Selling America Short
The website Reddit has caused a great deal of excitement in the public financial markets. The social media site caused several heavily shorted stocks to soar in price, forcing hedge fund managers to suffer huge losses. Melvin Capital, which saw losses from its short positions quickly pile up, was forced to get an emergency loan of more than 2 billion dollars from another hedge fund, Citadel.
At first glance, it appears to be a story of the little guy getting the best of Wall Street fat cats. After a few days, the incident is just more evidence that the financial markets are rigged by the rich and powerful.
The 52-week low for the GameStop company is $2.57. After Reddit users began buying the stock, it rose from the $20 range to a high of nearly $500 per share. This is an insane price level for a company that is almost certainly headed for bankruptcy.
The AMC Entertainment Holdings company is involved in the theatrical exhibition business. The company owns, operates, or has interests in theatres. Because of Covid-19, AMC’s stock has traded as low as $1.91. During the buying spree, its stock ran all the way up to $20.
Short squeezes result when short sellers of a stock move to cover their positions, purchasing large volumes of stock relative to the market volume. Purchasing the stock to cover their short positions raises the value of the shorted stock, thus triggering more short sellers to cover their positions by buying the stock.
When you short a stock, the most you can make on your trade is 100%. Your losses are unlimited if the stock rises dramatically in price. If someone shorted GameStop at $20 and closed the trade at the $483 high, they have to pay out 24 times their original investment.
The Reddit crowd then tried to create a short squeeze in the silver market. In early morning trading last Monday, the price of silver was pushed up to $30. Shares of silver miners surged, and retailers of bars and coins around the world struggled to meet demand.
The ruckus began after posts on the Reddit message board urged investors to buy physical silver. One post encouraged the buying of iShares Silver Trust (SLV), an exchange-traded fund whose shares represent ounces of silver sitting in a vault.
This would force the fund to create new shares and buy silver to back them, exposing a shortage of supply and pushing prices up, said the post under the headline “THE BIGGEST SHORT SQUEEZE IN THE WORLD $SLV Silver 25$ to 1000$.”
The problem with buying SLV is that it is likely backed by paper silver contracts that can be created at will. If the price of SLV is driven up past the spot price, the trust can create new shares by buying the physical metal.
Some people promoted the idea of purchasing Comex futures and demanding delivery of the metal when their contract came due. The exchange has changed the rules, which now allow it to settle any contract in cash only. To suppress the price of silver, the Comex increased the margin requirement to $16,500 per contract from $14,000. The increase means those who want to trade silver futures will need to put up more collateral to ensure they can meet their obligations.
The GameStop surge may have caused a few hedge fund managers to spill their coffee when the stock traded in the hundreds. The stock quickly tanked once people realized the company is likely to go the way of Blockbuster. I’m sure there are some hedge funds that shorted like crazy when it hit $480. Now that GameStop is way down, the hedge fund folks are probably out shopping for a new Rolls Royce.
I don’t have a problem with someone taking a short bet against a company. I think it becomes destructive when hedge funds use it to devalue whole industries. Many firms have gone under because they could not raise capital in the market or get a loan because their stock price was too low. We have a deficit in several key metals because big banks have sat on their prices for years.
I know we already have plenty of indications that we are living in the end times. This massive greed on Wall Street is just one more example of the depravity that is the lead-up to the last days.
“Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also . . . No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon . . . But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you” (Matthew 6:19-21, 24, 33, KJV).
There’s Method to the Madness
I’m in agreement with my close friend and colleague in Bible prophecy commentary, Daymond Duck. I read where he wrote in effect that he really would like to move away from things surrounding the evils of the political, societal, and cultural war today and deal with strictly Bible prophecy study. But all of this is so closely related to where this generation stands on God’s prophetic timeline that, for the moment, at least, I, like Daymond, must deal yet again with these matters.
It is all maddening to those who still retain rationality while observing the things going on. It’s maddening because thinking from the other side—the side that wants to change America from the nation founded upon Judeo-Christian principles to one along the lines championed by Marx and Mao—seems to have lost all sanity in their plans to force us into compliance. This, we have alluded to before, is because, as Paul points out in Romans chapter 1, their rejection of God has caused development of the collective reprobate mind of verse 28.
Evangelist Mike Gendron correctly assesses a large part of the American populace turning their backs on God.
