The more I read about the Reddit coordination, I am convinced that this is going to be big.
First, silver future is already up. Silver coin orders are surging- It won’t be long before silver miners will start popping- This is awesome for silver because silver price has been manipulated for so long-
However, the issue is that this is going to hurt JP Morgan, hedge funds, and brokers as reddit raiders go in and out of futures, options, and stocks. Driving prices up and down like rollercoaster from hell.
Somebody is going to get hurt. And it will be the banks, hedge funds, and brokers first. We already saw what happened to short sellers of Game Stop. Given that Wall Street has lobbied intensely on Democrats and Biden’s administration, Biden will have to act. Hey, they paid you.
It is likely that the SEC will jump on the Reddit raids and deem it as collusion or some sort of market manipulation. Then everyone who hates banks, hedge funds, and brokers will come and start a war. In the Democratic party, AOC, Warren, and Sanders will launch a crusade to crucify hedge funds. There are two big factions in the Democratic party, the socialists and the rich and corporate friendly folks. So there is going to be a big civil war. I mean it is already happening but it will get worse. Then the Republicans will jump in. Ted Cruz will just march in and draw more blood.
Yeah- it will be chaotic- Biden will be in the hot spot because he can’t piss off his donors but he can’t dump his base either.
I believe that Biden will side with the money. Of course, politicians love money.
This will expose how friendly Democrats are with hedge funds and corporations, which everyone should know by now.
By making his voters angry, the people will go on beast mode on their representatives further increasing the chaos. Online spamming and downvotes will occur very frequently. Politicians’ twitters will explode.
While all of this stuff is going on, the markets will be in turmoil as well. Banks and hedge funds will be afraid even with the SEC stepping in because there is no way to stop the rampage. There are so many ways to coordinate online and the brokers can’t shut down all the stocks that are mentioned or else they won’t make any money. And it is probably illegal.
Worst of all for Wall Street, the next stimulus will provide fresh ammunition- With fresh cash, the reddit raiders will go on a more crazy raids- And markets will be quite volatile- Because shorts will have to come up with the money for collateral and sell some longs- And this signal will feed into quant trading, which may amplify the magnitude. And then reddit raiders may jump on sudden drops and the whole thing may start again with multiple stocks.
Yeah, it is going to be a crazy year- 2021 may be crazy in its own way. January was just a teaser- Let’s see February…
No outcome is favorable to Biden. I believe that reddit raids will break the market and also break the democratic party. Also, people will be extremely angry once Biden sides with Wall Street. Thus, in 2022, it is likely that the Republicans will take both houses and Biden’s administration would be pretty much dead-
Things escalated so quickly….
The big problem is while the market is broken, many good firms won’t be able to raise financing effectively. Also, a crash is more likely with so much volatility and madness so a lot of investors may get hurt. It can get quite ugly-
So what should we do?
First, don’t join the reddit raid unless you know what you are doing. You may be angry but you still need that money. You may want to make a quick buck but you can lose it all. Also, hedge funds and banks are not stupid. They will collude in their own way and do something- And it might burn the individual investors very badly- The movement has already enough momentum to crush through but it might get bloody for everyone.
Second, you should definitely let your representatives know that Wall Street can’t play with their own rules forever. Hopefully, mounting pressure would bring some reforms to Wall Street.
Third, invest for the long term (at least three years). Going berserk on Game Stop is very suicidal. Going long on gold/silver miners is a great play. Miners have been always unhappy with banks playing games with gold/silver prices. You can invest in them and fight together the metal manipulation.
Finally, learn about investing and markets. Sophisticated institutional investors wins most times. But there are areas that sophisticated institutional investors do not have much edge over the average investor. For instance, in small caps, institutional investors cannot do much due to the small market cap. Also, institutional investors are more short term focused because of quarterly evaluation so they can’t hold for long but individual investors can hold on for sometime. Hence, learning to invest can be quite profitable-
As I finish writing this post, I am very curious what will happen on Monday- Let’s see what kind of fury, Reddit Raiders unleash-
Thank You Jesus for a blessed day- I am thankful for all Your love and mercy Amen-
Rejoice at all times. Pray without ceasing. Give thanks in every circumstance, for this is God’s will for you in Christ Jesus.
1 Thessalonians 5: 16-18
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