{"id":357226,"date":"2021-10-24T06:19:00","date_gmt":"2021-10-24T03:19:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/gary-genslers-overregulation-would-sink-meme-markets\/"},"modified":"2021-10-24T06:19:00","modified_gmt":"2021-10-24T03:19:00","slug":"gary-genslers-overregulation-would-sink-meme-markets","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/gary-genslers-overregulation-would-sink-meme-markets\/","title":{"rendered":"#Gary Gensler&#8217;s overregulation would sink \u2018meme\u2019 markets"},"content":{"rendered":"<p>&#8220;<strong>#Gary Gensler&#8217;s overregulation would sink \u2018meme\u2019 markets<\/strong>&#8221;<\/p>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<div class=\"inline-module inline-module--columnist inline-module--author\">\n<div class=\"inline-module--author__img\">\n            <img decoding=\"async\" width=\"76\" height=\"69\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76&amp;h=69&amp;crop=1\" class=\"attachment-nyp_columnist size-nyp_columnist\" alt=\"Charles Gasparino\" loading=\"lazy\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=152 152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=114 114w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76 76w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=38 38w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png 706w\" sizes=\"auto, (max-width: 76px) 100vw, 76px\"\/><\/div>\n<\/div>\n<\/aside>\n<p>BEVERLY HILLS, Calif. \u2014 Gary Gensler and his Democratic colleagues on the Securities and Exchange Commission will try to sell their long-awaited report on the \u201cmeme stock\u201d trading frenzy as a clarion call for more regulation.<\/p>\n<p>But if you remove the report\u2019s propaganda, it shows that our markets work pretty well. Even better, small investors have never been protected more from abuse than they are today.<\/p>\n<p>Of course, the Biden administration doesn\u2019t want you to see the glass-half-full version of the trading madness that occurred earlier in the year. They want you to think something is wrong with the plumbing of the markets \u2014 and small investors need to be protected \u2014 since, for a few days, a handful of stocks soared to astronomical heights for no <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>arent reason other than people took joy in bidding them up.<\/p>\n<p>Yes, the run-up in shares of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">Game<\/a>\u00adStop, a has-been video-game retailer, or AMC Entertainment, a teetering movie-theater chain, was weird. Penny stocks trading like Amazon or Apple is a sign that the madness of crowds has taken over.<\/p>\n<p>Don\u2019t blame the markets or even Robinhood, the no-fee trading app that facilitated the frenzy. Blame the Fed.<\/p>\n<p>The incentive for stock gambling comes from zero-percent interest rates and endless quantitative easing \u2014 the fancy term for the Fed flooding the zone with liquidity. The perfect conditions for people to trade stocks like they roll dice in Vegas.<\/p>\n<p>But Gensler, the SEC chair, and his Dem cohorts would rather turn the meme spectacle into something it\u2019s not \u2014 a scandal that mandates change. The word from Washington that made its way to financial titans attending the Milken Institute Global Conference in California last week is that Gensler will be using this recounting to ban practices like payment for order flow, and possibly force all trading to be completed on public stock markets instead of off-exchange venues.<\/p>\n<p>Why? For Gensler, it\u2019s about ambition. He wants to regulate everything from cryptos to market structure because he wants eventually to be named Treasury Secretary. The idea is to show he\u2019s tough on Wall Street.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/Gamestop.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"A GameStop store in Jackson Heights, New York City.\" class=\"wp-image-19904530\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/Gamestop.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/Gamestop.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/Gamestop.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>The Biden administration freaked out over the surge of GameStop stocks led by online trolls.<\/figcaption><figcaption><span class=\"credit\">REUTERS\/Nick Zieminski\/File<\/span><\/figcaption><\/figure>\n<p>For the Biden administration, it\u2019s a good way to score some class-warfare points as midterms approach. And their \u201cbad guys\u201d list starts with Robinhood, the no-fee brokerage app investors used to trade those meme stocks. Its sin, according to the report: Making trading fun with its easy-to-use app that is tapping into the masses\u2019 penchant to gamble rather than invest.<\/p>\n<p>Others on the target list: Citadel Securities and Virtu Financial, market makers that made a ton of money helping Robinhood run the alleged \u00adcasino, the report said.