TIL that the Panic of 1901, the 1st stock market crash of the 20th century and 1st ever on the NYSE, was effectively caused by a short squeeze (Northern Pacific).

  1. Overleveraging leads to dangerous positions that are forcefully liquidated once the bubble runs out of steam. It's a classic tale of hubris and greed- it will never end because there is always a fresh supply of young and dumb traders who are driven blind by greed.

  2. Still digging into this, but trying to look into this myself for the dotcom era. Will lyk (y'all know?) if find anything juicy like a Georgia peach

  3. I have studied this extensively at work, EVERY major market downturn has been the result of a major player unwinding an insolvent position. EVERY SINGLE ONE

  4. So I've speculated that the as of yet unexplained cause of the 'liquidity crisis' that started September 2019 (right before Covid appeared in China) that the Fed began giving out trillions of loans for, but kept the parties hidden for two years (turned out to be Nomura, Deutsche, JPM, Gildman, Citi iirc) started with the ultra-shorted Overstock announcing a digital dividend. They announced their plans to give a digital dividend....drumroll....September 2019.

  5. They sure need to show that strength though. Kenny G up in the limousine dropping a billy on Florida real estate. Has the most expensive property in America at $175m.

  6. ty fam! and not to deepthroat myself too much (there's a better way to phrase that I'm sure...toot my own horn?) I wrote another interesting (or what I thoguht was interesting) piece I'm always shocked about got little eyes...as of checking only 39 upvotes.

  7. Everyone's truce is going to be different. That's the fundamental problem. There's no negotiation when there's hundreds of thousands of people to negotiate who all have different desires. I guarantee you they already directly approached GME's board and the board told them to go pound sand. They approached AA at Sticky Floor land and he dilutes at every turn.

  8. The consistent difference between all these past large scale short squeezes that keep coming up and MOASS is that the longs have always been single entities. VW, the railroads mentioned here... There's been a couple others I can't recall right now. They all end the same way... That single entity capitulates, a deal is reached and their hands turn paper because they don't want the whole market to collapse as a result because to them it was really just the super wealthy fucking around with their friends.

  9. 100%. The longs have always been single entities...or at least, single entities in the same clubhouse...be it fellow private or publically listed companies (Volkswagen & Porsche) or private investors...

  10. I had concern about the shorts being allowed to close at $150. Now I am not, as you have explained how that worked. It was just rich fucks having a laugh and slapping a back or two. "Don't worry old chap, we won't leave you homeless. It was nothing but a costly jape". well fuck them. I'm not their friend and I want all their money.

  11. I would imagine they agreed to use it jointly under the Northern Securities Company which was formed by the moguls that were at war.

  12. This just tells me they definitely won’t let the current market play out as it should based on several points in history. We really need a competitive exchange. cough cough, enter decentralization…

  13. Still digging! Not sure, exactly but could have been like a MAD situation, if they let the shorts keep going maybe everything would have been destroyed in the market

  14. They were let off the hook a little over 4k per share in today's money. A few big differences. Today's market and problem are both much larger. There aren't 2 parties to negotiate with. More than likely, without government intervention, everyone would be getting phone calls all day begging you to sell.

  15. Back in early January, some AI program said 32k peak before the sneeze, right? And we all laughed and laughed. Then suddenly, it wasn't so funny or impossible. I will never regret canceling my GTC EXT 420.69 limit sells because the SHF's taught me to be greedy for numbers that look big to THEM and not to ME.

  16. man, thanks for the shout-out!! I appreciate it. I put so much effort into that post. When I posted it, there were so many other good posts that came out at once and mine got lost in the mix.

  17. A question: what exactly « short were allowed to close at 150$ » mean exactly? I mean, couldn’t that happen with our stocks like if they somehow block the price at, let’s say 5k$?

  18. If you're interested in this, you should DEF check out this book (I recommend audiobook). But it's pretty fascinating. All the major market crashes explained.

  19. Maybe... just maybe, shorting should not be a thing. If you like a company buy the stock, if not, don't. It's that simple.

  20. I don't really see how the "truce" portion plays out for GME... No cell # or cell for Kenny and Steve Cohen, no sale, etc.

  21. Wow all of this is weirdly reminding of the book Gravity’s Rainbow. I highly recommend any Thomas Pynchon novel to all. GR’s all about Rockets as well!

  22. A little more history for you Northern Pacific is one of the predecessor Railroads that was merged with CB&Q and Later Berkshire owned BNSF.

  23. This was a great read. Thanks Ape. Would love a weekly series on things like this. Such cool info!

  24. Likely there is a correlation between market crashes and short squeezes due to short sellers being liquidated. Maybe not causation though

  25. Can someone explain this last part to me? It sounds like the short squeeze was stopped... (Which is one of my biggest concerns).

  26. Commenting to come back and read links. This was a great read! Love love love in the comments “we” are not an entity. 😂 The funny thing is, the only way for them to plead mercy or even communicate is to post on SS or similar sub.

  27. This is what I don't understand. Why short a company. If you believe that it's unprofitable just don't buy. This whole shenanigans with derivatives goes against investing in my humble opinion. If anyone thinks that calls, puts, swaps etc are healthy for the market please let us have a discussion.

  28. What if we don't call a truce. Every short squeeze has had someone be satisfied and let short sellers off the hook. What if we all held together until we saw a phone book in our account.

  29. I'm reading The Great Game at the moment and it talks of this corner and alot of others. Great read for anyone learning and new to the markets or just anyone with an interest in markets in general. Gave this ape a few wrinkles for sure 👌👍

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