to discuss these issues and more i'm joined by my guest john timoney in washington he is director of the center for economic freedom at freedom works in chicago we have caught horowitz he is the chief strategist of butler trading and in jamaica we crossed image firesign he's a portfolio manager and author of planet ponzi our jim acosta grills in effect that means you can jump in anytime you want and i always appreciate it is going to top for us to end chicago this game stop story fascinates a lot of people but for a lot of very different reasons one i think for the popular media it's about a grievance redressal is some kind of populist finance for others it shows the inadequacies and actually kind of loopholes that are in the financial world and it's become very politicized and extremely emotional because we know that game stop

isn't worth what its stock is reflecting right now it just simply not true however he got there for a very different reasons and it probably has less value today certainly at these levels but this broader by this is trying to bring down the big shorts they were holding out and this is this is almost a model out of the. playbook which is through. the rule that sure he has now but he's that however and a current horrible prices that the dramatic losses exposing what happens with some of these hedge bonds when they can take advantage of these markets and push them around while now it's just the little guys were right at the wall street bats are now pushing around because they're starting to build these this momentum of many traders pushing together and or saying these bigger guys cover and and this is a very common thing at the end of the day the game is out. probably down to 0 and

then in the meantime the hedge funds roll laws billions of dollars trying to fight this market because they got trapped and they got run out by the little guys ok mitchell wait all of this follow up on that they got trapped but it was a trap that they said for themselves so you shouldn't feel sorry for these guys whatsoever is that true well yeah you shouldn't feel sorry for anybody who runs a short position because these are you got to differentiate between novice investors and professional investors so if they lose money because they go short that's their problem quite frankly where i disagree is i think the problems that were caused were in the in the market dislocations and valuations valuations are in a bizarre level you have a distrust of the media you've got government propagandizing everything the media has i think 60 percent of the people distrust the media and the narrative of the oss as far as the short selling goes though you know i don't know what kind of and they were but i can tell you one thing being in the biz is for 40 years i wrote

a book called plant ponzi about the corruption and the lack of enforcement of existing jesse seeing in government regulations as they pertain to the markets even alan greenspan said after the credit crisis we don't need new regulations we need enforcement of existing regulations you have jennifer yellen who is the fed she spent 20 years on the federal reserve now the treasury secretary she caused these problems she caused these problems the central banks cause these valuation problems the valuation of tesla $800000000000.00 is served the company makes no profits and this market is headed towards a disaster look i don't have i don't have a dog in this fight quite frankly i've been managing money for 40 years and i understand for an institutional side i don't deal with individuals well i understand that and what i would bet anybody on this panel anybody is that professional investors went on to read it and they front run brands so they bought . before it induced other people to buy those shares and made

a bucket load of money which is illegal it's collusion and the f.c.c. if they have any teeth to get their heads out of our asses and go and find out who made money and actually prosecute them because it's kluge and it's organized it's as manipulation against everything free market stand for. germany of the at the counter argument is that this is exactly what the hedge funds do all of the time the only reason why we're we're talking about it is because it was a cup but there's no you me interesting distinction professional to i mean at the end of the day it's money ok and if you're professional be run professional it's just about money here. how do you address that because it a lot of people would counter is that they had edge phones you know that you know it never in would never be talking about this event at a company's per share price went down we're all talking about it because one went up go ahead john well as overdone infotainment 'd if people aren't run in can convince a bunch of novice investors to pile into

a stock they do it all the time as for the argument that the fed does that do this that's laughable that's the case what happened in japan japan's had 0 rates for how many decades worth the stock market there were the stock market in europe despite the fact that the central bank there has been trying to allegedly goose it for all this time u.s. shares are abnormally high b. is largely because of 5 to 7 companies if you take out microsoft and apple and google equity returns aren't that great over the past year or more broadly this notion that there is war or 2 sides against each other markets misunderstands what markets are markets are a combination of bulls and bears and the passions of the bulls who wildly go into a star or blunted by the pessimism of bears who think the stocks get one down so this notion that a bunch of small investors ganged up on hedge funds on the way to some victory for the little guy is just so ridiculous and how we know it would be ridiculous she is when we. see some screw losses from the same wall street bets crowd that got lucky

one time in a wager when it's all over with i think one thing that caught. the 1st time for me right is that there's probably or probably was a large institutional investor wholly jian me shares the whole time and the idea that this was just small people just isn't serious and again we'll see that the next time they try to do a turn to explain to our viewers that i'm a b s 3 and it is because this is an issue that people are very emotional about what is the value of these hedge funds because a lot of people safe hedge funds they can generate huge incomes by dumping on companies by destroying value and that at the end of the day hedge funds don't create any value except for well how do you respond to that go ahead well i think that is basically correct i mean heads ons to get special arrangements they've got special tax breaks believe it or not which is which is hard to believe today but at the end of the day they can create because they have so much capital but you've

