Populist Revolt

It sounds like there is a populist revolt happening and Wall Street and Tresury Secretary Janet Yellen may be involved regarding this GameStop and Robinhood debacle. I know nothing about any of this so my commentary may not be as educated and applicable as I would like, but here goes. John Carney had an article (The GameStop Rebellion: 4 Things to Know) (1/29/2021) for Breitbart on this issue; let me quote Carney: Shares of GameStop and AMC saw tremendous gains this week as an army of small retailer investors beat back sophisticated hedge funds that bet against the stock. 1. A Bet That GameStop Won't Stop--Although Gamestop's meteoric price climb--from $35.50 last Friday to $280 today--grabbed lots of attention this week, a group of online investors have been saying the company was undervalued for over a year. The basic concept was simple. A lot of big investors decided that GameStop was the next Blockbuster, a brick-and-mortar retailer doomed to financial ruin by technological change. . . The GameStop bulls were in the minority. In fact GameStop shares were some of the most heavily shorted shares in the U.S. markets, meaning lots of big investors had wagered that their shares would decline. But they increasingly gathered around WallStreetBets and the comments section of Gill's YouTube page, comparing ideas and setting the stage for this week's action. How does an investor profit from a stock's decline? Here is a pretty simple explanation of how stock borrowing and shorting works--using cows as an example. Basically, you sell shares that you have borrowed from your broker. Later you buy them on the market and return the borrowed shares to the broker. If the price of what you sold them for is less than what you later bought them for, you've made money." My Comment: It sounds like the big investors had no confidence in GameStop but the small investors continue to back it and did very well. That sound great to me. As a staunch capitalist and ignorant investor, if small investors, indiviual, local, amateur or small professional, can play the Wall Street game and make money at it, great. We all win as the little people in our country and across our globe grow their personal wealth. I favor individualism and individuating, and appreciating wealth per capita is a win-win for everyone. Wealth and power should not be concentrated in the hands of the few, instead it should bedistributed all across society so most people are upper middle class, per capita wealth-wise, within the over all context of their society's total wealth number estimation. The citizens should ammass this wealth by earning it, not socialist confiscation of the wealth of the 1% by the government and then redistributing it. It sounds like the small investors, the WallStreetsBets crowd, have become shrewd investors, and honestly manipulated the market making huge profits at the expense of the major Wall Street investors. Again, I want to see small and amateur investors very adaptable, with-it, keen and adept at investing in and out of the stock markety. This way that keep the Big Guys honest, and bring a share of this speculative wealth to the little people, spreading expanding wealth portfolios across this greatest nation. What could be more desirable? Let me quote the article more: "2. The Short Squeeze and the Gamma Squeeze--An investor whos is short a stock makes money when the share prive falls. But when the price climbs much higher, the investor has to cover the short by buying the share at a higher price. This buying activity can force the price up further, forcing even more buying, creating a spiraling price effect known as a short squeeze. That's what happened to several hedge funds this week as companies they had bet against--including AMC, headphone maker Koss and GameStop--began to rise. They were "squeezed" out of their short position. In fact, many of the WallStreetBest posters predicted the short squeeze but to others it seemed far-fetched that retail investors would be able to forced the hands of major Wall Street investors. The WallStreetBets crowd also figured--correctly, it seems--that they could accentuate this bu arranging for something called a "Gamma Squeeze." This involves piling into call options that allow for investors to buy shares at a set price, often an inexpensive way to bet the price would rise aboe the strike price. The dealer who sold the option would ordinarily buy a few of the underlying shares to hedge their position, putting more upward pressure on the price. And as the price kept climbing, dealers had to buy even more. The squeeze was on. The WallStreetBets crowd did not invent the short squeeze or the gamma squeeze. They were not even the first to successfully pull off such a pincer play. But it was the first time a gang of retail investors losely organized around an online message board had carried out such a move and sent big Wall Street players reeling." As little stock market players become sophisticated, expert and versatile, their quick inventive minds will make them competitive or even able to surpass the profitability of the big investment brokers. That is good for riches flowing per capita to the little people across the country, and it allows fresh, novel and innovative research and support for new ventures and unique ways of backing winners and withrawing from losers, a way that grows our economy even more. Let me quote the Carney article even more: "3. Let the Investigations Begin!--On Thursday, many of the major online brokers restricted some trades in the stocks that had run up so much earlier in the week. This was largely a reaction to higher margin requirementsimposed by behind the scenes palyers, such as market-makers and the The Depository Trust & Clearing Corporation, the company that ultimately clears stock trades. But operations of these companies are cloaked in mystery and the brokers did not do much to explain why trading was restricted. To a lot of investors it looked as if Wall Street was striking back by limiting their ability to trade. Compounding this impression, GameStop shares fell 40 percent on Thursday. You can't blame people for thinking the fix was in. The limits came off on Friday, and shares rocketed higher. Robinhood, the popular app-based broker, said it had restricted trading in response to regulatory requirements and not at the request of big Wall Street players such as Citadel. All this has price action has attracted the attention of lawmakers in Washington, DC. . . Sen. Elizabeth Warren demanded that the Securities and Exchange Commission investigate." Reason 4 I have not included. It looks as if the Big Players may have cheated and rigged the market to curb their huge losses at the hands of savvy small investors. Let the investigation be done to determine the facts. We need more transparency on how Wall Street works, and we want the small online investors to grow their riches in an incorrupt, level playing field. It sounds as if Biden's Treasury Secretary, Janet Yellen, was on the phone all day in questionwith some of these big investors, and did she intervene on their behalf against the small investors? That is yet to be investigated and set straight. In closing, an investigation by Congress and the SEC should be conducted. I am not a socialist, not in favor of class warfare and nationalizing the rich and their holdings. On the other hand, the rich and powerful, whether these elites are on the Right or Left, should not conspire to close and arrange the market to limits legitimate profits of small investors against the major brokers. That smells tainted and corrupt. Let the facts be made known.