[이뉴스투데이 이상헌 기자] The collective behavior of individual investors who have flooded the stock market has emerged as a big variable in the global capital market. In Korea, voices against the short selling of Donghak ants are growing, while in the United States, a cult group that has hunted for hedge funds has emerged, leading to a civil war.
The pessimistic economic outlook is trending around the world on the 1st due to the prolonged corona19 crisis. Stock markets in the US and Korea, which have hit an all-time high over the past year, are also experiencing growing instability. Fed chairman Jerome Powell expressed concern over uncertainty and the New York Stock Exchange is also taking a breather, but there is also a phenomenon leading to a surge in certain stocks from the crash market.
On the 29th, the Dow Jones 30 Industrial Average of the US New York Stock Market closed at 29,982.62, down 620.74 points (2.03%) from the battlefield. The S&P 500 index also closed 73.14 points (1.93%) to 3,714.24, while the technology-oriented NASDAQ index fell 266.46 points (2.00%) to 13,070.69, respectively. It has been a month and a half since the 14th of December last year that the Dow index gave the 30,000 line.
Hedge funds, which suffered large losses due to the failure of short selling, also sold large quantities of other stocks, accelerating the chain decline in the stock market. On the other hand, the share price of GameStop, where individuals intensively bought, soared 67.9%. GameStop has soared more than 1600% this year. Another intensive purchase target, AMC Entertainment, also rose more than 500%.
At the heart of the civil war between’individuals and hedge funds’ are members of the online community called’Reddit’. These are far-right fanatics who have claimed that the Wall Street Deep State forces defeated Trump in a fraudulent election. Donald Trump Jr. and Tesla CEO Elon Musk drew attention.
Musk posted a post on his Twitter, saying, “You can’t sell a house you don’t own, you can’t sell a car you don’t own. But can you sell stocks you don’t own?” and “That’s bullshit, short selling is a scam.”
Opposition is also rising from the Democratic Party. When US free stock apps’Interactive Brokers’ and’Robin Hood’ began to block new purchases of some stocks, such as Game Stop, Democratic Minister Okashio Cortes announced that it was “unacceptable,” and a hearing was held.
The phenomenon that certain stocks continue to surge in the crash market is a side effect of excess liquidity. Even though millions of people are receiving unemployment benefits and companies are shutting down, it is the discrepancy between’real’ and’financial’ that the stock market alone has an unprecedented overheating pattern. This phenomenon is prolonged, leading to paralysis of investors.
SK Securities researcher Han Dae-hoon said, “As the pressure of hedge funds that sold short-selling increased, we sold the stocks we had to increase the decline in the market as a whole.” It is likely to be,” he said.
On the other hand, there is no apparent conflict in Korea. However, short selling is also pushed against each other over whether or not to resume, and the atmosphere is turning toward the Cold War. Financial authorities banned some of the stocks participating in short selling by 22 securities companies to prevent the side effect of short selling. Although a plan has been proposed to shorten the illegal short sale inspection period from the previous 6 months to 1 month, the Donghak ants reject the system itself, saying that the coordinating field is a collapse.
The reverse idea of actively supporting individuals’ short selling is also being promoted. The Financial Services Commission has a strategy of launching an integrated private loan system in June while requesting to increase the size of loans to five companies, NH Investment & Securities, Shinhan Investment & Securities, Kiwoom Securities, Daishin Securities, and SK Securities that currently provide loan services.
An official at a securities company said, “The US is outwardly noisy, but the net function of short selling is working.” It has a role to play,” he said.
He added, “What confuses the US right now is the conspiracy theorists who are dissatisfied with the defeat of the Trump presidential election. On the other hand, even if short selling resumes in South Korea, it is not easy for Donghak ants to act in groups like US Robin Hood. .
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