Exposure

I feel like maybe I’m running this topic into the ground, this is the third blog in a row I’ve written about it. In my defense, it’s the topic everybody’s talking about it and there’s still breaking news. Which is one of the good aspects of GameStopGate. If it wasn’t such a hot topic, we never would have known that Janet Yellen, Biden’s secretary of the treasury, received $800,000 from the Citadel group for speeches.
Now, we’ve been through this particular issue before, with Hillary Clinton. Stipulated, it’s not illegal to be paid for speeches. But it does present a conflict of interest, and Janet Yellen should recuse herself from any role in the upcoming investigation of Citadel.
I’m still not sure of the need for an investigation. We all know what happened with the GameStop stock, and nobody did anything illegal. Since then RobinHood, and their parent company Citadel, have blocked Reddit users from trading certain stocks (AMC cinemas. Bed, Bath and Beyond, and a couple of others) and now will only allow them to sell them, but not to buy them.
People who know how stocks work say this is stock manipulation, and prosecutable. I’d just call it breach of contract, which is prosecutable. But, the facts are already on the table.
Congress does love a good investigation, though. Everybody gets to stand up and deliver a speech, which is aimed at their constituency and often has little to do with the case, and then they all vote, and the status quo is preserved.
But, it will be real hard to go back to normal.
A Wall St. transaction tax has been suggested. This was also suggested by Bernie Sanders during the campaign and I think it’s a great idea. It would both raise revenue and slow down the pace of Wall St. trading, perhaps even prevent another 1929 style crash.
Making ‘shorting’ illegal has also been suggested.
If congress fails to punish Citadel, and does nothing to reform the situation or, worse, does something to lock small investors out so the hedge funds can continue to drive businesses into bankruptcy….well, you can expect me to have some very nasty words about that.