Market/Financial Thread

[bmags]

10 hours ago, gatnom said:

Does TSMC manufacture most of these chips for cars? I'm not horribly familiar with chip manufacturing supply lines, but it would make sense to me based on the kind of cars that are being halted (i.e. not self driving Teslas) that the chips which are missing are more on the lower end, meaning that they are probably capable of being manufactured by any number of outdated fabs.

As far as your supply lines comment goes, Samsung (the other cutting edge manufacturer) just announced today that they are opening a plant in the US in a couple of years. It seems somebody in the government is thinking the way you are. Intel is also still competitive and could regain its form, but one wonders if their architecture and manufacturing abilities have fallen too far behind.

Yep, that's where the GM report came from.

The Samsung report is good (and good for TX pretty sweet plan) but I think what is still unclear to me is whether they are actually going to succeed in being able to manufacture these newer miniaturized chips that really only TSM has shown an ability to specialize in. That's how TSM took the Apple chips away from samsung. 

I found this from when Samsung opened up the plant 

"A single extreme ultraviolet lithography machine from ASML Holding NV costs $172 million, and Samsung is setting up dozens of them in Hwaseong in an effort to be first with the technology. Taiwan Semiconductor and Samsung are both expected to reach 5-nanometer production processes with extreme ultraviolet lithography in the new year -- by contrast, a human hair is about 60,000 nanometers thick. When those two companies reach the 5-nanometer level on semiconductors, they'll have only each other to compete with in a market that's only set to expand."

So it is super capital intensive, and clearly very difficult to do. But it is good, apparently US has already pushed for more physical manufacturing of it to be done here, though TSM I guess is trying to toe the line so they don't get cut out of China businesses.

[bmags]

3 hours ago, Texsox said:

BTW smaller and medium size customers of chips buy through authorized distributors like AVT and ARW. When a components are in short supply profits go up. 

I think it's more that the newer chip designs for big manufacturers have become so small and custom they don't really have anywhere else to go that knows how to make them.

[bmags]

 I haven't seen the article or alert elsewhere yet.

[Soxbadger]

Bought some Tilray and Aprhia since they were down 30-40%. Already had Canopy and Cronos. 

[gatnom]

22 minutes ago, bmags said:

Yep, that's where the GM report came from.

The Samsung report is good (and good for TX pretty sweet plan) but I think what is still unclear to me is whether they are actually going to succeed in being able to manufacture these newer miniaturized chips that really only TSM has shown an ability to specialize in. That's how TSM took the Apple chips away from samsung. 

I found this from when Samsung opened up the plant 

"A single extreme ultraviolet lithography machine from ASML Holding NV costs $172 million, and Samsung is setting up dozens of them in Hwaseong in an effort to be first with the technology. Taiwan Semiconductor and Samsung are both expected to reach 5-nanometer production processes with extreme ultraviolet lithography in the new year -- by contrast, a human hair is about 60,000 nanometers thick. When those two companies reach the 5-nanometer level on semiconductors, they'll have only each other to compete with in a market that's only set to expand."

So it is super capital intensive, and clearly very difficult to do. But it is good, apparently US has already pushed for more physical manufacturing of it to be done here, though TSM I guess is trying to toe the line so they don't get cut out of China businesses.

It does seem unlikely that the true flagship manufacturing of Samsung and TSMC would ever come stateside, short of geopolitical instability forcing it to. It is worth noting that the types of chips that come off of these processes don't necessarily need the latest and greatest. FPGAs are kind of a canonical example; they use a 28nm process I believe.

AMD completely fell behind a decade ago (and split off their manufacturing to the still-behind GlobalFoundries). Intel was actually so far ahead 5 years ago that it still manages to be competitive despite its manufacturing having stalled out. A key piece here is that both were (and in Intel's case, still are) vertically integrated such that their primary focus isn't on just manufacturing but both the manufacturing and design. It doesn't seem inconceivable that an American company can enter this race and catch up, but as you note, it is incredibly capital intensive and difficult.

Because of chip embargoes, China is already moving towards creating their own manufacturing supply lines.

