Portnoy calls for people to be jailed over hedge fund scandal in scathing interview

good evening and welcome to tucker carlson tonight quite a day in financial markets not a phrase we use a lot on this show but a lot happened today and there are massive implications for all of us dave portnoy joins us in a moment to explain what those are but first some context for what we're watching right now last march as the country began to panic about the arrival of a strange new coronavirus from china a billionaire called bill ackman went on television in an attempt to make america even more afraid than it already was our economy may be done at this point he said over dead not coming back bill ackman went on like this for 28 full minutes terrified cnbc viewers watched slackjawed as he ranted here's part of his performance hell is coming this was a feeling like i've never had like there's a tsunami coming right the tsunami's coming in you feel it in the air right the tide starts to roll out okay and on the beach people are playing and having fun like there's nothing going on and that is the feeling i've had for the last two months okay and my colleagues at work okay thought i was a lunatic we need to shut it down now america will end as we know it okay i'm sorry to say so okay unless we take this option bill ackman was afraid and he wanted you to be afraid ackman was especially frightened for the future of hilton hotels hilton hotel's akmin proclaim quote is going to zero along with every other hotel company in the world every hotel is going to be shut down in the country every one talk about scary but in the end not for bill ackman not long after that appearance we learned that ackman's firm had made more than two billion dollars from trading in the stocks that many people believed he had pushed down with the hysterically dire predictions you just saw including hilton hotels so was ackman's rant on cnbc part of a very dishonest investment strategy seemed pretty obvious so we said so on the air ackman's lawyers immediately threatened to sue us in a long phone conversation later ackman swore to us that his public attack on hilton hotels had nothing at all to do with his desire to buy hotel stocks at a lower price or with the billions in profit that his firm subsequently reported there was no connection whatsoever he promised and he sounded emotional as he said it we'll let you assess bill ackman's sincerity we do know that this kind of behavior is common on wall street ackman himself once attacked the company herbalife on television it's going to zero he once again predicted in an effort to profit from herbalife's decline pretty ugly but that kind of thing happens a lot on wall street hedge fund managers bet money that a specific stock will decline in value that's called short selling short selling has no obvious value to the american economy short selling exists for the purpose of enriching the people who do it short selling hurts companies obviously it hurts their investors hurts their employees ultimately it hurts our country itself yet it continues no one does anything about short selling regulators ignore it cnbc applauds the brilliance of the people who do it oh they're so clever those hedge fund managers in fact nbc's business channel regularly lends its airwaves to unscrupulous short sellers who use free tv airtime you may have seen this to tank american companies for profit they do that all the time the last administration did nothing to stop this the current administration certainly won't the biden white house is more tightly controlled by business interests than any administration in history virtually every person there is beholden to the finance establishment what's happening on wall street is so clearly awful and so obviously destructive the question is who's going to fight back against it as it turns out a bunch of guys on reddit will it fell to them to push back against the short sellers because no one else even tried so they did a group of independent investors in a reddit group called wall street bets learned that hedge funds plan to short the stock of a fading retail company called gamestock so the reddit investors began buying shares of gamestop and gain stop surged in value ultimately up by more than a thousand percent the hedge funds for all their calculation hadn't seen that coming and they lost billions as a result of it one hedge fund lost so much money it needed a bailout from two other hedge funds meanwhile some of the investors on reddit got rich but getting rich was not the whole reason they did it they also wanted to send a message to the hedge fund managers here's one of the reddick guys a man called justin speak explaining i'd be lying to say if there wasn't some pleasure out of the fact you know i'm a pastor and jesus tells a story about this rich fool who has an over abundant harvest that's more than he can store and rather than give the excess to those in needs he chooses to build bigger and bigger barns to store it for himself and rather than share the billions with the less fortunate they've built bigger and bigger barns for themselves and so yeah i was 100 there was a part of me that thought well it will be fun to be a part of this moment to see this moment where at some level overnight these investors are losing their investing lives it's being demanded from them and they're left wondering what what they get what who's going to get what they had prepared for themselves they've built bigger barns for themselves well that's true not to mention epically enormous art collections the hedge fund people in case you haven't noticed in case you don't read the business press are very proud of their art collections very aggressively flamboyantly proud despite the fact that a lot of their so-called art is ugly overpriced garbage cheap garish crap that people will laugh at a generation from now and that tells you a lot it turns out that a lot of our financial wizards have awful taste they're as vulgar as the way they do business they don't know that though because no one dares tell them in a country that worships finance people the other kind of rich people who still think frank gehry is a brilliant architect not a scam artist so people like that arrogant lacking any self-awareness whatsoever understandably generate some resentment from the rest of the population they pause and say wait a second bill ackman and the many people on wall street who behave like bill ackman what exactly did you do to make two billion dollars did you improve anything was it just another sleazy inside deal that the rest of us were excluded from participating in tell us now please speak solely so we can understand your answer that was pretty much the message the reddit guys were sending to wall street watching at home a lot of americans applauded that message they feel the same way but the hedge fund people don't they weren't happy people who lose money really are happy but here's what make the hedge fund managers different from you they have a lot more power than you they control the game so they immediately change the rules of the game today