have no idea how this ends, and no one else does either.
How did we end up in this ridiculous situation? From GAMESTOP?? And it's not Retail's fault the situation is what it is.. why is everyone telling US that we need to back down to save The Market?? What about the short-side hedge funds that slammed that risk into the system to begin with?? We're just playing by the rules of The Market!!
Well, here are my thoughts, opinions, and some even further speculation... This may be total fantasy land stuff here, but since I keep getting asked I'll share anyway. Just keep that disclaimer in mind.

A Study in Big Finance Power Moves: If you owe the bank $10,000, it's your problem...

What happens when you owe money you have no way to pay back? It's a scary question to have to face personally. Still, on balance and on average, if you're fortunate enough to have access to credit the borrowing is a risk that is worth taking (especially if you're reasonably careful). Lenders can take a risk loaning you money, you take a risk by borrowing in order to do something now that you would otherwise have had to wait a long time or maybe would never have realistically been able to do otherwise. Sometimes it doesn't work out. Sometimes it's due to reasons totally beyond your control. In any case, if you find yourself there you have no choice but to dust yourself off, pick yourself up as best as you can, and try to move on and rebuild. A lot of people had to learn that in 2008. Man that year really sucked.
Wall street learned their lessons too. Most learned what I think most of us would consider the right lessons--lessons about risk management, and the need to guard vigilantly against systemic risk, concentration of risk through excess concentration of leverage on common assets, etc. Many suspect that at least a few others may have learned an entirely different set of, shall we say, unhealthy lessons. Also, to try to be completely fair, maybe managing other peoples' money on 10x+ leverage comes with a kind of pressure that just clouds your judgement. I could actually, genuinely buy that. I know I make mistakes under pressure even when I'm trading risk capital I could totally lose with no real consequence. Whatever the motive, here's my read on what's happening:
First, remember that as much fun as WSB are making of the short-side hedge fund guys right now, those guys are smart. Scary smart. Keep that in mind.
Next, let's put ourselves in their shoes.
If you're a high-alpha hedge fund manager slinging trades on a $20bn 10x leveraged to 200bn portfolio, get caught in a bad situation, and are down mark-to-market several hundred million.. what do you do? Do you take your losses and try again next time? Hell no.
You're elite. You don't realize losses--you double down--you can still save this trade no sweat.
But what if that doesn't work out so well and you're in the hole >$2bn? Obvious double down. Need you ask? I'm net up on the rest of my positions (of course), and the momentum when this thing makes its mean reversion move will be so hot you can almost taste the alpha from here. Speaking of momentum, imagine the move if your friends on TV start hyping the story harder! Genius!
Ok, so that still didn't work... this is now a frigging 7 sigma departure from your modeled risk, and you're now locked into a situation that is about as close to mathematically impossible to escape as you can get in the real world, and quickly converging on infinite downside. Holy crap. The fund might be liquidated by your prime broker by tomorrow morning--and man, even the broker is freaking out. F'in Elon Musk and his twitter! You're cancelling your advance booking on his rocket ship to Mars first thing tomorrow... Ok, focus--this might legit impact your total annual return. You need a plan, and you know the smartest people on the planet, right? The masters of the universe! Awesome--they've even seen this kind of thing before and still have the playbook!! Of course! It's obvious now--you borrow a few more billion and double down again first thing in the morning. So simple. Sticky note that Mars trip cancellation so you don't forget.
Ok... so that didn't work? You even cashed in some pretty heavy chits too. Ah well, that was a long shot anyway. So where were you? Oh yeah.. if shenanigans don't work, skip to page 10...
...Which says, of course, to double down again. Anyone even keeping track anymore? Oh, S3 says it's $40bn and we're going parabolic? Man, that chart gives me goosebumps. All according to plan...
So what happens tomorrow? One possible outcome of PURE FANTASTIC SPECULATION...
End of the week--phew. Never though it'd come. Where are you at now?... Over $9000^\)!!! Wow. You did it boys, and as a bonus the memes will be so sweet.
^\)side note: add 8 zeros to the end...
Awesome--your problems have been solved. Because...
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..
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BOOM
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Now it's EVERYONE's problem. Come at me, Chamath, THIS is REAL baller shit.
Now all you gotta do is make all the hysterical retirees watching their IRAs hanging in the balance blame those WSB kids. Hahaha. Boomers, amirite? hate when those kids step on their law--I mean IRAs. GG guys, keep you memes. THAT is how it's done.
Ok, but seriously, I hope that's not how it ends. I guess we just take it day by day at this point.
Apologies for the length. Good luck in the market!
Also, apologies in advance for formatting, spelling, and grammatical errors. I was typing this thing in between doing all kinds of other things for most of the day.
Edit getting a bunch of questions on if it's possible the hedge funds are finding ways to cover in spite of my assumptions. Of course. I'm a retail guy trying to read the charts and price action. I don't have any special tools like the pros may have.

