Hello Q Team,
Can you please take this post into discussion. It covers thoughts on the weaponization of the US financial markets and thoughts on restoring the US public markets as a venue for capital formation.
Near the beginning of the Q posts you disclosed Hodgman, so you’ve obviously early on followed all the relationships north into their origins. The purpose of the daisy chain of relationships is to craft a scenario where certain people can create un-natural outflows from the capital markets. I think you guys have that one under control. If you don’t, set up a meeting with FINRA’s short selling regulation dept. They are privy to all.
Nice job buffering us from the oil crisis.
There are a couple problems which have the same solution. First the markets have been weaponized. The weaponization seems to have just been activated. The second is, the blood letting above mentioned has ceased the US public markets from being a venue for capital formation; it’s a killing field for hopeful companies.
The weaponization was perfected down in micro-cap stocks. It is now being enacted within large cap and indexes. The process is to use automated trading schemes to increase volatility. With elevated volatility, humans simply pause waiting for cheaper prices. Bids get thin, HFT / AI slam through bids – very fast vicious cycle.
The solution is 2 step simple:
1 human. 1 hand. 1 order. All orders must be placed, amended, cancelled by a human hand.
Reinstate the uptick rule while abolishing the use of liquidity shares. Make it so one cannot use short term counterfeit shares to sell short. The shares must exist to sell short. And make it so the short seller must wait for someone to take his offer. Frankly you can eliminate short selling all together. The argument that short sellers prevent investors from getting victimized by fraud is 100% opposite from the truth. By definition a short seller puts out more shares to even more long investors before exposing the fraud. Short selling if performed correctly actually hurts more people.
This 2 part solution will help to return the public markets into venue for capital formation. In 2000 there were 12,000 publicly traded companies on the NASDAQ, NYSE and AMEX combined. Now 4800. GDP is 80% higher.
Human market makers and human traders bring in golfing buddies. How many golfing buddies do HFT programmers bring into the market?
You have to rehumanize the markets.
And, in eliminating or containing predatory destructive negative GDP short selling, tiny companies will begin to IPO and do secondaries again. Currently if a company is below $500,000,000 in market cap and does not have free cash flow to repurchase stock defending against HFT short selling, the odds are very high they will be driven down in value to the point of delisting. There is no opportunity for them to build a hopeful, engaged shareholder base and then pursue the follow on funding necessary to grow the business.
And you might want to hurry up. They’ve just started selling the 10 yr and the spy tech large cap. There go the 401k’s and pension funds just in time for the midterms. Funny how the market changed the day Q asked if we were ready for arrests???
Thanks for all you do.