I’m sure that everyone has heard about a bunch of people on Reddit turning the tables on large short selling investors. A reasonably good summary of it is an article on CNN Business titled “The real shock of the GameStop mania was that it didn’t happen sooner“.
Or as Jon Stewart says — in his first tweet ever — “This is bullshit. The Redditors aren’t cheating, they’re joining a party Wall Street insiders have been enjoying for years. Don’t shut them down…maybe sue them for copyright infringement instead!!”
The rich have been manipulating stocks for profit for a very long time. Every time you see a TV show or internet article giving investment advice, you can be sure that they bought a bunch of some stock, and now are trying to get lots of people to buy it to bid up the price. The amazing thing is that the people on the internet didn’t figure this out sooner.
It is difficult to see how this won’t destroy stock markets, now that everyone knows that they can be manipulated by any organized group on the web. Hopefully, this will lead to a dramatic restructuring of the markets so that they no longer are manipulable casinos that act as golden eggs for the rich and connected.
Thanks for posting this. I was having a hard time wrapping my head around this story and its implications.
I’m not sure whether I should feel happy or alarmed by this. On the one hand, it’s good to see people shining a light on the system that has conjured wealth out of thin air for a select few on Wall Street. On the other hand, I’m concerned that this will add a new level of volatility to the market, which can make “classic” investment much more risky.
A speculation tax might help. This video is a few years old, but highlights just how much money is being thrown around out there:
“No one can use the markets to rip us off, especially the since that is how we rip you off. That is just not fair!” Wailed the worthlessly wealthy with one voice.
Jeff, a transaction tax on buying and selling securities would definitely be a good idea. As would requiring anyone who promotes buying or selling of any securities to fully disclose their positions in those securities.