Shame On You Wall Street

Summary

• The corrupt practices by Wall Street continue.
• A perfect storm brought rise to the "Short Squeeze Saga", exposing the unethical, unfettered and financially ruinous practice of short selling by over-leveraged hedge funds in a crowded trade.
• Today certain brokerages halted trading in short squeeze names in a blatant violation of free market practice, to allow lecherous hedge fund cronies to staunch the bleeding.
• Chamath Palihapitiya may have called out the obvious, but now Wall Street shamelessly telegraphed a disgusting example of virtue signaling in a move that EVERY retail investor should despise.
• Wall Street may have seemed to escape this time, but the stay of execution will now never be lifted.  May you reap the pain you have sown.

As a retail investor, you know that the odds of beating the market are stacked against you.  First off, investing is not a talent one is born with, but must learn.  In the U.S., for over two centuries, the knowledge was available only to the financial elite at the very top of the food chain.  Secondly, it is a field that is counterintuitive (buy when things seem bad, sell when times are good) and in which history has taught us is fraught with deception and thievery.  Lastly, when things go bad, YOU are expected to pick up the check, even when it was  the spoiled privileged who screwed up.

With the advent of the internet and recent massive instances of malfeasance/corruption, information and disclosure requirements have started to level the playing field between retail investors and finance professionals.  Also, other free market developments (commission free trades, low cost ETFs et al) and structural differences in performance bound funds versus retail portfolios have arguably closed most of that large gap.  But as in America, there is still a clear divide, which exists because frankly, Wall Street does not want to afford the average person equal footing in investing, period.  For them, it is apparently bad business practice.

Now that is not to say that all financial professionals are this way, it is just that as a field it remains clearly self-serving.  If you disagree, likely you quit reading right after the article title.  Also, from my end, it is clear that the ability to sell short more than the public float of a company's shares borders on sheer lunacy and/or rampant greed.  Chamath yesterday on CNBC put it out there in plain sight and the responses (or lack of evidentiary reply) from host Scott Wagner made it obvious that they (Wall Street) are oblivious or think everyone else dumb.

As an investor, one must be at least somewhat capable of optimism; thus I was, thinking yesterday that we could see the dawn of an age where this elusive equality would seem possible.  However, today's bald-faced coup by the financial machina showed that it is doubling down on its hypocrisy.  RobinHood and TD Ameritrade suspended trading on these short squeeze names today, crushing the retailer side of the equation by choking off market liquidity which is the lifeline of a free market economy.  The market is not free as it is not equal.

Even more infuriating is the obvious virtue signaling that was their explanation for the literal theft of our money: "In light of recent volatility, we are restricting transactions for certain securities to position closing only".  RobinHood and TD Ameritrade disallowed retail investors from buying names like GME, AMC and BBBY but instead facilitated the selling or closing of these positions.  They essentially hijacked our free market economy and allowed their hedge fund cronies to unwind their toxic trades (and probably scheme to profit further on down the line).

SHAME ON YOU WALL STREET.  

Let me lay out your heinous lie: "In light of recent volatility" < because we got caught with our pants down (again) in a crowded corrupt trade that could have caused another meltdown, "we are restricting transactions for certain securities to position closing only" < we are unilaterally screwing you (again) and expect that you will be too dumb to understand or do anything.

Perhaps the situation is Wall Street was too dumb to understand what free thinking people were capable of, and again they were unable to accept blame much less take their own medicine; and thus resorted to the lying/cheating and stealing they know best.  And for those retail investors who "stayed away" from directly participating in the fracas, don't think yourself uninvolved or unscathed.  The market swoon yesterday was only a tickle in the collective throat of a system that realized that over-leveraged hedge funds would have to unwind their positions/portfolios and trigger a selloff and contagion as bad as getting financial CoVid.  More likely the powers that be dangled this possibility in front of institutions as the threat of what was to come if more of these trades turned against big money.  Every retail investor lost money yesterday or other days when the "system" made such an adjustment.

At some point, the reckoning will come, definitive and thorough.  Your assault on the free market economy, our way of life and even the American dream will not go unanswered.  Get this straight, Wall Street , you only exist because we let you; but we don't need you.  Not in this way, not ever.  For years you have alienated/disgusted those now in their peak earning years and have shown their children what callous disregard meant at an early and very formative age.  The next investing generation is rising against you and they will not forget.  Nor will their children; but that is immaterial because I doubt you will make it that far.