I have to admit, this is one of the more brazen acts of rebellion against the establishment I’ve seen in some time. They nearly bankrupted a hedge fund, and I’m not honestly sure this is over yet. The reaction is telling. Everything is fine when we manipulate the market, but if you proles do it, we’ll have investigations and demand the rules of the game be changed.
It looks like the hedge funds have been doing what I understand is called “naked shorting,” meaning shorting shares that you don’t actually own and may not even exist. The practice is illegal, but it wouldn’t surprise me if there was a wink, wink, nudge, nudge, as long as the right people were making enough money.
I am far from any kind of expert in finance, so this stuff both fascinates and confuses me. I know someone who trades, and have had him try to explain it all to me, and I keep coming back to: “How is this different than gambling?”