I didn’t pay much attention to the GameStop situation [Wednesday] – but oh, baby, after taking some time this morning to look, this was a massive takedown of huge hedge funds guys by a small army of internet day traders – regular folks. The hedge funds had decided to drive GameStop into the dirt and kill it while taking profits along the way and a few determined souls put a stop to it.
I was ready to mock CNN’s Chris Cillizza because he twisted the story to make it all about Trump – I think it may be a law that CNN can’t do a report without mentioning Trump in a negative way, but after reflection, he was sort of right for all the wrong reasons.
The GameStop thing has MAGA written all over it. Small, independent investors with little more than their own wits battling with hedge fund giants with banks and banks of computers and massive amounts of data – and borrowing power…and the little guys put the hedge guys in a several billion dollar hole.
Then the big guys went whining to their buddies in the government and had trading shut down.
It’s a story of the individual against the establishment.
Like I said, it has MAGA written all over it.
Then Smith wrote:
I have no problem with short sellers – in theory – the problem here is that it seems the powerful short selling hedge funds got caught in a naked shorting pinch (a naked short is the practice of short selling shares that have not been affirmatively determined to exist) and when the price started rising, they got their tits in a wringer and panicked.
Naked shorting is illegal, and it seems clear when 140% of the GameStop stock was shorted (expected to go down), some of that just might have been going on.
But it’s not about what is legal or illegal, or who made money, lost money or participated in this process, it’s about the massive hedge funds having the ability to pressure those who manage and control the exchanges to change the rules to their benefit in the middle of the game.
Imagine a college basketball game between Gonzaga, the current #1 team in the nation, and Screw U, a tiny private university that doesn’t even have scholarships. Now let’s say we are deep in the second half and Screw U is miraculously up by 40 points because they are shooting 80% from the field and throwing up nothing but 3 pointers.
With 5 minutes left, Gonzaga calls time out and confers with the refs and after the time out, the refs head over to to the Screw U bench and tell the coaches and players that Gonzaga will be allowed to keep playing, every bucket the Zag players make (no matter from where) now will count for 3 points; however, only 2 points will be awarded to Gonzaga – BUT 1 point will be DEDUCTED from Screw U’s total score for each bucket the Zags make. And to top it off, the Screw U players can’t go back on to the court until 30 seconds remain in the game.
That is the best description I can think of for how I perceive the GameStop situation has played out.
The big hedge funds were losing billions and they received favorable treatment from those who “manage” the markets that an individual investor would never get. We can talk about triggers and circuit breakers all we want but the fact is it certainly appears the stop in trading was done solely to allow the hedge funds time to stop the bleeding and cover their bets.
Of course, since this happened during the Biden administration, me bringing this up is probably misinformation, a danger to democracy and I’ll be put on a list with QAnon conspiracy theorist domestic terrorists.
Let’s not kid ourselves – the Democrats will try to spin this as wealthy Republican Wall Streeters once again taking advantage of the little guy – but the fact is, these hedge funds have become big Democrat donors.
Tom Steyer, who ran for the Dem nomination last round, made his fortune running a hedge fund. Janet Yellin, as Jen Psaki would remind us – our first woman Secretary of the Treasury, has made over $7 million in “speaking fees” from Wall Street, and Citadel, one of the largest hedge funds paid her a little over $800,000 of that.
This is just an example of the necessity of the MAGA movement created by President DJT and why it isn’t going away any time soon. Trump’s 4 years heightened America’s awareness of Swamp Dwellers trying to put one over on the little guy. People have wised up and are paying attention now, thanks to President Trump continually being proven right by the actions of Democrats, the corporate media and the Tech Oligarchy.
This biblical level David vs. Goliath stuff – and that is what MAGA is all about.
Then read this (bad language and all), posted by Will Flanders …
… who adds:
If it’s true that the White House pressured Robinhood to stop allowing GameStop purchases—interfering with the free market—he should have to answer to the millions of Americans who lost a potential mortgage payment, rent, or car payment to benefit Wall Street fat cats.