The human gazed at the aliens around him and knew, just knew, he was in a LOT of trouble.
They were not much to look at. Small. Furry. Possessing faintly rodent like features. Their powerful hindlegs had them leaping quite large distances. When humans first encountered this species their initial impression was of some kind of hybrid of Kangaroos, harvest mice and Hobbits.
Their gentle and passive nature and their habit of communal sleeping had led humans to call them ‘Dormice’ out of affection.
The human wanted, very much wanted, to go back home and inform his fellow humans that this was a bad idea. A very bad idea.
The Yucani did not appreciate the term. The Yucani did not appreciate a lot of things. Mostly, right now, this group of about 400 of them did not appreciate him.
Their angry chirps and trills grow in intensity as they hopped angrily around him. Younger males would seemingly leap towards him at high speed, before landing close with a furious hissing noise. While the human could speak Yucani, he could barely understand them as they trilled so quickly. He held up his hands in what he hoped was a universal sign of surrender.
The human may not have been an expert on Yucani culture, but he was fairly sure he knew what a lynch mob looked like. The mass of small creatures had cornered him against a wall and continued to gaze at him balefully. Each passing moment they seemed to increase in anger, in their aggression, in their potential for violence.
A stone slammed into the wall besides him.
Three things happened immediately. The human saw the stones arrival seemed to give the Yucani the idea that this was a brilliant innovation.
Oh crap! They are going to stone me!
The largest Yucani in the mob, stood about seven feet away from him, suddenly removed a vicious looking knife, with a long serrated edge.
It’s gonna stab me!
And a roar of a Yucani constabulary patrol ship suddenly was heard, its distinctive sound causing many of the small creatures at the back to turn their heads.
The police! They’re gonna save me!
As the vechicle moved closer, more and more of the mob heard it and the human was very relieved to see that they didn’t start picking up rocks and the one with a knife, his large brown eyes filled with fury and rage, slowly returned the knife back to his clothing.
The craft landed, and six Yucani got out; their green uniforms were armoured, which made them look actually impressive (the human had long ago realised that only the larger members of the race were ever chosen for their constabulary).
They slowly hopped towards the mob, who had now turned and were trilling and squeaking in high pitched tones towards the newly arrived officers.
The human gulped down a breath of air. The sense of relief and gratitude he felt was immense. He was saved. As the officers made their way towards him, the crowd parting, he felt his legs go weak. He wanted to collapse. But he managed to hold it together long enough, to offer a grateful smile as one finally made his way towards him, dividing his fellow Yuanci like the Moses before the Red Sea.
“I am very happy to see you,” says the human, smiling down at the Yucani constabulary officer. It responds by removing a short grey metallic pole and jabbing it into the humans leg.
Pain. SO much pain. A searing, agonising, exploding pain that begins in his leg and races through every single nerve cluster in his body. The human convulses and screams, his bladder empties and he almost instantly drops into unconsciousness from the agony. He falls into a crumpled heap against the wall. The Yucani officer, ignoring the little cheer that had began from his fellow species, gazed down at the human with contempt and spat.
Two months later…
The young human, manacled and bound is thrown into the small conference room the aliens had built for this meeting. His eyes glance up and fall upon the first human face he had seen in many weeks.
“Oh God, thank you. Are you here to save me?”
The other human was in his fifties; his eyes bore the look of a man who had seen many things, perhaps too many. His suit was well made, sensible, if not slightly on the conservative side.
In response to the question he smiles gently and says, “Kid, I’m fairly sure only God can save you. But I am here to try and help with the mess you are in.”
Relief, mixed with wild joy fill the prisoners face. The younger man spots a chair to sit in (the room had the familiar setting of two human shaped chairs and a desk between them), and falls into it in a heap, his manacled hands landing heavily upon the table.
“Oh, thank you! You need to get me off this planet. The conditions I’ve been kept in have been awful. I am totally isolated. A hole in the ground with a large vent in the ceiling. They throw food down to me. The place stinks.”
The older man raises an eyebrow, “That’s good. You getting off lightly.”
“Lightly? The entire thing stinks like a sewer.”
“That’s because it probably IS a sewer,” shrugs the older man, reaching for a briefcase by his side.
“What?”
“Yucani prisons. They don’t incarcerate anyone but worst offenders on their world. The closest they have to prisons are specially made sewers.”
“That’s…”
“Tell me, have random Yucani been coming along and urinating and crapping into your cell as they pass?”
“What? No. That’s horrible.”
As the older man places his briefcase upon the table between them, he smiles a cold, tight smile, “The Yucani word for ‘prisoner’ literally translates into English as ‘Eaters of Our Shit’. I think the fact that they are throwing you human food and not pissing on you qualifies as light treatment.”
The younger man’s jaw just drops. A stunned look of absolute horror crosses his face. The older human uses this as an excuse to open his briefcase, remove a heafty file in a manilla cover out (it lands on the table with a satisfying heavy sound), closes the briefcase and places it on the floor besides him.
“Are you from the Embassy?”
“No. I just arrived in-world an hour ago. Four days at warp. My guts feel mushy.”
“Oh. Are you a lawyer?”
“I afraid not. Formally the excuse the Embassy will give you is there are no humans conversant in the intricacies of Yucani jurisprudence to be able to offer effective advice. Off the record? No lawyer in the entire solar system would touch your case. So, they sent me. I’m a specialist.”
“What in?”
“Apparently being human,” says the older man, who opens the folder and begins scanning the pages underneath. The younger man is too confused to say anything which suits the older one just fine. He glances up into the scared eyes of the prisoner.
“Andrew Montgomery Eversham, born 2118, Britain. British? Should have figured. Father was an engineer on Ares station, mother was… French. Well that explains much.”
“What does my mother have to do with anything?”
The older man gazes him up and down and asks, “Only child huh?”
“Yes. Why?”
“Thought so. Right, Mr Eversham. Do you know what they are charging you with?”
“No one has told me anything at all. I was performing, and the next thing I know I was being chased by a mob of angry Dormice, and then one of their police…”
“Yucani. Not Dormice.”
“What?” Eversham’s eyes widen, and he nods, “Yes, right. I know. I figured that out. But you know its just us here.”
“Saying Dormouse to describe a Yucani is like being home and using the word ‘Kike’. It’s a derogative term. An insult. Maybe not enough to get you punched, but we don’t do that.”
“Alright. Yes. I understand. I will try. Good job you ain’t Jewish eh?”
“Bad news I’m afraid. I am.”
“Oh.”
The older man scans through the documents and frowns.
“You are charged with a multitude of offenses. The first of which is Causing Great Disgust of Public Morals; Crude and Offensive Language; Heresy towards the Gods of the Yucani; Causing a Disturbance of the Peace… what were you doing?”
“I was doing my routine.”
“Routine?”
“I’m a comedian. Stand up.”
There was a raised eyebrow.
“You are comedian?”
“Yes.”
“And you caused this reaction?”
“Apparently.”
“Gonna say Kid, I’d work on your act.”
Eversham blinks and his face contorts with frustration, “Are you here to help me or not?”
The older man however just gazes at the file before him, “As well as the above you are charged with Inciting a Yucani to Wish to Commit Violence- this is a serious offense by itself, but they have charged you with inciting every individual in the crowd who heard you. So that’s 496 separate charges. And given each one carries a possible death sentence…”
“Death sentence? I could die?”
The older man smiles coldly across the table, “And we haven’t even gotten onto the serious allegations yet. So far, its just been the warm up. Now it says here that you perform under a different name.”
“Yeah. Abe Froman.”
“What?”
“Abe Froman. You know from that old movie.”
“What old movie?”
“A 20th century classic. Ferris Bueller’s Day Off. The character of Abe Froman- the Sausage King of Chicargo? You must have heard of it?”
The older human raises his eyebrows high.
“No ‘Abe’ I haven’t. Neither have the Yucani. Which means they arrested someone called Abe Froman, only then to discover his real name is Andrew Eversham.”
“It’s my stage name.”
“The Yuctani don’t have concepts for ‘stage names’. All they know is a human arrived on planet with one name and then started using another name once here. And THIS is why they have charged you with espionage.”
“ESPIONAGE!!?”
“Yes. Specifically, because of the two names thing. And THEN because they think you are some kind of human agent, but don’t know what exactly you could have been up to, they assume the worst and charged you with everything they think you COULD have been here to do. That’s what the rest of the folder is.”
Andrew gazes at the thick pages with a look of absolute terror. The older humans eyes begin scanning; “So, from the top, ‘Suspected of Wishing to Assassinate the Emperor of the Yucani; Suspected of wishing to Assassinate the Chancellor of the Emperor of the Yucani…”
He moves forward a few pages.
“Suspected of wishing to put poison in the water supply of the cities of Heshis and Jebin…”
“But I…”
The older man lifts up more pages and smiles, “Suspected of seeking to violate the sacred virginity of the High Priestess of Rho- that’s impressive.”
“Are you serious? This is a joke.”
“Deadly serious,” hisses the old man, who closes the file with a loud thump. He fixes Eversham with a fierce stare.
“I gotta tell you ‘Abe’- you are in so much trouble right now that EarthGov is an inch away from washing their hands of you, throwing you to the Yucani and letting them take dumps on your for the rest of your short life. I am, literally, the only hope in hell you have of surviving and if I’m being honest- it aint much of a hope.”
“But it was just a few jokes,” mews Eversham, his eyes welling up with tears.
“Who thought it would be a good idea to travel to another planet and do stand up comedy?”
“My agent.”
“Your agent? What did you do? Sleep with his wife?”
“No,” comes the panicked reply.
“Didn’t you even do some basic research on what the Yucani considered humour?”
“No. I thought it would be more interesting to just turn up and see how they reacted to human jokes… you know… see the raw reaction.”
The older man is briefly speechless. He takes a breath and says quietly, “Gotta admire your chutzpah Kid. Not smart but that’s a LOT of chutzpah…”
“Why would EarthGov throw me under the bus? I don’t understand. I screwed up sure, but…”
He stops as the older man just holds up a hand. He gazes into his eyes as the first human he has seen in months speaks very quietly.
“Here’s the deal. As far as we can tell, a couple of months ago, this young human leaves Earth and flies to Yucani homeworld. He passes customs, checks into a Yucani version of a hotel and asks if they have versions of ‘clubs’. He discovers that, being social creatures, Yucani do indeed have these places where they gather to be entertained. Brilliant says he. The human goes to one of these. This human, he is not entirely ignorant- he’s learned basic Yucani. Not much, but enough to converse conversationally.”
The older mans stare nails the young man to his chair.
“So he goes there and meets the Yucani in charge. Explains that he is a ‘human entertainer’. Asks if he can perform. The Yucani, like the rest of his species? They get on well with us. We share similar traits. We have had good relations since the Treaty of Commerce and Travel was signed fifteen years ago. Sure, he says. He announces this human. Who gets on stage. But does not sing. Doesn’t dance. He talks. He talks to them. He says some pretty damn insulting things about them. He ignores their obvious growls of displeasure.”
“I thought they were laughing!”
“You thought wrong kid. The crowd sat for about twenty minutes getting madder and then decides enough is enough. They chase him out of the club, across two streets and corner him outside of his hotel. Where he is arrested and not lynched because the club owner rang the constabulary. Have I missed anything out?”
“No,” says Eversham quietly.
“So the EarthGov embassy gets informed of all this and do what they do and move to smooth ruffled fur. It’s just a misunderstanding they say. It’s an easy mistake they say. Their records show he is JUST a comedian. But here’s the thing kid. Yucani don’t have comedians. They don’t get it. So the Ambassador tries to explain it to them. Which in turn leads to a discussion about a very unique trait we humans have that Yucani do NOT have. Know what that is?”
“A sense of humour?” Eversham says, literally unable to help himself. He is surprised at the response.
“Well spotted. They have one but it is nothing like our own. They became fascinated at our sense of humour and then in quick measure, horrified at it. They find the very essence of human humour to be offensive, aggressive, cruel and vicious. Their government is considering tearing up the Treaty between our two races. Literally, your little stunt has caused the MOTHER of all diplomatic incidents.”
“I… I had… no idea,” stammers the Englishman.
“That comes as no surprise to me whatsoever,” comes the hissed reply. The older man sighs and rubs his eyes and continues. “Now the GOOD news is, given the severity of the charges you face, the nature of the issue, and the sheer monumental insanity of this whole thing, the Yucani have decided to not bother with all the minor courts, judges, appleant proceadures. You are going to be tried by the top court on the planet. The Ultimate Court. One trial, one hearing, one.”
Eversham just nods.
“The bad news is, it won’t be you alone on trial. It will be the entire human species. And our sense of humour. Somehow, just somehow, we have to convince these creatures that actually our sense of humour isn’t just an awful trait that they find offensive. And that means somehow, just somehow, I’ve got to defend human comedy in front of a species who has no concept of comedy at all.”
The older man sighs.
“And I thought raising my eldest daughter was tough!”
There is a silence. The full weight of the moment clearly hits the young man. He lowers his head and fights back tears. Eventually, without looking up, he says quietly.
“I’m sorry.”
“I’m sure you are kid.”
“I’ve been a fool.”
“This much EVERYONE can agree upon.”
“I never meant to cause this…”
The older man sighs again, “I know you didn’t kid. Everyone knows you didn’t MEAN it. Doesn’t make it any easier for folks back home.”
Andrew Eversham nods. Displaying the stoicism his nation was famed for, he remains very quiet. Tears drip off his nose but he makes no sound. The older man just looks at him, an iota of sympathy creeping into his sad eyes. Moments pass. Eversham finally speaks.
“It… maybe it would be better if everyone just wrote me off. Said I was insane. Aberrational. Throw me under the bus. Let everyone get on with it?”
A small sad smile crosses the older mans face.
“To be blunt, that is what a LOT wanted to do back in EarthGov. A lot still do. But it’s too late for that. The whole race is in the mix now. Like it or not, we gotta jump on this ride and see it through to the end. And this is why they sent me. Because some fool thinks that if anyone can win this, can somehow get you off, its me.”
“Are you a diplomat?”
“No, no, nothing like that.”
“So why did they send you?”
“Beats me kid. I mean I have a rough idea, but really? I think they sent me because they are desperate.”
“What do you do for a living?”
A smile.
“For my sins? I’m a Rabbi.”
Four Days Later; The Grand Chamber of the Yucani Ultimate Court
Rabbi Johnathan Cohen had to admit- it was impressive. For such a small race, the Yucani could do ‘grand’. As he looked around the chamber of the highest judiciary on their planet, he could imagine it being used for an equally impressive purpose back on Earth. Of course on Earth the décor and colour scheme would be a tad different. More imposing.
Regal even. This?
It reminded him of the garish interior of some Western Bordelo from the 1890’s if he was honest. Still, the gold and purples and reds didn’t distract from the gravitas of the assembly or the importance of the room.
Or the size of the crowd.
EarthGov told him it was going to be a big show. They were not kidding. The five judges (known as a ‘claw’ the standard designation in all Yucani trials apparently) were looking impressive in their yellow robes of office, but they were upstaged by everyone else. The importance of the nature of this trial had demanded that anyone who was anyone would be here.
Rabbi Cohen could see the heir to the Yucani Empire had arrived (representing his father and 83 siblings); the Minister for Relations With The Hairless Ones (the formal designation for the poor Yucani official who dealt with humans) was also there, talking to him in hurried trills.
There were delegations of all the great and the good of this species, including The High Matron of the Sacred Priestesses of Rho, whose arrival caused him to smile inwardly. And it wasn’t just the Yucani who were here.
The unique nature of the diplomatic spat had caused interest from a half dozen other species. He saw the Ambassador of the Tu-Kek sitting within a glass encased sphere; the Emissary of the Golden Hive, which sat unmoving upon a perch, witnessing all that it relayed to the collective hive mind of the crew of the colony/ship that had arrived in orbit a few days before.
There was even a Frosh there, hovering enigmatically in its encounter suit, and the Frosh didn’t seem interested in anything except fractal mathematical equations most of the time. None of the species knew a damn thing about them- highly advanced but utterly abstract.
And there were the other humans. The Ambassador was there looking nervous (he was partly to blame for messing up the aftermath of the event- his job was on the line); the Commodore of Human Forces in the nearest sector was to his right, looking bored (only here because EarthGov was slightly worried this could end in a war). The attractive secretary (who everyone whispered the Ambassdor was sleeping with), sat on the other side of the Commodore, his handsom eyes glancing at the proceedings nervously.
And this ignored the several hundred normal Yucani who had managed to gain attendance to the trial. Rabbi Cohen took a sip of water and muttered to himself, “No pressure then Johnathan…”
“What?”
He turned to the rather pathetic figure of Andrew Eversham besides him. He wasn’t chained, and he had been issued new clothing, but his eyes were sunken and he looked the very image of a broken man.
