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Title: Revenge: An Internet Mob Is Turning The Stock Market Into “A Video Game”, And The Establishment Is Freaking Out
Source: [None]
URL Source: ... establishment-is-freaking-out/
Published: Jan 28, 2021
Author: Michael Snyder
Post Date: 2021-01-28 08:57:09 by Horse
Keywords: None
Views: 262
Comments: 18

Retail investors have banded together to turn over the tables on Wall Street, and it has created a wild frenzy that is making headlines all over the globe.

Unprecedented short squeezes have pushed the share prices of GameStop, AMC, Macy’s and BlackBerry to insane heights, and prominent voices in the financial world are complaining that trading in those stocks has become completely divorced from the fundamentals.

In fact, these young retail investors are actually being accused of turning the market into “a video game”.

Infamous investor Michael Burry, who made crazy amounts of money betting against the housing market during the last financial crisis, even had the gall to claim that recent trading in GameStop was “unnatural, insane, and dangerous”.

Of course Burry is right, but the truth is that the entire market has been transformed into a giant casino and has been “unnatural, insane, and dangerous” for a very long time.

If the entire market fell 50 percent tomorrow, stock prices would still be overpriced.

So it is more than just a little bit hypocritical for the Wall Street establishment to be complaining about GameStop when they have been gaming the system for years.

Ultimately, GameStop is not a good long-term investment. Most people download video games these days, and so a brick and mortar retail chain that sells physical copies of video games shouldn’t be attractive to anyone.

GameStop lost money last year, and they will lose money again this year.

But a group on Reddit known as “WallStreetBets” noticed that some big hedge funds had taken ridiculously large short positions against GameStop, and they sensed an opportunity. They realized that if they all started to buy GameStop all at once, it would likely create a short squeeze of epic proportions.

And that is precisely what has happened.

A year ago, a single share of GameStop was going for about four dollars.

At the beginning of the month, GameStop was sitting at $17.25.

On Wednesday, it closed at $347.51.

In addition to making huge profits, the investors on “WallStreetBets” also wanted to get revenge on the big hedge funds for all the evil things they have done in the past.

Every great story needs a great enemy, and in this case the great enemy is a hedge fund called Melvin Capital…

Melvin Capital, the $12.5 billion hedge fund founded by Gabriel Plotkin, was one of the main targets of the Reddit campaign, after an SEC filing revealed that the fund had a large short position in GameStop.

‘By the end of the week (Or even the end of the day), Plotkin is going to have less than a college student 50k in debt who works part time at starbucks,’ one Reddit user wrote on Wednesday morning.

Nobody knows for sure how much money Melvin Capital has lost, but it appears to be in the billions…

CNBC could not confirm the amount of losses Melvin Capital took on the short position. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin’s hedge fund to shore up its finances. On Wednesday’s “Squawk Box,” Sorkin said Plotkin told him that speculation about a bankruptcy filing is false.

Melvin Capital has supposedly closed all of their short positions in GameStop now, but not everyone is buying that claim.

In any event, the crowd on WallStreetBets intends to continue to drive up the prices of GameStop, AMC, Macy’s and Blackberry for the foreseeable future.

Eventually, each of those mini-bubbles will collapse, but for now the big short sellers are squealing in pain.

Needless to say, the large hedge funds have been reaching out to their “friends” for help, and the SEC just released a statement which indicated that they are watching developments closely…

We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants.

And White House Press Secretary Jen Psaki told reporters just a few hours ago that the White House is “monitoring” the situation.

But what is there to “monitor”?

All is fair in love and investing, and the retail investors of “WallStreetBets” caught some big hedge funds with their pants down and punished them for it.

After everything that big hedge funds have gotten away with over the years, many would argue that a little bit of revenge was definitely in order.

But Wall Street has never seen anything like this before.

Retail investors are supposed to be small fish that get eaten alive by the bigger fish, but now technology has changed the rules of the game…

The way people trade stocks has been upended by the rise of no-fee apps like Robinhood. That technology has democratized investing, giving armchair investors far removed from traditional banks free access to sophisticated trading instruments, like options.

You could pay an analyst to tell you what stocks to buy, or you could create a Reddit account and follow forums like WallStreetBets. Millions of young people are opting for the latter, which is partly why the sudden surges in GameStop and AMC have caught Wall Street veterans by surprise.

Nobody should shed a tear for the short sellers.

They have made obscene amounts of money over the years by manipulating the markets and by preying on weak companies.

Now an Internet mob is preying on them, and many that are involved believe that revenge is a dish best served cold.

If you can’t handle the pain, don’t play the game.

In the end, this entire farce of a market is going to utterly collapse anyway. So the truth is that very few are going to get out of this thing unscathed.

Since the financial crisis of 2008 and 2009, investors have seen their portfolios increase in value by trillions of dollars, but this bubble only exists because of unprecedented manipulation by the Federal Reserve and others.

Now a relatively small group of retail investors is manipulating stock prices to punish a couple of hedge funds and everyone is in an uproar over it?

What a joke.

