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 Jews, pigs, blood, and the Goddess


Almost six years ago I first wrote about possible explanations for why Jews don’t eat pork. The essay was lengthy, yet it was incomplete – I could find no definitive answer. I can’t blame myself; no one really knows why Jews have a prohibition against pigs, and it is unlikely that anyone will ever be certain. For all my work, I didn’t have an answer any more than anyone else. Though unsurprising, it was deeply unsatisfying.

Over the years, I have kept my ears open for hints and clues that might help me come up with a better answer. This, then, is the result of pondering the question in the back of my mind over the years. I will not re-cover the ground that I plowed before. If you would like to read or review what I previously wrote, please check it out - Why Do Jewish Dietary Laws Prohibit Pigs?

Here, presented for your consideration, is my new hypothesis as to why Jews not only do not eat pork, but shun swine in every way: The Taweret Hypothesis.

Note: I am assuming that the laws of kashrut were not divine dictation, but rather that they are a human invention. If the rules laid out in Leviticus are truly the word of God, then no rationale need be ascertained. Also, I covered this postulate at some length in my earlier post.

I am also assuming that some portions of the Torah are at least based in truth, notably Exodus. Undoubtedly Exodus was corrupted through retelling as oral history, "spun" to make the story express the values that the author(s) held, and likely conflates multiple events into one, but, I believe it is at least loosely based on real events.

The archeological record is apparently spotty. The mud-brick houses of slaves in Egypt did not stand the test of time, and a tribe wandering in the desert left behind little besides footprints. But, archeologists and Egyptologists tell us that various Semitic groups were present in different parts of Egypt at around the time that Exodus was supposed to have occurred. Some Canaanites were trading with Egypt, others resided there, others were slaves, and still others became Pharaohs! Some escaped slavery, others merely moved on, and others were expelled when their dynasties fell. There is also debate as to whether any of these groups belonged to the "cult of Yahweh". Though these questions remain unresolved, there is general agreement that people who later became Israelites were probably in Egypt in some capacity at some point in history.

Leviticus 11:1-8


1 And the Lord spoke to Moses and to Aaron, to say to them:


א וַיְדַבֵּ֧ר יְהֹוָ֛ה אֶל־משֶׁ֥ה וְאֶל־אַֽהֲרֹ֖ן לֵאמֹ֥ר אֲלֵהֶֽם:

2 Speak to the children of Israel, saying: These are the creatures that you may eat among all the animals on earth:


ב דַּבְּר֛וּ אֶל־בְּנֵ֥י יִשְׂרָאֵ֖ל לֵאמֹ֑ר זֹ֤את הַֽחַיָּה֙ אֲשֶׁ֣ר תֹּֽאכְל֔וּ מִכָּל־הַבְּהֵמָ֖ה אֲשֶׁ֥ר עַל־הָאָֽרֶץ:

3 Any animal that has a cloven hoof that is completely split into double hooves, and which brings up its cud that one you may eat.


ג כֹּ֣ל | מַפְרֶ֣סֶת פַּרְסָ֗ה וְשֹׁסַ֤עַת שֶׁ֨סַע֙ פְּרָסֹ֔ת מַֽעֲלַ֥ת גֵּרָ֖ה בַּבְּהֵמָ֑ה אֹתָ֖הּ תֹּאכֵֽלוּ:

4 But these you shall not eat among those that bring up the cud and those that have a cloven hoof: the camel, because it brings up its cud, but does not have a [completely] cloven hoof; it is unclean for you.


ד אַ֤ךְ אֶת־זֶה֙ לֹ֣א תֹֽאכְל֔וּ מִמַּֽעֲלֵי֙ הַגֵּרָ֔ה וּמִמַּפְרִסֵ֖י הַפַּרְסָ֑ה אֶת־הַ֠גָּמָ֠ל כִּי־מַֽעֲלֵ֨ה גֵרָ֜ה ה֗וּא וּפַרְסָה֙ אֵינֶ֣נּוּ מַפְרִ֔יס טָמֵ֥א ה֖וּא לָכֶֽם:

5 And the hyrax, because it brings up its cud, but will not have a [completely] cloven hoof; it is unclean for you;


ה וְאֶת־הַשָּׁפָ֗ן כִּי־מַֽעֲלֵ֤ה גֵרָה֙ ה֔וּא וּפַרְסָ֖ה לֹ֣א יַפְרִ֑יס טָמֵ֥א ה֖וּא לָכֶֽם:

6 And the hare, because it brings up its cud, but does not have a [completely] cloven hoof; it is unclean for you;


ו וְאֶת־הָֽאַרְנֶ֗בֶת כִּֽי־מַֽעֲלַ֤ת גֵּרָה֙ הִ֔וא וּפַרְסָ֖ה לֹ֣א הִפְרִ֑יסָה טְמֵאָ֥ה הִ֖וא לָכֶֽם:

7 And the pig, because it has a cloven hoof that is completely split, but will not regurgitate its cud; it is unclean for you.


ז וְאֶת־הַֽ֠חֲזִ֠יר כִּֽי־מַפְרִ֨יס פַּרְסָ֜ה ה֗וּא וְשֹׁסַ֥ע שֶׁ֨סַע֙ פַּרְסָ֔ה וְה֖וּא גֵּרָ֣ה לֹֽא־יִגָּ֑ר טָמֵ֥א ה֖וּא לָכֶֽם:

8 You shall not eat of their flesh, and you shall not touch their carcasses; they are unclean for you.


ח מִבְּשָׂרָם֙ לֹ֣א תֹאכֵ֔לוּ וּבְנִבְלָתָ֖ם לֹ֣א תִגָּ֑עוּ טְמֵאִ֥ים הֵ֖ם לָכֶֽם:

Why pigs?

Many animals of the land, sea, and air are prohibited in Kashrut. Why then do I, and other researchers, care so much about the rules pertaining to swine?

