but the one business show you can't afford to miss on bridge a bore, and i'm rachel blevins in washington coming up today we bring you at the very special boom bus, will take you inside the world of retail training, where we'll explore several aspects of the new movement democratize training for the individual investor. c that will take you through some of the latest developments in the sector from mean stock to regulation and however, traders are shaping market. got a lot to get through today. let's dive right in with the rise of the retail trader has taken the country by storm and 2021 with individual investors showing wall street just how much power they can have when they come together. in fact, earlier this year, the volume of retail training grew so much that it rivaled hedge funds and mutual

funds combined. it flourished as many americans worked from home and discovered online platforms like robin hood were trading was easy and simple. the movement they created has had a lasting impact as the industry looks to reckon with, with the internet has created and how to respond to it. so joining us now to discuss our boom bus co host, ben and t i kristi, let's start with you here. so how have sites like robin hood so dramatically changed the face of retail investment? yeah, the rise of retail has really force wall street to take notice, especially after the catastrophic losses. they face when institutional got squeezed and started losing billions and names like game stop and blackberry. so they completely changed the landscape of investing, especially after blowing at some of the biggest hedge funds like melvin capital institutional. they train on fundamentals, they look at earnings, catalysts financials and global climate. and all that to determine price points of games and their market cap to look for opportunities. but then retail rely more on

sentiment and hype and to that. and it's a complete divergence from fundamentals because you look at a name like game software and see, and any institutional of b, like that's dead money, short it. but then all the retails ban together under their love of gaming and saving the movie theaters and movie business and manage to squeeze out all the hedges game. stop rally over 2000 percent this year, which is just unheard of. and now credit suisse estimates that a 3rd of all u. s. market trading this year has been dominated by retail. and they've seriously managed to move the markets and make ways and really all thanks to robin hood who wanted to bring trading to the masses by making it a super easy user interface with beautiful u i, u x. and most importantly, game of fi it making it a social experience because this is the ada social media where everybody tries to gain cloud, whether it's follow as our twitter or on instagram or tech talk. this is just another platform to brag about how many followers he had, how many people you can get to listen to. how big of an influence are you are. and robin hood basically capitalize and game

a fight it by giving these amateur traders a platform to band together an army which is more powerful than any hedge fund. and now better tells about these investors, who are they and what makes them unique compared to say, the traditional investor? yeah, there's a, there's a couple of things that are pretty significant here and talk about the median age, right. the median age of these retail investors is 31 years old, which is pretty remarkable. if you consider the fact that this is, i guess you can say this is not your daddy's investing game anymore, right? it's a, it's a totally different group of people from the past that i think everything christie just laid out, explains why that is right for the 31 year old and younger. these are folks who want a game of fide system who love the idea of being able to move markets by moving in mass together. if you think about, you know, older investors, they would never have considered a time when you would kind of move markets together by going online 1st discussing what traits to make and then making something go to the moon diamond hands and all the other thing you have look at is the fact of some of these other entities like

apex clearing, takes a look at some of the new folks who have been signing up for accounts in the last year since 2021 over a 1000000 new accounts have been made on these retail brokerage sites for people who are 19 years old, a 1000019 year old have joined into the system. so it gives you an idea of how young the people are who are involved in this. and the fact that for them it is social, and it's a totally different kind of experience than anything that we've seen in the past. and christie, traditionally it's large institutional investors, not the individual retail investors that we're talking about have had this profound impact on stock prices because they make large trade. but recent research shows that the new wave of retail traders are making their own impact else about that. yeah, traditionally the large hedge funds, they have these big impacts because they buy huge blocks given their size and assets under management. no retail investor can even match a fund. but now as retail traders are banding together in one name and trading

individually, all with the common goal of popping up a name. it's having a really big impact on stock pricing. and now they're buying stock with ernie surprises that are positive or negative, thus pushing up their prices. because usually when a company, mrs. earnest, it gets a sold off. it gets sold off with very heavy discrimination in normal market condition . but now even with a miss retailers, they continue to pile in. and this research paper by wharton used aggregated trading data from robin hood as a proxy to conclude that retail investors react to these earnings announcement itself. and not the actual news contained in the announcement whether it was good, whether it was bad. if found that these robin hoodies are more active and buy a company shares around earnings announcement as a catalyst event rat with carlos of whether it's good or bad. and this influence, it's even more pronounced in smaller firms, where shares are relatively more expensive to short sell. and while this is good news for, we tell a kind of disrupts the market a little bit because short sellers have their on the market. they're like the shark