seen them also step down as bill ackman did trying to lay out there are a life when he felt it was our value our other companies like that so there's no or sherm's or guarantees but they are and special situations and certainly they go with what meg said earlier they do get the advantage of what janet yellen has done and created a lot of this crap that happens in these markets and hopefully somebody will step in here because i want to know myself was there true front running in these markets because certainly if you have enough power behind you know is a floor trader on the floor in general or 25 out of my 43 years of trading and i've seen how the big banks and others can manipulate in front run these markets by creating a false narrative to begin with and then letting the markets ron and the direction they're trying to get him or saying a little investor they get stuck up their ass versus a drawing and having a profitable try. because they're trying to follow along with the big lie that has

much more power that will actually do the wrong thing i guess what their position was to me to get the right position and to trap the individual slaughter fest you know image you know there's a lot of coast to to look at reddit and look at these. robin hood but i mean if we're going to look at them should we look at how. how hedge funds reform is well i mean it shouldn't be a i mean we keep talking about a level playing field here if you going to go after these people and the people that front run it apparently should we look at how all of this short selling actually works and if it doesn't really at the end of the day it make any kind of value because a lot of people if they just destroys companies it destroys lives and destroys jobs as are just something we have to live with go ahead mitch i think that's an important point to make for the f.c.c. toothless regulation i mean this is what you need to address there are existing laws and regulations as to what you can and can't do in short selling you should be

able to impact who isn't you should be able. now to make an argument look i'm not really in equities and i'm a derivatives guy so what caused the run in tests in the other stock was derivative products in options and f.c.c. doesn't even look at facts you have to see as look at any any of the other ancillary exchanges and the impact they have add on to say that the central banks providing hundreds of trillions in the quiddity across the globe as an impact would ridiculous valuations to the point nars is specious comment and ridiculous frankly so you know as far as the hedge fund we had. when you have a large edge on one position you're talking about peter is difficult and i think a lot of people would call and solves the bunch of equity traders a hedge fund that it was from a hedge fund which is the industry that i've been involved in intricately for 40 years is going to have many different positions we've created tens of thousands of jobs by investing in real estate projects all over the world i've invested in clean

energy projects wind farms so you know if you can't group one size fits all a hedge fund is diversify or alternative asset class investment vehicle and you yours different instruments not just equity to offset your positions and having your existing portfolio it's not a bet it's not they're not just going out and you know that's damp but you can offset your liabilities by buying other assets that will heads in it if one asset class goes down this is the risk parity trade where people trade bonds against stock markets but that trade is blown up it's a lot more complicated it's not as simple as everybody thinks the politicians don't understand how the markets more than it's good it's not to a point where this is just being politicized and people are trying to make points and they don't know what they're talking about whatsoever i mean what my point in fact is nancy oh i wish she for example she front working ramey

visa i.p.o. by buying shares for her own account while she was sitting on a committee that determined the policy you know setting and she knew that they were going to pass it was she made a profit on that she also holds tesla options now the rest is exempt from insider trading should let me know if anybody on the nail or myself on you be impressed so you know you need not one rule for the and another for me you need one more on me as i am it really look let me get john here before we go to break but he isn't that really just a point i mean the again that's kind of the top line story for a lot of people there is there is. certain rules and regulations for some and there are some for others here 30 seconds before we go to the break go ahead oh well couple things for one short soldier corowa if they're willing to take the biggest risk of all the markets even the most often market forces work against them the idea that there's rules for hedge funds that are better than others he explained then why most hedge funds fail explain why wall street markets are so rigged why

most wall street had to be bailed out in 2006 markets are difficult incredibly difficult what hedge funds do is the sunshine to jump in here we're going to watch and we're going to go to a short break and every short break we'll continue our discussion on some headphones but hedge funds stay with arctic. that are going to go back to another man and not out of the gutter that cut out of the matter the money that they are putting not even alex i mean. this was a good time to. try to move there i'm doudna mongo.

know nothing get my money not why not. why x. 10 and the whole people we believe this job again. a lot of i can say they want them up with johnny they are the monotonic out a mother how do it all because there is a lot of money but i'm not i'm a little like a mad builder let's pull out the people i don't want to put out the other from our party without all the other bloodletting. chose seemed wrong. but old rules just told. me to get to shape out just because educated and engagement equals betrayal. when so many find themselves worlds apart. just to look for common ground.

welcome back to crossfire where all things are considered i'm peter labelle crimmins we're talking about democratizing the financial system.