Our financial markets are fraudulent, and they have been for many years.

Nobody should be accusing retail investors of turning the stock market into “a video game”, because the Federal Reserve already did that a long time ago.

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Begin Trace Mode for Comment # 16.

#1. To: Horse (#0)

Short sellers are the ass-pirates of the stock market. They take massive short positions in companies, then trash talk the companies, in an attempt to drive them into bankruptcy; riding the melt to make money. They destroy companies for fun and profit. Nobody should be shedding a tear over these guys, and they certainly don’t deserve any kind if bail out or assistance from the government. The pirates are bleeding. Good.

ghostdogtxn  posted on  2021-01-28   9:16:41 ET  Reply   Untrace   Trace   Private Reply  

#2. To: ghostdogtxn (#1) (Edited)

massive short positions

JP Morgan was short selling silver to keep the price down. And they just might get caught in a squeeze before much longer, since silver is used and cannot be replaced. Once it is gone, it is gone for good. Those holding physical silver will come out on top. ;)

BTP Holdings  posted on  2021-01-28   12:01:40 ET  Reply   Untrace   Trace   Private Reply  

#4. To: BTP Holdings, ghostdogtxn, Lod (#2)

That silver J P Morgan is sitting on actually belongs to China.

Horse  posted on  2021-01-28   15:04:43 ET  Reply   Untrace   Trace   Private Reply  

#7. To: Horse (#4) (Edited)

That silver J P Morgan is sitting on actually belongs to China.

It seems strange that China would not take physical delivery of that silver. Having it in JP Morgan's vault is a bit like holding paper silver or gold like an ETF. You really should have it in your hot little hands.

China had been accumulating as much gold as they could in a plan to release a 40% gold backed Yuan. But it seems they have been snookered on that deal since many of those gold bars had Tungsten cores. ;)

BTP Holdings  posted on  2021-01-28   20:32:35 ET  Reply   Untrace   Trace   Private Reply  

#11. To: Pinguinite, BTP Holdings, TommyTheMadArtist, Lod (#7)

The Chinese are using JP Morgan Chase to manipulate the price of gold and silver so they can accumulate more gold and silver at bargain basement prices. Then one day in the future they plan to own the world. Actually, that will not work because they will experience even more crop failures and not be able to feed their people.

Horse  posted on  2021-01-29   8:41:41 ET  Reply   Untrace   Trace   Private Reply  

#12. To: Horse (#11)

Actually, that will not work because they will experience even more crop failures and not be able to feed their people.

Right now people are picking thru the many garbage dumps trying to find scraps of food for their pets. You know things are tough when you get to that point. ;)

BTP Holdings  posted on  2021-01-29   8:47:18 ET  Reply   Untrace   Trace   Private Reply  

#16. To: Pinguinite, BTP Holdings, TommyTheMadArtist, Lod (#12) (Edited)

Please understand this very well. No Chinese government has ever survived a Grand Solar Minimum like the Maunder Minimum of 1645 to 1715.

During the Maunder Minimum the sun radiated less heat. Wheat prices rose as much as 400% in the UK. In 1709 the price of food in France rose 600%. The ground was frozen solid for a depth of one meter (40 inches.)

But Dr Valentina Zarkhova has noticed that more significant than the slight global cooling is the reduction of the sun's magnetosphere. This allows more cosmic rays (nuclear particles from distant decaying stars) to strike the earth. The New Madrid fault had a major quake on 12-25-1699 during the Maunder Minimum (1645-1715). During the Dalton Minimum (1793-1833), the New Madrid fault had 4 quakes on 3 days in 1811-1812.

Japanese scientists also noted an increase in the number of volcanoes during a Grand Solar Minimum. The likely cause of the increase in both quakes and volcanoes is the increased number of cosmic rays energizing the earth.

The biggest result of a major California earthquake would be the immediate collapse of the freeways, sewer lines, water lines and hospitals. 20 million people would have no roads, no food, no water, no sewers and no hospitals.

A weakened magnetosphere for the earth means that our jet stream is allowed to wander about creating havoc with our weather. Intense droughts in some areas and floods in others. More cosmic rays also means that we have more rain, more snow, more clouds, more cloud cover. Not good for farmers and people who like to eat.

The US economy would collapse. Since we have many times more Unpayable Debts to cancel now than in 1933, the economy will be far worse than then. (Expect Hyperinflation. And we have 202 million more people now than in 1929. Open Borders will not be popular with the survivors.)

Note about Richter scale. An 8.35 quake releases as much energy as two 25 megaton Hydrogen bombs. The scale is logarithmic so a 9.35 would be exponentially stronger than an 8.35)

China lost more than 300 million hogs to the African Swine flu. They have a drought in the north and are plagued by locusts in the northwest. Last summer floods destroyed Chinese agriculture.

The Chinese are buying America's food. No other nation is exporting corn, wheat, soy beans and rice like we are. We will have to stop exporting food. That is when China collapses.

Horse  posted on  2021-01-29   13:19:19 ET  Reply   Untrace   Trace   Private Reply  

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