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Posts Tagged ‘Wall Street’

Luther at the Diet of Worms, by Anton von Werner, 1877.

And it cast down truth to the ground; and it practised, and prospered.

  • Daniel 8:12

Truth is cast to the ground. 

I’ve thought about that quite a lot in recent years.  It seems as if the lie always prospers, while truth, it if even is heard at all, is quickly dismissed as nonsense and those who speak it as fools or worse. 

I was reminded once again of just how corrupt things have become after watching some of the shenanigans in the stock market last week with the big dust up over the Gamestop stock and how, supposedly, a group of small investors beat the big guys on Wall Street. 

I’ll not dive into the details of what took place, but on the surface we can say that at least one major hedge fund sustained significant losses when its short position on Gamestock was blown up by investors piling into the company’s stock and driving it to over $400 per share. 

For our purposes, what important to understand is that when an investor – either an individual or an institution such as a hedge fund – short sells a stock, he profits when the price goes down.  If the price goes up, the short seller loses money.  If the stock price goes way up, as was the case with Gamestop, the short seller loses a lot of money. 

When the losses were piling up for the big guys during the week, it didn’t take long for the weeping and gnashing of teeth to begin.  Billionaire hedge fund manager Leon Cooperman went on an epic rant on CNBC last Thursday, 1/28, saying, “The reason the market is doing what it’s doing is people are sitting at home getting checks from the government. This fair share, is a (bleep) concept.  It’s just a way of attacking wealthy people and I think it inappropriate and we all gotta work together and pull together.” 

Just how true is the narrative that a bunch of unemployed Robin Hood traders on their own drove up the price of Gamestop, thus inflicting heavy losses on some hedge funds, I cannot say for sure.  I have my doubts that things are what we’re being told, but, at the very least, Cooperman seemed to accept that narrative when he went on his rant last week.    

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