Outsider trading

Clown car, clown country, clown world.

If America is a clown country, the ruling class on Wall Street, along with their ruling class friends in Washington, are driving the clown car.

Enter Reddit.

You might have noticed that the suits are very upset this week. That’s because anonymous Redditors, while presumably brushing the Cheeto dust off their laptop keyboards, decided to do a little bit of stock speculation.

They had no fancy tools, no quantitative analysis, no Bloomberg terminals, and they’re certainly not members of the elite class who are entitled to engage in such sophisticated business.

What they did have was unbridled rage and disdain for the drivers of the clown car, and when they found a way to exploit them, they hijacked the clown car for themselves and took it for an epic joyride.

But if there’s anything the ruling class hates, it’s losing money—especially to a bunch of unwashed punks who were laughing in their faces while they sent Melvin Capital hurtling towards bankruptcy. In an instant, the rightful owners of the clown car demanded it back.

You see, only fancy hedge fund managers—members of the Wall Street ruling class—are allowed to decide the value of a stock. Those hedge fund managers decided the value of GameStop, a brick and mortar retailer, was very little. Hence the massive short position. They were allowed to short the stock as they pleased, which of course, in turn, continued to drive down the value of the stock, helping their positions. They knew what they were doing. Their friends at other hedge funds knew it, too, and took full advantage, pummeling GameStop into the ground.

But when Reddit decided the value of GameStop, a cutting-edge video game distribution company, was worth $350 per share (or at least worth enough to watch hedge fund managers cry, which is a hilarious source of entertainment) they were banned from purchasing the stock on almost every platform.

In our clown country, only the ruling class is allowed to win. If the ruling class is not winning, it will simply change the rules of the game.

Matt Taibbi takes the piss:

The only thing “dangerous” about a gang of Reddit investors blowing up hedge funds is that some of us reading about it might die of laughter. That bit about investigating this as a “pump and dump scheme” to push prices away from their “fundamental value” is particularly hilarious. What does the Washington Post think the entire stock market is, in the bailout age?

America’s banks just had maybe their best year ever, raking in $125 billion in underwriting fees at a time when the rest of the country is dealing with record unemployment, thanks entirely to massive Federal Reserve intervention that turned a crash into a boom. Who thinks the “fundamental value” of most stocks would be this high, absent the Fed’s Atlas-like support in the last year?

In other words, it was all well and good for investment banks and executives of phoney-baloney companies to gorge themselves on funhouse profits on a funhouse economy, but when amateurs decided to funnel just a bit of this clown show into their own pockets, finance pros wailed like the grave of Adam Smith had been danced upon.

GameStop has prompted more pearl-clutching than any news story in recent memory. Expert after grave-faced expert has marched on TV to tell Reddit traders that markets are complicated, this isn’t a game, and they wouldn’t be doing this, if they really understood how things work.

“I’m not sure everybody fully understands what’s happening here,” was the melancholy comment on CNBC of Wall Street’s famed fluffer-in-chief, Andrew Ross Sorkin. The author of Too Big to Fail added in pedagogic tones that while this “stick it to the man moment” might feel good, betting up the value of GameStop above Delta Airlines just isn’t right, because “there are no fundamentals here.”

Fundamentals? How much does Sorkin think his exalted Delta Airlines would be worth now, if the Fed hadn’t stopped its death plunge last March? How much would any of the airlines be worth in the Covid age, with their fleets of mothballed jets? What a joke!

Furthermore, everybody “understands” what happened with GameStop. Unlike some other Wall Street stories, this one isn’t complicated. The entire tale, in a nutshell, goes like this. One group of gamblers announced, “Fuck you!” Another group announced back: “No, fuck YOU!”

That’s it. Or, as one market analyst put it to me this morning, “A bunch of guys made a bet, got killed, then doubled and tripled down and got killed even more.”

He digs into the real nitty-gritty of the thing, and it’s worth a read if you’re interested. But for me, “No, fuck YOU!” is all I need to know, and t’will suffice. Anything that reduces The Power to bitching and boo-hoo’ing this way, hey, I’m good with it.

0 0 votes
Article Rating
3 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Ironbear

Heh. Melvin Capital got royally melvinned. I about bust a gut laughing every time I think about it.

