{"id":5572,"date":"2021-02-05T18:02:20","date_gmt":"2021-02-05T22:02:20","guid":{"rendered":"https:\/\/howigrowmywealth.com\/?p=5572"},"modified":"2021-02-05T18:02:23","modified_gmt":"2021-02-05T22:02:23","slug":"gamestop-janet-yellen-and-citadel","status":"publish","type":"post","link":"https:\/\/howigrowmywealth.com\/gamestop-janet-yellen-and-citadel\/","title":{"rendered":"GameStop, Janet Yellen and Citadel"},"content":{"rendered":"\n
I wrote a little bit about the mechanics of shorting stock and naked shorting of stock<\/a>. Some version of what I described in Scenario C happened to a hedge fund called Melvin Capital. Melvin Capital was heavily short GameStop (GME). The price rose rapidly and it sounds like they didn’t have enough money to close their position. According to the New York Post, “Hedge funds Point72 Asset Management and Citadel<\/strong> gave a $2.75 billion capital infusion<\/a> to Melvin Capital earlier in the week, enabling it to close out that position with a large loss.”<\/p>\n\n\n\n Source: https:\/\/nypost.com\/2021\/01\/31\/melvin-capital-lost-53-percent-due-to-gamestop-but-got-aid\/<\/a><\/em><\/p>\n\n\n\n Remember that name: Citadel<\/strong>. Citadel is a huge client of the trading platform Robinhood. Robinhood sells trading information to Citadel.<\/p>\n\n\n\n The retail traders on Robinhood trade for free. On platforms like Google, Facebook and Twitter where you get something for free you are the product. <\/p>\n\n\n\n Citadel<\/strong> is Robinhood’s customer. Without clients like Citadel Robinhood doesn’t make any money. So there is motive for Robinhood to want to keep Citadel happy.<\/p>\n\n\n\n Was there any hanky-panky between Citadel and Robinhood? Did Citadel tell Robinhood to halt trading so a hedge fund they sank billions into could close their positions? I don’t know. I don’t have evidence that this happened. But the motive is definitely there. Motive by itself isn’t sufficient though.<\/p>\n\n\n\n Should someone look into what happened? Don’t worry: Treasury Secretary Janet Yellen is on it! She is the first female Treasury Secretary and she is on the case.<\/p>\n\n\n\n Former Fed Chair and now Treasury Secretary Janet Yellen did very well for herself while between jobs. She has made at least $7.2 million in speaking fees. This number includes some $800,000 paid to her by Citadel<\/strong>. The same Citadel<\/strong> who is a huge client of Robinhood and bailed out Melvin Capital.<\/p>\n\n\n\nTreasury Secretary Janet Yellen<\/h3>\n\n\n\n