Saundra Hill Scott arrived at the Fort Myers courthouse with one goal: To save her house from foreclosure.
She had all her mortgage bills and all the docs from her lender. She was prepared to fight.
But she never got the chance.
The judge asked her just two questions. Then, he told Saundra that she, her husband, and their three grandchildren had 60 days to work out a deal or vacate the property.
Saundra didn’t want to go down without a fight. So, she pressed the judge to look at her paperwork. The judge’s response: “I don’t need to see that. That’s between you and the bank.”
Saundra had just experienced the “rocket docket.”
You see, Florida had a problem in 2009. The state’s court system was overwhelmed dealing with all the foreclosures from the Great Recession.
So, officials had to create a special court. Its mandate was to rubber-stamp foreclosures and get them through the system as quickly as possible.
Then the banks could sell the properties again – this time with clean paperwork.
The judges, who were brought out of retirement, saw 1,000 cases per day. That meant the average homeowner got just two minutes to make their case.
Hence the name “rocket docket.”
Millions had the same experience as Saundra in 2009. And it’s a prime example of how Wall Street can screw over Main Street.
It was the banks that packaged up subprime mortgages to sell, despite not having the proper documentation.
It was the rating agencies who gave these mortgages top-quality AAA ratings, despite the obviously low-quality loans. All so they could collect fees.
In other words, the banks created complex financial products to profit from as the whole scheme collapsed.
And when it finally came to the day a homeowner could defend themselves in court, they changed the rules with the “rocket docket.”
Bruce Springsteen summed up the situation quite succinctly at the time:
“High times on Wall Street, and hard times on Main Street.”
When Wall Street Loses, It Changes the Rules
A few months ago, we saw a similar Wall Street story play out in the GameStop and Robinhood saga.
As you’ve probably heard by now, it started with a group of small-time traders from an online forum called r/WallStreetBets, hosted on the social media site Reddit.
They noticed Wall Street was heavily short GameStop (GME), meaning it was betting on the stock going down. Wall Street’s short position was so heavy that it had sold short nearly 140% of GameStop’s outstanding shares… 40% more shares than actually existed.
So the members of r/WallStreetBets started a short squeeze. That’s where you buy a stock being shorted, push the price higher, and force the shorts to cover their position.
The short squeeze was successful, with GME running from $20 to nearly $500 in less than a month.
It put some members of r/WallStreetBets up millions. But the problem was, establishment investors were losing billions.
So, Wall Street stepped in and once again changed the rules.
Several brokers, including Robinhood, restricted the ability to transact in highly shorted stocks like GameStop.
They also raised margin requirements, forcing some investors to quickly come up with more capital.
Wall Street’s tactics worked, and GameStop traded south of $70 in the weeks that followed…
As a result, many small-time traders got crushed. YouTuber David Dobrik, for example, documented how he lost $85,000 once the restrictions went into place.
Now, it’s worth noting that GameStop is still up more than 920% year to date…
And considering Robinhood’s hollow claims of democratizing investing, the whole GameStop saga has left Main Street skeptical of Wall Street and institutional brokers. So, Bruce Springsteen’s quote is as apropos as ever.
Now, many experts talk about ways to fix the existing financial system to alleviate these disparities.
But “the existing financial system” is the problem…
What people need is a place where they can hold and lend assets in their own name.
That’s not how Wall Street works. But it is how DeFi (decentralized finance) works.
So, what exactly is DeFi?
DeFi is a broad category of financial applications being developed on open, decentralized networks.
The goal is to build a financial system native to cryptocurrencies that recreates and improves upon legacy financial systems.
And several features make DeFi much better than their traditional finance alternatives…
DeFi provides financial services to anyone with an internet connection, boosting financial inclusion. Your wealth, status, or location don’t determine access.
Records are kept simultaneously across thousands of computers instead of a central server. That makes them incredibly secure and resistant to hacking.
And most importantly, no central party is needed to ensure a valid transaction. In a DeFi system, you completely control your assets. So a third party like Robinhood can’t prevent you from trading your shares to anyone else.
For most of us, DeFi is entirely new. And it’s different from what we’re used to in traditional finance, which means it’ll require us to deal with changes we might not understand at first.
But it’s the future. And it’s going to become an increasingly important part of our lives.
That’s why we want to be at the forefront of this revolution… And ready to take advantage of new opportunities at a moment’s notice.
Main Street’s Secret Weapon
One of the most exciting opportunities in DeFi today is a new subclass of cryptos called “Tech Royalties.”
And unlike Robinhood’s claims of democratizing finance and giving investors more control, Tech Royalties will truly disrupt the traditional financial system.
Tech Royalties are relatively easy to understand. If you know how a traditional royalty works, then you understand how Tech Royalties work.
Just like musicians receive a royalty payment every time their songs are played, Tech Royalties pay investors as the underlying crypto projects grow and expand.
They’re a brand-new way for blockchain projects to drive the adoption of their technology by allowing investors to take part and cash in on a crypto’s success.
How will platforms like Robinhood or traditional brokerages compete against DeFi projects where investors are truly in control of their assets and are also rewarded for holding them?
They can’t. And that’s why Tech Royalties are just the beginning of a trend that’s going to upend many of today’s dominant financial giants.
They’ll also make early investors a fortune.
And because Daily editor Teeka Tiwari and I want all our subscribers to have a chance to profit before Tech Royalties really take off this year, Big T has put together a special presentation to show how these investments work…
And why you must get into them before Wall Street catches on.
So click here to watch Teeka’s presentation… and learn why Tech Royalties are poised to become one of the most profitable DeFi trends of 2021.
Analyst, Palm Beach Daily