Official backing for crypto creating conditions for financial crisis
In the past month Wall Street has been gripped by a new speculative binge. High value tech stocks have hit new records, with Nvidia becoming the first $4 trillion company by market capitalisation, while the so-called meme stock frenzy of 2021 has made a comeback.
Retail investors have been pouring money into the low-priced stock of low-profit and even loss-making companies such as the doughnut chain Krispy Kreme, the digital camera maker GoPro and the real estate platform Opendoor Technologies.
The companies targeted are those which have been heavily shorted. Shorting is a process in which investors borrow shares which they sell and then buy back at the lower price to honour the loans, pocketing…