America has become a moral cesspool that is overflowing with ungodliness, unrighteousness and wickedness. Our government has given women the right to murder their babies in the womb, and as a result, tens of millions of human beings have been killed in abortion clinics. Sexual perversions of all types are defiantly flaunted and widely accepted. God’s unique design for marriage was overturned in a landmark decision by the Supreme Court in 2013. Our country has also become the largest supplier of pornography throughout the world. These are all symptoms of a greater evil which is the sin of idolatry (Col. 3:5). Our nation has turned its back on the one true God by worshipping gods of all the false religions (Exo. 20:3). As a nation, we should no longer ask for God’s blessings but instead expect His judgment. “For the wrath of God is revealed from heaven against all ungodliness and unrighteousness of men who suppress the truth in unrighteousness” (Rom. 1:18). (Mike Gendron, “Let us not lose heart,” February 1, 2021, wwwproclaimingthegospel.org)
Again, half of the voting population, it is evident from developments since the 2020 presidential election, have observably rejected Heaven’s prescription for living under godly morality. The problems that have burgeoned in the nation’s division are from those who want America transformed and are determined to brutally enforce quickly accumulating executive dictates. Yet those against America as founded blame those of us who want to continue life under the Constitution as framed by men who claimed our rights as God-given to be the troublemakers.
They continue to tell lies through every venue available. Yet their chief cry as of late is that it is those who oppose their lawlessness and godlessness who are telling the “big lie.” The “big lie” accusation by the man currently occupying the White House claims that political opposition in constantly proclaiming the election to be fraudulent is alien in the same vein of Adolf Hitler’s and Josef Goebbels’ “Big lie” against the Jews that eventually brought on the Holocaust and the genocide against Europe’s Jewish people.
The following article excerpt explains to some extent.
[President Joe Biden and his cohorts accuse] President Donald Trump, Sen. Ted Cruz, and Sen. Josh Hawley of a “Big Lie” ; Rep. Mazie Hirono went on Anderson Cooper to accuse the Republican senators of a “Big Lie”; Dominion Voting Systems has alleged a “Big Lie” in their lawsuit against Rudy Giuliani; Jake Tapper has used the term repeatedly on Twitter and on air to describe allegations of fraud in the 2020 election.
Bloomberg explained the analogy in September: “Adolf Hitler and Goebbels, his minister of propaganda, espoused a technique known as the ‘Big Lie,’ which involved repeating a colossal falsehood until the public came to believe it was true.”…
[In his book, Mein Kamf] Hitler charges the Jews with destabilizing society by promulgating a big lie—the narrative that provided a sinister rationale for the detainment and mass murder of the Jewish people.
In the Hitler/Goebbels “Big Lie” analogy flowing freely from the mouths of Biden, Tapper, and others, the accuser would be analogous to Hitler, and the person being accused of lying would be analogous to the Jews.
In other words, the Hitlerian strategy is to accuse one’s enemies of using a “Big Lie” to gain and consolidate control. To accuse your opponent of a “Big Lie” is to borrow a murderous, anti-Semitic slander directly from “Mein Kampf”—and to align oneself with Hitler in the analogy. (Noelle Garnier, “The left keeps accusing conservatives of ‘The Big Lie’—a term invented by Hitler as he prepared to persecute German Jews, TheNationalPulse.com, Rapture Ready News, January 29, 2021)
So, to try to clear up a deliberately convoluted tactic by the present regime in the White House, the administration and their many mouthpieces are accusing those who claim the election was stolen through fraud are evil like Hitler. These rant that to claim the 2020 election fraudulent through illegal mail-in votes and the crooked Dominion Voting System is a Nazi tactic, using a “Big Lie” in the way Hitler employed the tactic.
In fact, it is these leftist operatives who are doing the very thing they accuse their opposition of doing. They are using Nazi-like methods with their “Big Lie” against those who see and report the fraud the left has perpetrated.
So there is method to their madness. All lies are from the father of lies, Lucifer the fallen one. His method hasn’t changed since the time of the Garden of Eden when He told Eve, upon tempting her to eat of the forbidden fruit, “Ye shall not surely die.”
Let us pray that many will turn from the father of lies to the Father of Truth, and be saved from the sin that ensnares them.
Paul, a servant of God, and an apostle of Jesus Christ, according to the faith of God’s elect, and the acknowledging of the truth which is after godliness; In hope of eternal life, which God, that cannot lie, promised before the world began. (Titus 1:1–2)