let's go back to john and watch them sorry i had to interrupt you before we went to the break there but the image maybe kind of give a more balanced assessment of what hedge funds do is something i used to work in equity to i guess we all and one form or another been in this line of business here i mean look at hedge funds and also can caution investors about over valuations because companies are always going to top themselves up it's one of the problems i think with finance in the last 30 years that it's more about a story about a company instead of it's about valuation so i mean why does hedge funds have such a bad rap in the in the public eye. or is as as as michel louis headphones do all sorts of different things all sorts of forms of investing why do they have such a bad rap why do companies have a bad rap there are certain industries that the media members choose to vilify who knows why this is particularly true as hedge funds because they do essential work

an economy can't function without pricing honesty hedge funds don't necessarily better perform up markets they don't necessarily benefit from down markets that benefit from bringing price in reality so to what lacks in terms of short sellers there's been this desire of the last week or so to say short sellers profit from astroid companies oh really does anyone still wish that blockbuster was ramsey which borders books was still rush how do you net 0 each force in the globe dot com short sellers put out to pasture businesses that are not meeting the needs of customers or shareholders alike thank goodness for them if we didn't have them the economy would be exponentially weaker. but going back to hedge funds i think there's a desire right now to say well they're all powerful and they get special deals if that's true why is that long term capital still around white bear stearns some would argue operate in some ways hedge fund why did it need a bailout why did goldman sachs need a bailout the reality is that is

a very difficult business for anyone to be and that's why there is so much money in the hedge fund billionaire as the cliche is a direct consequence of the basic truth the just about every hedge fund either fails we're does so poorly that we are even talk about ok so it's a story is not complete here todd let me let me go t. i mean all the way going back to george w. bush we heard about you know getting the little guy in the market you know democratizing finance here and these reddit guys really took it to heart it seems and i can i still make a strong connection maybe you all can correct me here but i think you know in looking. some of the bulletin boards of these people that were involved in this and 2008 and had a very huge impact on them and i and i'm i'm agreeing with all of you here i mean that this game stop it's more about grievance it's about revenge and targeting people that you believe that have hurt you and your friends and families

and maybe you know you know own financial condition here so but i mean where where is that or dumb is there room for democracy in the financial markets too because there is the perception in correct me if i'm wrong and the reason why we're doing this program is it stacked against a small investor go ahead. they get stacked against us mob vester in general but i think i want to address them the johns the real quickly the bottom line the reason bear stearns lammers needed help is they were leveraged 4 to one using derivatives it's got hired to use that type of leverage when when you start to get a tech you've already got the banks failing then the reason we've got lots of problem this country but the rules are not always fair i mean what is it that is an investor i'm not going to get bailed out if i go broke but they're trying to bail out the big banks because they were over invested or over leverage of these markets so that is one of the problems they have that appear in these markets on a regular basis is that right now you're laying the banks lend you've taken over our restrictions and they're going to have nothing but money how could we possibly

have housing sales going so crazy and that just has a do with the salmon markets you make it so much cash available as something a lower rate you can create these narratives in these markets and start the forced panic or chase markets around as the other as the bigger money sets and waits but the reason they bail them out is because they were over leveraged and they were gambling in these markets taking her normas risks with other people's money not their own well mitch i mean what has that been fixed to your satisfaction here be. because you know there's this i watching i guess the sea of the sea is the only time i watch them and years because of this story right now and it's there's such a bias it seems such an overt bias about protecting the poor hedge funds and i think john's absolutely right i mean if you want to go in that line of business it's tough and tumble if you win you win but you know there's most likely you're

going to lose but you never get better narrative in this means because kind of media coverage here i mean if there's going to be regulation and they were everyone said we need light touch light touch but regulate whom go ahead so you need a couple of things here that you know like the book that i wrote about the credit crisis because i was sitting at the epicenter of it when an app. and one of that as . he you know that exploded we work into it being knowledge of dozens managed. citibank we had months mosher to there was general debt and so much credit much leverage i was advising you couple of the different governments and i advise that all of these insolvent scale not bail them out too big too big to fail your big battle too big to jail is jus big time exists in my work and that's the mantra that we should be putting forth alan greenspan email asking the prices and said there was nothing that soran on behalf of market participants that we didn't you know we don't need new laws or regulations we need

for some of the existing regulars now the money printing orgy of money printing it demonstrated in japan their economies the morose for 35 years and it's flat line the money printing around the world has ended up in too much liquidity sloshing around in crazy valuations so we have $35.00 or 40 percent of the companies are zombie companies will never make money but when you like giving another drink to an alcoholic when you give insolvent companies more money what does it do it creates more debt on z. assets real debt yes. let's explode the debt remains and this is the problem we have today you know joe and janet yellen was keeps getting promoted promoted promoted but she's and and all of the central bankers are responsible for this mask when it blows up it's not a matter of if it's a matter of when and it's going to end badly for the retail people who are going to end up catching the or end of the stick because the professional investors even on

