The recent "GME Revolution" has attracted worldwide attention. Some netizens asked me if the weather is going to change on Wall Street.

The four seas are turbulent and angry, and the five continents are turbulent and thunderous. It is invincible to sweep away all pests. Bloomberg said: GameStop's grassroots uprising may mark the end of an era of short sellers.

All the leeks in the world unite and let the sickle tremble! Really?

First, the origin

The origin is the stock GameStop, which was excessively shorted by the organization, causing public anger. Better break the dogma than provoke public anger!

GameStop, with the code "GME" and Chinese name "Game Station", is the largest chain store selling video game software offline in the United States. Students who love watching The Big Bang Theory should be familiar with it. Sheldon often hangs out, which is the favorite of otaku.

Of course, in the era of mobile Internet, online distribution of games has become the mainstream, and the business model of offline sales has fallen behind and is considered as a sunset industry. The house leaks in the rain all night, catching up with last year's epidemic, further losing customers and dropping sales performance. As a result, short positions have become the perfect prey for Wall Street hedge funds to short.

You can't deceive others too much. This game store has grown up with many millennials and has a group of die-hard fans.

The empty talk of research institutions, the hunting of hedge funds, and the plunge in stock prices have annoyed the majority of grassroots retail investors. Under the leadership of the leading brother, the leek uprising was forced to empty, and the stock price rose from more than 2 yuan to the highest of 483 yuan, which soared 2 times in a few days. It is said that the total loss of short positions of institutions has reached 2 billion dollars, and many hedge funds are facing liquidation risks.

The last week of U.S. stocks was the worst week since October. However, GameStop's stock was surging, rising by 67.8%, and retail investors wanted to change their institutions' lives. Under the leadership of the leader, the stocks hunted by short-selling institutions have been hit head-on by retail investors, and the revolutionary bonfire has expanded to AMC, Gauss Electronics and other short positions.

The game station closed up by 67%, and this week it has increased by about 4%; AMC cinema closed up 53%, up 277% this week; Gauss Electronics closed up 52%, up 18.16% this week; Express closed up 27%, up 235% this week.

Second, short selling

Short selling has nothing to do with fundamentals. At this time, the stock has become a bargaining chip. To be precise, it is a bullet, and the short seller is bitten by itself, and the hunter becomes prey.

In 28, there was a similar scene. Porsche forced Volkswagen, and Adolf Merckle, the fifth richest man in Germany, committed suicide by lying on the rails.

In, the subprime mortgage crisis broke out in an all-round way, which made the global automobile industry worse. The German Volkswagen's prospects were bleak and its share price plummeted, and Merckle became a short seller. He bought a large number of put options of Volkswagen, which was also in line with the mainstream trend of the market at that time.

It turned out that Porsche had acquired Volkswagen. At that time, Porsche would hold 74.1% of the shares of Volkswagen. In addition, the government of Lower Saxony, where Volkswagen is headquartered, owns about 2% of the shares of Volkswagen, and the actual shares circulating in the market are less than 7% of the company's total share capital. Due to "naked short selling" speculation, the number of short positions in the market accounts for 13% of the total share capital of the public, far exceeding the actual circulation.

this is the horrible short-selling. When closing positions, short sellers will be forced to buy stocks at high prices to fill the stocks sold by naked short sellers. However, there is not so much spot in the market at all, resulting in a mindless skyrocketing stock price. Volkswagen once soared from 21 euros to more than 1, euros, becoming the most expensive company in the world.

After the short selling, the bodies of the bears are full of valleys, including the speculative richest man in Germany.

Under normal circumstances, it is not more than 1% to borrow and sell as much as possible. This time, GME was also a short-selling institution "naked short-selling". It was excessively short-selling, and the short position reached 14%, which was directly exploded by retail investors, just like Volkswagen.

Don't be superstitious about the level of institutions. China investors are crazy about speculating in funds now, and I think it's a run of luck, because no one can overcome the weakness of human nature, and this time it's also caused by greed. Hedge funds with high leverage, high frequency trading and long and short positions seem to be tall, and their trading strategies are mysterious. In fact, most of them are marketing means to fool customers. According to statistics, the average rate of return of hedge funds in this decade has not outperformed the index.

