Your eyes are finally open. You can’t ignore it or dismiss it. The 2020 election saw to that. You have made the transition from the darkness of ignorance to the light of knowledge. The country you thought you lived in does not exist. It hasn’t probably in our life time. Everything is a "dog and pony show." The machinery that runs our nation, politics and economics, among other things, is rigged in favor of the elites. The recent GameStop circus has reinforced that awareness in that, the elite investors, play their power card against the average American out there who are just trying to make a buck. Here’s what happened.
Hedge Funds had been heavily shorting GameStop (GME) stock in January. That means that they believed (more like wanted) GME stock would fall in value. Savvy hedge fund managers at places like Melvin Capital and other Wall Street money managers, just knew that the stock was over-valued. Only it wasn’t. The hedgies were very, very wrong. It was instead, rising since early January, driven by retail investors’ rampant buying of the popular gaming app security. But what is a Hedge Fund anyway?
Supposedly, it is an investment entity designed to protect investment portfolios from market uncertainty, while generating positive returns in both up and down markets. However, the industry is overrun with unethical and illegal activity. But they are yet another protected class. In reality, Hedge Fund is big money brokers betting against or in favor of a stock. In other words, investors of the Market who make money by manipulating stocks. But that’s illegal you say. Of course it is. For the little guys that is.
Evidently, what happened was that small investors realized that GME was actually under-valued, and they bought big while the big guys were forced to buy GME stock at prices several hundred times higher than just a few days earlier. And as these big players were losing their pants when the little investors were selling their stocks, they exercised their influence and connections and the selling was brought to a halt.
Robinhood, the retail trading app, informed its holders of GME that they could no longer buy
the stock; they could only sell it. And it wasn’t just the Robinhood trading platform that prevented retail investors from buying GME stock. TD Ameritrade did too, as did Interactive Brokers. And it wasn’t just GME stock that was suddenly and inexplicably restricted to account holders. But not Wall Street firms. No, they were allowed to buy those restricted equities in sufficient quantities to make up for some of their losses. Whether the Biden White House told Robinhood to stop GME trading or not, as it is being alleged, investors were denied their right to participate in the Stock Market. That did happen. What’s the takeaway for Americans? There are several.
First, once again, the notion that everything is rigged in favor of the rich, powerful and connected, cannot be denied. It’s in your face.
Second, Wall Street hedge funds are bailed out of a financial crisis of their own making at the expense of the little guy. That’s also undeniable. Third, the stock market just showed the entire world that it’s anything but a market. It’s a fixed game, an asset mainly for Wall Street and the politically connected. Fourth, the message couldn’t be clearer: Middle Class America has no business getting rich in the stock market—that money belongs to the elite. Many Americans who have their lost jobs and even perhaps their homes, who were looking to make it up in the market with what little money they still had, have been told go somewhere else.
And if nothing happens, if no one is punished, if none of the small retail investors are made whole for their losses, then the fifth takeaway is that corruption and graft now unashamedly occupy the highest places in the nation too. The country you thought you lived in does not exist. Those who play by the rules will always lose to those who make the rules in their favor.