“Nothing kid,” he says kindly, “you ready for this?”
“No,” comes the dispondant reply. For some reason Johnathan smiles at this.
“That’s the way. Honesty is always the best policy.”
The beating of a gavel is enough to start the proceedings. Ear pieces to allow fluent translations of all sides words are donned, and Rabbi Cohen takes a deep breath. Yucani trials followed a slightly differing format than humans- but the jist was roughly the same. The ‘prosecution’ he noticed was a grey furred alien, whose somewhat rotund body revealed him to be a corpulent and well fed member of his species. No doubt some great legal mind.
The trial passed quickly enough- the facts were not in dispute and indeed the defence case being as it was (the human in question was ignorant of any harm he could cause and meant no malice) was not even seriously contested by the state. No, in truth the real reckoning lay in the deeper issue of human sense of humour, and how in would colour future Human-Yucani relations.
Eventually, after about an hour, the rotund alien hopped back towards his table and began trilling in low, dark tones. In Cohen’s ear the translation came across clearly.
Which leads us, most supreme claw, to the crux of the issue. The human’s case rests upon a simple defense; he was innocent of any illwill towards our peoples, but sought to ‘entertain’ us with an example of human ‘humour’. This has led to our people investigating this aspect of the aliens personalities, and what we have found is disturbing indeed.
Johnathan watched closely as little creature trilled and squeaked in strong tones, his brown eyes forever gazing around him; while he was no expert on Yucani bodylanguage, Cohen knew showboating when he saw it. The little fat furball was playing to the crowd, playing upon the sensibilities of his race.
We have found humans delight in mockery; in lampooning; in deriding. They claim they do the same to themselves, as if this excuses them, as if it gives them the writ to inflict such things upon the rest of the galaxy. For a human, mockery of their institutions and their leaders is to be expected. But as we all KNOW- such things are anathema to we Yucani; where the familial bonds of love and honour are as natural to us as breathing…
The Rabbi tried hard not to roll his eyes. The prosecution was laying it on thick. Really thick. He watched as the creature hopped and trilled, waving its little arms about, modulating its voice expertly. He could see every Yucani in the room moved by this; their noses twitched, eyes welled up, their tails would go back and forth violently.
Carefully the Rabbi listened as the little creature moved onto the mainstay of his argument.
Is it not said by the Goddess Rho, that ‘all things shall be in its natural place, from star to planet, from ruler to bondman’; does not Rho teach us that there is only joy to be found in ‘careful appreciation of the natural order of all things’? Is it not said within our most sacred texts that ‘The ONLY path towards elevation of a soul, is through acceptance of its time within the body’? These are the foundations of our very society, our very civilisations…
The prosecution begins waxing lyrical about the virtues of the civilisation of the Yucani, but Johnathan was only half listening. There was a religious aspect to this after all?
As he mused on the sacred words of the Rho, part of him wondered if the wiley President of Earth was smarter than he liked to appear. Did the old guy KNOW this was going to be their approach? Is this why he sent him?
His thoughts are broken as the prosecution brings his long and somewhat vaudevillian diatribe to its conclusion…
…which bases itself upon mockery, and lampoon and cruelty towards living things are ideas we Yucani cannot afford to allow infect our civilisation. They gnaw at its roots. They will in time infest our nests. Supreme Claw, I must ask, no implore, no BEG of you, to issue an edict which petitions our Emperor to reconsider allowing these humans access to our world. Lest one night, one terrible night, the scenes we saw, where a single voice defiles the virtues of our culture are repeated… but this time by one of our own children.
Cohen takes a breath and smiles to himself. He glances over at the ambassador who looks back nervously. Besides him the quiet voice of Andrew Eversham says, “I really screwed this all up didn’t I?”
“Yes kid. But look on the bright side?”
“There’s a bright side?”
“It’s not everyday you get to be accused of defiling an entire civilisation. Think about how it will look on your CV?”
Rabbi Cohen stands as his opposing side sits down heavily. He picks up a small card wherein the correct honourifics needed to address the court are clearly printed and runs through the formalities quickly enough. That done he gazes at the five judges for a moment, and shrugs.
“The human sense of humour. Where do I, one of our species, even BEGIN to start describing this complex thing that lies at the heart of who we are, to your most Supreme Claw? There are great minds on Earth who have wondered about this for many centuries and reached no conclusion. And yet it is clear, I must. So let me try and break this down into a way I feel the Yucani can understand and I hope, accept it, for all its imperfections.”
“It is a question often asked by us humans- what makes us laugh? What is the source of our humour? The prosecution would have you believe it is cruelty and mockery. And from the surface it would appear so. But allow me to illustrate that human humour is complicated and made up of many levels.”
He strides out from behind his table, keeping his voice low and his eyes focused on the judges.
“The starting point is incongruity. We humans like you Yucanti had an issue with incongruity. Evolutionary speaking our ancestors, like yours, lived lives fearing predators; both our species in our ancient past? We would gaze, eyes to the horizon, forever searching for danger. We learned well the safety in patterns, the formal, fixed nature of our surroundings. Anything out of place, incongruous, we would be drawn to. It spelt danger, it spelt threat.”
“For my species, long after we had evolved past the need to spot such things, we had this trait inherent still within us. Why do I stress this? When humans spot an incongruity in nature, when it does not threaten us? We laugh. An exclamation of relief. Identical to what Yucani call the ‘musk of fear ending’. For your species it is natural and normal. Same with ours. Yours is scent. Ours is sound. Identical reactions. A thing we have in common yes?”
A few aliens nod at this. A good start.
“However this is not the full basis of our humour. Incongruity cannot be the full extent of our humour. If I was to find a shoe in a dishwasher, or you were to find Gurnix inside a Flubuton, that in itself would not be the cause of humour to us. It would be odd, but not humorous. The key for us humans is that incogurity has to be of a correct kind. For humans it has to involve a shift of perspective. The great human psychologist, Koestler, pointed out that for humans this shift is all important. An example would be…”
He nods to one of the technicians and displayed in the air in both languages are words.
When is a door not a door?
When it is a jar!
“This is an example of that type of humour. Incongruity presenting a perspective shift.”
There is utter silence from the audience and he scans the translation and smiles.
“Of course the joke does not translate at all to your race. The play on contexts and language is entirely lost to you. But notice how my fellow humans did not laugh either. Such things are primitive; plays on words, sudden perspective shifts. Proto-Jokes almost. I raise it to establish the baseline of our humour.”
“We humans have many of these jokes. We call them things like ‘knock-knock jokes’ and ‘lightbulb jokes’. They are not truly appealing to our humour, the highest compliment they can get is to be called clever, for you see they are missing a particular element of humour which the prosecution has done well to highlight.”
“What they miss, is a degree of cruelty.”
The little rotund advocate for the state stands and begins trilling in high pitched tones. Cohen waits for the translation to come through.
So you admit that humans revel in cruelty?
He smiles, “No.”
But you just said that your humour needs cruelty!
“A certain type, yes. But not the type you described.”
Semantics! Your supreme clawness, I urge you end this nonsense…
We will hear the human defence, intones the oldest, long whiskered judge, As we are curious as not how they will justify this.
“I thank the indulgence of the court,” smiles Cohen, and he takes a breath.
“There remains, there always will, an aspect of human behaviour that is mistaken for our humour but is not. This is how we humans use laughter. Laughter is a physical response to things. Mostly to humour yes, but also, and this is where the prosecution made their mistake, it can be a sound of triumph. At such times the sound is indeed dark and unmistakably cruel. Many have observed that for all the love we have of the sound of laughter it is by volume and in ferocity, an aggressive sound. And there exists many examples of our species using laughter when committing acts of cruelty.”
He shrugs, “It was only a few centruies ago that it became unfashionable to visit the places we kept our psychically and mentally disable for the purpose of laughing at them. We thought it good sport to look upon their pain. All of human history contains accounts of how public executions were raucous affairs, we would attend and celebrate the killing of one of our own, often with laughter as the guillotine came down upon them…”
Rabbi Cohen sighs heavily, “When I was younger I once saw a picture. Germany. The 1930’s. A small child, a Jewish boy, was being forced to clean the street on his hands and knees. Around him stood adults and they were laughing. This isn’t human humour, it’s cruelty. There are countless episodes of torturers laughing as they inflict pain. Of laughter being heard from mass shooters, from soldiers in war, at our most darkest moments. These things I do not refute. But point out a similarity of experience between our species.”
“Every species in the galaxy knows Yucani are fastidious in cleaning, how they value healthy and clean fur. No Yucani would ever dose another in urine for example. What then of your treatment of prisoners? Are we to take that as indicative of Yucani finding such things acceptable? Of course not. It is a certain, dark aspect of your society, misunderstood except BY your species. This is the same as using laughter by humans in moments of cruelty. It is separate FROM the debate about humour.”
He takes a breath and a sip of water before continuing.
“No, to say human humour is incognuity mixed with cruelty is too simplistic. It has to be the right type of cruelty…”
What do you mean the right type of cruelty? asks the supreme judge.
Johnathan Cohen thinks for a moment and smiles, “On Earth, a wise man called Mel Brooks once asked the question- what is the difference between tragedy and comedy?”
What was his answer?
“Tragedy is when I cut my finger. Comedy is when you fall down a manhole cover and die.”
The Ambassadors secretary bursts out laughing, the sound carries across the room, ALL eyes fall upon him. Hurridly he covers his mouth, going red in the process.
“And you see the very nature of it right there. A sudden juxtaposition of incongruity and a certain element of cruelty, producing an involuntary response. Laughter.”
He pauses for a moment and says quietly, “In our distant past, in the year 1991 of our calander, a human writer called David Barry said the following, “The most important humor truth of all is that to really see the humour in a situation, you have to have perspective. ‘Perspective’ is derived from two ancient Greek words: ‘persp’ meaning ‘something bad happens to someone else’ and ‘ective’ meaning ‘ideally someone like Donald Trump’.”
At this all the humans bursts out laughing and Rabbi Cohen holds up his hands, “Again- the involuntary reaction. I won’t bother to explain it your honours, just to say that last statement was a joke designed to highlight something.”
“The core cruelty here is that someone must lose dignity. As we humans say be brought down a peg or two, or be knocked off a pedestal. It can be used by the mob as a weapon, and YES, it does have a subversive power. One of our ancients, a man called Plato, thought humour was destabalsing to the state and should be banned from it, which for us humans? Tell us much about the kind of guy Plato actually was.”
See? This is my allegation Supreme Claw. The human ADMITS what I am saying is true…
“What we do you got right, WHY we do it you got wrong. I heard you speaking about how Rho says we must appreciate the time our souls connect with our bodies correct?”
The prosecution’s whiskers twitch a little, and carefully it says Yes
“Well, the most basic, the most universal, the most raw and successful brand of comedy, the one my clients version was but a verbal variation of, the one that transcends the many human languages, is humour based upon just that. The realisation that there is a split between the soul, the essence of a human, and these dull, mundane frail bodies we exist in. What a psychologist once called the ‘dualism of subtle mind and inert matter’. “
“We call that humour, slapstick.”
He grins to himself.
“The core of all slapstick is the ‘the blow and the fall’. It can be as simple as a human slipping on the skin of recently eaten fruit. Or elaborate and detailed, but at its core is something very important. We understand, totally, the immortality of the soul, what the Goddess Rho holds to essence of being, but we also recognise the limitations of the body. Your species finds solance in holding to the immutable structure of the universe to reconcile this correct? We reconcile it by finding humor when we are reminded that these frail bodies cannot match the perfection of what lies within.”
“All of this is just by way of explaining this…”
An image appears on screen. It is a small human infant, wearing a sundress, maybe aged about 2 or 3 years old. Walking towards them is an image of Rabbi Cohen. He smiles at the child, and walks towards her and then, suddenly, slips and lands on his backside, a look of mock shock on his face. And at that, the court room is filled with the sound of the small child laughing, laughing hard; uncontrollable laughter, a sound that makes every human in the room smile. The image ends.
“Your honours, THAT is the most beloved sound on my home planet. The sound of an innocent child laughing. It transcends cultures and languages, transcends time. It delights us like NO other sound. We can spend hours just trying to get children to make it.”
“Consider then what you just saw? An innocent- capable of no higher functions of thought; an infant. It’s reactions are primal. But what DID you see? An infant is able to identify itself as a being, and me as a separate being. It saw the classic imposition upon my being by this mundane body. I tripped and slipped on my tuchus. A sudden juxtaposition of incongruity. One second I am stood, the next I am not. Mixed with the RIGHT kind of cruelty. Misfortune happening to another. But notice my reaction- my mock smile? My grand daughter realises that it is not hurting me and responds with a spontainious reaction of laughter.”
“THIS is at its base, the core of ALL human comedy and humour; it is based on empathy, and innocence. Not for her convoluted explanations involving cruelty and mockery. Just instinct. As we grow we develop more sophisticated methods to find humour but at its core? That is it. Is that not a demonstration of how our humour is as identical as your veneration of the soul within the body? The acceptance of the duality of body and spirit?”
Rabbi Cohen smiles, gently and turns to the Judges.
“Your honours, I urge you to dismiss this case. And I urge you to do so because let me tell you what will happen to the defendant. He will be released. He will return home. And when he does? He will become the subject of many, many jokes. He bore no ill will in his heart towards your race- but he was a schmuck.”
What is a schmuck?
“It’s a certain type of human. For the Yucani? A schmuck will forever be my client.”
In his chair the stand up comedian opens his mouth and then closes it. Defeated.
“He will return home and we will make stories about what he did. We will laugh at his foolishness, his ignorance, his pride….”
And we so gonna have fun with you little fat gerbil, he thinks but does not say as he eyes the prosecutor.
“And our ambassador will sit down with the Crown Prince and they will add a provision to the Treaty of Trade and friendship that says, based on the psychological underpinnings of our two species, and given we recognise that we share in common a belief of the duality of our existence and indeed of the existence of the soul, that human humour is a natural byproduct of our evolution like musk scenting is part of yours. Neither of our species share these traits, so lets not inflict it upon the other huh?”
“That would seem to me to be a most equitable and fair solution.”
The judges consulte one another, the Yucani remove their translation devices, but Johnathan can see their chirpings are appreciative. He may not have convinced them humans are FUNNY… but he may have convinced them to let this slide. He sits down at his table, gathers up his case note and begins to place them inside his briefcase.
Besides him, the comedian gazes over and sees there, amidst the papers in the briefcase, a hard backed book… ‘On the origins of humor: why Neaderthals can’t take a joke’ by Dr Johnathan Cohen, and a sudden realisation crosses his mind and he whispers, “You wrote that?”
“When not studying the Torah, I dabble in evolutionary psychology. It pays the bills.”
“Thank you.”
“Hey kid, what we gonna do? Let aliens say we bad for liking to laugh? What’s next? We are sinful because we breath?”
As the court recesses, and the judges leave to make their judgement, Rabbi Cohen stands and turns to make his way over to the Ambassadour when he is stopped suddenly. There, before him, stands the representative of the Frosh. It’s towering form, its huge encounter suit, obscuring the being from within. It’s cold black visage, plain glass of some kind, looms balefully over him.
In all the hustle of the Yucani leaving, no one notices this member of the most elusive and obscure of all the alien species, make his way to stand before the human. Johnathan clears his throat and goes, “Hello?”
The alien just stands.
“Can I help you?”
The black screen suddenly flashes brief, fractal images upon it, who flare in and out of existing as quick as a human blink. At the same time a warbling high pitch noise emits from deep in the chest area.
The Rabbi blinks and says, “What?”
The images and the noise is repeated again. Realisation dawning, Rabbi Cohen places down his briefcase and picks up the translator device he was using back on the table.
“Say that again please?”
The images flash and the noise is made and two seconds later words form in the humans ear… a simple message…
Pull my finger.
There is a silence. Around them the Yucani chitter and trill but Johnathan Cohen begins to smile…

