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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

School of barracudas Thailand

Perspectives

Insurrection, rebellion, speculators and investors

David Bailin

By David Bailin

Chief Investment Officer

February 1, 2021Posted InFixed Income, Investment Strategy and Equities

The storming of Washington on January 6th was an insurrection, an act of rising in arms or open resistance against established authority. Acting to throw out the results of the 2020 US national election based on a false premise - that the election was stolen via massive voter fraud - meets that definition. An important feature of that that day was that it was made possible by social media platforms able to both spread disinformation and organize the actions of its leaders and participants.

The events on Wall Street this past week have been characterized in a similar light. While “Reddit vs. Hedge Funds” is highly unlikely to be of the historical importance of January 6th, the collective actions of millions of individual investors to bid-up the highly-shorted shares of generally underperforming companies have been viewed by some as an act of rebellion against financial authority in the form of wealthy hedge fund operators and their investors. Viewed that way, holding one share of GameStop (GME) was a way to take a stand against Wall Street.  

We think these recent Wall Street events may be viewed quite differently in the end. In 2021, with time, money and technology as fuel, retail investors have formed an online community whose stated purpose may be political, but it is certainly equally motivated by the idea of fast profits and the collegiality of sport. The rapid trading of speculative shares that achieve unsustainable valuations has happened before. Such periods have not ended well for small investors.  In equities markets, the period from 1999-2000 is an analogue.Then, many “dot.com” concept firms attracted mass investor appeal in the absence of viable business models. Many of them fell to zero, leaving small investors with billions of dollars in losses. 

Right now, the 100 most shorted shares in the US equity market represent just 0.7% of its total value even after this week’s events.  In our view, the dangers of “naked shorting” - multiplied by the power of options and the power of the internet as an organizing mechanism - will become apparent in the days and weeks ahead. In the meantime, as stressed investors close their positions, it would not surprise us if there are ripple effects that drive prices of quality, liquid investments down, distorting broader markets for a short time.

Download: CIO Strategy Bulletin