these run ups are going to make money but i'm sitting out i don't play these little little games but short selling is a market mechanism that should be allowed and you know less as you see once the enforced of the rules equally which they don't i mean you know look if i must use touted he's actually gone out and talked about the regulators being if you know he's made profanities with his tweets and he encouraged the run up in this game start by tweeting about it but also you have to you have to realize is when he said his company was ready for a buyout now $420.00 of funding is secured they did nothing to him they slapped his wrists and his cut that's why his company today as a ridiculous valuation he wants and short selling because tesla is a prime candidate for short ok good. job do you think we could. pull ballers in a year 100000000000 dollars made in the year. ok let me let me go to john

in washington do you think we could see this game stopping happen again with another stock or a series of stocks i mean is this a preamble to what could happen in the future sure it can things can happen all the time i just think to presume that this is going to be the norm going forward which is what the people on reddit presume is laughable of it the idea that a bunch of retail investors can move stocks because they've been together misunderstands what moves stocks in the 1st place and misunderstands how investors value stocks in the 1st place so i think there's so overdone excitement that's going to be quickly brought down more broadly i think it needs to be stressed yet again it keeps coming up at the professional investors will come out of this. really well and the small investor will be wiped out well again let's go back to 2008 that this is not about why the bailouts for whether or not they're going to go bad i think the bailouts reprehensible back in 2008 with this notion that professional investors somehow walk away from this every time with their pockets

full of money defies basic common sense and defies basic logic and then to say well you know the fed did it again if it's so easy for central banks to goose stock markets please explain to me why japan is still half what it was in 1989 why is europe's stock market rally and when the e.c.b. is doing the same thing the fed has been trying to do what we keep believing now is that the u.s. people can fight about valuations all they want but the reason for the big rallies in the u.s. and this is true every time is for very few companies that markets have a high opinion show if it was just the fed to explain what happened to exxon mobil most valuable company in the world 2014 where is it now g.e. was the most valuable company the world in 2000 where is it now what we're seeing is certain companies that investors think highly of going up. in the ones they dislike going down the notion this is

a fed thing misunderstands basics johnny. b. and that's the point of the program go ahead i mean if we don't we're 1st of all we don't have a true free market system which is the very answer to one of the things g.o.f. i mean you give a lot of breaks and this whole my friends thing situation not allowing the recession's to happen not allowing the system to fail and then rebuild itself is that is this your answer to all of your questions we do not have a true free market system anymore we are more involved in the of my amount of bailouts that we can get it goes they get i mentioned the banks the banks have unlimited amounts of power to print money because that's what they're doing at the same time when they're lending so we keep adding to the money supply which creates more of these problems allows the attack i'm certain as a cook of a companies and push them higher and destroy the other ones the fundamental changes obvious companies they're not worth what they were before so not our job they had

a new group of companies but at the end of the day it's about the true free market system where asset classes really price themselves and alan greenspan was the 1st of the master bubble bellers that we have and that is more going to continue development as long as the federal reserve is in bio and printing money these markets are going to continue just so far just because of the fact that there's no place else to go they've destroyed the overall regular system allows normal regular investors and good but you hear it in other parts of the world keep disproving your narrative i'm not that this is that you know i do. think they're awful i believe recessions are beautiful well what you're saying is disproved by what central banks are trying to round the world time and time again and it hasn't worked lou we greet we believe in recessions they're healthy we believe in free markets it's not always a free world we have a free market here. what are your resume mean is just for. right gentlemen i have

to jump in here we're not going to resolve this but these are all very important questions i want to thank my guests in washington chicago and in beautiful jamaica i want to make our viewers for watching us here are the next time remember. that the bill really key sneer those who really can show you. that with that. you know the numbers to.

go to see if you. are doing your force where you would be near must of missed if not thoughts about spirit. was more. for you to. sort of move. them to maximize their financial survival guide. looking forward to your pension account. yanks this is what happens to pensions in britain. watched kaiser report. secret prisons are not usually what comes to mind when thinking about europe however even the most prosperous can be

deceived within the zeros on the work to view houses were. preserved was located only cia people had access to the story for investigators sure hell they uncovered the darkest dealings of the secret services but i mean there you go rid of nor in. hockey see maybe a sore knee for. crying for justice on. the headlines this after no chance to giving it a shot requesting countries change their tune on russia sputnik the vaccine are 3 leading medical journal publishes a study about its high ethical sea we hear from the sea of the fund this back in nature. when you come by c l for the price of logistics you really help

what i believe the best of the world and meet scientists on the wall to agree meanwhile despite a wave of criticism european commission president underline refuses to apologize for the block slow vaccine rollout and in the u.k. police arrest the man dishing out precinct to the vulnerable to violating lockdown rules. if you feel you see.