HazHap

Yep. This entire thing has been hilarious. And watching the supposed “smart money” crowd get their heads handed to them by a bunch of nobodies has been the funniest part. “No, wait, those are OUR toys and only we get to play with them!” scream the toddlers as they stamp their feet and hold their breath until they turn blue.

I fully expect the ruling clash to crush the Wall Street Bets crowd in the end, though. Anyone who has made gains in Game Stop had better make damn sure they dot every I and cross every T when they file their taxes, including paying estimateds up front, or the IRS will crush them without mercy and levy heavy fines. Our rulers want that money back, proles, it was never meant for you.

Barry

That’s a good point regarding the IRS.

Comments policy

Comments appear entirely at the whim of the guy who pays the bills for this site and may be deleted, ridiculed, maliciously edited for purposes of mockery, or otherwise pissed over as he in his capricious fancy sees fit. The CF comments section is pretty free-form and rough and tumble; tolerance level for rowdiness and misbehavior is fairly high here, but is NOT without limit. Management is under no obligation whatever to allow the comments section to be taken over and ruined by trolls, Leftists, and/or other oxygen thieves, and will take any measures deemed necessary to prevent such. Conduct yourself with the merest modicum of decorum, courtesy, and respect and you'll be fine. Pick pointless squabbles with other commenters, fling provocative personal insults, issue threats, or annoy the host (me) and...you won't. Should you find yourself sanctioned after running afoul of the CF comments policy as stated and feel you have been wronged, please download and complete the Butthurt Report form below in quadruplicate; retain one copy for your personal records and send the others to the email address posted in the right sidebar. Please refrain from whining, sniveling, and/or bursting into tears and waving your chubby fists around in frustrated rage, lest you suffer an aneurysm or stroke unnecessarily. Your completed form will be reviewed and your complaint addressed whenever management feels like getting around to it. Thank you.

Categories

Archives

Subscribe to CF!

Support options

Shameless begging

If you enjoy the site, please consider donating:

Notable Quotes

"America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards." – Claire Wolfe, 101 Things to Do 'Til the Revolution

"There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters." — Daniel Webster

“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” – Frank Zappa

“The right of a nation to kill a tyrant in case of necessity can no more be doubted than to hang a robber, or kill a flea.” - John Adams

"It is terrible to contemplate how few politicians are hanged." - GK Chesterton

"I predict that the Bush administration will be seen by freedom-wishing Americans a generation or two hence as the hinge on the cell door locking up our freedom. When my children are my age, they will not be free in any recognizably traditional American meaning of the word. I’d tell them to emigrate, but there’s nowhere left to go. I am left with nauseating near-conviction that I am a member of the last generation in the history of the world that is minimally truly free." - Donald Surber

"The only way to live free is to live unobserved." - Etienne de la Boiete

"History does not long entrust the care of freedom to the weak or the timid." — Dwight D. Eisenhower

"To put it simply, the Left is the stupid and the insane, led by the evil. You can’t persuade the stupid or the insane and you had damn well better fight the evil." - Skeptic

"There is no better way to stamp your power on people than through the dead hand of bureaucracy. You cannot reason with paperwork." - David Black, from Turn Left For Gibraltar

"The limits of tyranny are prescribed by the endurance of those whom they oppress." - Frederick Douglass

"Give me the media and I will make of any nation a herd of swine." - Joseph Goebbels

“I hope we once again have reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.” - Ronald Reagan

"Ain't no misunderstanding this war. They want to rule us and aim to do it. We aim not to allow it. All there is to it." - NC Reed, from Parno's Peril

"I just want a government that fits in the box it originally came in." - Bill Whittle

Best of the best

Neutral territory

Alternatives to shitlib social media:

Fuck you

Kill one for mommy today! Click to embiggen

Image swiped from The Last Refuge

2016 Fabulous 50 Blog Awards

RSS feed

RSS - entries - Entries
RSS - entries - Comments

Contact


mike at this URL dot com

All e-mails assumed to be legitimate fodder for publication, scorn, ridicule, or other public mockery unless otherwise specified

Boycott the New York Times -- Read the Real News at Larwyn's Linx

Copyright © 2021