EVERLY HILLS, Calif. — Gary Gensler and his Democratic colleagues on the Securities and Exchange Commission will try to sell their long-awaited report on the “meme stock” trading frenzy as a clarion call for more regulation.
But if you remove the report’s propaganda, it shows that our markets work pretty well. Even better, small investors have never been protected more from abuse than they are today.
Of course, the Biden administration doesn’t want you to see the glass-half-full version of the trading madness that occurred earlier in the year. They want you to think something is wrong with the plumbing of the markets — and small investors need to be protected — since, for a few days, a handful of stocks soared to astronomical heights for no apparent reason other than people took joy in bidding them up.
Yes, the run-up in shares of GameStop, a has-been video-game retailer, or AMC Entertainment, a teetering movie-theater chain, was weird. Penny stocks trading like Amazon or Apple is a sign that the madness of crowds has taken over.
Don’t blame the markets or even Robinhood, the no-fee trading app that facilitated the frenzy. Blame the Fed.