The system has been gamed forever. Patrick Byrne was all over this 2 decades ago, called it “Deep Capture”.
In a nutshell there is a political science theory (I’d say fact) that regulators are ‘captured’ by those they regulate. This is for many reasons. It’s because the people they deal with every day (the regulated) get cozy, and because they take their orders from the politicians who take their orders from the donors who are being regulated, and because the little guy has virtually no voice unless s/he is part of a very large mob.
Patrick took it one step further and called it Deep Capture. He said it’s beyond just regulators being captured by the regulated - the entire system is captured by a small handful of special interests. The GameStop (and there are a dozen or more other stocks in the same situation) scam is just a peek into the problem. The big bankers lost $80 billion this month, on paper at least, from their short positions. So surprise surprise surprise, the brokerages stopped the small investors from buying the shares, thus creating a flood of supply and cratering the stocks.
I do agree, the stock (and most of the market) is decoupled from reality. It’s not just GME and AMC. We’re in the middle of a pandemic, record unemployment, huge collapse in GDP, and the stock market hits new highs. How is this possible? Helicopter money.
I worked in the pharmaceutical industry for a dozen years, long enough to learn that the FDA is a wholly-owned subsidiary of Big Pharma.
Post 20 good points