One of the more intriguing recent developments has been the whole GameStop story and how a bunch of neophyte traders on Reddit spanked the greedy hedge fund pirate plutocrats of Wall Street and beat them at their own game.
We won’t go into depth on explaining what happened. We’ll let this article explain the proceedings. Or you can let Tom Tomorrow at This Modern World explain it in cartoon format. But in a nutshell, a group of investors on Reddit, a group called WallStreetBets or WSB, decided they were going to teach the greedy hedge fund managers a lesson. One tactic hedge fund managers use is to short sell stocks. They look for stocks that are failing and basically bet that they’ll continue to die. So they borrow shares to sell and buy all the stock at a lower price before paying off their lender and usually make a fortune. GameStop is a brick-and-mortar video game retailer whose days are numbered because of online video gaming and the pandemic, so they were on the hedge funders lists of future profits. But WSB stepped in and bought stock so that the stock price rose precipitously, which means that the hedge fund managers, who were betting that the stock prices would fall, lost money, BIG TIME. We’re talking billions of dollars. The trend continued for other failing businesses like AMC, Bed Bath and Beyond, and Blockbuster, whose stock price rose 3,990% in a week.
If you say this sounds like rigging the system like that of a casino, you are absolutely right. The WSB people showed that the hedge fund managers have been using Wall Street as a casino for years to get filthy rich with absolutely no repercussions. Of course, now that WSB did the same thing, plutocrats are crying foul and proclaiming that there needs to be regulations in place. You see, only plutocrats are supposed to win money on the stock market, while the rest of us working stiffs just work our asses off making these avaricious assholes richer. So, the greedy corporatists are fine with no regulations until they’re beaten at their own game and then they cry like babies.
We’re looking forward to see what kind of regulations Senators like Elizabeth Warren and Bernie Sanders have in store for the greedy fat cat capitalists in the next couple years. It could get interesting, folks.