First Chapter Chapter 6-The Second Dojo Chapter 8- If...
Chapter 7-Private Lessons and Private Conversations
Travis stood over the pan, watching the bacon fry. He had set it in the pan about 2 minutes ago and it was sizzling rather nicely. He had eggs whipped up for scrambled eggs ready and the batter ready to fry. Mel’Bae was in the shower. It had been three months since he and Mel’Bae had started dating and things were going great. The dojo had grown in the first month to about 20 new students, but over the month it fell to about twelve, when the ladies figured out it wasn’t a dating service. Well, not intentionally.
Tonboon, the usually studious med student had become a bit of a ladies man. Hell, he practically had a sign-up sheet! Sensei had to take him aside and give him a talk about not hooking up inside the dojo. What he does outside is ok, but in class we gotta keep it professional. He’s almost a black belt and the rules are different when you attain that rank. Tonboon and Travis weren’t the only ones that had been involved with the Shil’vati in more than a professional manner. While Travis hadn’t seen Sensei or Sadie. Travis had seen Mark sneaking out of one of the officer’s quarters. It took Travis a moment of shock to process what he was feeling. He hadn’t had the time to even form the words in his head: What do I do about this? Should I tell Julie? When he then saw her, sneaking out of the same room. Oh, well thank Goddess for that!
Goddess? Damn Mel’Bae’s rubbing off on me.
Travis was staying over with her about three or four times a week now. They were still being exclusive together. They had talked about maybe adding someone new, but he wasn’t ready for that yet.
The bacon was done so he pulled it out. He skimmed off a bit of grease and then added the eggs to what remained, letting it slowly fry before folding it over itself to make sure the eggs turned out smooth and not dry. Using a towel, he wicked his forehead to keep the sweat out of his eyes from the hot stove and the hot room.
He had come up with a novel solution to staying in a room set to her preferred temperature. He was wearing a YUKATA. The thin, cotton KIMONO-like robe that was a gift from a friend during a summer festival in Japan was comfortable at Shil’vati temperatures, it also covered his body enough for their ideas of male modesty. It worked well in the kitchen too, as it kept him from violating the general rules of bachelor cooking:
1 Always wash your hands before going to the bathroom if you have been handling chilies.
2 Never fry bacon naked.
It also had one more advantage: it was easy to slip on and off.
The eggs were ready and he put them on a serving plate. Next he re-greased the pan with some of the leftover bacon grease and began to pour the batter in small batches waiting for it to fry and bubble up. When it was golden brown he flipped it over to cook on the other side.
Mel’Bae got out of the shower, she pulled on a sports bra and a pair of shorts. Then toweled her long hair off before tying it loosely behind her back, she usually did this most mornings now waiting to put it up in her usual bun until after breakfast when she had to go on duty.
Travis set the table and each scooped eggs and bacon out onto their plate. For the other item Travis had some honey (real maple syrup was out of his price range, and he refused to buy the imitation “maple flavored” crap) and some elderberry jam his mom had sent him. Mel’Bae and his mom hadn’t met in person yet, but they had talked through video conferencing. Similarly, Travis had only seen recorded messages from Mel’bae’s family. She apparently had six mothers. All of whom Travis was trying to tell apart. No real word sent by her father though. Deal with that later, Travis thought.
“I’ve got to run back to my apartment today,” He told Mel’Bae. “But I should be back by the time you’re off duty. I’ve got a private class with Nosis at ten o’clock and his wife probably will want to talk to me afterward.” Nosis was Agent Sommarsdar’s young husband. Travis couldn’t judge the dude for marrying into money, I mean both men and women have been doing that for centuries.
He was coming along as a good student and taking private lessons from Travis had improved him in regular classes quite a bit. Though it was odd, training with him felt a lot like training with a gentler version of Sadie. Which is either the most logical or the strangest thing to think.
“I’ll pick up some stuff from the commissary annex for dinner,” Mel’Bae offered. The Base’s version of a grocery store.“ Any chance back in town you could pick up some more of the stuff to make these?” She asked as she held up a piece of one of the golden brown disks with her fork. “They’re really good. What are they called again?”
“They’re flapjacks.” Travis told her.
_____________________
Mel’Bae gave him a quick kiss as she headed out to start her shift in the shuttle hangar. Things between them hadn’t cooled in the bedroom exactly, but they were restraining themselves from copulating in the mornings, well in the mornings she had to go on duty. If they both had Shel off…
He hung up his YUKATA and took a shower. Getting ready for his private class. The stipend the military was paying for Sensei to teach lessons was enough to keep their regular dojo open, though they still didn’t have any new students walk through the door. And with Travis teaching some private classes he had enough money to meet his needs without having to bounce if he didn’t want to. He would occasionally pick up a shift as a favor to someone, but that was just as a little extra spending money.
Showered and shaved, he put on his regular clothes and placed his GI in his backpack. He loaded up the omni-pad Mel’Bae gave him as a gift. Saved on it was the complete series of Aikido videos he could use to show Nosis to help him understand how techniques could be done. In a ready-to-transfer file he had uploaded a bunch of videos and texts for his wife to help her understand humanity better.
Perhaps it was all just subterfuge, him teaching her husband, but Agent Sommarsdar had been picking his brain to help herself understand humanity. And if it meant less loss of life to help the Shil’vati figure out how to drain the ranks of angry young men and women from the rebels, then he was happy to do it. Today’s collection was of original texts, essays, and commentaries from some of the great thinkers in human military strategy. Clausewitz, Sun Tsu, Musashi Miyamoto, Max Brooks.
All packed up he turned his attention to clearing the dishes and getting some laundry done before his class. Since he was crashing at her place he had taken up more responsibilities of basic housework. It was best to try to use the laundry room in the mornings when most of the Marines were on shift. Nobody had yet tried “the ol’ grab ‘em by the dick” brand of courtship with him yet. However the best way to win a confrontation was to not be in one. Gathering up his and Mel’Bae’s clothes he headed out.
__________________
“SHIT!” Nosis whined as Travis corrected his movement, showing him how to lift his arm in such a way that his whole body was aligned in the movement and focused on the weakest part of his partners arm allowing it to raise easily.
“It’s OK, just remember to keep your hand inside of his arm, if it goes to the outside he ..um..or she can use their bicep to pull you down. Raising this way works on the triceps muscle which is not as strong. But the most important part of Tenshinage is the bottom hand. You’ve got to draw it down and to the side like this.” Travis slid at a forty-five degree angle in toward Nosis and lowered his hand that he was grabbing. Nosis’ shoulder dropped and he lost his balance. “Like this, Tenshinage doesn’t look like much, and almost nobody will ever grab you this way, but It has the building blocks of a lot of different moves.
“How do you remember all of this stuff!?!” He asked exasperatedly.
“Hey, remember, over ten years vs about three months. You’ll get there, you just have to keep trying and have patience. It’s like Zen meditation, minus the getting hit with sticks part. You do it a thousand times, or ten thousand times wrong then one day it comes to you.”
“If you two are ready to call it a day, I’ve got us some lunch.” Said Agent Sommarsdar coming into the room. Travis had been teaching Nosis for the last two hours in their home.
“Sure we can end here.” Travis then turned to Nosis and bowed.
“Thank you, Sensei.” Nosis called out
“Hey, remember, our Sensei is Sensei, I’m just Travis or if you want to Travis Sensei.”
“Sorry, Travis Sensei.”
“Don’t worry about it just remember next time. Ok on three.”
“Domo arigato gozaimasu,” They bowed to the picture of the O sensei, the founder, that Travis had brought. “Well, let’s get lunch.”
_________________
Sitting around the table eating with the two of them it was easy to remember how alien they were. Agent Sommarsdar treated her husband with a level of pampering or maybe mothering he and Mel’Bae definitely did not have with each other nor did he want there to be. She was practically spooning his food into his mouth for him. It made the conversation a little distracted. “What you really need to understand is very complex in its simplicity: if humans feel they are treated well, we will be the best friend you ever had. If we feel disrespected and put down, we’ll hate ya till the day you die.”
“But we are treating you well. Your standard of living has increased significantly and you are from what was the wealthiest of your nation states. What we’ve done for some of your ‘lesser developed nations’ should have been seen as a Goddess sent miracle.”
“You’re right, but that’s not how most people feel,” he tried to explain. “For a lot of people anti Shil’vati sentiment and resistance started when we saw the footage of that incident at the Grimmsville Hospital. None of us knew that woman, or her husband, but seeing that we all felt like we did. She could have been our sister, or wife, or mother. That could have been our child or grandchild. If the roles were reversed Nosis, even with amazing leaps forward in living do you think you could forgive?”
Nosis looked at Travis, you could see that the idea had struck a nerve with him. And with his wife. “Have you...”, he asked, “Been able to forgive?”
“I try to.” Travis thought about the best way to phrase his next words. “I try to remember that Shil’vati are people no better or worse. and judge the individual by their actions. Do I feel that the Shil’vati in charge should face some punishment for her incompetence? Yes.” This garnered a look from Agent Sommarsdar, She seemed to be thinking of something, or remembering. "However, I don’t blame all of the imperium for her actions. It's hard sometimes to separate the actions of a system from that of the individuals in that system. But that’s basically how my country was founded.”
“Have you read any of the works about the British Empire?” He continued. “They, at their height, controlled a quarter of the planet. The country I grew up in was started when they felt disrespected. They fought because they were taxed without having a say in the government. From that start they became the world's largest political and military power. I grew up believing in the idea of ‘American Exceptionalism’. The idea that we were, despite our faults, the best there was. That belief has been shattered and many now feel that they are fighting to get that back.” Travis took a breath. “Even though they’re fighting for an idea that was a lie. Yeah America had the greatest military strength, but we also had a crumbling infrastructure and massive debt that was the cost of that military. There was a political deadlock that made sure every problem was politicized and argued about endlessly and never fixed.”
“So you never saw this American Exceptionalism?” She asked holding out another morsel for Nosis to pluck from her hand.
“I saw it every time I saw a homeless man with a sign that read:
HOMELESS VET
PLEASE HELP
GOD BLESS”
“I hope you’re not thinking of The Imperium as some kind of flawed saviors.” Nosis added. Which earned him a reproachful look from his wife. Travis had learned that he was the far more liberal of the two.“
“Oh God...dess no!” He blurted out. “I know you didn’t come here for our benefit but for yours. You took us over ‘cause we were here. But in the end It’s simple. Like a… a marriage.” Pointing to the two of them. “Humanity needs to feel special.”
“That’s a lot to think about,” Agent Sommarsdar replied. “But sadly our lunch needs to come to an end. I’ve got to get back to the office, my sweet.” she said to Nosis.
“Yeah I gotta get going too. Before I go though, have you thought about that riddle I gave you.”
“I have but I’m still puzzled.”
“What riddle?” Nosis asked.
“Maybe you can solve it for her. What’s the easiest way to get someone to clean your house for free? Think about it awhile and maybe next private class you can give me an answer.”
_____________________
Travis walked around the grocery store picking up the ingredients for making more pancakes as well as some large ham steaks that would go well with them. It seemed like he was turning more into a homemaker, cooking and taking care of Mel’Bae, but to be honest there wasn’t much to do with his time right now that his financial situation was more stable.
It was strange the way things that would appear bizarre to an outsider become normalized after a few months. The fact that he was practically living with Mel’Bae now was one of those bizarre facts. For humans it was bizarre because he was livin’ in sin with an alien woman, and for Shil’vati because he was doing it with only one of them. But hey, it was working for them right now so why try to mess with a good thing? However, he knew his ego would draw the line if she tried to start hand feeding him.
Nosis had been a wealth of information for Travis on how the Shil’vati were viewing his group. Being that they are the first civilian employees on any military base. In a way, it was funny, the nicknames the ladies came up with for them sounded almost like they were a boy band. Sensei was still Sensei, but Tonboon was the sexy one. Sadie was the scary one. Julie and Mark were the lovers. And Travis?
The boring one.
Heading up to the check out Travis thought. Who cares if I’m boring, I’ve got a lover and I’m getting laid regularly. How many of them can claim that? The answer to that though probably depended on how tired Tonboon was on any given day. Sensei and himself might have to do another sit down with their soon to be black belt in the near future.
_________
Travis walked down the hallway to his apartment door. Grocery bag in his left hand as he took out his phone. He had gotten through the security check point rather fast. Last time he had been stopped and taken into the back room because the marine on station was one of their students and she had a question about last class. Which then turned into a fifteen minute impromptu workshop on Kaitennage. Travis unlocked his phone and looked at his messages. It had been a while since he had come back to his apartment. He started writing down the codes for his door so that he wouldn't forget. He glanced at the number and then put his phone away. Even now too many people still spent most of their life looking at a screen and not paying attention. Before coming up with the idea to teach the Shil’vati, Travis had thought about printing up business cards that had the dojo’s logo and phone number on them. Then have everyone go around slapping them onto the screen of someone they notice being too absorbed in their phone or tablet or omni-pad. The card would simply read. If you knew Aikido, I would have never got this close.
Getting to the door he keyed in the code and pressed UNLOCK. The door pushed open. Home sweet home, except for the three men standing in his room. One of whom was the man that had followed him from the hotel.
First Chapter Chapter 6-The Second Dojo Chapter 8- If...
Author's Post Script: Thank you again to u/WastedHope17 for all of his help as well as my Beta readers. You all ROCK!
I'm not sure how long I can commit to two chapters a week due to my work picking up but I will try to continue till I cannot.
Thank you all again for reading my work.

