Photo: theindianwire.com
Dr. Betsy Brown ends her COVID newsletters like this:
And finally, my caveat is that this is my experience and my opinions, which are subject to change as more information is available, and not related to the organization I work for. Thanks for reading.
That’s how I should start all of my newsletters. Or maybe like this:
My caveat is that I have zero training in any of the topics I typically expound about and just like the ‘previous dude’ in the White House (thanks for that, Jelani Cobb!) I tend to trust my gut instincts over my grey matter any day of the week.
I’m not going to lie. I’ve been more than a little tickled reading about the recent stock market hiccup in regards to some once obscure subReddit group called WallStreetBets monkeying around with ‘the system’.
I understand there are a significant number of financial talking heads with their panties in a bunch because a bunch of individual investors got together and collectively threw a wrench into the works. As I understand it, big money players in the stock market, represented by something called ‘hedge’ funds, were betting against what they considered were low hanging fruit stocks - GameStop, AMC, Bed, Bath & Beyond. Some people are referring to these stocks as “mall” stocks because they are mostly companies you would find at malls that are dying a slow death all around the country. Partly due to the pandemic, partly due to Amazon and partly due to movies like Paul Blart: Mall Cop.
The big money players were salivating over making a killing on businesses that may or may not be mortally wounded. Kind of like culling the weak, dying or sick from the herd.
I don’t fully understand it, so I am not going to try and explain it, but the gist of it is that hedge fund managers see failing businesses, bet against them and profit off of their stock plunging. In order to bet against them of course, they have to put their money at risk.
These individual investors who hang out on this site on Reddit decided to rally around some of these “mall” stocks. Again, as I understand it, some big money players, like Elon Musk, chose to join in the fun. Suddenly, the “mall” stocks and, in particular, GameStop, shot through the roof going from single digits to triples digits in value thereby endangering the livelihoods of hedge fund managers betting against them. Please bear in mind, these hedge fund managers were (and still are) at risk of losing billions.
Which, may or may not, be a shame. After all, it was rumored a hedge fund facilitated the destruction of, at least, one redwoods forest in California.
I listened to the Planet Money podcast where this Reddit user wound up watching his stock portfolio go from thousands to several million virtually overnight. A house in the Bay Area he was hoping to purchase was now in reach. I was under the impression he wisely took his profit and skedaddled.
Chalk one up for the little guy.
I’ve known - at least - one hedge fund manager. This person was, in day to day life, lovely. Like cockroaches, ticks and leeches, I am sure there is a reason hedge funds, and the people who manage them, exist.
But when I visualize most hedge fund managers, I visualize Martin Shkreli. Which is interesting because, as it turns out, Martin Shkreli, the hedge fund asshole who jacked up essential drug prices and, in my mind, is the quintessential avaricious con artist, was, according to a New York Post article, one of the original moderators on the WallStreetBets subReddit forum. Ah, what a tangled web we weave! He is following the brouhaha intently from behind bars.
I do not doubt that. He must be pissed he will miss out on the opportunity to “make money for nothing.”
I’ve browsed some of the WallStreetBets comments. Enough to know that the waters are muddied, there are assholes on all sides and it is certainly not only Davids versus Goliath.
Even so.
What I like about the story is hearing the financial gurus squirm. I like the casino-like aspect of the stock market being exposed. I like contrasting the behavior of Kelly Loeffler and David Perdue, the two recently deposed Georgia Senators who used some insider trading knowledge to profit off of the pandemic and get away with it, and those of their ilk, compared to citizen day traders giving Wall Street ulcers by - essentially - playing the game as it was designed to be played.
I like hearing the commentary by financial talking heads trying to convince people they are concerned the little guy might get burned by acting foolishly with their hard-earned money.
I find it interesting how quickly the powers-that-be are coalescing or rallying around the idea that something must be done, and doing so in a bipartisan way, when they’ve known all along that the game is rigged. Surely what’s good for the goose is good for the gander? (I don’t know if that fits. I just wanted to use it. I like the alliteration of it.)
You know how conservatives have longed to drag social security funds into the stock market? Probably all social safety net funds?
This whole episode is why it’s a bad idea. While it’s true over time the stock market has always trended up, it is also prone to periods of cataclysmic and irrational behavior.
But what do I know? My knowledge of these things could fit into a Peanuts comic strip. I’m just hoping as a small fry gander my dozen shares of AMC stock double by the end of the week!
Pandas playing in the snow! How adorable! Plenty of pandas in snow on YouTube. A worthy rabbit hole to fall into.
Also, AAR Nancy Enz Lill highly recommends the movie Penguin Bloom. Although, from what I can gather, there are NO penguins or, for that matter, pandas in the movie. It looks uplifting. And who couldn’t use some uplifting these days?
I think they are called. . . espressos. - JLM