The raw delight with which Reddit and other chat rooms are taking on hedge funds and the financial establishment is understandable.
How enticing it is that for a small retail commitment of cash, there is the promise of great gains at the end of the rainbow.
It is not just holders of exchange traded funds invested in silver and mining stocks who will be joyous at the huge pop in prices.
The Reddit group WallStreetBets, which has been encouraging investors to snap up shares in shorted companies, has now turned its attention to silver
Antique silver dealers will be heading to the smelter with their less intrinsically valuable objects as prices touch an 11-year high.
This populist movement against Wall Street, the City et al is more akin to Extinction Rebellion and the Arab Spring than anything else.
It may appear raucous fun and a voice for all those involved but eventually ends up as damaging the cause.
Extinction Rebellion alienated a broader audience from the green agenda and, in the Middle East, a social media-driven campaign led to a bloody civil war in Syria rather than peaceful transition to democracy.
Reddit is not the first player to spot that a ridiculously illiquid and malfunctioning silver market might be a good place for a killing.
In the 1980s, Texas oil tycoon Nelson Bunker Hunt attempted to corner the silver market and eventually came to grief when the price fell back and all he was left with was a ‘tonne’ of debt.
Doubtless there will be investors in metal exploration stocks across the world, including London quoted Fresnillo, Polymetal and Glencore, who will delighted by the assault of the online retail brigades which will have made them richer and may temporarily have damaged hedge funds.
Regulators may be willing to tolerate disorderly markets for the short-term, but if there were to be margin calls on Wall Street (a request for more cash to be posted on losing trades) there could be cascading financial failures and all of us with pension funds or ISAs could be hurt by what may seem a harmless romp.
Teaching the hedgies a lesson in one thing, but inadvertently kicking away the underpinnings of the financial system is dangerous.
Green legacy
The alacrity with which Asos is snapping up the more valued brands in Philip Green’s collapsed retail empire reflects badly on the old rascal’s management.
For a time Green was able to capture the fashion zeitgeist with Topshop, and was boastful of his high fashion relationship with supermodel Kate Moss, a store on 5th Avenue in New York and his work on fashion academies.
But the neglect of investment on a versatile digital platform provided the space for online competitors Asos and Boohoo to step up.
Green adored the hype and the moniker ‘King of the High Street’, but in the end the £1.2billion dividend he extracted for his wife Tina, the yachts in the Mediterranean, the bolthole and spa treatments in Arizona were what really excited him.
The idea of creating a retail empire which could be passed onto the next generation, or creating something long lasting such as Primark or Zara-owner Inditex, was a fiction.
He leaves behind a trail of destruction in terms of lost jobs, the High Street, consumer choice and fresh burdens for HMRC and pensioners.
The £50million of make-good funding from Lady Green, together with the property value of the Oxford Street store, will leave a big hole of up to £200million to be picked up by the Pension Protection Fund and reduce benefits for thousands of workers. The taxpayer will have to pick up the redundancy bill.
It is a vainglorious ending for a self-righteous retail showman for whom apology is a foreign language.
Young ones
The stain of Hargreaves Lansdown’s full-throated support for Neil Woodford’s bust investment empire will, for some investors, including this writer, always reflect badly.
The company has discovered, along with Boohoo and other UK online innovators, that consumers and investors will forgive almost anything if the platform is easy to use and income climbs.
The 10 per cent jump in profits to £188million in the first half year, driven by an influx of locked-down younger investors, proves the point.
Over-ripe management fees mean it makes the returns other financial firms can only dream of.
With an extra £150billion of retail cash deposits looking for a new home post-pandemic, there will be no rest for the wicked.
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