Banks were the lenders, hedgefunds the bag holders. It's like the Mafia and some low-level conartists. If the mob thinks your model of making money works, they give you a little to play with so that you can make some more money for them. If it comes back to bite you in the ass, you better cover your debts for the lenders, or you're dead. The smart ones don't turn on their lenders, but simply eat the cost of getting caught, you can live to play another day. A hedgefund is just a group of gamblers working together to screw people over in larger quantities.
How come banks were able to cut the risks of GME investors. But not for large hedge funds? Seems like banks learned nothing since 2008.
Banks were the lenders, hedgefunds the bag holders. It's like the Mafia and some low-level conartists. If the mob thinks your model of making money works, they give you a little to play with so that you can make some more money for them. If it comes back to bite you in the ass, you better cover your debts for the lenders, or you're dead. The smart ones don't turn on their lenders, but simply eat the cost of getting caught, you can live to play another day. A hedgefund is just a group of gamblers working together to screw people over in larger quantities.