Reddit’s little guys revolt against Washington and Wall Street’s rigged game
WASHINGTON. Philip Carret, a Wall Street investor of some renown and founder to one of America’s first mutual funds, once said, “The average trader is naturally a chronic bull. It is human nature to prefer optimism to pessimism.”
You could say the rambunctious user groups of Reddit’s “DeepF&%kingValue” and “WallStreetBets,” two groups on the social media platform, are eternal optimists. They go “long” by actually purchasing stocks in hopes of future growth and profit. But billion-dollar hedge funds, the “smart money,” occasionally leans towards the opposite and more negative side of investing. They go “short,” betting against a stock, hoping to profit from its steep decline. (The Redditors’ GameStop victory will be short-lived)
This give-and-take among stock traders is what adds liquidity to the markets.
The Billionaires Club
The media has spilled a lot of ink concerning the chatty online investor’s for pushing up the price per share of stocks for companies like GameStop, Bed Bath and Beyond and BlackBerry. A feat that is nothing short of remarkable in the face of Wall Street’s bearish masters of the universe.
Remember, hedge-fund investors – like billionaire leftist loon George Soros – made remarkable fortunes on the creative destruction that is part-and-parcel of the capitalist economic system. In fact, Soros joined the billionaire’s club after his shorting of the British Pound Stirling proved wildly successful in the 1990s.
In 2008, when the global economy crumbled in the wake of the US housing bust, the Securities and Exchange Commission (SEC) issued an emergency order temporarily suspending the ability of traders to short the stocks of investment banks like Goldman Sachs, Morgan Stanley and Merrill Lynch.
The very same financial institutions that so cavalierly bundled toxic subprime mortgages to sell globally in the form of “investments” called collateralized debt obligations (CDOs).
Wall Street’s creative derivative investment ushered in a decade-long “Great Recession.”
These are the same folks now crying crocodile tears in the wake of the massive GameStop short squeeze, with losses nearing $70 billion for Walls Street’s smart-money boys.
Protecting the “investor”
And the response to this David vs. Goliath story is telling. The SEC issued a statement saying they are on the job:
“The [Securities and Exchange] Commission is working closely with our regulatory partners, both across the government… and other self-regulatory organizations, including the stock exchanges, to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing.”
They then say:
“In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity.”
Translation: Institutions like Wall Street hedge funds are the only “investors” the SEC is pledged to “protect.” The little guy (“retail investors”) are those who “should be careful.” (Redditors, GameStop and Wall Street: The Government should do nothing)
Internet freedom and Big Tech tyrants
The Internet helped alternative online journals break the monopoly on the information held by a left-leaning mainstream media. This allowed outsider Donald Trump to use them and social media site Twitter to push his message directly to the public in 2015 and beyond.
Likewise, Reddit’s online investors used their Internet forums to outsmart Wall Street by driving up prices for stocks the Big Apple’s bears saw as hopeless losers, forcing these short-sellers to cover their positions, thus driving up the price further.
Online sites such as Twitter and Facebook have since banned President Trump
Those platforms feared President Trump would use them to launch a potent opposition movement against former Vice President Joe Biden’s illegitimate regime, which Washington’s ruling elites witnessed firsthand on Capitol Hill last Jan. 6th.
You should not be surprised, then, that Washington regulators and their crony capitalist Big Tech and Wall Street allies pressured Internet-based, commission-free investment app Robinhood to limit the purchase of stocks by the retail investors who snookered Wall Street’s best and brightest.
And government-sanctioned Big Tech will attempt to control the investment space as it controls opinion-forming information and political discourse.
Because, as the Capitol Hill insurrection and the GameStop short squeeze proves, the Davids of this world can give the Goliaths a real run for their money.
Top Image: The New York Stock Exchange. Historic Image via Wikipedia, https://commons.wikimedia.org/wiki/File:Photos_NewYork1_032.jpg.