It is because pigs stand out as a special case. I turn here to (though in this they are hardly alone):

“There is probably no animal as disgusting to Jewish sensitivities as the pig. It’s not just because it may not be eaten: there are plenty of other animals that aren’t kosher either, but none of them arouse as much disgust as the pig. Colloquially, the pig is the ultimate symbol of loathing; when you say that someone ‘acted like a chazir [pig],’ it suggests that he or she did something unusually abominable. Indeed, many people think of pork, ham, bacon, etc., as the most unkosher foods there are… It’s not the only animal on the unkosher list, but it gets the worst treatment of any of them… Many call the animal davar acher, ‘another thing,’ rather than by its proper name.” 

[Side note: A Jewish friend of mine refused to even read an earlier version of this piece because it was about pigs. That's way beyond bacon.]

It is interesting that in Islam too, pork is a special case. Halal bans three categories of food (carrion, blood, and food that had been used as an offering to any god other than Allah), but only one animal. That animal is the pig, which is called out by name as being haram (forbidden).

Pigs as the sacred animal of Egyptian goddesses

I believe that the total ban on pigs and pork resulted from the Jews’ enslavement in Egypt; but they did not adopt a ban on pork in imitation of their former masters - rather it was a reaction to Egyptians holding pigs as sacred, not profane. Specifically, it was a reaction to the worship of the goddess-demon Taweret.


Statue of Taweret

Taweret, “The Great One”, or “The Great Female”, was a goddess of maternity and childbirth, and protector of women and children. Her sacred symbols were the hieroglyphs, sa, meaning protection and ankh, life – thus, she was a protector of life. Her appearance echoed the power that she wielded. She was presented as a combination of a hippopotamus, crocodile, and lion. All three are animals with great strength, well equipped to protect offspring. It was believed that she assisted women in labor and scared off demons that might harm the mother or child.

The Great Female was the goddess-demon defender of women and of the female realm. Taweret protected the home where her image was placed, and this is where she was worshipped.

The way she was regarded is unlike that of the majority of Egyptian gods and goddesses. Most gods had temples built by Pharaohs to glorify them and provide a home for them on earth. Commoners rarely, if ever, went into to these temples and were excluded from performing rites. They may have gone to the temple to pray or make offerings, but would not normally have entered the edifice. Indeed, certain casts were “unclean”, and thus banned from access to temples altogether.

What does Taweret have to do with pigs and Jews?

How does an Egyptian goddess relate to the Jews, and why would she cause the Jewish priests to declare pigs the most vile of all creatures on earth? Stay with me, because this is going to be a twisty ride, but it ends up in some interesting places.

Evidently, Egyptians believed that hippos were swine. Indeed, they were called “water sow”- not only pigs, but female pigs. As with many gods, Taweret had multiple names. Among hers was Reret, “the sow”. So, since Taweret was part hippopotamus, she was also part pig.

Leviticus provides a hint that the Jews agreed that hippos were pigs, since they were not named in the Kashrut. If hippos and pigs were both seen as swine, then only one of the two needed to be mentioned – which is the case. Had the Patriarchs believed that hippopotami were a separate species, then Leviticus should have listed them. As it happens, hippos do not have cloven hooves, nor do they chew their cud, so they embody a special case that we would expect to have been noted. But hippos are big, fierce, dangerous, nocturnal, animals. They spend their days in the water, only coming out at night to forage. We can imagine that few people got close enough to examine their feet. The images of Taweret give no clue, as she has the paws and feet of a lioness. I suggest that Jews of the time did not know how they were shod, and already believing that they were pigs, did not brave the hazard to find out.

According to the book of Exodus, Jews were in bondage in Egypt for 430 years - more than 20 generations. During such a long period it is inevitable that Egyptian ideas would have entered Jewish culture. Indeed, they may have been compelled to express fealty to Egyptian gods and adopt their cultural adornments.

Exodus tells us that during their years of wandering in the desert, the Jews stopped at the base of Mount Sinai while Moses ascended to receive the ten commandments. It is written that Moses was gone for longer than expected, causing the people to despair that he would never return. They demanded that Moses’ brother, Aaron, create a god “to go before them.” They melted down their gold jewelry from which Aaron formed the idol of the Golden Calf.

This imagery did not come out of nowhere. Had the Jews departed Egypt as committed monotheists, it would never have occurred to them to create an icon of a god other than Yahweh. The statue they made was probably of the “Apis Bull”, a sacred animal that was worshipped as a god in Egypt and around the region. The story of the Golden Calf, if true, makes it clear that during their time in Egypt the Jewish people adopted at least a few polytheistic notions of the divine. Wandering in the desert for decades did not wipe away generations of cultural pollution from Egyptian ideology.

The Apis Bull

[Aside: It is said that there were non-Jews that escaped from Egypt with the Jewish slaves, and it was they that convinced the group to make the Golden Calf. But, even then, if the Jews had been committed to Yahweh, it is unlikely that these outsiders could have moved the group to make the idol. That Moses’ own brother could be swayed is strong evidence that the grip of Yahweh was weak.

As a further aside, I also have to wonder how a bunch of Egyptian slaves had more than a thimbleful of gold among them, but that’s for a different investigation.]

Once returned to Israel, the Patriarchs would have wanted to consolidate their power over the people. To do so they needed to eliminate the influence of Egyptian theology and restore the monotheistic worship of “the one true god”, Yahweh. As noted, most of the Egyptian gods would have been very remote to Jewish slaves. Indeed, though they may have been involved in building the temples, once consecrated it is unlikely that a Jewish slave would ever have been allowed inside.

Striking down the worship of such gods would have been relatively easy among the men. A Jewish man may have heard of Ra, Osiris, Horus, Anubis, and the rest of the pantheon, but they were the gods of their oppressors, not deities that they interacted with themselves. But Taweret was different. She was a goddess worshipped at home, by women, and for women. She was an active participant in the lives of both Egyptian and Jewish women.

Though matrilineal, Judaism has always been patriarchal. Women bore and raised children, kept the home, cleaned, cooked all the food, acquired the ingredients, made clothing and other necessary items, created extra crafts and foods to take to the market to sell, and on and on. Men spent as much time as possible praying, studying scripture, and debating with other men. This structure is seen through the ages, during the diaspora, and even in modern orthodox homes.

