Iron Fist Of The Market: Wall Street Protects Hedge Funds From The Little Guy
Charles Payne Posted: Jan 29, 2021 12:39 PM
Wow, another roller coaster ride for the market that saw major indices rocket higher, then stumbled into the close. But the broad market could have set itself on fire, and no one would have noticed. All eyes continued to watch the short squeeze saga, which took an unsurprising, but dastardly turn for the worst for individual investors.
Wall Street didn’t put its collective finger on the scales, but it put an iron fist on the side of hedge funds. Several trading platforms, including Robinhood, denied individual investors the right to buy certain stocks. Hint, the stocks that hedge funds have heavy short positions. It was the kind of boldfaced move that only Wall Street could pull off.
Imagine watching a boxing match, and the 500-to-1 underdog is winning, on the verge of a knockout, then the referee pulls out a set of brass knuckles. He hits the underdog on the head, and the whole time, the announcer describes the dramatic blow and altered momentum as an inevitability.
All this happens while also wagging their fingers at others, thinking of beating the champ. Later, the referee says he assaulted the long shot pugilist to save him from getting hurt later in the bout. Bizarre? It could only happen in an old Jerry Lewis movie for laughs.
It happened in plain sight yesterday. The investing world picked hedge funds over individual investors. And did the latter dirty. It’s heartbreaking and bewildering. I think it’s illegal. And if it’s not, it should be. And while we are on the subject, there must be rules against 140% of a company’s float being sold short, borrowed, and sold over and over and over again.
This concept smacks of collusion, manipulation, and disdain for the dreams and aspirations of smaller investors. And while we are on the topic, these short campaigns are not about price discovery or taking advantage of potentially overpriced stocks.
These campaigns destroy companies. Period. The good news is Congress is looking into this. The bad news is these shorts, including players in the current drama - have pumped a lot of money into the coffers of prominent politicians, including Speaker Nancy Pelosi.
Perhaps the saddest part of it all is Robinhood took aim at its customers.
https://finance.townhall.com/columnists/charlespayne/2021/01/29/iron-fist-of-the-market-wall-street-protects-hedge-funds-from-the-little-guy-