Yes, as you read, cross post from boringpeople, but it's well worth a read, as long as it is. All credit to u/jn_ku, and go read the other parts. Godspeed autists
​
Disclaimer: I am not a financial advisor. This entire post represents my personal views and opinions, and should not be taken as financial advice (or advice of any kind whatsoever). I encourage you to do your own research, take anything I write with a grain of salt, and hold me accountable for any mistakes you may catch. Also, full disclosure, I hold a net long position in GME, but my cost basis is very low (average ~$67--I have to admit, the drop today was too tasty so my cost basis went up from yesterday)/share with my later buys averaged in), and I'm using money I can absolutely lose. My capital at risk and tolerance for risk generally is likely substantially different than yours. In this post I will go a little further and speculate more than I'd normally do in a post due to the questions I've been getting, so fair warning, some of it might be very wrong. I suspect we'll learn some of the truth years from now when some investigative journalist writes a book about it.
Thank you everyone for the comments and questions on the first and second post on this topic.
Today was a study in the power of fear, courage, and the levers you can pull when you wield billions of dollars...
Woops, excuse me. I'm sorry hedge fund guys... I meant trillions of dollars--I just briefly forget you control not just your own but a lot of other peoples' money too for a moment there.
Also, for people still trading this on market-based rationale (as I am), it was a good day to measure the conviction behind your thesis. I like to think I have conviction, but in case you are somehow not yet familiar with the legend of DFV, you need to see these posts (fair warning, nsfw, and some may be offended/triggered by the crude language). The last two posts might be impressive, but you should follow it in chronological order and pay attention to the evolution of sentiment in the comments to experience true enlightenment.
Anyway, I apologize, but this post will be very long--there's just a lot to unpack.
Pre-Market
Disclaimer: given yesterday's pre-market action I didn't even pay attention to the screen until near retail pre-market. I'm less confident in my ability to read what's going on in a historical chart vs the feel I get watching live, but I'll try.
Early in the pre-market it looks to me like some momentum traders are taking profit, discounting the probability that the short-side will give them a deep discount later, which you can reasonably assume given the strategy they ran yesterday. If they're right they can sell some small volume into the pre-market top, wait for the hedge funds try to run the price back down, and then lever up the gains even higher buying the dip. Buy-side here look to me like people FOMOing and YOLOing in at any price to grab their slice of gainz, or what looks to be market history in the making. No way are short-side hedge funds trying to cover anything at these prices.
Mark Cuban--well said! Free markets baby!
Mohamed El-Erian is money in the bank as always. "upgrade in quality" on the pandemic drop was the best, clearest actionable call while most were at peak panic, and boy did it print. Your identifying the bubble as the excessive short (vs blaming retail activity) is money yet again. Also, The PAIN TRADE (sorry, later interview segment I only have on DVR, couldn't find on youtube--maybe someone else can)!
The short attack starts, but I'm hoping no one was panicking this time--we've seen it before. Looks like the momentum guys are minting money buying the double dip into market open.
CNBC, please get a good market technician to explain the market action. Buy-side dominance, sell-side share availability evaporating into nothing (look at day-by-day volume last few days), this thing is now at runaway supercritical mass. There is no changing the trajectory unless you can change the very fabric of the market and the rules behind it (woops, I guess I should have knocked on wood there).
If you know the mechanics, what's happening in the market with GME is not mysterious AT ALL. I feel like you guys are trying to scare retail out early "for their own good" (with all sincerity, to your credit) rather than explain what's happening. Possibly you also fear that explaining it would equate to enabling/encouraging people to keep trying to do it inappropriately (possibly fair point, but at least come out and say that if that's the case). Outside the market, however...wow.
You Thought Yesterday Was Fear? THIS is Fear!
Ok short-side people, my hat is off to you. Just when I thought shouting fire in a locked theater was fear mongering poetry in motion, you went and took it to 11. What's even better? Yelling fire in a theater with only one exit. That way people can cause the financial equivalent of stampede casualties. Absolutely brilliant.
Robin Hood disables buying of GME, AMC, and a few of the other WSB favorites. Other brokerages do the same. Even for people on 0% margin. Man, and here I thought I had seen it all yesterday.
Side note: I will give a shout out to TD Ameritrade. You guys got erroneously lumped together with RH during an early CNBC segment, but you telegraphed the volatility risk management changes and gradually ramped up margin requirements over the past week. No one on your platform should have been surprised if they were paying attention. And you didn't stop anyone from trading their own money at any point in time. My account balance thanks you. I heard others may have had problems, but I'll give you the benefit of the doubt given the DDOS attacks that were flyiing around
Robin Hood. Seriously WTF. I'm sure it was TOTALLY coincidence that your big announcements happen almost precisely when what has to be one of the best and most aggressive short ladder attacks of all time starts painting the tape, what looked like a DDOS attack on Reddit's CDN infrastructure (pretty certain it was the CDN because other stuff got taken out at the same time too), and a flood of bots hit social media (ok, short-side, this last one is getting old).
Taking out a large-scale cloud CDN is real big boy stuff though, so I wouldn't entirely rule out nation state type action--those guys are good at sniffing out opportunities to foment social unrest.
Anyway, at this point, as the market dives, I have to admit I was worried for a moment. Not that somehow the short-side would win (hah! the long-side whales in the pond know what's up), but that a lot of retail would get hurt in the action. That concern subsided quite a bit on the third halt on that slide. But first...
A side lesson on market orders
Someone printed bonus bank big time (and someone lost--I feel your pain, whoever you are).
During the face-ripping volatility my play money account briefly ascended to rarified heights of 7 figures. It took me a second to realize it, then another second to process it. Then, as soon as it clicked, that one, glorious moment in time was gone.
What happened?
During the insane chop of the short ladder attack, someone decided to sweep the 29 Jan 21 115 Call contracts, but they couldn't get a grip on the price, which was going coast to coast as IV blew up and the price was being slammed around. So whoever was trying to buy said "F it, MARKET ORDER" (i.e. buy up to $X,XXX,XXX worth of contracts at any price). This is referred to as a sweep if funded to buy all/most of the contracts on offer (HFT shops snipe every contract at each specific price with a shotgun of limit orders, which is far safer, but something only near-market compute resources can do really well). For retail, or old-tech pros, if you want all the contracts quickly, you drop a market order loaded with big bucks and see what you get... BUT, some clever shark had contracts available for the reasonable sum of... $4,400, or something around that. I was too stunned to grab a screencap. The buy market order swept the book clean and ran right into that glorious, nigh-obscene backstop limit. So someone got nearly $440,000 PER CONTRACT that was, at the time theoretically priced at around $15,000. $425,000 loss... PER CONTRACT. Maybe I'm not giving the buyer enough credit.. you can get sniped like that even if you try to do a safety check of the order book first, but, especially in low liquidity environments, if a HFT can peak into your order flow (or maybe just observes a high volume of sweeps occurring), they can end up front running your sweep, pick off the reasonable contracts, and slam a ridiculous limit sell order into place before your order makes it to the exchange. Either way, I hope that sweep wasn't loaded for bear into the millions. If so... OUCH. Someone got cleaned out.
So, the lesson here folks... in a super high volatility, low-liquidity market, a market order will just run up the ladder into the first sell order it can find, and some very brutal people will put limit sells like that out there just in case they hit the jackpot. And someone did. If you're on the winning side, great. It can basically bankrupt you if you're on the losing side. My recommendation: Just don't try it. I wouldn't be surprised if really shady shenanigans were involved in this, but no way to know (normally that's crazy-type talk, but after today....peeking at order flow and sniping sweeps is one of the fastest, most financially devastating ways to bleed big long-side players, just sayin').
Back to the market action..
A Ray of Light Through the Darkness
So I was worried watching the crazy downward movement for two different reasons.
On the one hand, I was worried the momentum pros would get the best discounts on the dip (I'll admit, I FOMO'd in too early, unnecessarily raising my cost basis).
On the other hand, I was worried for the retail people on Robin Hood who might be bailing out into incredibly steep losses because they had only two options: Watch the slide, or bail. All while dealing with what looked to me like a broad-based cloud CDN outage as they tried to get info from WSB HQ, and wondering if the insta-flood of bot messages were actually real people this time, and that everyone else was bailing on them to leave them holding the bag.
But I saw the retail flag flying high on the 3rd market halt (IIRC), and I knew most would be ok. What did I see, you ask? Why, the glorious $211.00 / $5,000 bid/ask spread. WSB Reddit is down? Those crazy mofos give you the finger right on the ticker tape. I've been asked many times in the last few hours about why I was so sure shorts weren't covering on the down move. THIS is how I knew. For sure. It's in the market data itself.
I'll admit, I tried to one-up those bros with a 4206.90 limit sell order, but it never made it through. I'm impressed that the HFT guys at the hedge fund must have realized really quickly what a morale booster that kind of thing would have been, and kept a lower backstop ask in place almost continuously from then on I'm sure others tried the same thing. Occasionally $1,000 and other high-dollar asks would peak through from time to time from then on, which told me the long-side HFTs were probably successfully sniping the backstops regularly.
So, translating for those of you who found that confusing. First, such a high ask is basically a FU to the short-side (who, as you remember, need to eventually buy shares to cover their short positions). More importantly, as an indicator of retail sentiment, it meant that NO ONE ELSE WAS TRYING TO SELL AT ANY PRICE LOWER THAN $5,000. Absolutely no one was bailing out.
I laughed for a minute, then started getting a little worried. Holy cow.. NO retail selling into the fear? How are they resisting that kind of price move??
The answer, as we all know now... they weren't afraid... they weren't even worried. They were F*CKING PISSED.
Meanwhile the momentum guys and long-side HFTs keep gobbling up the generously donated shares that the short-side are plowing into their ladder attack. Lots of HFT duels going on as long-side HFTs try to intercept shares meant to travel between short-side HFT accounts for their ladder. You can tell when you see prices like $227.0001 constantly flying across the tape. Retail can't even attempt to enter an order like that--those are for the big boys with privileged low-latency access.
The fact that you can even see that on the tape with human eyes is really bad for the short-side people.
Why, you ask? Because it means liquidity is drying up, and fast.
The Liquidity Tide is Flowing Out Quickly. Who's Naked (short)?
Market technicals time. I still wish this sub would allow pictures so I could throw up a chart, but I guess a table will do fine.
DateVolumePrice at US Market CloseFriday, 1/22/21197,157,196$65.01Monday, 1/25/21177,874,00$76.79Tuesday, 1/26/21178,587,974$147.98Wednesday, 1/27/2193,396,666$347.51Thursday, 1/28/2158,815,805$193.60
What do I see? I see the shares available to trade dropping so fast that all the near-exchange compute power in the world won't let the short-side HFTs maintain order flow volume for their attacks. Many retail people asking me questions thought today was the heaviest trading. Nope--it was just the craziest.
What about the price dropping on Thursday? Is that a sign that the short-side pulled a miracle out and pushed price down against a parabolic move on even less volume than Wednesday? Is the long side running out of capital?
Nope. It means the short-side hedge funds are just about finished.
But wait, I thought the price needed to be higher for them to be taken out? How is it that price being lower is bad for them? Won't that allow them to cover at a lower price?
No, the volume is so low that they can't cover any meaningful fraction of their position without spiking the price parabolic almost instantly. Just not enough shares on offer at reasonable prices (especially when WSB keeps flashing you 6942.00s).
It's true, a higher price hurts, but the interest charge for one more day is just noise at this point. The only tick that will REALLY count is the last tick of trading on Friday.
In the meantime, the price drop (and watching the sparring in real time) tells me that the long-side whales and their HFT quants are so certain of the squeeze that they're no longer worried AT ALL about whether it will happen, and they aren't even worried at all about retail morale to help carry the water anymore.
Instead, they're now really, really worried about how CHEAPLY they can make it happen.
They are wondering if they can't edge out just a sliver more alpha out of what will already be a blow-out trade for the history books (probably). You see, to make it happen they just have to keep hoovering up shares. It doesn't matter what those shares cost. If you're certain that the squeeze is now locked in, why push the price up and pay more than you have to? Just keep pressing hard enough to force short-side to keep sending those tasty shares your way, but not so much you move the price. Short-side realizes this and doesn't try to drive price down too aggressively. They can't afford to let price run away, so they have to keep some pressure on at the lowest volume they can manage, but they don't want to push down too hard and give the long-side HFTs too deep of a discount and bleed their ammo out even faster. That dynamic keeps price within a narrow (for GME today, anyway) trading range for the rest of the day into the close.
Good plan guys, but those after market people are pushing the price up again. Damnit WSB bros and Euros, you're costing those poor long-side whales their extra 0.0000001% of alpha on this trade just so you can run up your green rockets... See, that's the kind of nonsense that just validates Lee Cooperman's concerns.
On a totally unrelated note, I have to say that I appreciate the shift in CNBC's reporting. Much more thoughtful and informed. Just please get a good market technician in there who will be willing to talk about what is going on under the hood if possible. A lot of people watching on the sidelines are far more terrified than they need to be because it all looks random to them. And they're worried that you guys look confused and worried--and if the experts on the news are worried....??!
You should be able to find one who has access to the really good data that we retailers can only guess at, who can explain it to us unwashed masses.
Ok, So.. Questions
There is no market justification for this. How can you tell me is this fundamentally sound and not just straight throwing money away irresponsibly?? (side note: not that that should matter--if you want to throw your money away why shouldn't you be allowed to?)
