Hacker News Reader

What banks? And why banks? Banks are not involved in the short squeezes at all.

Banks back the primary dealers who take and back these leveraged trades. They are up to their noses in this.

what? banks just lend money and are scared of defaults. what do banks have to do with this? the power company is complicit by providing electricity too?

if you against banking, you have bigger fish to fry

Ever since Clinton repealed Glass Steagal, banks have been able to offer both commercial banking and investment banking. And they aren't really scared of defaults when they are too big to fail.

Brokerage firms are backed by banks, and if a brokerage firm was somehow small enough that they couldn't provide the liquidity to cover the trades, then the banks backing them are on the hook.

I agree with your skepticism but it is possible, even likely, that maple and melvin were levered as part of their short strategy.

I think its far more likely that the poison would be released by funds themselves, but do not think for a second that banks will not intervene to safeguard their revolvers...

Reply on news.ycombinator.com