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THEY HAD IT COMING!!! “Gamestonk”, Hedge Funds, and the “Free-Market” Farce

Originally posted at: THEY HAD IT COMING!!!
https://thinkweiss.substack.com/p/they-had-it-coming

Almost a decade ago, Ian Fletcher published a piece entitledĀ Why Free-market Economics Is a Fraud. Among the key takeaways:

Nobody with any wits about them really believes in free markets. People believe in them when it’s in their interest, but not when it’s the other way around.

Surely this is the current sentiment of hedge fund managers who, after getting their assess handed to them by a bunch of ā€œamateurā€ investors on Reddit, seem to suddenly like the idea of market regulation.Ā Additional regulations, however, may not be needed as the ā€œmarketā€ is already ā€œcorrectingā€ itself. Some omnipotent ā€œinvisible handā€ wagged its finger at Robinhood so furiously that buying of GameStop shares on the company’s platform grounded to a halt. Robinhood is currently mired in a class-action lawsuit, but Google, using its own ā€œinvisible handā€, has come to the rescue by making negative reviews about Robinhood magically disappear. Robinhood may want to consider rebranding itself as Nottingham, Inc.

There is also talk about stopping trading when ā€œunusual activityā€ is linked to ā€œsocial media chatterā€. There are even calls for shutting down online forums where such ā€œchatterā€ takes place. This is quite interesting because I don’t recall any fat cats publicly advocating for online censorship after the Capitol was invaded. Maybe that terrorist attack didn’t mess up their portfolios too badly.

WHEN NASDAQ THREATENS TO HALT TRADING FOR STOCKS LINKED TO "UNUSUAL SOCIAL MEDIA CHATTER:"
"OH, I'M SORRY. I THOUGHT THIS WAS THE FREE MARKET!"
Source:Ā ifunny.co

Frankly, I have no sympathy for the current plight of hedge fund managers: they are the antithesis of what the ā€œfree marketā€ is supposed to be about. To begin with, hedge fund managers make their windfall profits by gambling with (whoops, I mean ā€œmanagingā€) other people’s money, not necessarily their own. Hedge fund managers get paid ā€œmanagement feesā€ regardless of how their funds perform and receive a sizable percentage of the profits when the hedge funds perform well. Naturally, this setup incentivizes taking massive risks to maximize profits. If you had millions or billions of dollars to invest with little or no risk to you personally, what would you do?

Perhaps you’d try betting against (sorry, I mean ā€œshort sellingā€) a company that appears to be in danger of going under. This is a ā€œfree marketā€ after all, so what’s wrong with trying to profit from other people’s misfortune? And, what could possibly stop you? Some random ā€œchatterboxesā€ buying stock in the same company you’re short selling? Oops!

These random chatterboxes successfully gave the ā€œhedge headsā€ a taste of their own medicine. And yet, contrary to the free-market dogma, the investors who pulled this off seemed to be motivated less by profit potential and more about punishing the top 1%. If anyone has the right to claim the ā€œRobin Hoodā€ moniker, it’s the Redditors on WallStreetBets. ā€œReddit Hood” has a decent ring to it.

Progressives have been screaming for Wall Street reforms and regulations for decades. This episode makes the argument for a ā€œcorrectionā€ very compelling, but don’t get your hopes up. Any new regulations will likely be designed to protect Wall Street tycoons at the expense of everyone else. Who do you think most of our legislators are taking money from?

Nevertheless, this episode has highlighted the extent to which the market is rigged in favor of a handful of ruthless profiteers who will do anything and everything possible to preserve and expand their wealth while denying the masses any hope of achieving the so-called ā€œAmerican Dreamā€. In many ways, ā€œGamestonkā€ proved to be an example of modern-day class warfare, and it appears that the people won this battle. But, we still have a long way to go in terms of crushing the free-market farce and creating a fair society where opportunities for financial success are open to everyone.

Until then….

r/PoliticalHumor - Shut up and...
Source:Ā r/PoliticalHumor

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Michael Weiss Las Vegas, NV

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