We're not trading in your securities pricing model. This isn't irrational just because your model says long and short positions are the same thing. The model is not a real market. There is asymmetrical counterparty risk here given the shorts are on the hook for all the money they have, and possibly all the money their brokers have, and possibly anyone with exposure to the broker too! You may want people to trade by the rules you want them to follow. But the rest of us trade in the real market as it is actually implemented. Remember? That's what you tell the retailers who take their accounts to zero. Remember what you told the KBIO short-squeezed people? They had fair warning that short positions carry infinite risk, including more than your initial investment. You guys know this. It's literally part of your job to know this.
But-but-the systemic risk!! This is Madness!
...Madness?
THIS. IS. THE MARKET!!! *Retail kicks the short-side hedge funds down an infinity loss black hole\*.
Ok, seriously though, that is actually a fundamentally sound, and properly profit-driven answer at least as justifiable as the hedge funds' justification for going >100% of float short. If they can be allowed to gamble INFINITE LOSSES because they expect to make profit on the possibility the company goes bankrupt, can't others do the inverse on the possibility the company I don't know.. doesn't go bankrupt and gets a better strategy from the team that created what is now a $43bn market cap company (CHWY) that does exactly some of the things GME needs to do (digital revenue growth) maybe? I mean, I first bought in on that fundamental value thesis in the 30s and then upped my cost basis given the asymmetry of risk in the technical analysis as an obvious no-brainer momentum trade. The squeeze is just, as WSB people might say, tendies raining down from on high as an added bonus.
I get that you disagree on the fundamental viability of GME. Great. Isn't that what makes a market?
Regarding the consequences of a squeeze, in practice my expectation was maybe at worst some kind of ex-market settlement after liquidation of the funds with exposure to keep things nice and orderly for the rest of the market. I mean, they handled the VW thing somehow right? I see now that I just underestimated elite hedge fund managers though--those guys are so hardcore (I'll explain why I think so a bit lower down).
If hedge fund people are so hardcore, how did the retail long side ever have a chance of winning this squeeze trade they're talking about?
Because it's an asymmetrical battle once you have short interest cornered. And the risk is also crazily asymmetrical in favor of the long side if short interest is what it is in GME. In fact, the hedge funds essentially cornered themselves without anyone even doing anything. They just dug themselves right in there. Kind of impressive really, in a weird way.
What does the short side need to cover? They need the price to be low, and they need to buy shares.
How does price move lower? You have to push share volume such that supply overwhelms demand and price therefore goes down (man, I knew econ 101 would come in handy someday).
But wait... if you have to sell shares to push the price down.. won't you just undo all your work when you have to buy it back to actually cover?
The trick is you have to push price down so hard, so fast, so unpredictably, that you SCARE OTHER PEOPLE into selling their shares too, because they're scared of taking losses. Their sales help push the price down for free! and then you scoop them up at discount price! Also, there are ways to make people scared other than price movement and fear of losses, when you get right down to it. So, you know, you just need to get really, really, really good at making people scared. Remember to add a line item to your budget to make sure you can really do it right.
On the other hand..
What does the long side need to do? They need to own as much of the shares as they can get their hands on. And then they need to hold on to them. They can't be weak hands either. They need to be hands that will hold even under the most intense heat of battle, and the immense pressure of mind-numbing fear... they need to be as if they were made of... diamond... (oh wow, maybe those WSB people kind of have a point here).
Why does this matter? Because at some point the sell side will eventually run out of shares to borrow. They simply won't be there, because they'll be safely tucked away in the long-side's accounts. Once you run out of shares to borrow and sell, you have no way to move the price anymore. You can't just drop a fat stack--excuse me, I mean suitcase (we're talking hedge fund money here after all)--of Benjamins on the ticker tape directly. Only shares. No more shares, no way to have any direct effect on the price whatsoever.
Ok, doesn't that just mean trading stops? Can't you just out-wait the long side then?
Well, you could.. until someone on the long side puts 1 share up on a 69420 ask, and an even crazier person actually buys at that price on the last tick on a Friday. Let's just say it gets really bad at that point.
Ok.. but how do the retail people actually get paid?
Well, to be quite honest, it's entirely up to each of them individually. You've seen the volumes being thrown around the past week+. I guarantee you every single retailer out there could have printed money multiple times trading that flow. If they choose to, and time it well. Or they could lose it all--this is the market. Some of them apparently seem to have some plan, or an implicit trust in certain individuals to help them know when to punch out. Maybe it works out, but maybe not. There will be financial casualties on the field for sure--this is the bare-knuckled capitalist jungle after all, remember? But everyone ponied up to the table with their own money somehow, so they all get to play in the big leagues just like everyone else. In theory, anyway.
And now, Probably the #1 question I've been asked on all of these posts has been: So what happens next? Do we get the infinity squeeze? Do the hedge funds go down?
Great questions. I don't know. No one does. That's what I've said every time, but I get that's a frustrating answer, so I'll write a bit more and speculate further. Please again understand these are my opinions with a degree of speculation I wouldn't normally put in a post.
The Market and the Economy. Main Street, Wall Street, and Washington
The pandemic has hurt so many people that it's hard to comprehend. Honestly, I don't even pretend to be able to. I have been crazy fortunate enough to almost not be affected at all. Honestly, it is a little unnerving to me how great the disconnect is between people who are doing fine (or better than fine, looking at my IRA) versus the people who are on the opposite side of the ever-widening divide that, let's be honest, has been growing wider since long before the pandemic.
People on the other side--who have been told they cannot work even if they want to, who wonder if congress will get it together to at least keep them from getting thrown out of their house if they have to keep taking one for the team for the good of all, are wondering if they're even living in the same reality.
Because all they see on the news each day is that the stock market is at record highs, or some amazing tech stocks have 10x'd in the last 6 months. How can that be happening during a pandemic? Because The Market is not The Economy. The Market looks forward to that brighter future that Economy types just need to wait for. Don't worry--it'll be here sometime before the end of the year. We think. We're making money on that assumption right now, anyway. Oh, by the way, if you're in The Market, you get to get richer as a minor, unearned side-effect of the solutions our governments have come up with to fight the pandemic.
Wow. That sounds amazing. How do I get to part of that world?
Retail fintech, baby. Physical assets like real estate might be a bit out of reach at the moment, but stocks will do. I can even buy fractional shares of BRK/A LOL.
Finally, I can trade for my own slice of heaven, watching that balance go up (and up--go stonks!!). Now I too get to dream the dream. I get to feel connected to that mythical world, The Market, rather than being stuck in the plain old Economy. Sure, I might blow up my account, but that's because it's the jungle. Bare-knuckled, big league capitalism going on right here, and at least I get to show up an put my shares on the table with everyone else. At least I'm playing the same game. Everyone has to start somewhere--at least now I get to start, even if I have to learn my lesson by zeroing my account a few times. I've basically had to deal with what felt like my life zeroing out a few times before. This is number on a screen going to 0 is nothing.
Laugh or cry, right? I'll post my losses on WSB and at least get some laughs.
Geez, some of the people here are making bank. I better learn from them and see if they'll let me in on their trades. Wow... this actually might work. I don't understand yet, but I trust these guys telling me to hold onto this crazy trade. I don't understand it, but all the memes say it's going to be big.
...WOW... I can pay off my credit card with this number. Do I punch out now? No? Hold?... Ok, getting nervous watching the number go down but I trust you freaks. We're still in the jungle, but at least I'm in with with my posse now. Market open tomorrow--we ride the rocket baby! And if it goes down, at least I'm going down with my crew. At least if that happens the memes will be so hilarious I'll forget to cry.
Wow.. I can't believe it... we might actually pull this off. Laugh at us now, "pros"!
We're in The Market now, and Market rules tell us what is going to happen. We're getting all that hedge fund money Right? Right?
Maybe.
First, I say maybe because nothing is ever guaranteed until it clears. Secondly, because the rules of The Market are not as perfectly enforced as we would like to assume. We are also finding out they may not be perfectly fair. The Market most experts are willing to talk about is really more like the ideal The Market is supposed to be. This is the version of the market I make my trading decisions in. However, the Real Market gets strange and unpredictable at the edges, when things are taken to extremes, or rules are pushed beyond the breaking point, or some of the mechanics deep in the guts of the Real Market get stretched. GME ticks basically all of those boxes, which is why so many people are getting nervous (aside from the crazy money they might lose). It's also important to remember that the sheer amount of money flowing through the market has distorting power unto itself. Because it's money, and people really, really, really like their money--especially when they're used to having a lot of it, and rules involving that kind of money tend to look more... flexible, shall we say.
Ok, back to GME. If this situation with GME is allowed to play out to its conclusion in The Market, we'll see what happens. I think all the long-side people get the chance to be paid (what, I'm not sure--and remember, you have to actually sell your position at some point or it's all still just numbers on your screen), but no one knows for certain.
But this might legitimately get so big that it spills out of The Market and back into The Economy.
Geez, and here I thought the point of all of this was so that we all get to make so much money we wouldn't ever have to think and worry about that thing again.
Unfortunately, while he's kind of a buzzkill, Thomas Petterfy has a point. This could be a serious problem.
It might blow out The Market, which will definitely crap on The Economy, which as we all know from hard experience, will seriously crush Main Street.
If it's that big a deal, we may even need Washington to be involved. Once that happens, who knows what to expect.. this kind of scenario being possible is why I've been saying I have no idea how this ends, and no one else does either.
How did we end up in this ridiculous situation? From GAMESTOP?? And it's not Retail's fault the situation is what it is.. why is everyone telling US that we need to back down to save The Market?? What about the short-side hedge funds that slammed that risk into the system to begin with?? We're just playing by the rules of The Market!!
Well, here are my thoughts, opinions, and some even further speculation... This may be total fantasy land stuff here, but since I keep getting asked I'll share anyway. Just keep that disclaimer in mind.
A Study in Big Finance Power Moves: If you owe the bank $10,000, it's your problem...
What happens when you owe money you have no way to pay back? It's a scary question to have to face personally. Still, on balance and on average, if you're fortunate enough to have access to credit the borrowing is a risk that is worth taking (especially if you're reasonably careful). Lenders can take a risk loaning you money, you take a risk by borrowing in order to do something now that you would otherwise have had to wait a long time or maybe would never have realistically been able to do otherwise. Sometimes it doesn't work out. Sometimes it's due to reasons totally beyond your control. In any case, if you find yourself there you have no choice but to dust yourself off, pick yourself up as best as you can, and try to move on and rebuild. A lot of people had to learn that in 2008. Man that year really sucked.
Wall street learned their lessons too. Most learned what I think most of us would consider the right lessons--lessons about risk management, and the need to guard vigilantly against systemic risk, concentration of risk through excess concentration of leverage on common assets, etc. Many suspect that at least a few others may have learned an entirely different set of, shall we say, unhealthy lessons. Also, to try to be completely fair, maybe managing other peoples' money on 10x+ leverage comes with a kind of pressure that just clouds your judgement. I could actually, genuinely buy that. I know I make mistakes under pressure even when I'm trading risk capital I could totally lose with no real consequence. Whatever the motive, here's my read on what's happening:
First, remember that as much fun as WSB are making of the short-side hedge fund guys right now, those guys are smart. Scary smart. Keep that in mind.
Next, let's put ourselves in their shoes.
If you're a high-alpha hedge fund manager slinging trades on a $20bn 10x leveraged to 200bn portfolio, get caught in a bad situation, and are down mark-to-market several hundred million.. what do you do? Do you take your losses and try again next time? Hell no.
You're elite. You don't realize losses--you double down--you can still save this trade no sweat.
But what if that doesn't work out so well and you're in the hole >$2bn? Obvious double down. Need you ask? I'm net up on the rest of my positions (of course), and the momentum when this thing makes its mean reversion move will be so hot you can almost taste the alpha from here. Speaking of momentum, imagine the move if your friends on TV start hyping the story harder! Genius!
Ok, so that still didn't work... this is now a frigging 7 sigma departure from your modeled risk, and you're now locked into a situation that is about as close to mathematically impossible to escape as you can get in the real world, and quickly converging on infinite downside. Holy crap. The fund might be liquidated by your prime broker by tomorrow morning--and man, even the broker is freaking out. F'in Elon Musk and his twitter! You're cancelling your advance booking on his rocket ship to Mars first thing tomorrow... Ok, focus--this might legit impact your total annual return. You need a plan, and you know the smartest people on the planet, right? The masters of the universe! Awesome--they've even seen this kind of thing before and still have the playbook!! Of course! It's obvious now--you borrow a few more billion and double down again first thing in the morning. So simple. Sticky note that Mars trip cancellation so you don't forget.
Ok... so that didn't work? You even cashed in some pretty heavy chits too. Ah well, that was a long shot anyway. So where were you? Oh yeah.. if shenanigans don't work, skip to page 10...
...Which says, of course, to double down again. Anyone even keeping track anymore? Oh, S3 says it's $40bn and we're going parabolic? Man, that chart gives me goosebumps. All according to plan...
So what happens tomorrow? One possible outcome of PURE FANTASTIC SPECULATION...
End of the week--phew. Never though it'd come. Where are you at now?... Over $9000*!!! Wow. You did it boys, and as a bonus the memes will be so sweet.
*side note: add 8 zeros to the end...
Awesome--your problems have been solved. Because...
..
BOOM
Now it's EVERYONE's problem. Come at me, Chamath, THIS is REAL baller shit.
Now all you gotta do is make all the hysterical retirees watching their IRAs hanging in the balance blame those WSB kids. Hahaha. Boomers, amirite? hate when those kids step on their law--I mean IRAs. GG guys, keep you memes. THAT is how it's done.
Ok, but seriously, I hope that's not how it ends. I guess we just take it day by day at this point.
Apologies for the length. Good luck in the market!
Also, apologies in advance for formatting, spelling, and grammatical errors. I was typing this thing in between doing all kinds of other things for most of the day.