The organization has completely surrendered this time, and it will not kill if it surrenders its gun! After 2 years of "wash my hands of the golden basin", the founder Andrew Left confessed to the revolutionary teenager and repented: "It has become something I hate ..." On Friday, Citron said that it would no longer release short-selling reports and focus on studying the long-term opportunities of individual investors. (Shannon predicted that GameStop's share price will soon return to $2)

Third, who is pushing the air?

In 28, most of the people who occupied Wall Street last time were the poor at the bottom, mainly colored people.

In 221, most of the people who washed Wall Street this time were grassroots retail investors, and most of them were millennials, mostly young people and whites, and most of them were not poor, because the poor at the bottom of society had no money to stock and had no stock account at all.

Young people, white people and middle class are also rebelling! A familiar melody came from my ears:

Let's go,

You have everything, I have everything,

When the road is rough, shout,

When it's time to do it, do it,

Rush into Kyushu!

Originally, the U.S. stock market was an institutional market, and Wall Street has always been the world of institutions. How come there are so many retail investors? Is the us stock a-share?

Yes, in recent years, the development of Internet brokers, such as Robinhood, a free trading platform, has attracted a large number of young people to enter the market and become new retail investors.

From Trump to Biden's government's relief plan, the relief fund, which is recharged into everyone's account, has money;

Since last year, there has been a pandemic, and the community is isolated. I live in Izaike and have time.

Some people have money and time, and the number of retail investors in the stock market has suddenly increased. Independent and unyielding American investors have begun to compete with institutions for the right to speak. Of course, if we want to form combat effectiveness, we need organization and leadership.

Organizations rely on the Internet and social platforms, and the US retail base camp is Reddit sub-forum WSB；;

The leader is the first big brother, the most famous one, whose net name is "DeepFxxxingValue", and his real identity is Keith Patrick Gill, a 34-year-old Boston financial analyst. He first called for short-selling GME, and figured out that institutions have been excessively short-selling. As long as the retail investors are United, they can move Taishan, forcing short-selling institutions to cover high positions and bloodbath Wall Street.

With people, money, time, organization and leadership, all the elements needed for mass movement are ready, and a vigorous grassroots revolution has begun. Retail investors also published a denunciation in their forum WSB: Wall Street, the world is bitter in Ku Jin! (Translated into vernacular: Capitalist, fuck you! )

Fourth, from "Occupy Wall Street" to "Bloody Wall Street"

Indeed, the world is bitter in Ku Jin!

The "Three Virtues", the leader of the "post-wave" in the United States, was the first to jump out and support the grassroots revolution, denouncing Wall Street as rich and heartless, and mending the knife. Senator Sanders tweeted: "Wall Street can't continue to operate like a casino. It's time to tax the speculation on Wall Street. The tax collected can be used to cancel student loans and provide public higher education free of charge."

In the past, Wall Street was full of institutional greed and elite arrogance. The money of retail investors is called "stupid money", and the money of institutions and elites is called "smart money". The sickle leek is completely different, and retail investors can only be cut off.

Where there is oppression, there is resistance. Get up, don't want to be a leek investor!

This time, American retail investors bloodbath Wall Street, making tens of billions of dollars of short-selling institutions lose their blood, showing the power of the great alliance of leeks, and also sounding the alarm for global capital. When can the bubble feast last?

From the "occupation of Wall Street" in 28 to the "bloodbath of Wall Street" in 221, behind it is the tear of American society.

The epidemic is widespread, and the world is releasing water. From the perspective of wealth, it means that the rich are inflated and the poor are deflated.

On the one hand, the middle class and the bottom class are miserable, especially the vast number of migrant workers and small business owners.

On the one hand, the super-rich are extremely rich. In the bubble era, their assets are growing by trillions. By January 18, 221, the total wealth of 66 billionaires in the United States was $4.1 trillion, an increase of 38.6% compared with the total net worth of nearly $3 trillion in the early 22 pandemic.