[bmags]

31 minutes ago, gatnom said:

It does seem unlikely that the true flagship manufacturing of Samsung and TSMC would ever come stateside, short of geopolitical instability forcing it to. It is worth noting that the types of chips that come off of these processes don't necessarily need the latest and greatest. FPGAs are kind of a canonical example; they use a 28nm process I believe.

AMD completely fell behind a decade ago (and split off their manufacturing to the still-behind GlobalFoundries). Intel was actually so far ahead 5 years ago that it still manages to be competitive despite its manufacturing having stalled out. A key piece here is that both were (and in Intel's case, still are) vertically integrated such that their primary focus isn't on just manufacturing but both the manufacturing and design. It doesn't seem inconceivable that an American company can enter this race and catch up, but as you note, it is incredibly capital intensive and difficult.

Because of chip embargoes, China is already moving towards creating their own manufacturing supply lines.

Very helpful, thanks!

[Texsox]

4 hours ago, bmags said:

I think it's more that the newer chip designs for big manufacturers have become so small and custom they don't really have anywhere else to go that knows how to make them.

I'm referring to the OEMs that buy chips so they can manufacture their products. Ford has the buying power to go directly to the manufacturer. Smaller companies aren't buying directly from AMD, TI, Motorola,  etc but through component distributors who are authorized to carry those products. So for example if you need 10,000 ICs,  you will be routed through a distributor. During allocations those distributors do quite well. 

[southsider2k5]

https://www.reuters.com/article/us-retail-trading-gamestop-classaction-idUSKBN2AH2LQ?utm_campaign=trueAnthem%3A+Trending+Content&utm_medium=trueAnthem&utm_source=facebook

[Texsox]

2 hours ago, southsider2k5 said:

https://www.reuters.com/article/us-retail-trading-gamestop-classaction-idUSKBN2AH2LQ?utm_campaign=trueAnthem%3A+Trending+Content&utm_medium=trueAnthem&utm_source=facebook

I must be getting the players confused without a scorecard. Isn't this the guy living in Tennessee and refereeing volleyball? He had one semester of college before dropping out. 

[bigruss]

3 hours ago, southsider2k5 said:

https://www.reuters.com/article/us-retail-trading-gamestop-classaction-idUSKBN2AH2LQ?utm_campaign=trueAnthem%3A+Trending+Content&utm_medium=trueAnthem&utm_source=facebook

Did you read his testimony?  I've seen articles stating he was licensed through MassMutual but it seems that wasn't his job, so which is true?  He also was not a huge pusher on social media, he had his streams but he was not pushing the short squeeze agenda, many many others on WSB and other places were doing that.  Seems like this guy is being named the culprit because it's easy to, at least checkin he didn't even sell any of his shares (just some of the options) and is still holding even after the whole push.  

I think we're about to find ourselves in a really dangerous predicament if they go after him hard.  

[Texsox]

https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-referee

I was thinking of this guy. 

And options was the main play, not owning the stock. 

 

[southsider2k5]

Just now, bigruss said:

Did you read his testimony?  I've seen articles stating he was licensed through MassMutual but it seems that wasn't his job, so which is true?  He also was not a huge pusher on social media, he had his streams but he was not pushing the short squeeze agenda, many many others on WSB and other places were doing that.  Seems like this guy is being named the culprit because it's easy to, at least checkin he didn't even sell any of his shares (just some of the options) and is still holding even after the whole push.  

I think we're about to find ourselves in a really dangerous predicament if they go after him hard.  

These are the types of cases that the FINRA/SEC has brought its entire existence.  It is exactly what I said would happen based on what has always been done here.  Especially people who are licensed have a set of responsibilities and rules to follow in these situations, and it doesn't matter what job they are, or are not doing.  While the feds haven't gotten to him yet, they will.  There will also be a lot more of these.  Also for the record, one does not have to profit from market manipulation for there to be a crime.  Mass Mutual is also going to get drilled into the millions for failure to supervise.  Obviously I don't know the merits of this particular lawsuit specifically, but this guys worst days are still ahead of him.  These agencies don't move fast, but they do move.