This is a follow-up post to this one. I got so many messages and DMs I wrote this part two to answer the most common questions.

The music business is 90% mental

To be a great artist or producer is an inner game.
You need talent. You need to make music worth sharing. You need to connect with an audience.
But mostly you need to get out of your own way.
This is also true of elite sports and silicon valley entrepreneurs. They have coaches to achieve peak performance under pressure.
You don’t. You’re on your own.
The music business is beautifully brutal. It provides soaring highs and crushing lows.
Being able to create and perform under pressure are prerequisites.
Working on your art is essential. Working on your mindset and philosophies are critical.

Luck

You’re going to need it. We all do.
Successful artists and producers diminish the impact luck has had on their careers.
If you’re not making remarkable music that is worth sharing, If you’re not connecting with an audience; luck will only provide a flash in the pan.
There are three ways to breakthrough.
1) You’re so phenomenally talented that you go viral naturally.
2) You get lucky and have enough talent to leverage the opportunity
3) You make remarkable music that matters. And you slowly build a career through word of mouth
Luck provides opportunities.
Good is no longer good enough. You need to be extraordinary to seize opportunities.
You will only get one shot. Be ready.

Success and pressure

It’s the American dream.
Success will bring happiness and fulfilment. That’s what society has told us, that’s what pop culture has sold us — and that’s what our parents have implored upon us.
But it’s all wrong.
Success is a hedonic treadmill. When we achieve a goal, we immediately create an even bigger goal and so on.
Happiness and fulfilment can’t be found externally.
They come from within us.
We think success will fill the voids in our self-esteem.
But it makes them bigger. The more successful we get the bigger our imposter syndrome becomes.
Many successful artists are unhappy. Their entire self worth is wrapped up in their success.
They’re terrified of losing their status. They’re scared of losing their identities.

“I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.” – Jim Carrey

Success is not the problem. It’s our expectations.
Can you be successful, happy and fulfilled? Of course, but you must disengage your identity and self-worth with success.
You must reframe what success is. You must focus on your audience and not yourself.

You can’t control success. You can’t control outcomes.

They control you.

The real suffering of success comes from the pressures of maintaining and growing it.
It’s the pressure of making more music that your audience loves in a notoriously fragile and fickle industry.
It’s the pressure knowing one wrong move…and it could all be over.
If you don’t manage the pressure, it will consume you. And destroy your creativity.
It becomes a self-fulfilling prophecy.

One hit wonders

64% of all artists in the last 6 decades were one hit wonders on the Billboard Top 100 charts according to this data.
Pressure provides poor performance.
It’s choking. It’s performing below the levels of our skills due to extreme stress and pressure.
And it happens to artists and producers at all levels. Success is relative — stress and pressure are not.
—————————
Record labels spent $5.8 billion on finding and marketing new talent in 2019. And next to nothing on nurturing existing talent.
They leave hundreds of millions of dollars on the table annually by not helping current artists manage the pressure of their follow up records.
Pro sports teams spend big on mental skills coaches to help athletes achieve peak performance under pressure.
The music industry does nothing of note.

