I guess Greenwald and I didn't really understand the original story.
Miriam
Janet Yellen's Conflict of Interest Augurs Retail Investment Regulation
As the GameStop market swings continue to squeeze the brains of Redditors
who don't know whether to sell or hold, Wall Street's big fish are counting
on Janet Yellen to set their rules for the new retail investment game
by Raul Diego
February 05th, 2021
Mint Press
By Raul Diego
Robinhood Markets, Inc. was reportedly forced to re-impose trading
restrictions on GameStop shares after the stock price began to soar again on
news it had lifted the initial restraints on GME as a result of the
now-infamous short squeeze play by the WallStreetBets community of
Redditors.
The minute-by-minute saga continues to play out on social media and national
news outlets, with each new twist seemingly bolstering the narrative that an
unlikely group of hedge fund dragon slayers made up of regular joes has Wall
Street on the ropes. However, clues that this sexy plotline was not all that
it was cracked up to be had been emerging since the very day the news broke.
Stories like BlackRock's potential $2.4 Billion windfall on their GameStop
investments were barely mentioned on social media in the frenzy of
proclaiming David's victory over Goliath. Still today, few are talking about
the smaller hedge funds like Senvest Management, which made a tidy $700
Million from the rally - its most profitable investment ever - and other
similar stories.
While much of the popular excitement centered on the 53% loss suffered by
Melvin Capital, the hedge fund targeted by the Redditors in their attempt to
short squeeze the firm's GameStop position, recent data has shown that it
was actually institutional investors driving the "wild price action" of the
GME rollercoaster. In fact, the idea that retail investors were behind the
debacle is failing to hold up as more information leads industry insiders to
suspect that the investment rookies were being weaponized against the hedge
fund by other big players.
Panicked Authorities Clamp Down Amid Wall Street Bets' GameStop Rebellion
Within hours of a move that saw Wall Street lose billions, panicking
authorities rushed in to shut down Wall Street Bets' GameStop rebellion.
MintPress News | Alan Macleod | Jan 29
According to University of Chicago law professor Todd Henderson, the $GME
"price inflation was likely driven by vindictive hedge funds trying to
squeeze out a hedge fund that was short GameStop". But, a recent discovery
by Wall Street on Parade (WASOP) may shed light on a deeper game being
played, that suggests the entire GameStop fiasco could be an excuse to bring
down the regulatory gauntlet on the retail investment market altogether,
with Melvin Capital offered up as a sacrificial lamb.
Under the table
Citadel, the multinational investment firm, that together with Point 72
(formerly S.A.C. Capital Advisors) rushed to shore up Melvin Capital with a
$2.75 Billion-dollar infusion in the wake of the ostensibly grassroots
squeeze on its short position, was profiting from the orders Redditors were
placing through the online brokerage firm Robinhood or any of the other such
firms that Citadel processes market orders for through its trading platform
Citadel Securities, which include TD Ameritrade, Charles Schwab, WeBull,
Fidelity Brokerage Services, and Ally Invest Securities.
According to Wall Street on Parade, Citadel's unique position in the
securities exchange marketplace allows it to offer massively profitable "pay
to play" trading services that have resulted in billions of dollars flowing
into company coffers from millions of daily automated trades. By examining
over 600 SEC reports filed by nine online brokers, WASOP discovered that
these firms were directing stock and option orders to Citadel in exchange
for rebates from the trading and investment giant.
Further suspicions of how all that money is moved in the interim are raised
by a statement found on Citadel Securities' website that mentions "18
alternative liquidity venues," which WASOP suggests could be tied to Dark
Pools - private exchanges owned by Wall Street's biggest financial
institutions that are not accessible to the public. One such dark pool owned
by Goldman Sachs, JP Morgan, UBS, and other banking behemoths has been
playing with GameStop stocks since December 2020.
As a result of the repeal of the Glass-Steagall Act, these large banks are
able to engage in all manner of behind-the-scenes predatory manipulations of
the stock market, such as the creation of stock market bubbles to "suck in"
the small retail investor in colossal, virtual boiler room scams, that rely
on intentionally false or misleading research reports distributed by
'reputable' investment firms to their clients to make a given stock price go
up, but penalizing brokers if they tried to get their customers out on the
high end.
These and other scams are perpetrated daily by the biggest fish on Wall
Street and its possible that the GameStop event is yet another one of these,
albeit with a larger dimension and possible ulterior motives beyond
immediate profit as the relationship between Citadel and Biden's Secretary
of the Treasury and former FED chairman might suggest.
The house always wins
As if faced with an existential dilemma, Yellen has voiced her desire to
"understand deeply" what has led to the so-called "Reddit Rally" and has
called for a meeting with the U.S. Securities and Exchange Commission (SEC),
Federal Reserve Board, Federal Reserve Bank of New York and Commodity
Futures Trading Commission to look into the mysterious retail trading
frenzy.
Papering Over the Rot
The staggering concentration of wealth at the top has deformed our governing
institutions - new window dressing will not end oligarchy.
MintPress News | Chris Hedges | Feb 1
With the media's focus squarely on the plight of amateur investors as $GME
stock continues to fluctuate wildly and the Redditors at the center of the
story vacillating between selling and holding, talk of dealing with market
"distortions" revolve around the retail investors themselves who are now in
the crosshairs of regulators. According to Andrea Cicione from the TS
Lombard economic research institute, thanks to the GameStop scandal, market
distortions caused by investors conspiring to cause them "might find its way
into regulation in a more explicit way."
The likelihood that any regulatory initiatives that might result from
Yellen's meeting will touch companies like Citadel or any of the real market
distorters is low, to say the least. The new head of the U.S. Treasury has
received almost one million dollars in speaking fees from Citadel since
stepping down as Federal Reserve Chairman in 2018, including a $50,000 to
$100,000 refund she hasn't paid back to the investment firm for a canceled
event.
Citadel's investment in Yellen is unlikely to yield strict regulations on
their and other Wall Street firms' activities; as they are happy to pay
speaking fees and relatively nominal fines for any breaches - a form of
legalized corruption that pervades financial markets. Far more likely is a
new regulatory framework to control the market activity of the equally new
breed of retail investors, which the GameStop circus has now motivated to
enter the Wall Street casino where the house always wins.
