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GameStopping the system


GameStopping the system
 
 
The controversy over the shares of US video game company GameStop has again exposed what has long been obvious: there is something seriously rotten in the state of the world’s financial markets. It was a battle between a hedge fund, Melvin Capital, which manages $US13 billion, and a small group of ‘amateur’ investors who communicated with each other on a Reddit forum called WallStreetBets.
The hedge fund had bet that the price of GameStop shares would be lower at a specific date in the future, a strategy known as shorting (shorts are a type of derivative, which are ....

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Friday's Market Minute: FOMC Guidance And Other Side Of COVID-19


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The December FOMC meeting concluded largely as expected, with the Fed providing some additional guidance around the asset purchase program but declining to make changes to the program at this time.
As stated, the Federal Reserve will “continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.”
When reading the statement, note “further progress” does not necessarily mean complete progress; therefore, one can infer the Fed will rein in the asset purchase program before raising interest rates. The investment community seeks answers to questions, such as when and under what conditions will the Fed begin to taper the $120 billion monthly QE program? Powell did not explicitly provide a timeline, but did indicate a provision of advance no ....

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