that keeps a seal population check, because short sellers, we'd out bad companies, we'd gleick companies and they punish them. and then invest in the profits in gaines into growing companies. they have a role in distributing and redistributing and allocating capital where it's needed to put the greatest possible use by rewarding growing companies. and that entire ecosystem has now been disrupted by retailers who only want name to go up. boom husband's lawn and christy, i thank you both for your time. thank you. thank you. while retail trading has grown in popularity caught the air of wall street and even the united states congress as the mean stock crazed picked up earlier this year. now the most prominent mean stock as we just mentioned to gain attention was video, game retailer, game stop it all started as read. it uses on wall street bet sub read. it moved forward with a short squeeze game stop after the citrus research predict. and the stock price would fall. now the global pandemic had taken a toll on retail as

a whole. and game stop was struggling to keep up in digital delivery. and video game became more and more popular. the move, it was so severe it pushed the price from just over $17.00 at the start of january to highs of nearly $350.00 by january 27th. now, dow jones market data showed it became so popular $175000000.00 shares in the company were traded on january 25th alone at the end of january read, it's moved on to a short squeeze. the movie theater chain m. c, which was also struggling amid the pandemic us trading values as a whole on the 27th of january when both were taking place. hit new hi, surpassing those scene during the financial crisis of october, 2008. think about that. now since then, we've seen other companies entered the mean stock trend, including many outmoded companies like blackberry, kodak, or even nokia, as well as fast food chain. wendy's, which had a brief moment in the sun because rudders loved to use the term 10 days for chicken tenders. so for more on all of the bringing tobin's met, these are the transform,

the research and peter shift. he is the chief economist and global strap just at euro pacific capital. thank you both for coming on to join us to talk about what seems silly, but look at those number. that's pretty important. tobin we had you on the show when all this started back in january and you pointed out a short squeezes, nothing new. so it's all about the power being put into the hands of regular people in retail trading. well, it's a couple of things 1st. if peter and i wanted to get together and make a stock go up and we had an agreement, we'd buy x amount of stuff that would probably be illegal. there's no law here that says no, you can't be on read it or beyond. you know, wall street banks and assemble a team of, you know, 50000 people who want to buy it and there's no law yet. that says you can't do that . but clearly if you punch the, you know, the good guys are the bad guys in the nose, depending where you're coming from. there's going to be blood and you're going to

see, i believe that you can't go in a situation where you organize. clearly tell lies clearly have people on youtube and other things telling also the expansive lies to get for one thing, the people who shorted that stock to get the price rise in the people who did it early are going to make a lot of money. it's just like a ponzi scheme, so it's fun while it last, but you can have price discovery in the stock market if we're going from main stock . that means stock. now to that point, peter, i mean, we can talk about how fun it is for the moment, but do you think retail investors really understand the risk involved with trading? highly volatile means stocks. most of them probably not. i don't think they have much of a conception of investing at all. you know, the, the whole thing is, is, is, as tobin said, it's a ponzi. it's a pyramid. by the way, it's nice to be i with you, toby, it's been a while, but a long time. you know, i don't think there's, if i don't think there's a future in mean stops,

i think this is a flash. and unfortunately, a lot of people are going to lose a lot of money. a small number of people will make a lot of money. and those are the people that get in early, get the crowd all you know, ginned up and get them to buy. and then get into hold on, but then there's going to be a lot of bag holders because these stocks were being shorted for a reason. they've got flaw business models. maybe they're going out of business. smart money knew enough to bet against these stocks. now done money piled in, they bid them up to these ridiculous prices. there's no way these prices can be sustain like any ponzi scheme or chain letter. you run out of chain and eventually the bottoms going to drop out. and there's going to be a lot of bag holders. ah, you know, left it when this crazes over i was even as they had done lenny as a way to describe it. i toe, van, i, the big corporations behind these companies that have been able to take in all of this cash i, they benefiting from something that was almost started as

