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[rain_gryphon]

Citadel LLC has serious money (at least a billion, possibly more) exposed in Melvin Capital, one of the major losers in the GameStop shortselling fiasco. The gravity and urgency of the issue is such as to almost demand the deep involvement of the Treasury Secretary. However, Sec'y Yellen's receipt of more than $800k in speaking fees from Citadel certainly creates at least the appearance of a solid conflict of interest in the matter of the GameStop price manipulations. It will be interesting to see how this resolves. Will she recuse herself, effectively failing to do the job for which she was (just) appointed, or will she resign and leave the field clear for someone else?

Comments

[thewayne]

The sad thing about the who fiasco is that the only people it will benefit will be the board and maybe the share-holders, it won't do diddly for the people working in the stores.

The treasury didn't do anything when Jammin' Hot Dogs went out of business here in Alamogordo, which provided real jobs. Same with any number of businesses across the country. Melvin tried to make a fortune by the death of Game Stop, and a bunch of "geeks", as everyone is calling them, decided to make a point and show that Wall Street is a game rigged to show that the rich exploit everyone else. Wall Street was insufficiently punished in the 2007 housing crisis, I think now would be a great time to demonstrate their disclaimer that 'past performance is no guarantee of future returns'.

[rain_gryphon]

I have very serious reservations about allowing people to make money through market volatility and stock price changes anyway. It's not a path to a stably growing economy, and I think a lot of the problems that we have are caused by our having decoupled the stock market from the idea of investing in companies, and seeing it as a way to make money on its own merits. I'd love to see a system where you were required to hold a purchased stock for at least a year before selling. You'd immediately see a focus on companies with sound fundamentals, I think.

[thewayne]

I really like Warren Buffet, or at least I like a lot of the things that he's said.  He once talked about a 100% tax on selling stocks by board members and CEOs of the companies that they work for, if they sell the stock within a year of their leaving.  And that tax would drop 10% per year.  For far too long Wall Street has been demanding short-term profits over long-term viability of companies.  This morning I read an excellent long piece on bbc.co.uk about CEO compensation and how the inequality in relation to worker wages has tremendous consequences to the country's health.  With the exception of certain brilliant people: Steve Jobs, Elon Musk, very few CEOs are worth the money that they're paid.