[bigruss]

26 minutes ago, southsider2k5 said:

These are the types of cases that the FINRA/SEC has brought its entire existence.  It is exactly what I said would happen based on what has always been done here.  Especially people who are licensed have a set of responsibilities and rules to follow in these situations, and it doesn't matter what job they are, or are not doing.  While the feds haven't gotten to him yet, they will.  There will also be a lot more of these.  Also for the record, one does not have to profit from market manipulation for there to be a crime.  Mass Mutual is also going to get drilled into the millions for failure to supervise.  Obviously I don't know the merits of this particular lawsuit specifically, but this guys worst days are still ahead of him.  These agencies don't move fast, but they do move.

So what exactly did he do that was illegal?  Legitimately asking as someone who isn't really familiar with those laws.  

And why isn't the SEC investigating the halt of buying certain stocks with certain brokers?  Why aren't they investigating the short interest?  Why aren't they investigating the failure to deliver stock?  

[southsider2k5]

1 minute ago, bigruss said:

So what exactly did he do that was illegal?  Legitimately asking as someone who isn't really familiar with those laws.  

And why isn't the SEC investigating the halt of buying certain stocks with certain brokers?  Why aren't they investigating the short interest?  Why aren't they investigating the failure to deliver stock?  

Crimes for this guy?  Right off of the bat, giving advice without proper disclosures for sure, even if he wasn't a part of the actual manipulation.   It also sounds like he didn't disclose his outside business activities and trades as his firm is saying that they had no idea what he was doing.  That is without even getting into how they view his trading behavior potentially as market manipulation to profit off of.

I am sure they are investigating the first thing.  My guess is that the firms who halted were in margin troubles, which is why they were stopping the additional positions.  I would expect firms to pay a lot in fines in regards to them.

Second, being short a stock isn't illegal as long as the short wasn't fraudulently obtained through something like a method of quickly exiting and re-entering the position so it looks like a day trade and not a held position.  As long as proper trade procedures were undertaken, including short locates, proper margining, and proper labeling of positions, this isn't illegal.  It is also not illegal as a firm to enter as big of a short position as a firm can legally obtain assuming they have the cash to cover it per margin/haircut rules.  The only spot at which this could become illegal beside the above notations, are if they coordinated their trades with other outside interests for the purpose of market manipulation.  That is where the reddit crowd is going to get hammered.  They coordinated this.  A great example of this is the LIBOR fixing scandal, which has cost something like 6 billion dollars in fines.

Not familiar with what you are referring to in the 3rd part in detail, but fails are a HUGE issue in the market place right now.  Each firm is required to either deliver stock, or in the case of a short position, to borrow it from another long position to be able to short it.  FINRA is all over fails.  Now understand that a failure to deliver by itself isn't a crime, but the firm must then take a cascading margin/haircut loss on the position until they have to have 100% cash coverage for the FTD position until they either get out of it or if they receive delivery.  There are also steps that must be taken and reported for fails.  Firms want nothing to do with fails.  because of the ease of moving stock around in 2021 trades are 99.999999% cleared on time.  This isn't like the old days where someone had to mail in an actual phsycial certificate of stock.

Finally also realize that the SRO's in play here don't announce investigations to the public.  They just start investigating and document requesting.  I promise you that investigations have already begun  at these bodies, even if you and I don't know about them.  We might get a press release, but we will really know when  FINRA starts fining, when the SEC starts charging people, and when the Wells letters start flying.

[Texsox]

@southsider2k5 through various avenues I've bought stocks via face to face to recently with an app but I've never really bothered to understand what happens after I say (for example) I want 100 shares of GOLF. It seems like whomever I have the account with must have the financial resources to make the trade on my behalf. I guess on some level I recognize that somehow my order gets to the appropriate exchange and magic happens. So what are the mechanical steps? Or, I can go look it up but you always explain this stuff in a way I can understand.

[southsider2k5]

Just now, Texsox said:

@southsider2k5 through various avenues I've bought stocks via face to face to recently with an app but I've never really bothered to understand what happens after I say (for example) I want 100 shares of GOLF. It seems like whomever I have the account with must have the financial resources to make the trade on my behalf. I guess on some level I recognize that somehow my order gets to the appropriate exchange and magic happens. So what are the mechanical steps? Or, I can go look it up but you always explain this stuff in a way I can understand.

