Wow! Elizabeth Warren Jumps into the GameStock Controversy and Begs SEC to Investigate Reddit and Social Media

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Fake Indian and US Senator Elizabeth Warren decided to jump into the debate on the GameStock trading controversy.   Her position shows that she is a fake populist too.

Senator Warren drafted a letter to the SEC to address the recent trade activities in the markets involving GameStock stock and others.   Big League Politics wrote:

Senator Elizabeth Warren has sent a letter to acting chair of the Securities and Exchange Commission (SEC) Allison Herren Lee to request information on their plan to prevent “market manipulation” by small investors following the surge in GameStock’s market value.

Warren tweeted out her comments as well:

And later Warren went on TV to attack small-time investors.

The five-page letter can be read here. In it Warren begins:

I am writing regarding the recent surge in share prices for the video game retailer GameStop, whose stocks are “up 1,700 percent this month, including Wednesday’s climb of 135 percent” – driven by what one expert called a “flash mob with money.” These wild swings in value of GameStop and other companies that are subject to similar bets by traders are “detached from the factors that traditionally help establish a company’s value to investors,” I am deeply concerned that these casino-like swings in the value of GameStop and other company shares are yet another example of the gamesmanship that interferes with the “fair, orderly, and efficient” function of the market, raising obvious questions about public confidence in the market and those trading in it. I am writing to seek information on how the SEC intends to address these concerns and prevent these and future incidents of potential market manipulation.

Hedge funds, such as Melvin Capital Management, have bet that GameStop’s shares would fall in the hopes of reaping substantial profits. In recent weeks, however, share prices for GameStop began to rise, with a dramatic surge in recent days fueled not by any changes in the company’s economic fundamentals but by anonymous traders on the Reddit forum r/WallStreetBets. News reports state that these traders moved quickly to buy options contracts in an apparent attempt to target large investors.  This “epic contest between Wall Street traders who bet against stocks and legions of small-scale investors” has fueled a level of speculation “not seen since the tail-end of the dot-com boom two decades ago.” These shifts also raise questions about broader instabilities in the market and financial system, as “[n]o one knows how this ends” and “the intense activity could eventually prompt a wider sell-off in the market by forcing hedge funds on the losing side of these trades to sell parts of their portfolios to raise cash to cover their losses.”

Warren’s comments show she has picked the side of the big hedge funds who make money betting that a company’s stocks will fail.  This is fine with Warren but when individual investors get together to buy a certain stock, which ends up with the big hedge funds losing the money on their bets that a company fails,  the hedge funds should be protected!

Big League Politics concluded:

Turns out Elizabeth Warren is just as much of a populist as she is an American Indian. Be wary of those who put on a populist act when it’s convenient but side with oligarchs against the people when the chips are down. This lesson applies to both left-wing and right-wing populists alike.

Well said.

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