Egypt was not quite so rigidly patriarchal. There were female goddesses and sometimes female pharaohs. Even the Nile was considered to be a female goddess. In the patriarchal Jewish culture, an image of female power such as that presented by Taweret would have been a significant threat, not just to monotheism, but to the male power structure. Jewish women were certainly slaves in Egypt; It is hard to say if their lot was any better under the Jewish patriarchy. Jewish women needed the protection of their goddess. Taweret was there in the home, sitting on a shelf in the kitchen, depicted on a wall, and hanging as an amulet on a chain close to their hearts.

Amulets of Taweret

So, the men prayed and studied. Their devotion returned to Yahweh and no other. But terminating the worship of Taweret by women would have posed a much greater challenge. To achieve this, she, in the form of her sacred animal, was shunned. If you could not even look upon a sow, you could no longer worship Taweret.

One can imagine a man going to his wife and telling her that God has decreed that they may not eat blood, carrion, rabbits, camels, nor swine. This might change her cuisine, but not her relationship to her god, Taweret. Should that same man tell his wife that God considers pigs to be the vilest of animals, such that they may not be raised, eaten, touched, or even looked at, well, now she’s got a problem. Give up Taweret, or give up her husband, her children, and her community.


I hope I have made a compelling argument for this new hypothesis regarding the Jewish prohibition against pigs. Until someone builds a time machine, we can never be certain of the true answer. But none of the previous explanations have ever felt completely reliable. The Taweret Hypothesis I present here holds together rather nicely, showing not only why pork is not eaten, but why swine are considered utterly unkosher.

Postscript: Blood

Below is another thought regarding Jewish misogyny and the roles of cleanliness and blood.

And he shall slaughter the young bull before the Lord. And Aaron's descendants, the kohanim, shall bring the blood, and dash the blood upon the altar, around [the altar] which is at the entrance of the Tent of Meeting.” - Leviticus 1:5

“For the life of the flesh is in the blood, and I have assigned it to you for making expiation for your lives upon the alter.” - Leviticus 17:10-14

Jews held blood as sacred. Metaphysically, they believed that it was blood that carried the soul. One can imagine how such an idea might come about - a hunter, soldier, or farmer observes that as the blood flows out of a body, so the person or creature fades and dies. There is something special in the living that is missing in the dead, and that something follows with the blood. Certainly, in pre-modern times, an injury serious enough to cause heavy bleeding could easily lead to a life threatening infection, even if one doesn’t bleed to death. So, keeping your blood inside your body was pretty important.

Blood was used for sacrifice but forbidden for other uses. Kashrut prohibits the consumption of the “lifeblood of the animal”. After slaughter, animals must bled dry, either by hanging until the blood stops, salting, boiling, or a combination of these. The blood must then be covered up, lest it go to any other purpose. Indeed, even eggs must be checked. If a single drop of blood is found in an egg, it must be discarded.

Yet, horrifyingly, it turns out that women bleed once a month without causing them any lasting harm, and without being an offering to God. What kind of foul magic is this? If your soul is spilling out of you on a regular basis, that is something that needs spiritual management. That it comes from the same place that brings us new life makes it doubly problematic.

Bloody hippos, bloody women

Which brings us back to the hippopotamus.

“Hippos secrete a reddish oily fluid sometimes called ‘blood sweat’ from special glands in their skin. ... Their skin is very sensitive to both drying and sunburn, so the secretion acts like an automatic skin ointment. It also protects the skin from becoming waterlogged when a hippo is in the water.” - Scientific American

Hippos, which were believed to be swine, appear to sweat blood, and yet oozing blood does not harm them. Sound familiar? Metaphorically, hippos, and therefore pigs, are menstruating all the time.

The Torah includes a set of ritual purity laws, call the niddah (meaning “separation” or “family purity.”) The simple, normal, natural, and predictable act of menstruation separates a woman from her husband. She must not have sexual relations with him while niddah lest she transfer her uncleanliness. Failure to set a spiritual fence around this act of bleeding, and that of childbirth with its concomitant blood, threatens to make a woman and her family unclean.

Just as obeying the laws of Kashrut makes one tohorah (“pure” or “clean”), and breaking them makes you tum’ah (“impure” or “unclean”), so the laws of niddah must be followed to remain pure in the eyes of God and the community. Though rooted in ordinary life, the niddah is focused on the conceptual. While unclean, the woman can spread her impurity to others.

Leviticus 15:19 and 24: “If a woman has an emission, and her emission in her flesh is blood, she shall be seven days in her [menstrual] separation, and anyone who touches her shall be [tum’ah]…  until evening… And if any man lie with her at all and her [menstrual] separation will be upon him, he will be [tum’ah] for seven days….”

Leviticus 20:18: “And if a man lie with a menstruating woman and reveal her nakedness, and she revealed the fountain of her blood, both of them will be cut off from among their people.”

Once a woman’s menstruation has stopped, she has physically returned to cleanliness, but she is still spiritually impure. She must then go to the mikvah (ritual bath), to become truly clean. It is only through this purification ritual that she consciously changes her status from tum’ah to tohorah.

[Aside: I have absolutely zero proof of this, but I would venture to bet that some rabbi, 3000 years ago, didn’t like having sex with his wife during her period, then, hey presto, “God” told him that it was forbidden. Now, if you don’t like having sex with your wife during her period, fine, work it out with her, but don’t make women feel ashamed of their bodies for the rest of eternity. Geesh.]

Women are also made impure due to the blood of birth. After giving birth to a boy, a woman is “separated” (sexually) from her husband for 7 days and is not fully tohorah until 33 days have passed. After the birth of a girl those times are doubled. [Wow, were these rules ever written by a man!] It has been suggested that a girl child is herself a “fountain of blood”, so the double waiting period covers the mother and the female child.

If you are going to be physically separated from your husband, and metaphysically separated from your tribe for 7 to 14 days immediately following childbirth, you’d better bring Taweret with you. You’re going to need her, because the male god of Abraham, Isaac, and Jacob (and, Sarah, Rebekah, and Leah) is more concerned that all blood be reserved to him than he is about you and your infant.

OK, I am confused. 

I am not a lawyer, but I thought I understood the law in this case.

