Written By: Anton Sawyer
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I'll never forget the time I used my remedial card-counting skills to walk away from a blackjack table in Nevada with $150. To be honest, I think it was more luck than anything, but I'll never forget the feeling I had knowing that I had at least leveled the playing field a bit more in my favor.
Right now in America, we are currently in the midst of a giant casino game known as the stock market. Over the last two weeks, Reddit forum members have been in full force trying to turn the entire system on its ear.
And ... it's actually working.
For those of you unaware of what all the hullabaloo is about, it's about people using loopholes on the internet to make an absurd amount of money on what some consider to be "garbage" stocks. Of course, investing 101 says to buy low, sell high, and that's exactly what's being done ... in a way.
See, there's more than one way to fry a fish. Because of the fact that the stock market is so fluid, it allows for businesses like hedge funds to bet against the success of a business. Melvin Capital is a hedge fund (worth US $12.5 billion until recently) that took a "short position" on Gamestop.
In essence, a short position means Melvin was betting GameStop’s share price would fall. When it would fall, they would back the truck up to grab the cash and then get the hell out of there. A group of Redditors came together in what some have called the "greatest troll of all time." Telling people to buy Gamestop stocks at basement rates, and then hold on until it hit a certain value—you can also cash out, and then kick yourself for doing so a couple of hours later. This concept went viral and a lot of lower and middle-class citizens have been reaping the benefits. On the flip side, it's also helping to decimate the bottom line of mega-corporations and banks.
Though the Gamestop stock buy-up is still going on, there's another penny-stock that has caught on in a big way in an attempt to replicate the results from Gamestop. This company is a crypto-currency called Dogecoin.
As always, we here at The Indie Truther try to gain perspective from facts and figures, but we always try to involve ourselves in some way to get a first-hand account. To accomplish this, our CFO Nicole West recently purchased 7,400 shares of the cryptocurrency Dogecoin for literal pennies. The push right now is to get it to $1.00 per share. As long as people stick to their guns, it appears this goal is a very realistic one. I mean, it wouldn't hurt to make a couple of bucks while doing research, right? One would think that this share of the bigger pie would be met by our leaders in Washington with open arms. As we all know, more money to lower and middle classes means more money put directly back into the economy, which benefits all of us.
You'd be 50% right ...
Because these penny stocks are taking off, it has caused massive losses towards stock futures in both the Dow Jones and the NASDAQ. The corporations aren't sure what's going to happen. Are people going to dump all of their blue-chip stocks the next time another campaign goes viral for some other corporation that is selling stocks at absurdly inexpensive prices? Should these companies re-evaluate their shareholder structure and stock pricing to remain competitive? All of these questions, plus many more, are being thrown out all over the place from TV financial advisors. Of course, whenever anything impacts the wealthy, the lawmakers are there first to arrive and save our "American way of life."
With the upheaval this campaign has caused, even Adena Friedman, CEO of NASDAQ, has spoken about adding additional regulations to trading to stop this runaway train. "As we look at these new technologies that are available to everyone, including investors. I think it's also important for regulators to understand that manipulation is manipulation. Whether it's happening through a new technology medium or it's happening through traditional mail." Given the history of the stock market and how it has supplied tens of millions of dollars to lobbyists (or really whoever can get the money to the intended Congress-person) over the last century to prevent regulations, her next statement was truly telling. "I think it's just a matter of making sure that we understand what the behavior is, what's underpinning the behavior, and working appropriately with the regulators to manage the situation."
I find it bemusing then as to why, if this is truly about stopping manipulation, that Friedman said the NASDAQ's role as a "self-regulatory organization" is to make sure activity in the market is "legitimate" and to root out manipulation in the market. She did not detail what kind of technology the NASDAQ uses to "evaluate social media chatter," but she said if the NASDAQ can match unusual trading with social media activity, the exchange will halt the stock and potentially engage with the SEC to evaluate and investigate. This means that if someone who runs the show sees a Reddit post about stock "X," and then "X" starts shooting to the moon, the entire trading of "X" will be stopped.
Per Dictionary.com, manipulate means: to adapt or change (accounts, figures, etc.) to suit one's purpose or advantage.
The house is pissed that a lot of people have just learned to count cards.
There isn't enough space in this article to list everyone who lives in the world of wealth or power and has been incarcerated for various felonies tied to these activities. From Georgia's Republican Senator Kelly Loeffler and Republican Senator Richard Burr of North Carolina's improper conduct on Wall Street—both of which occurred in 2020. Along with others like GOP representative Chris Collins of New York, who had been under investigation by the House Office of Congressional Ethics since 2017 for sharing material nonpublic information in the purchase of Innate stock, using his status to purchase discounted stock, and in 2013 directing an NIH employee to meet with Innate staff to discuss a clinical trial. Yet, after all of these, not once has anyone from NASDAQ or the Dow Jones come out to say that due to rampant fraud, that there needs to be an overhaul because of manipulation.
