Swamponomics: Trump's Fed Pick, A Kodak Moment, And GDP Misinformation

President Donald Trump and his administration recently announced that Kodak (KODK) would be transformed into a pharmaceutical producer under the Defense Production Act (DPA). The president confirmed that Kodak would receive a $765 million loan to establish Kodak Pharmaceuticals to manufacture generic pharmaceutical ingredients to decrease America’s reliance on foreign drug makers.

If you have not been paying attention to Kodak’s transformation, you might be surprised that a film and camera maker from back in the day is now producing pharmaceuticals. But the business filed for bankruptcy in 2012 and turned itself into a materials and chemical company.

A Kodak Moment

The announcement was huge for Kodak shares, as the stock skyrocketed nearly 1,300% in only a few trading sessions, climbing from a couple of bucks to as high as $60. But the subplots behind Kodak’s ascent were just as riveting as seeing the stock soar to the moon.

The first story involved the New York Stock Exchange halting trading because circuit breakers were tripped twenty times. The volume of Kodak trading activity spiked after the news was announced, climbing to more than 250 million in just two sessions. The number of Kodak options ballooned to as much as 300,000 — and these were not bullish contracts, either.

The final compelling development was the considerable number of Robinhooders holding Kodak stock. Only a few thousand Robinhood traders held shares in the company before the news, but that figure spiked to more than 130,000.

The men in tights have been near the front of the line when it comes to the various bullish trades, even if it is only for a week or two. At the start of the pandemiconomy, dumb money was pouring into coronavirus-related stocks, such as personal protective equipment (PPE) and biotech companies. Weeks later, Robinhooders were hitting the bullseye on bankrupt stocks like J.C. Penney and Hertz (HTZ). As gold prices hit all-time highs, users were putting their bows and arrows in gold exchange-traded funds (ETFs).

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