As of February 9, 2021 (last Tuesday), there was there was an undecided question about an ambiguity in impeachment law. The Senate was asked to decide if the Constitution allows for a former President, who has been impeached by the House, to be tried in the Senate after leaving office. By a vote of 56 to 44, the Senate voted that yes, the Constitution grants it the jurisdiction to try a president after he has left office. Decision made; law decided. This was then the law of the land, and the Senate proceeded with the trial.

This afternoon, on February 13, 2021 (Saturday), Mitch McConnell spoke before the Senate saying that: (A) He was certain that former President t**** had incited the mob to insurrection. But (B) he did not believe that the Constitution allows for trying a former President. Thus, he said, he voted to acquit t**** because the trial should not have occurred.

But wait. Hang on here. The US legislature decided a point of law, thus setting the law unless and until new law overrode it, or the courts struck it down. Then a jury (who also happened to be the Senate), heard the case presented by prosecutors and defense. That jury was supposed to hand down a verdict based on whether or not they believed that the defendant was innocent or guilty as charged. The jury was not being asked whether or not the law was valid.

McConnell, and other Senators, decided to acquit t****, even though they felt he was guilty, on the basis that they didn’t agree with the law. Isn't that the same as if a jury, hearing a case against a doctor that performed an abortion in which the woman died, found the doctor guilty because they didn’t agree with how Roe v. Wade was decided? Or wouldn't it be the same as if a judge handed down a sentence on a person found guilty of a hate crime, using the criteria for a non-hate crime, because that particular judge didn’t agree with hate crime legislation?

Juries don’t get to decide the law. They only get to decide if the law was broken. Judges only get to decide the law if it is ambiguous. Otherwise they only get to decide what the sentence should be. It doesn’t matter what they think of the law. Right?

So, am I wrong? If McConnell believed that t**** incited the insurrection, then he should have been compelled to find him guilty. Other Senators announced ahead of time that they would be acquitting t**** because they didn’t agree that he could be tried. But as jurors, it was not within their purview to make such a decision. Didn’t they invalidate themselves as jurors by refusing to give their honest opinion on the facts of the charges, and vote based solely on those facts?

I’m confused.

God was clearly such a geek.

He got all the nerdy stuff working great – atoms, molecules, sub-atomic particles, photons, etc. He perfectly balanced all the different forces – gravitation, weak force, strong force, electromagnetism… really, really, tough problems in universe creation! And we know that was what really interested him, because he did all that stuff first and spent nearly 2/3’s of his time on it.

Then he finally got around to the yucky, squishy stuff – animals. Even there he took the techie approach, setting up a bunch of single celled animals with this really cool DNA stuff and a set of rules for reproducing and mutating. Then he let the machine do all the real work. When that was done he took credit for fashioning all the beasts that walketh, swimmeth, or flyeth, which I suppose technically he did do, but, not in so many words.

Finally he gets around to making man and creates him in his own image. What a self-important dweeb. But it turns out that he completely forgot that one guy all alone in the Garden of Eden is going to get really bored, which can only lead to trouble. So what does he do? A total hack. He takes a rib from man and creates woman. That is a kludge if ever I saw one.

Then, like any nerd that has spent the past 6 days head down working on a project, living on Mountain Dew and Doritos with hardly any sleep, on the 7th day he totally crashes. Like out cold for 24 hours. Not even a shower first, just boom, into bed still covered with Cheetos dust.

To top it all off, he didn’t get around to writing any documentation for eons, but when he did finally get it done it sucked. It needed all kinds of updates by end users (most of whom were really just guessing). Stupid books like Humans Made Easy, and Humans for Dummies, ended up being best-sellers because the original document set was borderline useless. In the end all the tech support had to be done by users groups.

Geesh! What a geek!


Recently there has been a swirl of news related to the sudden, meteoric rise in the price of GameStop stock (as well as that of AMC and others). I have heard a lot of misunderstandings related to what occurred. Friends, family members, strangers, and people in the media, seem to harbor a variety of errors in their understanding of stock markets, “short selling”, hedge funds, and the like.

I intended to write a brief primer on some of these things in the hopes of making it clearer. However, this appears to have turned into a rather lengthy discourse on variety of subjects that the GameStop trading issue touches on. Nonetheless, I hope some will find this useful.

Note: I am not securities lawyer, nor a lawyer of any kind. I am not a broker, advisor, nor investment manager. I have no role any investment business of any kind, other than as an individual investor who has been managing his own portfolio for 40 years. None of the information presented below is intended to be construed as investment advice. When making investment decisions, always seek advice from a qualified professional. None of the examples I provide below are intended to reflect any real-world event. I have used Apple Computer as an example to explain various transactions. This should not be construed as an endorsement of Apple, its products, or its stock. Nor was Apple Computer involved in the GameStop events in any way.


We refer to some assets as “liquid” and others as being “illiquid”.

For example, as of this writing, the stock of Apple Corporation is considered to be “highly liquid”. Thousands of people buy and sell millions of shares of Apple Corporation (AAPL) each day. As of this writing, the average daily volume of AAPL is almost 109 million shares! At today’s closing price of about $140/share, almost $15 billion (with a “b”) worth of Apple stock changes hands on an average day. If you wish to either by or sell shares in Apple, it will be very easy for you to do and will take just fractions of a second. There will always be someone out there that is happy to buy AAPL shares from you or sell them to you. The stock might not be trading at a price that you like, but whether you can acquire or dispose of it is not in question.

Other assets are “illiquid”. This includes all sorts of collectibles, for example “Beany Babies.” If you want to buy or sell a particular Beanie Baby, you could go on eBay and either buy or sell it there. However, it could take an unknown amount of time to either find someone selling the Beanie Baby you want or find someone willing to buy your Beanie Baby. The price to either buy or sell could vary widely depending on who the other party is, what the condition of this particular beanie baby is (which is never an issue with corporate shares), how badly you want to buy/sell the Beanie Baby, and how much the other party feels it is worth. Unlike Apple stock, there are not millions of Beanie Babies changing hands every day in a well-organized market.

Another common example is an asset like a house, which is generally considered to be “highly illiquid”. Selling a house normally involves finding and hiring a realtor, advertising the house, making it available for inspection by interested parties, and potentially waiting while a prospective buyer arranges for a loan from a bank, has the house inspected, and so forth. Depending upon the house, the location, and the price, in the US this could take as little as a month, but it could take years or even decades. Buying a house, is similarly complex.

