US Treasury Secretary advises heads of the stock exchange regulator and the Fed on the stock market turbulence surrounding the video game dealer.
Gamestop benefits from the short-term dispute about its own stock market price. The stock is basically the money currently on offer, but it is certainly not worth that.
In view of the turmoil on the stock exchange around the video game retailer GameStop, which was also fueled by small investors, US Treasury Secretary Janet Yellen is advising supervisors on how to proceed. As your ministry announced, the heads of the Securities and Exchange Commission, the futures market authority, the Commodity Futures Trading Commission and the Federal Reserve and its New York branch are invited to the meeting on Thursday.
The Reuters news agency had reported in advance that a meeting with this composition was planned. It should be about the high price fluctuations triggered by a power struggle between small investors and hedge funds.
Analysts see the price capers as a side effect of the longest bull market in history. The US monetary watchdog Robert Kaplan has named the money flood triggered by the Fed as a factor in these developments.
Because the Fed is currently helping to ensure high liquidity, as it is buying government bonds worth $ 80 billion (around 66.6 billion euros) and mortgage securities worth $ 40 billion every month in the fight against the consequences of the pandemic crisis.
Strong fluctuations
Speculative purchases had driven the shares of GameStop and other titles up sharply and then allowed them to fluctuate sharply. The background to the turbulence was also the activity of small investors who arranged to meet in Internet forums to buy shares in GameStop and other companies in concert.
The resulting price increases forced hedge funds to cancel their bets on the price decline of these securities. This drove some funds to the brink of ruin.
The US Securities and Exchange Commission said in the meantime that it is observing the events closely and will ensure the safety of investors and “fair, orderly and safe markets”. Silver and the crypto currency Ripple have also recently seen violent price movements on the market.