According to the data reported by the Federal Reserve in the second quarter, the total wealth of the top 1% population in the United States is $34.23 trillion, while the total wealth of the bottom 5% population is only $2.8 trillion.

5. Is "unplugging the Internet cable" a hooligan?

In the face of the retail revolution, have no martial ethics, an institution, "unplugged the internet" if it couldn't beat it.

Many brokers such as Robin Hood began to ban the trading of GME and other stocks. Is it illegal for American brokers to restrict retail investors from buying?

This depends on the agreement between the user and the brokerage firm when opening an account. If there are clauses in the agreement, the brokerage firm has the right to restrict the trading of specific stocks, which is technically not illegal. Brokers make decisions to restrict transactions, mainly for regulatory compliance requirements. Under the T+2 clearing system in the US stock market, securities brokers are required to pay the clearing margin to the clearing company. With the increase of trading volume and stock price, brokers need to dynamically meet the regulatory requirements to make up the margin, or limit the trading volume to the margin compliance range.

Of course, investors don't buy it. The United States has an independent judiciary, and retail investors have launched group lawsuits against securities firms to restrict trading. Members of the U.S. Congress also sent a letter to the Justice Department asking for an investigation into Robinhood.

Compliance and protection of shareholders are all reasons on the table. You know, there are of course shady behind it and conflicts of interest. Why does Robinhood "unplug" his users? Because a large number of retail investors choose this kind of brokerage firm without commission trading, and the brokerage firm gives the transaction to a high-frequency liquidator for making money; Then the liquidators were too involved in short-selling transactions. Now that it has been emptied, the liquidator may go bankrupt, so we have to go to have no martial ethics.

GameStop's biggest short position Melvin's parent company is Citadel. Ken Griffin, the boss of Citadel and a wall street tycoon, has two companies, one is Citadel, the other is Citadel Securities, and he is also an investor of Robinhood. Citadel is an investment company, Citadel Securities is a market maker, and Robinhood is an Internet broker for young Americans to buy stocks. Retail investors trade through Robinhood, and Citadel Securities is actually their rival.

Wall Street is intertwined and has deep interests. This is exactly what happens: the red flag rolls up the serf halberd and the black hand hangs the whip of the overlord.

6. Bears must die, Musk, right?

Musk, the new richest man in the United States, is unwilling to be lonely and supports the revolutionary actions of the teenagers. He cursed that "shorting is a scam", because Tesla was hunted by bears two years ago. Thanks to China's help, he escaped, and the Jedi counterattacked and smashed the bears. "Why does Musk dance for China?

However, as a technology giant, Musk's view of crossing the border into the financial field is really flattering.

To be fair, long and short are normal, a healthy market needs long and short balance, and a reasonable market price comes from long and short games. The unilateral market, which can only do more, is distorted and easy to breed bubbles. Short selling mechanism is a self-purification mechanism of the market, which is conducive to improving market liquidity and promoting price discovery.

participants in the market, whether they are long or short, make money because of their correct judgment and lose money because of their wrong judgment. The comparison of long-short power will only temporarily affect the fluctuation of stock price, but in the long run, the trend of stock price is determined by the intrinsic value of the company.

In the market, no matter how short you are, it is neutral. You can't say that being a buyer is morally noble and being a seller is morally despicable. In a normal securities market, both short positions and long positions are legitimate market participants, and shorting and long positions are legitimate trading behaviors. It is precisely because of buying and selling that the market can balance supply and demand, thus giving play to the function of value discovery. Without bulls, the market will collapse; Without shorts, the bubble would be crazy. Both short positions and long positions are healthy forces in the securities market. As long as they are legal and compliant, short positions only have technical problems, but there is no moral problem.

The failure of GME bears lies in the technical carelessness in Jingzhou. The biggest fate is that the position is exposed, and the short position is 14%. Only when the opponent sees through the cards can the retail investors launch an offensive to violently empty the position.

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