by John Rubino
Dollar Collapse
Wall Street traders have traditionally played hardball with each other. They’ll take a position and then “talk their book” on CNBC, or short a competitor’s favorite stock while spreading negative rumors about it, or do any number of other ethically-dubious things to profit at the expense of their peers. When they end up on the losing side of such a scheme they don’t like it, but they understand that this is how the game is played.
Then the game changed. The government sent billions of dollars of covid relief checks to video game playing Millennials who had just discovered stock trading apps like Robinhood that allow customers to trade for free. And – no surprise for people who have been organizing cooperative video game raids their entire lives – these newborn daytraders figured out that by targeting heavily-shorted stocks and buying them en masse, they can force hedge fund short sellers into a panicked short squeeze, sending the target stocks through the roof. Et voila, easy money, over and over with no apparent end in sight – all at the expense of the market’s former top predators. It’s as if the Super Bowl audience started rushing the field and tackling Tom Brady for a loss – on every play.