Why do we care about liquidity?

Well, the more liquid market is, the easier it is for individuals to buy and sell in that market. If you’re an investor, you probably like securities and commodities markets due to the liquidity. If you have money to invest, you “go to the market” and purchase whatever investments you like. If you no longer want a given investment, you go back to the market and sell it. Buying and selling are normally almost instantaneous for commonly traded stocks. [Side note: there are “thinly traded” stocks in which there are relatively few trades per day, but even in this case, there will usually be thousands of shares changing hands on an ordinary day.]

You might like investing in art, or collectibles, or real estate; but in doing so you must understand that you may or may not be able to get into or out of an investment when you want to, or you may have to take a significant loss in order to get out of such an investment in a hurry. Because of illiquidity, you’re probably not going to be willing invest unless you’re quite sure that there are significant gains to be made.

Buying “on margin”

Stated simply, buying stock on margin is purchasing stock using money that a broker lends to you for that purpose.

Imagine that you think Apple stock is going to do very well in the future. So, you use the money that you have for investing to buy shares in Apple. This is a very normal transaction that happens every day. If the stock goes up in value, great, you make money. If it goes down, you lose money. Very straight forward.

Now let’s say that you really, really think that Apple is going to do super well in the future. You might wish that you could buy even more shares than you can afford. You might be able to borrow money from friends, relatives, or a bank, and use that to buy the stock. Alternatively, you could borrow the money from a broker to buy more shares, “on margin”. If you’re right and Apple goes up, then you will have made even more money than had you simply purchasing the stock outright, because you own more shares than you were otherwise able to afford. On the other hand, if you’re wrong and Apple goes down, you will own more shares that have lost value. You will have lost more money than if you hadn’t borrowed money to buy those extra shares. Also, no matter what happens, you still owe the broker the money that you borrowed. Sooner or later you’re going to have to pay up. Buying shares on margin multiplies the amount you could gain, and the amount you could lose. This is a form of “leveraged investing.”

If you ask friends or family to lend you money, they might just give it to you (sweet), but if you ask the broker to buy you Apple on margin, they are going to want collateral on the deal. In this case, the collateral is simply the stock itself. But stocks go up and they go down, and if your investment goes down, then you might no longer have sufficient collateral to cover the loan.

Let say you bought $10,000 of AAPL on margin. If your stock were to lose $1000, then there would be only $9000 worth of Apple in the account. Now your $10,000 loan is collateralized by just $9000 worth of stock. To make sure that there is always enough collateral in the account to cover your loan, brokers have what’s called an “margin requirement”. This is an amount of money that they insist you have in your account so that there is enough collateral to cover the loan even if the stock goes down in value. For example, let’s say the margin requirement is 20%. To buy that $10,000 worth of Apple, the broker is going to insist that there is at least $2000 in your account (in addition to the $10,000 worth stock.) If Apple stock goes up, good for you. Everything is just peachy. However, if Apple were to decline, the total value of the account will go down. If you then skip town, the broker could be left holding the bag, but, because of the margin requirement, they can still make themselves whole by selling the stock and making up any loss from the money you provided as collateral.

Under normal circumstances that is not the conclusion anyone wants. You want to keep the investment, and the broker does too. But there is no longer enough value in the account to cover the 20% margin requirement. The broker wants to maintain the account with total assets worth at least the value of original investment plus a 20% buffer. With the stock worth less than its original cost, you are going to have to kitty up some more dough.

The broker is going to make what is called an “margin call”. Basically, they’re going to call you up and say, “hey, you gotta put more money in the account.” If you don’t, they will sell enough of your shares of Apple to bring up the amount of cash in the account, and lower the number of shares, thus covering the exposure. This is part of the margin loan deal. The broker can sell your shares if they feel they need to. [Note that the margin amount in your account does not need to be in cash, it could be shares of some other stock. However, if that is the case, should that other stock go down, that too might trigger a margin call if there is then not enough total value in the account to cover the margin requirement.]

Finally, the broker didn’t just lend you that money out of the goodness of their heart; they are going to charge you interest on the amount loaned for the entire period that you borrowed it. So, your chosen stock needs to go up, and you want it to do so pronto.

Going “long”

When someone owns shares of a stock (or some other investments) we will often say that they are “long” that stock, for example, “I am long Apple.” Similarly, if someone owns a lot of shares in different high-tech stocks, we might say that they are, “long high-tech”.

For the purposes of this discussion, “long” is really only interesting in that it is the opposite of “short”.

“Short” Selling

Short selling (or “selling short”, “going short”, or “shorting”) is the crux of what was going on with GameStop recently.

Simply stated, a “short” is selling something that you don’t own – in this case, shares of a stock. A broker will lend you the stock so that you can sell it. You might want to do this if you believe that the stock is going to go down in value over time, just as you would go long if you thought the stock was going up. You borrow the stock today at its current market value and sell it at the going rate. Later you buy that stock back at the then current market price and return it to the broker. Assuming the stock did go down over that period, you keep the difference between what the stock was worth when you borrowed and sold it, and what it was worth when you repurchased and returned it. Of course, if the stock went up instead, you’re going to have to rebuy it at a higher price than when you borrowed it, so you lose the difference.

Note, that this is effectively borrowing from the broker, and so it is a transaction on margin. You will have to pay interest on the transaction, there will be a margin requirement, and you may be subject to margin calls. The only difference is that in this case you would face a margin call if the stock went up (making your short position worth less) rather than getting a margin call when the value of the position goes down, as is the case in a normal purchase on margin.

Limited gains but unlimited losses are possible

One important thing to be aware of with short selling is that there is a limit to how much profit you can make, but your potential loss is theoretically limitless.

