There’s a practice on Wall Street which has become extremely popular with many and wildly profitable for a few. It’s called “short selling”, a transaction in which a speculator borrows shares in a company from another speculator with the promise to return an equal number of shares to the lender at some later date. The first speculator immediately sells the shares he has borrowed at the current price, then buys the shares he needs to return to the lender sometime before the end date. If the price of the shares has dropped, the speculator “going short” has made a profit; if it has risen, the speculator “going long” makes the profit.
For example, speculator A borrows 200 shares of company XYZ’s stock from speculator B when the stock is selling for $100 a share and he immediately sells the shares at that price. On the day speculator A must return the shares to speculator B, the stock is selling for $60 a share. Speculator A buys 200 shares at that price and returns them to speculator B, making a profit of $8000 ([200 x $100 = $20,000] – [200 x $60 = 12,000] = $8000). Such gambling doesn’t even necessarily involve the buying and selling of any stock. In what’s called “naked selling”, the price of a stock on a certain day and its price some day in the future can be used to calculate who won and who lost and by how much.
Here’s a real-life example between speculators who think any amount expressed in less than 7 digits (sometimes 10!) is just chump change. Investors who shorted First Republic Bank, the bank that went under a week ago, made a profit of $848 million as the bank’s stock dropped from $16 to 33 cents a share in the course of a week. Imagine that! The already redundantly wealthy made enough to pay the salaries of 10,000 teachers while they idled the time away doing the backstroke in their money vaults a la Scrooge McDuck:
Those going long can profit, too, as did those who made $700 million betting on a company called Game Stop in 2021. Did these high-stakes gamblers make a contribution to American society equal to that of 10,000 teachers? I’d say they didn’t contribute so much as ONE teacher does! Why do we tolerate this in a country which boasts of its egalitarianism, especially as such unearned income may be gained through immoral, if not illegal, price manipulation?
One reason is because Wall Street is a sacred cow (or calf?). The United States has achieved tremendous economic success and the New York Stock Exchange is considered a key component in this success, so we are hesitant to question the ideologues who assure us the stock market is a brilliant way to see that capital is allocated rationally. Any tampering with it, we fear, will kill the golden goose.
Reference to a sacred calf brings to mind a second reason we are hesitant to question the gambling going on at 11 Wall Street; namely, that Jews are disproportionately represented there (with estimates short-sellers have made 7 billion dollars off bets on failing banks just in the last month or so, expect to see a lot of buildings bearing Jewish-sounding names popping up on college campuses across the country). Hence, criticism of short sellers could easily be interpreted as anti-Semitic, no matter how justified and ethnicity-blind the criticism may be.
Despite the unfair opprobrium that may be flung at those calling for an investigation, such calls are being made. If, as a result, among the manipulative short-sellers exposed, marginalized, jailed, a disproportionate number of the most egregious malefactors have names like Weinberg, Goldstein, Kratz, we should remind ourselves that most Jews do not work on Wall Street, nor do they profit directly from the shenanigans of their coreligionists.** Though taught cliquishness from an early age and proud to be associated with the astounding accomplishments of their ethnicity, many Jews wear their tribal robes very loosely. Let’s not confound the guilt of some with the innocence of the many.
Unfortunately, that’s not how human society works. Instances of collective punishment go all the way back to the time decent Sodomites and Gomorrahans perished right alongside their debauched fellow townspeople. To take a more contemporary example, there are those of us adamantly opposed to what we believe is the central tenet of American foreign policy, a striving for global hegemony; but if our leaders’ ambitious goal causes some unsympathetic foe to rain bombs down upon us, they will fall on our heads just as they do on those plotting away in the bowels of the Pentagon, State Department, NSA, as well as those in think tanks and in the street egging them on. Caveat judaei.
——————————————-
* The world’s first stock market, the Amsterdam Stock Exchange, had barely been founded before a shrewd trader introduced the practice of short-selling. He and his cabal of associates were so successful in bringing down the price of shares in the Dutch East India Company by casting doubt on the solvency of the company that the authorities quickly banned short sales (at least in its “naked” form).
** It doesn’t help the reputation of Jews that the man who invented short-selling, Isaac Le Maire, was apparently a Jew, based on his name, his brother’s name (Solomon), and his son’s name (Jacob). Nor does it help that the person responsible for seeing that the casino on Wall Street does not have a rigged roulette wheel and whose term in office has seen short-selling burgeon, the Chairman of the Securities and Exchange Commission (SEC), is a Jew.
Ken's Blog 