Imagine a hypothetical MLB where all the best players were on one team, like All-Star, MVP-level players at every position and on the bench, all five starters, and the seventh man in the bullpen. They go 161-1 over a full season. Now imagine that 1 is to the worst team in the league.
Today was a good day. The Internet won a tiny little victory.
If you haven’t been paying attention, “failing mall-based retailer” GameStop is having quite the moment on Wall Street. The gaming store has been on a roll ever since recent shifts within the company’s board of directors “sparked a rally” of its stock. Yeah right, it was Robinhood and the army of traders on the Reddit forum r/WallStreetBets.
A real quick catch-up for anyone who feels behind on this.
1- The hedge funds borrowed ~140% of GameStop’s worth of stocks specifically with the intent of crashing it. This is called naked shorting (short selling more shares than are deemed to exist), and it is illegal.
2- Reddit sniffed them out, called their bluff, and bought like crazy because the hedge funds that bought the short stock have tocover whatever the new price-per-share ends up being. This is called a short squeeze, and it is perfectly legal. Back in 2008 this happened to Volkswagen stock. Porsche bought up a TON.
3- The rich coming out of the woodwork to support the hedge fund has been insane. It’s like watching termites pouring out of a log you throw onto a fire. Media pundits bashing the millions of people on Reddit for doing something completely legal, the SEC and White House reportedly “watching” the situation, the CEO of NASDAQ floating the idea of freezing the market, and now these trading firms manipulating the market so people can’t buy, all with the intent of rescuing the hedge funds that were practicing illegal trades.
To be clear though, this is less of a failure of capitalism and more of the reality that the stock market is a giant casino, despite assertions to the contrary. Capitalism has enough failures to fill several libraries (and already have!), but r/WallStreetBets is merely leveraging the fact that stocks really have no basis in reality, merely perception. And like any casino, the house always wins because they take a built-in vig on the action.
This has become class warfare and it doesn’t take Bernie Sanders to know the country’s rigged against the working class. It’s Occupy Wall Street 2, only this time, rather than sitting outside a building, which doesn’t matter to Wall Street at all, millions of average people sunk their teeth into hedge fund money, and they’re hanging on like a pissed off junkyard dog.
I hope this serves as an eye opener to many as to how nakedly rigged the system is. Not a one of these banker parasites faced any real consequences for destroying the economy in 2008, and here within hours of them losing their shirts there’s talk of regulation. Redditors proposing class action lawsuits have been permabanned, the discord and subreddit were taken offline. Nobody really knows what the fallout from this is going to look like. I mean, I have anxiety just typing out these words. The Stonks have had a major impact alright, because we’ve made it this way. Not because it has to be this way.
–Dagobot
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