For example, let’s say you buy (long) a stock at $20 a share. The most you can lose is $20 a share if it were to go to zero. On the other hand, it could be the next Google and just rise and rise and rise making you more and more profit. However, if you sell that same stock short at $20 a share, the most you can possibly make is $20 - if the business goes bust. However, if you were dead wrong, and the stock shoots up, you are losing money all the way up. In practice, stocks don’t go from $20-$1 million over night, so practically speaking, you can’t actually lose an infinite amount of money, but depending upon how many shares you have shorted, you can lose a hell of a lot more than you can gain, and theoretically your potential loss is unlimited. Sophisticated investors are supposed to understand this risk.

Is short selling legal, and why does it exist?

Short selling is entirely legal. It is a common practice. I have done it myself.

Why is there this thing called short selling, and why is it legal? Basically, it helps increase liquidity in the market overall. The more buying and selling of stocks, the greater the market liquidity. By allowing people to borrow stock that they don’t own and then sell it, you have increased the number of transactions, and the number of people buying and selling stock. Since liquidity is good, the availability of short transactions is good for the market.

Also, prohibiting short selling would be almost impossible. The SEC could prohibit brokers from lending shares to investors, but it would be very difficult to prohibit individuals (or firms that aren’t brokers) from lending stock to each other and then selling it.

We should also note that it is usually wealthy individuals who do things like this. Not because poor people are actively excluded from these markets, but because poor people don’t normally have the money available make such risky investments - if they can afford to invest at all. They might also have poor credit, in which case the broker would not be willing to lend to them for any margin activity, be it long or short.


Hedging is basically “hedging your bets”. Hedges are simply ways of insuring your portfolio. You buy a stock or other investment that you expect to go up, and then you also by something else that will go up if that first thing goes down – i.e., you buy two investments that move opposite to each other. Most of this requires sophisticated analyses. Hedging in a portfolio is a way to reduce risk at the cost of purchasing the hedge. Though it reduces the possible gains of the portfolio, it reduces the chances of losing money.

Effectively, hedging, it is a fancy kind of insurance. People buy insurance all the time to hedge various risks. You use your life savings to buy a house. That is a major “investment” for you. But all kinds of things could go wrong that would wipe you out: fire, flood, Godzilla, etc. So, you buy insurance to cover your loss if something happens to your house. This is the same thing as buying a hedge on your portfolio. If your investment goes down, your hedge goes up, reducing or eliminating the loss. Hedges cost money (and hence lower your return in the case where things go well), but they reduce risk. Making money with as little risk as possible is the name of the game.

Hedge funds

Originally hedge funds were basically managed portfolios in which the hedge fund manager and his or her team used all kinds of fancy esoteric methods to make money regardless of whether the economy went up or down, the stock market went up or down, etc. They promised to use hedging to make money with as little risk as possible. Some hedges sound crazy (to me), but apparently the math works out (usually.)

Over time, the hedge fund world changed. A lot of funds gave up on the idea of low risk, and instead used their sophisticated investing techniques to take big risks in the hopes of extraordinary gains. Bernie Madoff’s fund (which turned out to be a hoax) was pretending to be just that. It was actually a Ponzi scheme, but it seemed to investors at the time as though Madoff was successfully taking big risks and returning outstanding results. There are still hedge funds whose business is making money with as little risk as possible. But there are also now funds courting investors by chasing extraordinary gains.

Most hedge funds specialize in some particular strategy. One of the original types of hedge funds is referred to as “long-short equity”. Such a fund buys one investment (“going long”), and shorts some other investment, so that no matter what happens they make at least a little bit of money on the deal, and if they did it right, the risk was negligible.

However, nothing is ever certain. You can never eliminate all risk and still make any returns. During the great recession of 2007-2008, markets were roiled by a “once in a century” shakeup and a tremendous loss of liquidity. Facing margin calls, hedge funds (and others) were forced to get out of positions at a time when no one was buying, and so had to sell at “pennies on the dollar.” During that period, long/short hedge funds lost prodigious amounts of money, in spite of having their positions carefully hedged. They hedged against a normal market environment. They did not hedge against markets collapsing as they did in 2007. In a similar way, funds that were recently shorting GameStop were not hedged against the possibility of the stock shooting up with no one willing to sell them the stock they needed to close out their short positions.

Another type of hedge fund is a “distressed” fund. These funds look for opportunities in businesses, real estate, or other investments which are in trouble - investments which are “distressed.” They then attempt to make money either by short selling the investment or buying the investment and attempting to increase its value (possibly by breaking it up and selling the parts ala “corporate raiders”), or by bringing in new management for the business, or by putting together a group of investors that will buy the business and attempt to turn it around, or other things. [Side note: the 2007-2008 recession created lots of opportunities for distressed investing. However, there was so little liquidity in the market that many funds weren’t able to take advantage of these opportunities.]

There are lots of other kinds of hedge funds, but these are the two types that are interesting for our story.

Are hedge funds only for the rich?

A complaint that people tend to have about hedge funds is that they are only for the rich. That the game is rigged for the wealthy, and the little guy can never get ahead. It is true that small investors generally cannot invest in a hedge fund, but not for the reasons most people think. It’s not some rich guy club that is out to screw the poor and won’t let less affluent people in.

There are two main reasons why only wealthy individuals can invest in hedge funds.

First, these are odd, esoteric, investments with specialized risks. So, hedge funds will only accept investments from experienced investors. This is to keep novices from investing in products where they might not understand the risks that they are taking. “Shares” in a hedge fund are private sales to sophisticated investors and are largely unregulated. People who cannot afford to lose large amounts of money should not be in this arena, even if it can offer great rewards. So, hedge funds will not accept investments from inexperienced investors who cannot afford big losses if things go wrong.

Second, these sophisticated mechanisms often require long timelines to execute. If you’re going to buy real estate in Tokyo and hedge it against Argentinian cattle (hyperbolic example), that’s a very illiquid set of trades. For this reason, hedge funds often limit the timing or frequency with which you can extract your money. They may allow investors to withdraw money only once per year, or only on one particular day in the year, or even less often than that. So, they want to make sure that the partners (their investors) have sufficient personal funds to put in huge amounts of money, and not take it out for a very long time. Having lots of small investments from people with limited net worth, that might want to remove their money at any time, would make it impossible for a hedge fund to successfully execute its strategies.

