Although most, if not all, of those reading are familiar with what has been happening over the past week, allow for a brief summary. Hedge funds such as Melvin Capital shorted stocks — most prominently Gamestop ($GME), but also many others — borrowing shares and selling them, expecting the price to drop so the shares could be bought back later and returned, netting a profit. Part of the issue is that $GME was shorted 140% meaning that more shares are owed than exist. But a group of enterprising individuals from r/wallstreetbets, and later on, much of the rest of the world, saw this as an opportunity. By purchasing and holding shares, they are driving up the price and costing hedge funds billions of dollars. Melvin Capital alone has lost 53% of its value (previously $12.5 billion) and Wall Street is bleeding. There are many more detailed and thorough explanations, but that is the simple version. This of course has the financial and media establishment up in arms because normal people were able to inflict serious losses on large firms, something never seen before on such a scale.
This short squeeze, dubbed by many as the “Gamestop Rebellion”, has resulted in some of the most widespread unity ever seen across the political spectrum. Millions of people are joining in for a chance to take a stand against Wall Street, and hopefully, make a few dollars in the process. I am not a financial expert and cannot offer financial advice, but you don’t have to be an expert to understand the political implications of what is happening. All in all, there is one message to take away from this: that the people wield far more power than those “in power” would like to have us believe.
It’s often touted by the anti-gun crowd the Second Amendment is useless as a check on tyranny because our firearms are no match for a government that has cruise missiles, tanks, and fighter jets at its disposal. Obvious issues with implying that such instruments would even be practical for warfare in such a situation aside, the central premise of this argument is that a large and powerful institution with all the might in the world could wipe out the armed population with such ease that it doesn’t even make sense to consider. On an individual level, this is true. There is precedent for one-man armies dealing massive damage to much more powerful adversaries (one example being Alejo Garza Tamez) but ultimately, any fight of such odds ends poorly for the lone wolf. By the same token, no one stock trader with internet access and a zero-commission trading app can make the financial establishment panic. However, people do not exist in a vacuum, isolated and devoid of impact beyond their immediate surroundings.
The Gamestop Rebellion has been so impactful because of the internet and popular resentment against corrupt institutions. Millions of people see a financial ecosystem that acts with impunity, filled with people free to behave recklessly in the comfortable knowledge that they can be bailed out if their greed results in disaster. Alone, they can do nothing to stop it, and the various institutions which comprise the ecosystem are all interconnected. The Secretary of the Treasury received $800k from Citadel Management, Citadel’s senior advisor Ben Bernanke was the Chairman of the Board of Governors of the Federal Reserve, Citadel has what the Washington Post described as a “close relationship” with Robinhood (which halted trading of $GME, $AMC, and other stocks involved in the short squeeze), Citadel also infused almost $3 billion into Melvin Capital just days ago. This incestuous relationship between financial firms and organizations can only be described as a monopoly on power. The individuals, the firms, etc. all have their own agendas, but as the saying goes, “it’s a big club, and you ain’t in it”.
The rifle is a democratization of the use of force just as trading stocks on your phone is a democratization of the financial system. Whenever those who wish to see you disarmed claim that your individual right to keep and bear arms does not matter in the face of such massive odds, remind them of what we are witnessing first hand. This country was founded on the premise that true power and authority lies in the hands of We the People, and the Gamestop Rebellion is a stark reminder of that truth.