Creative success vs commercial success

"If you plan on being less than you are capable of being, then I warn you that you'll be unhappy for the rest of your life." —Abraham Maslow

We are compelled to create. It’s what we do and who we are.
It can be a blessing or a curse. That is your choice.
The music business is one of the most saturated markets on the planet.
Only 1% of artists and producers make a full time living. Far less go on to be A-list stars.
It will take you 5-10 years of deliberate and almost daily practise to master the art of songwriting and connecting with an audience.
You need to work out who you are, and who you will create for.
You need to develop a unique artistic vision so you can differentiate yourself from the millions of other artists and producers.
You need to develop artistically.
If you are only focusing on commercial success you will almost certainly fail. The pressure and expectations are too big.
It doesn’t have to be that way.
Focus on creative success. Fulfil your creative potential. Become the best artist or producer you can be.
Make music that matters. Connect with your audience.
If you connect with enough people, commercial success will follow as a consequence of your creative success.

Ambition and controlling the controllables

I talk about focusing on the process instead of the results a lot.
Some say it is pessimistic.
Focusing on the process is a peak performance technique used in elite sports.
Phil Jackson is the most successful basketball coach of all time. He has was won eleven NBA championships as a coach and twice as a player.
His philosophy? Focus on the process and the results will take care of itself.

‘Obsessing about winning is a losers game.’ Phil Jackson

Jackson removed the pressure of winning from his players, which allowed them to play their game to the best of their capabilities.
In professional sports, they don’t talk about winning championships, Super Bowls or leagues.
They talk about playing one game at a time.
They focus on tiny steps. They remove the pressure and expectation.
Artists and producers often focus on huge commercial goals.

Let go of expectations and outcomes.

Elite athletes control the controllables.
They focus entirely on the game and how they play. The results take care of themselves.
Focus on making music that is remarkable and connecting with your audience.
That is in your control. Be ambitiously obsessive about becoming the best artist or producer you can be.

Ego and the creative process

We all have egos. They stop us from creating our best work. We want to create art so you will validate us.
We want to create great art to make us feel better about ourselves.
We are getting in our own way. We are overthinking it. Trying too hard is holding us back.
You need to make music that validates the listener, not yourself.
Shared experiences, philosophies and empathy are what connect us to each other.
Creativity is just an extension of humanity.
It’s creating art that articulates the emotions and experiences that validates your audience’s inner thoughts and feelings.
The purpose of your art is to soundtracks your audience's’ lives…to inspire them…to let them know that they are not alone with their feelings.
An artist is nothing without an audience. You create the art but it’s your audience that defines it.
Serve your audience, not yourself. And you will create better material — and become a better artist.

Being Present

To create your best work you must do so in the present. Fear lives in the future, guilt and shame are in the past.
You can’t control either of them.
You are worried about what people will think of your music.
You are worried your art will get rejected. And dwelling on past mistakes.
So you tone it down. You don’t take risks. You play it safe.
If you’re creating free from fear, you are creating within your comfort zone.

No art has ever been created in a comfort zone. You need to push yourself. You need to find the courage to be different.

You need fear. Fear tells you you’re creating something fresh and exciting.
Fear tells you you’re making something that is risky.
Something that may just stand out and get noticed. That may make a difference.

Always follow. Never run from your fear.

18 million songs are released annually. Take risks, be bold, be different — or don’t bother.
You have to be intentional. Create in the present, create with flow.
Create your art with your feelings and not your thinking.

Purpose

We pursue commercial success to try and create meaning. To compare ourselves next to others on the scoreboard of life.
We want to feel good enough. We want to feel special.
87% of people are disengaged with their jobs.
They trade their passions for a paycheck and fulfilment for credit card debt so they can buy crap they don’t need.
They slog their guts out for 40-50 years so they can look forward to retiring when their minds are still active but their bodies are expiring.
Only 1 in 4 Americans live their life with purpose.
Most people live empty lives and die having never made an impact on others.
They were too scared to live the lives they wanted.
It is the most common dying regret.
We have our creativity. We have a passion.
When we master our creativity, when we inspire and impact on others, we have created our purpose.
We have created meaning. We have made a difference.
When a stranger tells you your work has moved them emotionally or changed their perspective; you will feel fulfilled.

You don’t find meaning and purpose, you create them

And if you’re truly good enough. And you impact on enough people; you will become commercially successful as a result.
We think it is commercial success that defines our lives but that’s all wrong. It is our creative success.
Commercial success is nice but without meaning, it’s empty and shallow.
It is the impact we have on other peoples lives that matters.

Life is about enjoying the process and the journey, not the destination and the result.

If your philosophy is the latter you may die with regrets have never even truly lived.
The joy of the creativity is in the creating. Not the results of the creation.
It’s about connecting with others.
You can be commercially successful and fulfilled but only if you use your talents to serve others.
You don’t become a success. It is your audience that listens to your music and buys your merch and tickets that make you a success.
Without them we are nothing.
What matters most is you have the courage to grow as a person as well as artist or producer. That you serve your audience with empathy and compassion.
Have an impact. Make a difference. Make music that matters.
And the results will take care of themselves.
Living with purpose and passion are worth more than fame and fortune.
They are priceless.
Thanks for reading.
Peace out
Jake

So as we all know, the Marble League system has 28 teams, and everyone knows that 4x7=28. So what I'm going to do is to divide the 28 teams into 7 Tiers, based on how good they are before and now. Let's go.
Tier-I: Basement Dwellers
Starting off from the bottom, we have the Basement Dwellers. These teams are the literal shame of JMR, as they always suck whenever given a chance to enter a competition. And the 4 Teams that belongs here are:
Turtle Sliders, Jawbreakers, Rojo Rollers and Hornets.
You can understand why the Turtle Sliders and the Jawbreakers make it into this category: They're just crap. Rojo Rollers just choke every time when they are in the MLQ, while the Hornets absolutely flopped in every competition they are in, even harder than Mary in 2020. I know, the Hornets are in the Marble League last year but so what? I had to put 4 teams in here! But I'm not even scared, considering that all of them combined probably have less fans than Sheffield United had points in 2020/21.
Tier-II: Showdown Quality
These teams are quite bad, but aren't that bad to be called "Basement Dwellers". These teams are perceived as either dragged down by a marble or being lifted by a marble. These 4 teams, in my opinion are:
Limers, Team Primary, Indigo Stars, Shining Swarm.
Both Indigo Stars and Shining Swarm did win a medal when they are in the Marble League, so that's fine. Limers aren't considered Basement Dwellers by me all thanks to Limelime. Dude, GET OUT OF THE LIMERS NOW, BEFORE YOU POTENTIAL IS STUFFED DOWN A WELL! And Team Primary showed less confidence now than Joe Hart, so yeah, Showdown Quality for Primary.
Tier-III: Below-Average
Now we're talking! These teams are usually Marbula One mid-table teams, and can easily challenge for the Showdown Title. Some of these teams are also historic, but has been on the decline, a bit like how Newcastle United declined from their glory days back in the 2000's. These are the first teams that I would consider are actually Marble League quality. These 4 teams are:
Chocolatiers, Pinkies, Jungle Jumpers and Snowballs.
If the Pinkies and Chocolatiers are invited to the Winter League, then they must still have some bits of good left in their team. These 2 historic teams, one a mid-table Marble league team, while the other a staple of basement in Marble League. Snowballs are alright, despite what the Showdown tells you. Don't forget: They are just one Snowflake failure away from qualifying for the 2020 Marble League, with Snowflake finally being able to take on her idol after 2 years. And the JJ's are decent, but are complete trash in Marbula One. I mean really. 1 Point all season!? Appalling.
Tier-IV: Average Teams
For these teams, they can pull off shocks time to time, but are mostly just middle-of-the-road, not really shining too bright. For these teams, their mission is to just stay in mid-table, trying to climb up to the elite teams that you will see pretty soon. Those teams are:
Minty Maniacs, Bumblebees, Balls of Chaos and Kobalts.
I said this many times: The Minty Maniacs' 2020 season is a fluke. You've seen it in Marbula One: Minty Fresh, the supposed New Starry, is screwing M1 up harder than I did in my exams! Bumblebees are a decent team, but needs another season to prove that they are a good team; Ball of Flames check em'>! Balls of Chaos are also a decent side, but need to reorganize together or they would be ridiculously out of their depth in 2021. Kobalts are making a comeback, and I'm tipping them an outside shot to get to the 2021 Marble League.!<
Tier-V: Good Teams
These teams are definitely good teams, and are Marble League and Marbula One regulars. They can win multiple medals, but would need some extra bits to get into the next level. This and the next level are probably the most controversial ones. The 4 teams are...
Green Ducks, Mellow Yellow, Raspberry Racers and Thunderbolts.
Out of these 4 teams, only the Thunderbolts am I actually sure that they are Tier-V status: The others could be in the next tier too: Green Ducks are proving me wrong about saying that their 2019's a fluke, Raspberry Racers won the title in 2019, and Mellow Yellow is a team filled with history, medals and have a hundred-points Captain on their books! But ultimately, both the Ducks and Racers haven't done enough yet to be the next tier, while Mellow Yellow's performances in 2020 is just awful.
For this part, I'll stack the top tiers together, as that would ruin the surprise if I just write Tier-VII after Tier-VI.
Tier-VI: Best of the Rest
If you are an English Football fan, you would have heard of the term "BEst of the Rest", which means "Too good for a relegation battle, but not good enough to challenge for the Title." In the Premier League, we use this term on Everton: In the Marble League, we use it to describe the teams that are too good for the basement, but not good enough for the Title. They are:
Tier-VII: Big Four
These team are the pinnacle of Marble Sports. These Four teams represents what the Marble League is. These teams are known to be at the top, and always hunts for medals. The teams provides some of best youngsters and the GOATs of the Marble World. They eat every team alive, and there is no one who can stop them. These Four teams are:
Tier-VI: Crazy Cat's Eyes, Hazers, Team Momo and Oceanics.
Tier-VII: Savage Speeders, O'rangers, Midnight Wisps and Team Galactic.
Tier-VI:>! The Oceanics are so good at Mid-table, that I think they just squeaks into this tier, with their history and the fact they even HOSTED a Marble League (But don't ask them how it went). Hazers and Momo are relatively easy picks for this tier, while CCE are one of the best teams right now, but since they have only been good for a year or two, we need to wait a bit more until this team fully proves that yes, they are the second coming of Team Galactic.!<
Tier-VII: The Speeders and the O'rangers are obviously first picks in this tier, while the Midnight Wisps are regarded as the 3rd best team in the Marble League. The only pick that might look out of place is Team Galactic, who hasn't even finished in the top 3 in any competitions yet. I would have picked Mellow Yellow for this spot...had they not screwed it over in 2020. You might say I'm insane, but are we forgetting how consistent Team Galactic is: Always finishing in top-half since 2019. They finished 5th 7 times in 2020, and they have an athlete so good, that Team Galactic fans probably worship her like a literal deity. So yes, in my opinion, Team Galactic right now are better than the Hazers and even the Crazy Cat's Eyes.
So this is my final list. What do you think? Have I gone insane for what I placed? Let me know, and I'll see you at Snowboard Cross!
Oh by the way, here's a tier list for this analysis.
https://preview.redd.it/nra5lh6uvp961.png?width=970&format=png&auto=webp&s=bd3280ad64d525d8bf497fc01fe366804066c125