What's missed in all of this, is by just talking about "Institutions" and "Hedge funds", people are missing out on who hitting those places affects, the average person. A lot (not all) of these places support pensions, retirement savings, and people's life savings. These institutions aren't playing with their own money most of the time. And this isn't saying WSB is solely responsible, most of the blame lays out to the managers that shorted a stock more than 100%; honest, I think over 40% of a stock being shortened is probably a very bad thing.
The government has an interest in a stable market place, as it can cause ripple effects in the economy, I think in the short-term stopping this action is probably a good thing. I also think that in the long-term rules on shorting need to come in to prevent a single institution from over shorting a stock.
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