the investment app robin hood which is used by independent investors to buy and sell stock banned its users from trading game stock shares as well as from several other company shares no one even knew that was legal maybe it isn't but robin hood did it anyway and they did it under pressure from the hedge funds who they really work for so much for the free market you're always hearing about there's something free about it that turned out to be a lie turns out that what wall street really hates is outsider trading the idea that people from outside their world might be getting rich that's the one sin they can't abide the management of robin hood of course didn't admit any of this they can't they're still posing instead as an outpost of inclusive progressive values in a sea of rapacious capitalism the irony being of course robin hood is the most rapacious they sell information they gather from their customers to the hedge funds who use it for their advantage and most customers don't even know how's that for progressive on the other hand they do support blm they're against hate and systemic racism they're for science and they want you to know that here's an ad from robin hood that ran just last month remember when greed was good when you had to look the part when you had to pay for a seat at the table we set out to change it the way the system works to put the power in everyone's hands to make it feel speak sound and look just like you we all invest every day in ourselves our communities our future we are all investors it's so fun to watch that stuff after the fact that ran a month ago we set out to change the way the system works says robin hood well that's for sure in fact that's literally true robin hood changed the system at precisely the moment when people from outside the system started benefiting from the system sorry proles no trading for you were locking your account other platforms took effectively the same position but felt the need to pretend a little more than robin hood did they justify changing the rules by attacking the very people they were hurting by changing the rules the communications service discord for example banned users from the wall street bets group for using its platform why'd they do that it wasn't all because the reddit guys were beating the hedge fund guys with their own grubby game and that's not allowed no it had nothing to do with that of course no instead they were banned according to discord because the reddit guys had engaged in quote hate speech of course the reddit guys were racists that's when he humiliated the hedge funds only a racist would do that you can laugh if you want but keep in mind this is a time tested tactic it works that's why they do it remember back if you can to the occupy wall street protests of more than a decade ago the 2008 crash wrecked an awful lot of families in this country many have not recovered even now people are angry about that and many blamed wall street and they said so but rather than address their grievances some of them legitimate wall street and its countless puppets in the media just changed the subject so it was right about this point that we started hearing an awful lot about identity politics we can prove that in 2011 when the occupy movement was at its peak mentions of the word racism in the new york times the washington post and los angeles times skyrocketed in the case of the washington post which is america's most committed defender of entrenched power literally owned now by the richest man in the world mentions of racism nearly tripled at the height of occupy wall street oh and of course it worked they changed the subject they're doing that again they always do that always over on cnbc home of the professional short seller the ones who tell you to sell when they profit from it they haven't started yet yelling about the scourge of white supremacy on reddit though obviously that's coming it's inevitable but they started their defense at big finance a little more tactfully than that the problem with humiliating hedge funds explained to anchor and professional hedge fund shill and ross sorkin is that in the end humiliating hedge funds only hurts the people who do it so for their own good they might want to stop this nonsense immediately what i'm concerned about is that this is a pump and dump scheme that effectively is being cloaked uh you know as mother teresa has arrived on the scene i think there are real underlying issues with the system that need to be resolved i do not want to protect the system i i i love watching the little guy beat the big guy as much as anybody but what i wonder is whether uh these folks trying to quote stick it to the man are ultimately going to be sticking it to themselves they only hurt themselves with their scheme not at all like what the guests on this channel do this is a scheme and andrew ross sorkin is deeply concerned about this scheme he's just really really worried that average people might be hurt by this scheme he can barely sleep thinking about it he was so fraught with anxiety last night he was almost late to soul cycle this morning that's how much he tossed and turned beneath his goose down duvet as he pondered the fate of america's beleaguered middle class which is hilarious but even if you were to believe it it's a little late honestly where was andrew ross sorkin for the last dozen years as the central bank shoveled trillions to wall street thereby enriching a few devaluing the american dollar guaranteeing hyperinflation and of course destroying the value of the average person's savings did indra sorkin even notice that any of that happened the reddit guys noticed that's why they're mad jenny ellen might have something interesting to say about all of this jenny ellen ran the federal reserve for years beginning under barack obama as much as any single person on earth janet yellen is responsible for creating the distorted financial system that made the reddit revolt possible indeed inevitable so where is janet yellen now and what does she have to say for herself oh yeah as of last week janet yellen is joe biden's treasury secretary here's what joe biden's flack had to say yesterday about jenny ellen the white house concerned about the stock market activity we're seeing around game stop and now with some other stocks as well uh including the subsidiary or whatever the company that was uh blockbuster um and have there been any conversations with the sec about uh how to proceed well um i'm also happy to repeat that we have the first female treasury secretary and a team that's surrounding her and often questions about market we'll send to them but our team is of course our economic team including secretary yellen and others are monitoring the situation it's a good reminder though that the stock market isn't the only measure of the health of our econo our economy it doesn't reflect how working and middle class families are doing so as her first answer gensake is quote happy to repeat that janet yellen is the first female treasury secretary let's translate actually jenny allen has nothing to say about reddit or