/biz/ - Business & Finance

Imagine playing Lebron James in 1 on 1 basketball and he starts flopping and rolling on the ground like a faggot. Meme stocks are basically causing these people problems and at the very crux of it all is the fact that short positions on the scale these people were engaging makes them ILLIQUID.
Imagine needing to make investments/trades that are on the scale of Trillions of dollars. You can easily see that trying to invest that much money into a stock is literally going to move the price so drastically that you will very quickly not be able to fill orders as 100% of all of the supply will dry up. This is why shorts are seething, because the longs know 100% what is going on. The shorts could do no more than pretend to hide for three years but they have no capacity to resolve the issue.
LTCM used to make massive trades back in the 1990s. They were so extremely secretive they would split a single trade up between numerouns brokers because EVERYONE was trying to figure out what was making them so successful. They needed the first Wallstreet bailout because they were shorts hundreds of billions of dollars worth of Italian bonds that were rising in price. (They were also long off the-run bonds and were arbitraging the price as On the run bonds decrease in price as they age).
They were unable to stay solvent and were hemorrhaging cash the entire time. But the problem was this: They had NO CAPACITY to buy back their shorts to stop the bleeding because there simply were not enough bonds available.
I recommend you all go and read some Finance 101 student curricula known was "When Genius Failed". This is very similar. All of the banks had to come together and pony up billions upon billions of dollars to bail out this hedge fund not because they were such nice guys. But because they were counterparty to trillions of dollars worth of derivatives
The problems are all worse now. And it might not even be physically possible to bail out the shorts this time