Earlier quoted context omitted.
I think this whole episode might cause the next market sell-off: (1) fund degrossing as the initial driver - already happening (2) everyone is being reminded of 99/00 mania (3) uncertain regulatory environment surrounding trading (4) worries of systemic risks created by bubble GME going higher is likely to trigger it more than it dropping off right now
I think there's also evidence that the "short bubble" might be more widespread than we think. I'm not entirely convinced that Melvin was able to unwind their 50mln short position and drive the short interest down on Ortex (they're the best thing we've got in terms of guessing how much true short interest there is, because exchanges only report once or twice a month on a week or more delay) by covering. Equally likely…
My key takeaways here are that there was probably a little fraud (maybe someone found a bug in some broker that let them do some sort of infinite shares glitch), maybe a little rolling of shorts (but not by anyone big), and probably a lot of writing of covered calls by the likes of Fidelity and Blackrock as a way to get income generation while at the same time acting as a limit sell order (albeit one that you can't take down). Coupled with some early botched PR and celebrity pumping etc, and even my own speculation, this feels almost Q-like in it's explosive growth and conspiracy-theory oriented thinking.
After everything I've seen this week I think I actually have the highest faith I've had in a long time in our financial system.