gamestock or short selling or even the dangerously corrupt condition of american finance more broadly she hasn't thought about those things probably doesn't even care jenny yellen herself has made millions from hedge funds including from funds that lost money to the reddit guys but whatever buzz off we'd like to remind you that jenny allen is a woman and so are many of the people around her these brave leaders have broken glass ceilings they are empowered and that's enough we can't give you an answer we won't improve your life but we do have diversity so you should be happy that's their position has there ever been in all human history a clearer distillation of the essence of neoliberalism than that probably there never has been maybe at this point people will start to catch on to the game suddenly people are catching on to a lot of things it looks like looking back we may see the reddit guys and their effective defense of gamestop as a kind of turning point in this country's history whatever our current system is it is definitely not the capitalism we were promised not even close one of the rare people in media who understands this is our next guest he's the founder of barstool sports as well as an independent investor who trades an awful lot online and has done well dave portnoy joins us now to explain exactly what this moment means dave this kind of gets to the heart of what you've been doing under quarantine and i'm wondering what lessons we can draw from this what is happening exactly you know i've been trading heavily since quarantine started and i was shocked by this uh i personally did invest in amc and nokia those are two of the stocks that the reddick guys and the wall street bets guys were pushing i believed in the power of the internet when i saw what uh robin hood was doing ironically robin hood take from you know take from the rich and give to the poor even though they do the exact opposite i was stunned uh i think it's criminal i think there has to be an investigation i think people have to go to jail whether that actually happens i don't know but i've never been more convinced about market manipulation and the people the hedge funds controlling the game than today i i mean just to wake up and say hey you can't trade these stocks anymore you can only sell them we're going to intentionally crash the market in these stocks and everyone who has it tough you're going to lose a ton of money but we're going to save the rich people in the hedge funds shocking like in 20 years of me doing barstool i'm not exaggerating it's the most shocked i've been and maybe i shouldn't be but you know when you have aoc and donald trump jr both on the same side of an issue you know something's dramatically wrong this seems like a betrayal of the basic promise of american public markets which is their transparency purely meritocratic if you i mean that's why you've been able to make dough during quarantine you make a bet you're right you win i mean how amazing is it to discover that that's not real apparently it's real for them and i love the lectures you hear it from the hedge funds and the suits as i call them but they'll say they're protecting you and we're protecting you first yourself and people don't understand the risk and margin and then you look at him it's like buddy look in the mirror you're doing the same thing the hedge funds are betting against companies we're betting on them with money and margin we're doing the same thing the only difference is we're winning and you're getting your teeth kicked in and you just said time out we're changing the rules and it's bananas it it cannot happen and i saw the robin hood guy vlad he's on tv he's lying through his teeth there is listen the thing that really is scary robin hood i'm going to give this guy a shred of credit when he woke up and he said we're going to halt trading and ruin our mo our client base he knew that was the end of robin hood robin is done that company will cease to exist because what they built it on the day trader the retail trader they're never going back so he willingly blew up his company today he knew that was gonna happen why who's in the back end who's pulling the strings who's making the decisions we have to find out and by the way it's not enough just to be like oh we're gonna slap you on the wrist and give you a fine these are billionaires they can write billion dollar checks like we write 10 checks somebody has to go to jail for this this is intentional market manipulation and it's everyday people's just not the reddit people i have people hit me up all the time today yesterday they're putting their rent into this they got caught up in the momentum and if you lose money fair and square fine but nobody was under the impression somebody could just press the stop button and say guess what we can crash this stock without you having any say you can only sell it you can't buy it what happened this is like the movie wall street it's insane i just read a piece about 15 minutes ago that said and it seemed right that robin hood's real customer is not retail investors like you it's real customer is the hedge funds they sell data on trades to the hedge funds which use it to their advantage assuming that's true did you know that well do you think anyway robin hood knew that i didn't know that i did not know that till today i don't think anybody knew a lot of the things that were going on till today um you know again robin hood was operating under the guys that this was a retail trading platform a lot of people said i helped build it because we had all our retail bros as they call them going there they literally in their bio said they're going to democracize trading it's the exact opposite and now they're saying we're going to go back to normal tomorrow we're going to let everybody do our normal trading tomorrow well tucker what changed oh i'll tell you what changed the billionaire hedge funds they got out of their shorts tonight so what why is this uh behavior not risky tomorrow but it was today it's because they're being pulled by strings it's criminal behavior what happened today plain and simple people have to go to jail plain and simple best description i've heard i got to ask you before you go several weeks ago you announced you were starting this fund to help businesses a lot of restaurants that were hurt by the corona shutdowns you're starting to raise money how much did you raise and how's it going it we are closing in on 33 million dollars raised over 200 businesses we've helped we have over 200 000 people have donated to it and it's uh you know again i'm a prickly guy but it's been it's been gratifying to be able to help and thank you to everybody who's donated we continue to do it but we're helping a lot of small businesses and a lot of employees in a lot of communities so it actually it's been it's been great it really has it's amazing you're like your own federal agency at this point helping people when others won't i appreciate it dave portney thank you for coming on tonight thanks tucker

2021-02-01 21:10

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