The one trading company that's in the cross-hairs is Robinhood. I don't think there was any irony or sarcasm when the name of the company was picked. But seeing how they are really trying to bend to the wills of Wall Street so they can keep their status, they really just want to take from the rich and ...?
Lawmakers from both major parties criticized Robinhood after the California-based financial services firm announced it had restricted its customers’ ability to buy stock in GameStop and other companies whose shares have been driven up by retail investors organized online. It has already been determined that there will be hearings by the Democratic leaders of the House Financial Services Committee and the Senate Banking Committee. It does appear that there are a few congressional members who have already formulated an opinion. Democrat representative of California Ro Khanna was quoted as saying, “While retail trading in some cases, like on Robinhood, blocked the purchasing of GameStop, hedge funds were still allowed to trade the stock, Instead of investing in future technologies to help America win the 21st Century, Wall Street poured billions into shorting this stock to crush this company and put workers out of business. The future of this country lies in that access and equality across every sector of our economy.” Representative Rashida Tlaib (D-MI), a member of the Financial Services Committee, went further by claiming “They’re blocking the ability to trade to protect Wall Street hedge funds, stealing millions of dollars from their users to protect people who’ve used the stock market as a casino for decades.” I think Ohio Senator Sherrod Brown summed it up the best. "People on Wall Street only care about the rules when they’re the ones getting hurt,” Brown said in a statement. “American workers have known for years the Wall Street system is broken – they’ve been paying the price. It’s time for the SEC and Congress to make the economy work for everyone not just Wall Street.” To be honest, there was one quote that surprised me. Given the clear party lines drawn, Texas Senator Ted Cruz came out in support of the traders, “Let the people trade."
I think the single greatest example of how little those who control the financial strings in this country care when it comes to stock manipulation, happened in March of 2020. Bill Ackman, CEO of Pershing Square Capital Management, a hedge fund management company did basically the same thing that's being done through Reddit and ended up pocketing $2 billion.
Ackman disclosed that his $400 million Pershing Square Foundation, had invested capital in a company called Covaxx, which is working to boost antibody testing kits to test people against covid-19. He released a statement warning everyone that "hell is coming," and that 30-day lockdowns and financial ruin were going to follow. Like with the Game Stop stocks, Achman was betting that the stocks he had acquired from Covaxx would tank. Shortly after the press release was widely circulated, the stock tanked, and Ackman pocketed two billion dollars.
Ackman has been no stranger to controversy. In this last decade, he has had to pay hundreds of millions of dollars in fines for inside trading. However, these fines are just a drop in the bucket compared to his gains. Even though he has been caught breaking these laws (alongside the others mentioned above), the only punishment he received was fines.
With these outlandish amounts of money being thrown around, you would think that a complete overhaul of the system would be needed. That because there have been repeated examples of those in leadership who have committed financial crimes in the amounts that some people may never see in their lifetime, you would think something systemic would need to be done.
It's a casino.
Sometimes you win, sometimes you lose, but it's all OK if you're the RIGHT kind of person winning or losing.
In the world of the financial elite, gaining money with ease is what is seen as the status symbol. There are also those who won't accept people who have money unless it's old money. That because they worked hard for their riches, it makes them "less than" somehow. Keeping this mentality, you could see why the elites would be scared to death that this wealth may come to all walks of life to quote Syndrome from The Incredibles, "When everyone's super, no one will be." Having millions of people rise through the ranks into wealth will mean that wealth, in and of itself, will no longer be a status symbol. That the nice car you just bought yesterday is a 2019 and your neighbor just got the same model, but newer. Their ability to live a lavish lifestyle will no longer be an immediate separating factor from "undesirables"—i.e. poor.
That's what is so sickening about this entire situation. I don't know of anyone personally who has two billion dollars, or two million, or really anything other than what my middle-class boundaries allow. With Nicole's purchase of those Doge stocks, within the last couple of days, she's made almost $600. With my working-class roots, I can promise you that I've never worked a job where I made $600 in two days for doing almost nothing. She, along with millions, are now starting to get a taste of what could be. That you may be able to game the system just as effectively as the big boys, and actually have some money available for the little things. You know, things like food, rent, basic living necessities.
2021 is going to be an interesting year to see what happens in the stock market. You have to realize that in 2020, we had both the Dow’s worst single-day point drop in U.S. market history. To ending the year with millions still unemployed. Yet the Dow Jones not only recovered but also set new records when it reached over 30,000. Someone, somewhere, is getting paid off of all this human trauma. I can guarantee that with how few people believe in the US government and its institutions already, that if it gets involved and enacts laws that will negatively impact those of us who want our day in the sun, whatever faith is left will blow away like dust.