a joke. oh my gosh. game stop played it perfectly. by issuing almost what $3000000000.00 were the stock when the stock was probably worth $4.00 and it was selling for $385.00. sorry. about a bag holder. when they sold those shares, they sold those to institutions. they didn't tell them in it visual, so there's a bunch institutions that are sitting with $250.00 game stock stock. that's not trading for $250.00. you know, you listen, this is a motion. this is also sort of a tribal behavior. i've written a few books on tribal media behavior, and when you get all together, it's fun, you get the dope, i mean go, you like how much fun it is. look how much smaller i am and those stupid idiots who are not making money as soon as you identify as a tribe member than men in your subject. have tried to psychology on the up and down. peter, you know some of the go ahead go ahead. yeah, i said some of the real winners were the bottom holder. there are a bunch of bottle. there's now we're going to get pennies on the dollar when the

company went bankrupt. and now they get paid in full. i mean that was the thing is if you remember back in amc in last summer, so about july, august of 2020. there was a lot of talk about amc going bankrupt. obviously they got funding from other folks . but the fact was that was where they were, and this because stock craze happened now. now peter, we hear about the diamond hands. they were a big deal in the middle of the crazy. the writers you know, wanted you to hold on to stand strong on those stock. i mean, does the bottom eventually drop out or do they just hold it? and amc for some reason continues to be a stock that is way, way over value. both the diamond hands is all part of the height because the people who want to sell have to make sure that other people don't because you don't want to be in competition with other sellers. so you have to convince everybody never sell, hold on forever. well, what are you holding on to? it's a company that doesn't have any earnings. it doesn't pay any dividends. you're holding nothing. your whole, the air you're holding height. the smart money is dumpy,

while those people with diamond hands have been conned into holding on. ever bitter, just one more follow up on that. i mean, i know we talk about this regularly and i know we, we tend to talk to you occasionally about crypto, which you're not necessarily a huge believer it. but is there some truth to the idea that yes of that has value? if you decide it has value? well, not really, because something actually has to have legitimate value. there's a difference between price and value. warren buffett talks about that price is what you pay. value is what you get. you can put a price and game stop. you can put a christ on bitcoin as long as somebody is willing to pay. that's the price. and as long as the bins are there and you own whatever it is, you can get out by hitting that bid. but there's a big difference between what something is fundamentally worth and what's some idiot is willing to pay for it. but eventually the supply of idiots runs out, and all these bubbles collapse, you just never know how big they're going to get before they do. unfortunately,

there's a lot of foolish people out there to be full, but eventually the last rule again is old. the bag is going to happen with amc. it's going to happen with game stop. it is going to happen with not only bid coin, but all these crypto currencies. all right, have been sending that for us. do you see this chain continuing as we move forward, or will it die out as wall street continues to win? well, if we're, if we're talking bitcoin and crypto, your listeners have to understand that particularly bitcoin is a religion. it's an instrument of faith. it is tribal, digital tribalism. when you say i'm a crypto person, that means those a theory of guys are knuckleheads. i feel great about that. it makes me feel great and smart when the things going up and value man, i'm getting dopamine. hips like crazy. i love it, that is an addiction and it's, it's tribal psychology if, if you're, if your listeners really want to learn something to look up tribal psychology because everything that happens with bitcoin and with any of the criptos follows

the path. there's a leader. it's like you get to go to heaven and religion will hear you get to hang up and hang on with eli musk. i mean it's, it's, it's an absolute construct of digital tribalism and digital tribalism. as long as it's giving you the dopamine hips, the psychological rewards it's, it's good to stay. it's not going anywhere. and you're right, they and they're always trying to bring in new converts me. it's like, they're that mot modern day harry kirshner. i think they're always trying to get into the end of the faith. you know, i don't believe it's work for more. it's work from mormonism for like a 150 years. you go out and proselytize, you go out and you know, bring new people into the flock and what people don't understand is if, without that of really religious fervor, there is no crypto. hovens, smith, of transformative research at peter, chef of euro pacific capital. thank you both for your time. so thank sam. now for a quick break, but when we come back,

