Stocks arehitting record highs, but not everyone is happy. Greenlight Capital’s David Einhorn is upset, particularly with regulators. He has a long list of gripes, ranging from the Federal Reserve’s handling of inflation to the U.S. Securities and Exchange Commission’s lack of action on everything from Robinhood toGameStop.
Einhorn’s complaints regarding the Fed are boilerplate. The Fed has the job of keeping inflation in check, but is now willing to let inflation rise above its long-term target. He doesn’t like the new laissez-faire attitude about rising prices.
But Einhorn’s harshest words in a letter published Thursday were reserved for the SEC. Its job is to ensure fair trading, but Einhorn writes that it seems to have no interest in investigating spikes in the stock prices of tiny companies or statements from prominent figures such asTesla’sElon Musk and Chamath Palihapitiya that he likens to pouring “jet fuel on the GME squeeze.”
“There is no cop on the beat,” Einhorn writes. “Companies and managements that are emboldened enough to engage in malfeasance have little to fear.”
With Greenlight returning just 5.2% in 2020—theS&P 500returned 18%— Einhorn’s rant could seem like sour grapes if the issues he raises weren’t so serious.
Einhorn calls on Congress to grill absentee regulators instead of interviewing Roaring Kitty.
It would be a start.