Fiduciary duty

Another thing that’s important to understand is fiduciary duty. “A fiduciary duty is an obligation to act in the best interest of another party.” ( Hedge fund managers, as well as other investment advisors, are required to act in their client’s interest. It is illegal for them to do things which are not expected to benefit the client. So, when people point at hedge fund managers and accuse them of being greedy, their actions aren’t entirely driven by greed. If they see a market opportunity that fits their mission, they are obligated to invest if such an investment is in the best interest of the hedge fund and therefore its clients. If they see an investment which is outside their stated mission, or is not in the fund’s best interests, then they are legally prohibited from making that investment. It is said that they have a “fiduciary duty” to their clients (which doesn’t mean that they aren’t greedy, just that in this case they are not acting on behalf of their own greed.)

Holding stock in street name

Investors virtually never take possession of the stock certificates for the shares that they own. Actually having the physical pieces of paper is kind of a pain in the ass. You’ve got to get them from your broker, store them safely, and then get them back to your broker when you want to sell. At the end of the day, you want to participate in the profits of Apple Corporation, you don’t care about that piece of paper.

So, under normal circumstances brokerages hold their client’s stocks for them “in street name”. This means that if you put in order for AAPL, the brokerage buys the shares on your behalf and just makes a note that they are yours. It’s pretty much all electronic anyway these days. You will get such privileges as receiving dividends (if any) and voting those shares at a shareholders meeting, but underneath the covers it’s all done with smoke and mirrors.

One aspect of the GameStop fiasco is that many of the people involved didn’t understand how it was that brokers could just lend somebody’s stock to someone else. Basically, the stock was held in “street name”, not owned by the individual investor. So, the broker could lend it to someone else without so much as a by-your-leave from the investor.

Just as with the EULA’s (End User License Agreements) that people sign without reading all the time, this information is spelled out in the contracts people sign with their brokers (and probably don't read). Most people never need to know this stuff - it hardly ever matters. But these facts managed to ruffle a lot of feathers of people who didn’t realize them during this GameStop business.

So, what the hell happened with GameStop?

Well, some managers at hedge funds, as well as sophisticated individual investors, saw GameStop as a distressed business, and therefore an opportunity. These investors saw in GameStop what they had seen in Blockbuster Video years before. People used to go to Blockbuster to rent videotapes or DVDs. But along came Netflix, first allowing customers to rent and return movies through the mail, and then online. Then Walmart jumped into the act, and Amazon, and others. Blockbuster was late to the online game so didn’t survive.

GameStop is a bricks and mortar store that sells video games. But nowadays most gamers play online or buy and download games over the Internet. GameStop’s business is drying up. When COVID-19 came along, people stopped leaving their homes at all, let alone going to a store to get something that they could get more easily, safely, and conveniently online.

GameStop’s business is a bad business to be in right now. They are selling buggy whips in the age of the automobile. Investors observed this, predicted its stock would go down (eventually to zero), and so sold the stock short. But, surprise, surprise, a group of young people figured out a way to outsmart the short sellers. They realize that there were so many short-sellers that if they bought enough stock to drive the price up just a little bit, margin calls would force covering of shorts making the stock price go up further, which would force more margin calls, causing it to spiral upwards, costing the short-sellers vast amounts of money. It is uncommon that a stock is so highly oversold, with so much leverage, that a small amount of buying would generate such a large and rapid reaction in the market. Well, now we know. Ooops.

Were laws broken?

As noted, I am not a securities lawyer. Indeed, I’m not a lawyer of any kind. But I am certain that the hedge funds and brokers (including Robin Hood), are run amok with lawyers. These entities might very well get as close to the line of legality as they possibly can, but their lawyers should make damn sure that they don’t step over it, especially once the eyes of the world were focused on them, as they were once GameStop blew up in the news. Thus, I would be surprised if any of these entities broke any laws or regulations.

On the other hand, the individual investors trading in GameStop, not having the benefit of staffs of lawyers, may have broken laws, intentionally, by accident, or due to a lack of understanding of how the laws are applied. Of that I cannot say.

Should any laws or regulations be changed because of these events?

Honestly, I don’t know. But I suspect not. The hedge funds that lost money knew what they were doing. They are highly sophisticated investors. They knew the risks they were taking, even though in this case it turns out that they underestimated those risks. It’s hard to blame them though, because nothing quite like this ever happened before, so these events weren’t in their models.

The investors in the hedge funds, and other investors that got hurt in the short selling, should have been sophisticated investors. Brokerage houses should have been making sure that novice investors weren’t buying shorts.

Those investors from the Reddit board observed a market opportunity and took it. They were not working based on secret insider information. They did not break into systems, or hack something, or steal money. Everything they did, they did out loud, in the open, on public bulletin boards, using publicly available information. Clever. Not illegal.

Should laws and regulations be changed to better protect innocent investors, or protect the proper operations of the markets as a whole? Again, I don’t know, but I suspect that no changes are required. Sophisticated investors who practice these strategies are now warned that there are really clever people out there that might very well exploit any error they make. These sophisticated investors should carefully review their investment practices to make sure that there are no other such errors in their portfolios. But that doesn’t mean we need to create a new law requiring them to do so.


Hopefully, this post will help people understand what happened, what these investment mechanisms are, why they exist, and how a group of individual investors on Reddit managed to shoot gaping holes in the portfolios of a group of hedge funds. I hope this will help people understand that, though we do have terrible wealth disparity in this country, this particular event does not expose a world of nefarious wealthy investors taking advantage of their wealth to collude with other greedy, rich, old men (and women.)

Wealth disparity is a crushing problem which is destroying the fabric of our society and our economy. But it should be cured by increasing taxes on people like me, and breaking down systemic racism and the barriers that limit what people of lesser means can achieve in their lives. Opportunities should be increased. School systems should be improved. College should be made affordable. And so on. Ending a handful of investment mechanisms such as short selling and hedging won’t solve any of these problems.

Several years ago I planted an Australian finger lime bush (Citrus australasica). It took a few years to get established, during which time I got just a couple fruits, then a handful of fruits, then more, and more, until now I harvest a couple of pounds per season (they are quite small, so that is a lot.) Though they are great on sushi, salmon, and a few other things, it’s not clear what else to do with them. 