we turn to the regulatory side of retail trading. as the u. s. government has ramped up. it's brittany of companies like robin hood will bring you an expert insight just on the other side. the chain will be right back to what we've got to do is identify the threats that we have. it's crazy, even foundation, let it be an arms race is often very dramatic development only personally and getting to resist. i don't see how that strategy will be successful, very difficult time time to sit down and talk ah, if you would expect to be of non government could be in the image or with a seat. and i'm sorry, this is a wrong expectation. you will have to see if you want me to go on as but the energies you can't impose the democratic system on sunday,

the board and then political order is your media reflection of reality in the world transformed what will make you feel safer? isolation for community. are you going the right way? where are you being led somewhere? direct. what is true? what is great? in the world corrupted, you need to descend. ah, so join us in the depths. will remain in the shallows.

ah ah, of course, after 40 years of fed interventionism by simply expanding and pretending and printing a lot of money, they got into this cargo called a, you call it mentality where simply waving a flag, you know, essentially printing more money is going to make all the problems disappear, meanwhile, politically, what we've seen in america is really remarkable. the, the liberal left and their cohorts in the media. even though that this policy is causing credible human suffering in america. they effectively marginalize those people as quote, deplorable and really made scapegoats of the victims of j pow. and they've often said that this is a victimless crime, money printing and extortion that's practice at the fed. and yet i look at those 90000 dead americans last year from opiate overdose. i'd say j pal, you've got blood on your hands because that's a direct result of mal investment, money printing, and rogue economics that you're practicing as

a charlatan. with a welcome back. the viral names dot craze and their response from some online firms to cut off and limit trading was quick to attract attention from congress. earlier this year, the ceo of robin hood was called to testify, where he was asked about whether his company was acting in the interest of the hedge funds that were losing billions of dollars. love in the securities, put the restrictions in place in an effort to meet increased regulatory deposit requirements, not to help head forms. we don't answer to hedge forms. we serve the millions of

small investors use our platform every day to invest. robin hood was hit with dozens of private law suits, and it went on to face charges of $70000000.00 over sweeping regulatory allegations at the brokerage, misled customers approved ineligible traders for risky strategies, and didn't supervise technology that locked millions out of trading. as a result, the companies i p o filing mentions the numerous class action lawsuit that is currently facing and it also warns of the risk of regulation from the federal government. while robin hood has made its name popular with the promise of 0 commission stock trades, it's practice of relying on payment for order flow, or sending customers stock to 3rd party firms has drawn criticism from the se. see, the agency haven't made any moves to ban the practice just yet, but the question of what it can do has created concern that it could change the trend of retail training as we know it. turning us down to discuss is international

regulatory attorney miles edwards miles. it's great to have you on the show to day . and we know that when we look at s c, c, chairman, gary gansler, he has repeatedly pointed to the fact that payment for order flow is illegal and other countries like the u. k. but even though there is some bipartisan support here in the us, do you think that there's enough support for a full ban on the practice? i think there's no support at all for the ban. i mean, if you look at it and the $200.00 to $20.00 election financial services firms contributed over $2000000000.00 to politicians. and most of those people are now currently serving on the house of financial services committee. and, you know, the financial services firms did a correctly they gave about 47 percent to republicans and 53 percent to republican . so it has to go through these legislative hurdles. it's really going to be dead on arrival. i,

i don't see any sort of support currently on for any type of repeal on payment for order flow. and even if they did ed, it would still have to go through the se, see rule making process as well. so it's a, it's going to be a very long and diff, difficult um, process to begin with. so i, i just don't see it happening at all. but i am, sorry, miles, i just have to clarify something. you're telling me that big business in the united states, donates millions of dollars to congressional members and whole. yeah. and so donahue in, ma millions, 1000000000 in hopes that they will follow through with the policy that they want. i'm, i'm absolutely shocked. i, i, i know you're shocked and you can ask michael bloomberg, why they contributed a $160000000.00 and sigma the trade organization for financial firms like robin hood contributed $15000000.00. so they've always been politically active in this area. and so how much power to the fcc happier,

