After the minor chaos that erupted because of the stock market situation this week, many people such as Senator Elizabeth Warren have spoken out and given their thoughts on the situation.
In a statement, Sen. Elizabeth Warren called out the Securities and Exchange Commission (SEC) for failing to act in light of the situation going on in the stock market. She said:
We need an SEC that has clear rules about market manipulation and then has the backbone to get in and enforce those rules. To have a healthy stock market, you’ve got to have a cop on the beat. That should be the SEC. They need to step up and do their job.
The Senator also talked about the narrative of the situation, and disagreed with the notion that it was an example of a “David vs. Goliath” story, and rather the problem is now who really is doing what. She explains, “That’s the problem: How do you know who’s manipulating the stock at this point? Are you entirely sure that there aren’t wealthy people on both sides? That hedge funds haven’t moved in on the side of the people who bid up the price of GameStop?”
What do you think will be long effects of this recent volatility in the stock market? Do you believe there will be more government oversight of the practice?
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3 thoughts on “‘You’ve got to have a cop on the beat’: Elizabeth Warren slams SEC over GameStop chaos”
I think it would overtime hurt the stock market and a lot of people are going to lose money investing in these companies and getting major increases and then major decreases all because of persuasion. I feel like there will be government oversight especially if it is hurting the market.
The long effects I can see coming from the recent volatility in the stock market are the decrease in the U.S stock market’s prestige and the increase in government regulation on the stock market. Firstly, I believe that the volatility will harm the stock market’s prestige due to stock market’s fragility being shown by the heighten volatility. Furthermore, because of the recent events with stocks like GameStop, more people (such as Elizabeth Warren) are beginning to question whether the stock market is truly safe from manipulation by any one person/group. This questioning harms the notion that the stock market is truly about risk and making wise investments, for people will then believe that the rich can use the stock market without the same risk as the normal person. Additionally, I also believe that the volatility will lead to government regulation on trading stocks due to the current bipartisan support (which is rare during these time) for such measures. However, the effectiveness of new regulations will have to be seen in the future.
I believe the long effect outcome will extremely hurt the stock market. The market has become manipulating and scandalous in the past couples months especially the Gamestop stock. A lot of people are going to lose money as well. I believe the government will have way more oversight in the future over the practice of stocks.