From a technical standpoint, a clearing firm has 2 days to move the shares from their custody to the custody of your clearing broker assuming it is not a day trade. Typically those shares move from Firm A to the DTCC (who is the main clearing agency in the US)  to Firm B. If you are making the trade in cash, that money moves the opposite direction of the shares.  If you are trading on margin your cash, plus the cash of the firm is moving.  Typically a firm is required to hold enough net capital to cover 15% of the market value of its stock positions (its a little more complex than that, but for simplicity sake).  If they are unable to deliver on time, then their requirements for cash go up, until they are required to hold 100% of the cash value of that stock in reserve.

[Texsox]

1 minute ago, southsider2k5 said:

From a technical standpoint, a clearing firm has 2 days to move the shares from their custody to the custody of your clearing broker assuming it is not a day trade. Typically those shares move from Firm A to the DTCC (who is the main clearing agency in the US)  to Firm B. If you are making the trade in cash, that money moves the opposite direction of the shares.  If you are trading on margin your cash, plus the cash of the firm is moving.  Typically a firm is required to hold enough net capital to cover 15% of the market value of its stock positions (its a little more complex than that, but for simplicity sake).  If they are unable to deliver on time, then their requirements for cash go up, until they are required to hold 100% of the cash value of that stock in reserve.

And what is moving at this point are electronic bits and bytes. I think I remember way back in the last century being asked if I wanted to hold the paper shares or allow the form to hold them. Damn, that was almost 40 years ago. When you say the firms are required to hold 15% of their positions, but isn't that actually of their client's positions?  

[southsider2k5]

6 minutes ago, Texsox said:

And what is moving at this point are electronic bits and bytes. I think I remember way back in the last century being asked if I wanted to hold the paper shares or allow the form to hold them. Damn, that was almost 40 years ago. When you say the firms are required to hold 15% of their positions, but isn't that actually of their client's positions?  

Today?  Almost all electronic.  You can still request physical shares, but no one really does it.  It might even cost you these days.  One of my older bosses first jobs was actually receiving and mailing stock certificates around for delivery and custody purposes.

They are indeed client positions, but the firms is required to have cash on hand as well so that if individuals blow up, that they will still have enough cash to stay in business.  There is a really long and complex set of rules around net capital requirements.

[bigruss]

1 hour ago, southsider2k5 said:

Crimes for this guy?  Right off of the bat, giving advice without proper disclosures for sure, even if he wasn't a part of the actual manipulation.   It also sounds like he didn't disclose his outside business activities and trades as his firm is saying that they had no idea what he was doing.  That is without even getting into how they view his trading behavior potentially as market manipulation to profit off of.

I am sure they are investigating the first thing.  My guess is that the firms who halted were in margin troubles, which is why they were stopping the additional positions.  I would expect firms to pay a lot in fines in regards to them.

Second, being short a stock isn't illegal as long as the short wasn't fraudulently obtained through something like a method of quickly exiting and re-entering the position so it looks like a day trade and not a held position.  As long as proper trade procedures were undertaken, including short locates, proper margining, and proper labeling of positions, this isn't illegal.  It is also not illegal as a firm to enter as big of a short position as a firm can legally obtain assuming they have the cash to cover it per margin/haircut rules.  The only spot at which this could become illegal beside the above notations, are if they coordinated their trades with other outside interests for the purpose of market manipulation.  That is where the reddit crowd is going to get hammered.  They coordinated this.  A great example of this is the LIBOR fixing scandal, which has cost something like 6 billion dollars in fines.

Not familiar with what you are referring to in the 3rd part in detail, but fails are a HUGE issue in the market place right now.  Each firm is required to either deliver stock, or in the case of a short position, to borrow it from another long position to be able to short it.  FINRA is all over fails.  Now understand that a failure to deliver by itself isn't a crime, but the firm must then take a cascading margin/haircut loss on the position until they have to have 100% cash coverage for the FTD position until they either get out of it or if they receive delivery.  There are also steps that must be taken and reported for fails.  Firms want nothing to do with fails.  because of the ease of moving stock around in 2021 trades are 99.999999% cleared on time.  This isn't like the old days where someone had to mail in an actual phsycial certificate of stock.

