Read this before you cheer the humbling of hedge funds by online day traders

It’s easy to cheer the bloody nose given to wealthy hedge fund managers this week. But we also ought to remember some persistent realities about financial markets, not least that short-selling overvalued companies can be socially useful, says Ben Chu

Melvin Capital, before it threw in the towel on its short position in GameStop, had been bailed out by a $750m injection of funds from Steven Cohen, the founder of SAC Capital, which was closed for insider trading in 2013 (Reuters)

Sebastian Mallaby’s history of hedge funds, published in 2010, had the provocative title More Money than God.

Mallaby recounts how one hedge fund boss had his $50m private jet fitted with a crib for his baby, how another put transmitters on the turtles that lived on his private island so he could monitor their mating habits, and how a third had the roof of his private movie theatre decorated with the pattern of the stars on his wedding night 16 years earlier.

Such conspicuous consumption, doubtless, helps to explain why so many have taken such pleasure at seeing these financial titans put to the sword by a motley bunch of day-trading Redditors.