<\/p>\n<aside class=\"single__inline-module alignright\">\n    <\/aside>\n<p>They did this through so-called payment for order flow. Robinhood is free for users because it sells its \u00adorders to these market makers. Citadel and Virtu then matched the buyers and sellers of the meme stocks and skimmed some nice fees off the bid-ask spreads. This club of Robinhood, Citadel and Virtu might have secret dealings that are harmful to the little guy; investors might be paying no commissions, but they could be losing money on the market makers\u2019 \u00adexecution.<\/p>\n<p>Even worse, much of this activity was conducted through what the report labels \u201coff-exchange market makers,\u201d and venues derisively known as \u201cdark pools.\u201d They are dark and allegedly sinister because these markets don\u2019t post their prices publicly and are used by the \u00adfinancial elites possibly to screw people, the report suggests.<\/p>\n<p>Yet on closer look, dark pools aren\u2019t so sinister, the report also shows, particularly considering the system they replaced.<\/p>\n<p>Gensler would like to return to the good old days when the vast majority of market action occurred on the floor of NYSE or the Nasdaq in full public view with less opportunity for alleged corruption.<\/p>\n<p>But the history of NYSE market making is hardly devoid of small investor rip-offs. Meanwhile the off-exchange trades are heavily regulated \u2014 like everything else on Wall Street. Brokers are mandated to provide best execution, which is why they turn to off-exchange venues. The investor orders are typically executed at better prices than in public exchanges for a lot of reasons. Brokers can move orders to competing venues at a lower cost for small investors.<\/p>\n<p>Don\u2019t believe me. Just read the report, which points out that the vast majority of the market making in shares of GameStop during the frenzy occurred outside of the NYSE or Nasdaq without a mention of small investors being conned.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/AMC-Theater.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"People going to the AMC Theater on W42nd Street in New York, NY on March 6, 2021.\" class=\"wp-image-19904529\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/AMC-Theater.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/AMC-Theater.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/AMC-Theater.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>AMC Entertainment stocks soared while theaters were still closed thanks to Robinhood app users carelessly trading with the help of the Fed\u2019s zero-percent interest rates.<\/figcaption><figcaption><span class=\"credit\">Christopher Sadowski<\/span><\/figcaption><\/figure>\n<p>Now take the report\u2019s findings on payment for order flow. \u201cThese payments can create a conflict of interest,\u201d the report says. I\u2019m sure they can but they didn\u2019t. How do I know? The report didn\u2019t mention small investors getting hosed. Given Gensler\u2019s vast ambitions, if Citadel was screwing Robinhood customers, we\u2019d all know about it by now.<\/p>\n<p>Yes, there were hiccups during the meme insanity\u2014 Robinhood couldn\u2019t handle the volume of orders and ceased trading in the stocks. A hedge fund nearly went out of business and was bailed out in part by Citadel.<\/p>\n<p>But the system worked, which is obvious as you read through Gensler\u2019s agitprop and focus on his actual findings.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2021\/10\/23\/gary-genslers-overregulation-would-sink-meme-markets\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Gary Gensler&#8217;s overregulation would sink \u2018meme\u2019 markets&#8221; BEVERLY HILLS, Calif. \u2014 Gary Gensler and his Democratic colleagues on the Securities and Exchange Commission will try to sell their long-awaited report on the \u201cmeme stock\u201d trading frenzy as a clarion call for more regulation. But if you remove the report\u2019s propaganda, it shows that our markets&#8230;<\/p>\n","protected":false},"author":1,"featured_media":357227,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/newspress-collage-19904306-1635040925592.png?w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[86706,117955,73689,77826,72128,72667,71451,72976,72388,70359],"class_list":["post-357226","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-robinhood","tag-10-23-21","tag-amc-entertainment","tag-federal-regulation","tag-gamestop","tag-investors","tag-memes","tag-securities-and-exchange-commission","tag-stock-market","tag-stocks"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/357226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=357226"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/357226\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/357227"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=357226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=357226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=357226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}