Sean Davis, that is. This six tweet thread says it all about GameStop and what the Big Picture meaning of it all is:
Wall Street’s war on reddit and Robinhood isn’t about free markets or price transparency or longs vs. shorts or anything like that.
Wall Street institutions have crushed retail shorts with impunity for decades, even and especially when the shorts were right. (1/x)
What’s happening right now is Wall Street realizing that retail investors, whom Wall Street mocks as nothing more than dumb commission factories for big brokerages, actually have some power that Wall Street believes it has a divine right to wield. That cannot be allowed. (2/x)
The war on reddit and Robinhood is about putting retail investors in their place. Retail investors are not allowed to move markets. Only Wall Street institutions move markets. Retailers are not allowed to squeeze shorts. Only Wall Streeters are allowed to crush shorts. (3/x)
Wall Street, you see, is allowed to make money no matter what. That was the lesson of 2008. Who cares that it’s Wall Street who destroyed the housing market/economy by lying about the risk of their garbage mortgage derivatives? They were entitled to bailouts. (4/x)
Sure, millions lost their jobs and countless people lost their homes. The bankers got paid--with your money. They got bailed out--with your money. Sure, you lost your savings and home. But that’s what you get for being a dumb rube instead of a New York City banker. (5/x)
So don’t get conned by those claiming hedge funds are just trying to protect the markets and price transparency and efficiency and blah blah blah. This is a war between corrupt institutions and normal people, and the institutions simply will not allow the normals to win. (6/6)
Which is why the proposed security around the enablers of the corrupt institutions--in the People's House. And the National Guard transformed into the Army of the Potomac--the Imperial Guard for the Imperial City. Haha! Joke's on you! "People's House"? Guard for the Nation? Not your house, not your nation. At least that's what we're being told.
But what kind of con are they trying out on us? You're not gonna believe this. I mean, you will but you won't:
So I see the Ruling Class has moved to the “Redditors are domestic terrorists” phase https://t.co/qsDSWX0DnJ
— Benjamin Weingarten (@bhweingarten) January 29, 2021
Pretty soon they'll have to fence in Wall St., where our masters make their money, and have the "National" Guard patrolling the Financial District.
Question du jour: on what basis did trading platforms/apps limit the ability of retail customers to BUY GME yesterday, but apparently Hedge funds that were getting reamed in the butt due to their exposed short positions were allowed to BUY GME yesterday while the price dropped (due to limits on retail customer being able to buy) to get out of their short positions with less losses?
ReplyDeleteThat's the smoking gun evidence of a rigged market to benefit investors of a particular circumstance at the expense of others.
And I haven't heard anyone raise this point so far.
They're in charge. They don't need no stinkin' basis.
DeleteThat's the whole point, and when you're a Leftist and you're in charge you do things just to remind everyone else.
DeleteIt would be bad enough if somebody imposed an across the board restriction on the ability to BUY or SELL shares that applied equally to ALL.
DeleteBut this is blatant market discrimination.
I'm no lawyer, but wouldn't this be a RICO case? It's clear the hedge fund managers, Wall Street billionaires, parent company of RobinHood and Google have colluded to do financial harm to every day investors - out in the open.
DeleteWhat US "Institution" will we find hopelessly corrupt and rigged against us 'normies' next?
....it's just sick.
Dave
EZ: The rules are rather technical, but in essence, it matters where you have your account (who your broker is).
DeleteMost online brokers--Fidelity, Chas Schwab, ETrade, TDAmeritrade--act as broker/dealers, making markets in securities.
Robinhood is an introducing broker, and directs all its orders to other brokers, namely Citadel and TDAmeritrade (and maybe some others). RH gets paid for order flow. (Something that should be forbidden, but is not.)
In this manner, RH is no different than Google or FB who offer free services--and you, the customer--is the product being sold. Just as there is information value in your browsing history, or what you post on FB, there is information value in your securities transaction.
When Citadel/TDAmeritrade tells RH, "no trading in these names due to exigent circumstances," orders don't get executed. That means tough luck to RH's customers.
As always in the securities business, you must read the compliance disclosures ("Terms & Conditions"). The game is always rigged against you when you don't know the rules.
It was only a matter of time before some chatroom instigated a mob to take Wall St. down a notch or two. The SEC and FINRA (regulators) have always been too far behind the curve--because Wall St. has better lobbyists than John Q. Public.
I've spent most of my career in the securities and investment business, and most who work on "Wall St" are vipers and despicable people. They'd sell their grandmother to make a buck.
Janet Yellen got BIG BUCKS from Citadel but won't recuse herself from this matter.
DeleteMark--That's an interesting issue. Treasury is not a regulator of the securities markets--that falls on the SEC and FINRA, and if criminal, DOJ. It would cost her nothing to recuse. But I assume, like all Democrat administrations, a refusal to recuse on anything and everything. Media will cover for the Dems.
DeleteIf history teaches anything, Dems refuse to recuse until a resignation is necessary for someone to fall on their sword.
Deputy Treasury Secretary Roger Altman resigned in '94 after stating he :didn't recall" two dozen times in Congressional hearings about Whitewater.
Are these folks using The Hunger Games as a game plan goal?
ReplyDeleteI've seen a lot of articles trying to explain the crisis with the GME shares, and they all start with and emphasize the redditors. imo, the stories should all start with how groups of institutional traders shorted so much of these shares (i.e., sold shares they didn't have, for future delivery at cheaper prices), that they ended up under contract to sell a higher number of shares than those that were available. As late as yesterday, I believe, they were under contract to sell 121% of the floating shares!! This is obviously not very good or ethical, and when people realized this, they realized those shares had a new value separate from the company's income stream- to sell back to the funds who had contracted to deliver them in the future. So all the articles should start with these funds stupidity and greed in agreeing to sell more than 100% of something, which is a really greedy and stupid thing to do!!!!
ReplyDeleteAll the redditors did was look up the publicly available stats on the percentages of short positions relative to floating shares, and realize these greedy and stupid people had put themselves in a very vulnerable position that begged to be taken advantage of!!
Then, like the Blue Meanies they are, they go to the media and authorities blaming the redditors for being opportunistic sharks and taking advantage of them. This is so funny, because they pride themselves on being the smart and vicious ones who eat everyone else for lunch.
They are exactly like the old guys in the classic movie "Trading Places"!!!! Many of them are meeting the same fate! If you can't handle short transactions well, then, the last place they should have been is a hedge fund!! haha We need more articles about what idiots these large investors were and less about the smart, financially savvy redditors.
"Deplorables of the world, unite!"
ReplyDeleteAre we there yet?