Finally also realize that the SRO's in play here don't announce investigations to the public.  They just start investigating and document requesting.  I promise you that investigations have already begun  at these bodies, even if you and I don't know about them.  We might get a press release, but we will really know when  FINRA starts fining, when the SEC starts charging people, and when the Wells letters start flying.

If he disclosed in his streams that this was not financial advice, and showed the research he had done but cautioned folks to do their own research to validate his or even invalidate it (many times in his stream he asks for people to do research to find holes in his logic and offer counterarguments).  That seems dangerous to say that doing research and sharing it on social media is considered market manipulation, he never told people to buy the stock, he showed that he was favorable on it and walked through why.  That seems super concerning to me.  He was not out there doing the whole diamond hands things, he was stating he was long GME though.  

Definitely not saying shorting should be illegal, but shorting a stock over 100%?  Sounds like a perfect spot for some regulations.

I would argue that the HFs coordinated MUCH more through the events in the last few weeks than retail did, but of course the blame is on retail.  Shouldn't the SEC be looking into massive volume trades of GME that was designed to bring the value of the stock down (I wish I had the links still, but folks were showing massive trades occurring at much lower prices all at steep discounts, it seemed to hint at trading mass volume in between funds to make it look like it was trading lower.).  Between that and not allowing the purchase, but still allowing the sale of a stock seems to be a massive indication that funds have way too much of an advantage over retail (hint, what drove retail to rally together).  

https://www.bloomberg.com/news/articles/2021-02-17/sec-data-show-359-million-of-gamestop-shares-failed-to-deliver#:~:text=Share Snafu&text=About 2.1 million GameStop shares,in so-called meme stocks. How does a HF get out of a position that they are over 100% shorted in, and in which retail is heavily purchasing and holding available shares?  There are lingering questions of how shares were being covered during that time, there were more shares reported as being owned by institutions than even being issued by Gamestop, how does that add up?

Again, I'm a dummy to this and maybe what we are seeing is totally legal, but it sure seems rigged and not looking out for retail.  What I ask is, if we're going to go after retail with this much passion, I ask that we hold the SEC/FINRA/whatever to the same accord with institutions, but I think we all know they won't.  

[southsider2k5]

10 minutes ago, bigruss said:

If he disclosed in his streams that this was not financial advice, and showed the research he had done but cautioned folks to do their own research to validate his or even invalidate it (many times in his stream he asks for people to do research to find holes in his logic and offer counterarguments).  That seems dangerous to say that doing research and sharing it on social media is considered market manipulation, he never told people to buy the stock, he showed that he was favorable on it and walked through why.  That seems super concerning to me.  He was not out there doing the whole diamond hands things, he was stating he was long GME though.  

Definitely not saying shorting should be illegal, but shorting a stock over 100%?  Sounds like a perfect spot for some regulations.

I would argue that the HFs coordinated MUCH more through the events in the last few weeks than retail did, but of course the blame is on retail.  Shouldn't the SEC be looking into massive volume trades of GME that was designed to bring the value of the stock down (I wish I had the links still, but folks were showing massive trades occurring at much lower prices all at steep discounts, it seemed to hint at trading mass volume in between funds to make it look like it was trading lower.).  Between that and not allowing the purchase, but still allowing the sale of a stock seems to be a massive indication that funds have way too much of an advantage over retail (hint, what drove retail to rally together).  

https://www.bloomberg.com/news/articles/2021-02-17/sec-data-show-359-million-of-gamestop-shares-failed-to-deliver#:~:text=Share Snafu&text=About 2.1 million GameStop shares,in so-called meme stocks. How does a HF get out of a position that they are over 100% shorted in, and in which retail is heavily purchasing and holding available shares?  There are lingering questions of how shares were being covered during that time, there were more shares reported as being owned by institutions than even being issued by Gamestop, how does that add up?

