I haven’t had anything to say on the meteoric rise of GameStop stock, propelled by a bunch of retail investors, because I don’t understand the market conditions that led to it soaring up 14,300 percent at one point. What I have enjoyed is watching Wall Street firms lose billions upon billions of dollars
I will say this, it’s pretty clear that the Capitalist’s defense of the market – the most efficient means to distribute capital to deserving companies – is complete and total bullshit. And everyone knows it’s bullshit. For years the media has been calling Wall Street a “casino” and talking about hedge fund activities as “bets.”
The Wall Street Journal acknowledged Wall Street is a casino where the wealthy go to place bets in their headline again today: “Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets.” The keyword there is “bets.”
If you’re trying to figure out the most efficient way to allocate capital to deserving companies you don’t do it by “making bets.”
What I find exceptionally annoying about this whole situation is the rush of institutional investors, big banks, and regulators now saying they need to step in and protect us. Again, I’m calling bullshit.
The regulators cared about our well-being, they would have sought to protect us from bad-faith and self-interested actors in the retirement space. Instead, the SEC wrote down a toothless regulation, gave it an Orwellian name about being in your “Best Interest”, and went back to letting Wall Street and the big banks pillage your retirement.
Wouldn’t it be nice if the SEC showed the same level of concern when it comes to protecting your retirement as the show for protecting the short-selling interests of hedge funds?
RT – which has its own nefarious agenda – called it correctly when they wrote “you don’t fix a broken system by playing by its rules.” They’ve also had some good coverage on how this saga has exposed how disconnected Wall Street has become from main street, which again, I feel proves the point that the market is no longer the best way to allocate capital to deserving companies. All that being said, I’m not giving RT a link from my blog. If you’re interested in what they had to say, I’m sure a quick DuckDuckGo search will find it.