Tech

WallStreet Bets succumbed to Wall Street

We have relayed to you how the Reddit forum WallStreet Bets rebelled against Wall Street investors with the GameStop movement. The GameStop movement, which has had a tremendous impact around the world, revealed just how fraudulent the game is. In fact, Bill Gurley, one of the most recognized investors in the market, expressed his admiration for this move. Despite all these impressive developments, the WallStreetBets team has succumbed to Wall Street in the long run.

Although individual investors have made substantial profits from GameStop shares, pressure from hedge funds in both the White House and Robinhood has eroded earnings.

Keith Gill of the WallStreetBets team, for example, managed to turn the investment of $ 54,000 into a fortune of $ 48 million. However, had started as more than half of the profits were split into $ 22 million in a few days, lawmakers were investigating Gill for a possible disclosure violation.

Also, Keith Gill is one of the rare names who benefited from this GameStop move. Many amateur investors have not been as lucky as Gill. Amateur investors, who were late to the rally, saw GameStop shares fall to $ 52 on Friday, after breaking above $ 480.

The bank always wins

The term “Cash always wins“, which we are familiar with in casinos, also applies to the Wall Street market. Hedge funds continue to control the strings to win at all times.

Senvest Management sold its 5 percent stake in GameStop after Elon Musk’s tweet and $ 700 million of Gamestop’s investment won. Robinhood, meanwhile, received a total investment of 2.4 billion dollars with the emergency investments it received.

Senvest and Robinhood are not the only beneficiaries. Citadel, who played double-sided throughout the process, is one of the top mutual funds. Citadel even combined forces with founder Ken Griffin and transferred $ 2 billion in cash to Melvin Capital, which opened short positions for stocks and thus suffered a large loss. Hence, Ken Griffin, Elon Musk’s arch nemesis, Melvin Capital’s I looked at his back.

If you recall, we reported that the Citadel mutual fund paid RobinHood about $ 28 million to observe what hobby investors were doing. Citadel also paid $ 800,000 for speeches by US Secretary of the Treasury Janet Yellen. In short, we can say that the Citadel has already taken over every corner and is ready for everything.

Although some of the big investment companies have suffered with GameStop, Wall Street Bets still does not have enough resources to break the order it criticizes. However, we cannot describe the GameStop movement as a complete failure. After all, the Wall Street Bets team has managed to show just how fraudulent the system is.

No room for small investors on Wall Street

A CNBC posted on December 11 according to the surveyAccording to 57 percent of Americans, the stock market shows how well businesses and the wealthy are doing, not the rest of the country. This definition also applies to the financial elite and Republicans, who are the historical defenders of the free market.

Let’s say Ken Griffin, the founder of Citadel, who was at the center of the events, was a huge supporter and financial supporter of the Republican Party. Griffin, a major donor to the party, had previously funded the presidential campaigns of Mitt Romney and John McCain. In short, the public is not unfair in its opinions.

Garphil Julien, a researcher at the Open Markets Institute antitrust policy institute, took the Wall Street approach. He quotes:

“All work is fundamentally a power dynamic and is geared toward choosing big over small. Those who have huge amounts of capital, huge amounts of money will basically use their power to get what they want, and when they get what they want, someone the more you will lose. “

Considering what happened with this statement, it is clear that for now there is no place for small investors on Wall Street. The GameStop movement could disrupt these games recklessly played by Wall Street giants, if backed by legal sanction.

A large part of the WallStreetBets team is made up of those who suffered from the 2008 crash. As such, Wall Street’s no-rule approach that led to the 2008 crash is slowly shooting you arrows again, thanks to WallStreetBets. Criticized throughout the process, Robinhood was fined $ 65 million by the SEC, while Wall Street giants such as JP Morgan, Morgan Stanley and the Citi Group invested internationally to avoid US laws. keep scrolling.

Meanwhile, none of the market professionals believe that Wall Street will be penalized for this approach. If the Wall Street giants continue to avoid the rules, it could leave us with a global crisis. While large US banks decrease their assets in their own countries, they continue to grow in Australia, Japan, the United Kingdom, Brazil, China, Hong Kong and Mexico. Any bubble that prepares to burst in international markets can cause a new crisis.

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