The thing that is cool about finger limes is that when you cut them open, little balls of lime juice spill out. They are about the size of flying fish row (aka tobiko) and are sometimes referred to as “lime caviar”, which is an excellent description. Unfortunately, you can’t really taste them unless they get burst by your teeth when you chew them. So, they easily get lost in a lot of applications. I have read that bartenders have gone crazy for them, but when I use them in drinks they are a flop, because most people don’t chew their beverages.
A bowl of finger limes
Since I now harvest a lot of finger limes, I have been looking for things to do with them other than give them to my favorite sushi chefs and bartenders. The skin of the finger line is delicious, but sharp and (pleasantly) bitter. The fruit inside tastes much like standard limes – not identical, but similar. Taken together they have a unique lime flavor, but if you use the skin, the bitterness can easily become overwhelming. So how, I wondered, can I take advantage of so many fruits, and their skins, and manage the fact that the juice is locked up in tiny capsules. I concluded that marmalade could show off the special characteristics of finger limes.

I am working on a finger lime marmalade recipe. Note that this is a recipe in progress. I have made it just once, and it was only semi-successful. The result of my first batch is sourer and a lot more bitter than what I had in mind. It is nice as a garnish - a dollop on salmon is great, and it is a delicious accompaniment to brie on crackers, but it is not something you are going to want to spread on toast. The next time I make it, I intend to try to reduce the bitterness and increase its sweetness.

Even though the recipe isn’t ready for "publication", I present it here for your interest. Hopefully, I can get some comments and suggestions for the next batch (to be made after the next harvest.) Perhaps people in Australia, or elsewhere in the southern hemisphere, will make some marmalade now, and let me know how it went.

It is also worth mentioning that for the purpose of incorporation into a cooked product like marmalade, these limes freeze well. In fact, they freeze surprisingly well to store for almost any application. This first batch included frozen fruit collected over a couple of seasons, in addition to fresh. 

Left, fresh. Right, previously frozen.
My recipe is loosely based on a lime marmalade recipe from Blue Ribbon Preserves by Linda J. Amendt. Mine is a new recipe due to the unique characteristics of finger limes, but I did use her recipe for the general structure. It is also assisted by ideas from the two web sites that claim a finger lime marmalade (which are almost identical to each other).

Also note that currently finger limes in the USA run about $30-$50 per pound. So, you pretty much must have your own tree to consider making this marmalade. The recipe below yielded 10 cups of marmalade. Thus, the cost would be between $10 and $17 per cup if one needed to purchase the limes.

And so, for your enjoyment, I present the “beta test” of my Finger Lime Marmalade, v1.0. 

Finger Lime Marmalade Recipe v1.0

Yield: 10 cups

  • 3.5lbs Finger limes.
  • 3.5lbs Sugar for macerating limes.
  • Additional 8oz sugar added during cooking.
  • ¼ C dextrose to reduce sugaring off (can sub Karo, or other non-sucrose sugar.)
  • 1 pkg liquid pectin (3oz).
  • Baking soda (optional).

Processing the limes took a fair bit of time and effort, so I did it in two batches over two days, then cooked them on the third day. I don’t think this is necessary, though macerating fruit for marmalade is generally a good idea to get it to release liquid and pre-absorb sugar. On the first day I processed about 1.5 pounds, macerating them in the refrigerator with an equal amount of sugar. On the second day I processed the rest, adding them to the same container, again with an equal amount of sugar. On the third day I cooked the marmalade.

Useful tools for processing the limes: knife, mini-rolling pin, and bench scraper.
  1. Blanch the whole finger limes in boiling water for a couple minutes, then plunge them into cold water. This will help to remove some of the bitterness and make them easier to “squeeze” (see below.) Unfortunately, for v1.0 I decided that I wanted to retain some fresh lime oil, so I left about 1 cup of fruit unblanched. As noted, the marmalade was too bitter, so next time I will blanch the whole batch.
  2. Next, slice the stem end from each lime. Squeeze the fruit from the skins with a small rolling pin.

  3. Spread the pulp out on a cutting board to pick out all the seeds you can. This is a long, tedious process. Hey! Guess what! When I cooked the fruit, I found that any seeds I had missed floated to the top! Next time I will skip picking out the seeds and simply skim them off during cooking. Assuming that works, it will be a big time saver. If it doesn’t work, I guess I’ll have a batch of seedy marmalade.

  4. I did not do this, but next time I will re-blanch the emptied skins to try to remove some of the bitterness of the pith which is now exposed. Hopefully that won’t remove too much flavor from the end product.

  5. Chop the skins into pieces of a size that is pleasing to you. I started out trying to make neat, uniform disks, but quickly realized that I would go mad before I finished, so I resorted to just chopping. The result was fine. Disks would have been prettier, but not if they dragged me away in a straight jacket before I got done.

  6. Put the fruit and chopped skins in a container with an equal amount of sugar (by weight). Allow them to macerate in the refrigerator at least overnight. Note that it can be held this way for an indefinite number of days until you are ready to cook.

I strongly recommend investing in a copper jam pot if you do a lot of preserving. They are quite expensive (generally US$200 and up), however, using one makes preserving easier and produces a better product. Really. If you don’t have one and can afford it, you’ll thank me. 

Before starting, put a plate in the freezer with several spoons to use in testing for setting. 

Put the macerated limes into the pot along with 8 oz additional sugar (next time I intend to use more.)

Add the baking soda. Note that since the skins are very thin, this is probably unnecessary. Baking soda in marmalade helps to break down the peels, shortening the time it takes to cook and soften them.

Bring to a full boil over medium-high heat. Reduce the heat and simmer for about 20 minutes, stirring occasionally. Return the mixture to a full rolling boil, stirring constantly. Add the liquid pectin. Stir constantly while bringing the mixture back to a full rolling boil. Boil for one minute. 

Test for set and consistency using a spoon from the freezer (or any other method you prefer.) When the marmalade has set to your satisfaction, remove it from the heat. Allow it to cool for a few minutes to minimize separation of the fruit, skins, and juice in the jar.

For working with hot jam or marmalade, silicon gloves are a must-have.
Ladle into sterilized jars and process by whichever safe method you prefer.