even if it doesn't move to ban as you just mentioned, there's no appetite to do so. are there other ways of looking at moving to limit companies like a like a robin hood or td ameritrade that focuses on retail banking or retail on trading? i absolutely. and i think the easiest way to do it is through finra. so robin hood is not only registered with securities and exchange commission, there are also a fin, remember, broker dealer, the fcc has complete authority over finra. so i think the se c puts pressure on finra. to look at robin hood to look at their practices, to start examining them, and to put pressure on them to change the way that they do business. and more importantly, to change the relationship, say, have with both the retail and institutional customers. now when it comes to those law states that have been filed against robin had by customers who had their trades limited earlier this year, that companies easier agreeing that requires just needs to be settled and arbitration rather than civil court. so are these lawsuits likely to stay,

can i these people likely to actually had their day in court? now, because the courts have even recently said, arbitration agreements are binding as long as they're in writing and the customer agrees to it. so what's gonna happen is, it's not only arbitration, it's finra arbitration, which means that you're gonna have to go through the finra process, and you're gonna have to appeal to the arbiters, arbitrators, to have it removed to maybe a state or federal court. and that's a very, very difficult situation to be, and because all these claims relate to their accounts with securities firms, which is a member of finra. so i think that it's, it's of, it's really an up her up uphill battle um, for these lawsuits to survive. and miles before we go quickly here, there's also been a call for real time settlement, which also could have avoided some of the issues that all of these major retail brokerage firms had. now, if it is with the se, se, se would be

a massive undertaking is the move to real time sentiment, something we're likely to see in the future as this becomes more and more popular or not. ah, maybe in a decade when the technology and maybe even employee block chain technology to do it. but right now the technology is not in place for this to occur. and i just want you to know that back in 1969 wall street basically shut down because they couldn't process and settle the trades. they want to technology. now we're back to the point where we can not get away from trade plus to for settlement, unless a technology increases. so i don't see that happening any time soon. excellent. when's against that? are here. international, regulatory attorney miles. edwards. thank you for your time. thank you. well, rachel, i mean, you know, we've covered a lot of this retail trading boom. and it seems like, you know, there is some criticism we see from both the training side,

the regulatory side. but, but the fact is, i mean when you look at the way wall street has always worked for big institutionalize, it definitely feels nice to see that real everyday people can have an impact on markets and, and be able to trade and make money in the center that gave them a taste of what could happen, even if we don't see a mean stock crazed, quite like that one. they're still the possibility for them to rally together and really cost those has run some money. and if you're, if you're betting on shorts, you definitely want to be careful in this situation. that's for sure. and that's it for this time on boone boss, catch us on portable t v. you can find it at portable dot tv. we'll see you next time. mm. hm. oh

no one. no, no, no. hon luna little more real than what they should of unit 73. 1 was a unique organization in the history of the world. what they were trying to do was to simply do nothing short and build the most powerful and most deadly biological weapons program that the world had ever. no real good. you know to push that issue or should i put it under? no good, good quino chicken nugget. son, me, lucille. he unmoved monica to no. mother's name. nguyen, the moment i've been there and i got over marcell. janine, i go on monday. i wish to know about julie who,

who knew he didn't or guzzle more. pushed in a jr. let's i had to put the mother on buddy bill, god hours. oh boy festival. to go or. oh, i want on this the wow. she my a new on it. i don't know. i can send more or said mom. good. so you don't, the, you are not all put them out. i think it is driven by drink, shaped by thinkers and those things in in there's things we

dared to ask in imagine picking up a future textbook on the early years of the 21st century. what are the chapters called gun violence school shootings, homelessness? first, it was my job, then it was my family. dealing with my savings. i have nothing. i have nothing and it's not like i don't try. i look for resources, i look for jobs. i look for everything i can to make this pass and i end up doing is passing the road to the american dream, paved with dead refugees at this very idealized image. all this older america makes americans look past the deaths that happen every single day. this is a modern history of the usa by america on our t o

. the headlines and i think the u. k. government turns the army to alleviate pressure at the pad full pumps and fuel supply pails. meanwhile, a poll reveals probably can get at the medias handling of the crisis, but there also does also appear to be another colquitt on people's minds. the news is the ne complain the media media government to play across in europe, gas prices hit a new record that the german government. they're wanting people to prepare for a chilly month ahead. that is the country's energy regulated though we still get to grants a license for brushes, nordstrom to gas pi.