Again, I'm a dummy to this and maybe what we are seeing is totally legal, but it sure seems rigged and not looking out for retail.  What I ask is, if we're going to go after retail with this much passion, I ask that we hold the SEC/FINRA/whatever to the same accord with institutions, but I think we all know they won't.  

One thing of note is that it helps if you understand what the short ratio is.  It is short interest compared to average daily volume.  If it is above 100%, it just means there are more short positions than average trading volume.  It isn't something taken against total shares or something like that.

On FTD's the explanation is in there...

and 

So in the case of the lack of cash, they are margin called.  That isn't illegal.  The second part of not doing a locate is a problem, and again those will be investigated and fines will happen for those as well.  As I said before, Robinhood especially is going to be in a world of trouble just for their margin problems.  if they, or any other firms, were allowing shorts without locates, they will pay for it.

Finally you can argue that anyone did anything.  Do you have evidence of coordination between the shorts?  Because if you do, call the SEC and tip them.  You will get a 10% reward that results in fines being paid.  "I would argue" doesn't really do anything.  Do you have email trails?  Recorded calls?  Because that is exactly how the LIBOR stuff was broken.  There will also be plenty of people looking to see if there was coordination here, as there is a LOT of money  to be made on fines and the like.  If it is there, it will be found.  There are billions of fines out there for institutions, as they are the people with the deepest pockets.

 

[southsider2k5]

The whole Tatis contract futures thing got me looking around the internet, and I came across this.  Thinking seriously about it.

https://evoinvest.com/

[Texsox]

7 hours ago, southsider2k5 said:

The whole Tatis contract futures thing got me looking around the internet, and I came across this.  Thinking seriously about it.

https://evoinvest.com/

YOLO.

I was a part of a group that sponsored a golfer on the mini tours back in the early 2000s. Same principle. 

In one of the articles on the Tatis extension they characterized those advances as predatory. I'm guessing the adjectives could range from charity to predatory.  

[caulfield12]

9 hours ago, southsider2k5 said:

The whole Tatis contract futures thing got me looking around the internet, and I came across this.  Thinking seriously about it.

https://evoinvest.com/

What would be interesting would be to crowd-fund with Sox fans and put together similar deals to BLA for someone like a Colas who aren’t peak of the market players but interesting nonetheless.

They used to hold the Cubans captive basically until they signed similar deals to get off the island...which certainly adds to the unsavory/iffy ethics, but once stateside, they’re certainly freer to seek out financial propositions that are not using their own safety or family’s safety back home against them. 
 

 

Despaigne has accused Puig of helping Cuban authorities to arrest several human traffickers, in order to curry official favour while plotting his own flight. The claim is contained in a 10-page affidavit the boxer filed in Miami, as part of a lawsuit against Puig by one of the purported traffickers who is currently incarcerated in Cuba.

Despaigne said he liaised between the baseball player and Raul Pacheco, a Miami-based air-conditioning repairman and recycling business owner who was allegedly part of a group that offered to extract Puig in exchange for 20% of all his future earnings. Pacheco reportedly has past arrests for burglary and credit card fraud, according to public records.

After several failed attempts to escape from Cuba, smugglers spirited Puig, Despaigne, Puig’s then girlfriend and a santería priest to Isla Mujeres, a fishing village on Mexico's Yucatán Peninsula, near Cancún.

According to the reports, the smugglers detained the group in a motel while they haggled with Pacheco over Puig's worth. A team allegedly sent by Pacheco and some of his associates ended the stand-off and, shortly thereafter, Puig entered the US.

Despaigne said that eventually an envoy of a smuggler boss known as Leo confronted him in Miami, demanding payment.

 

https://www.theguardian.com/world/2014/apr/18/la-dodgers-yasiel-puig-kidnapping-gangster-drama

[Soxbadger]

So GME back to doing strange things again. 

[Texsox]

2 hours ago, Soxbadger said:

So GME back to doing strange things again. 

I was just thinking one of my ETFs probably has a short position. CLIX is long on all of the on line retailers and short on brick and mortar stores. It's down a lot this week.