What the Gamestop saga is really about
Stick it to the man.
The 2010s have seen a rise of populism spread across the entire world. Trump (US). Brexit (UK). Bolsonaro (Brazil). The Atlantic wrote a piece on how populism has spread and will have continued impact on the world in the 2020s.
What the 2010s did…was give populist parties the ecosystem they needed to thrive — due to, among other things, the consequences of the 2008 global financial crash and the digital revolution.
This same ecosystem has created a burning coal of frustration from every day people who have grown increasingly skeptical of the elite.
Political scientists have suggested that the most impactful years of one’s life on forming a political stance are 18–25. The American financial crisis of 2008 put an emotional scar on a class of people who are now 12 years older. This means they’re now 30–37. And, given the magnitude of the crisis, even those in their teens may have been affected. Today’s 24–37 year old class, who grew up in either middle or low income households, are now building wealth, perspective and capabilities to exercise on their hard earned frustration. They’re back with a vengence and finally able to do something.
Enter Gamestop.
How insane. A retailer started in the 1970s who sells video games is the battleground of an emotional war between financial institutions and the children of families who got screwed just over a decade ago.
Consider this post from the r/wallstreetbet thread on Reddit:
I was in my early teens during the ’08 crisis. I vividly remember the enormous repercussions that the reckless actions by those on Wall Street had in my personal life, and the lives of those close to me. I was fortunate — my parents …had some food storage saved up. We were able to keep our little house, but we lived off of pancake mix, and powdered milk, and beans and rice for a year.
Those close to me, my friends and extended family, were not nearly as fortunate. My aunt moved in with us. Do you know what tomato soup made out of school cafeteria ketchup packets taste like? My friends got to find out.
Imagine the emotional scar left by that moment. And imagine what retribution you’d impose when you found a worthy target:
To Melvin Capital: you stand for everything that I hated during that time. Your continued existence is a sharp reminder that the ones in charge of so much hardship during the ’08 crisis were not punished. Your ilk were bailed out and rewarded for terrible and illegal financial decisions that negatively changed the lives of millions. I bought shares a few days ago. I dumped my savings into GME, paid my rent for this month with my credit card, and dumped my rent money into more GME (which for the people here at WSB, I would not recommend). And I’m holding. This is personal for me, and millions of others. I’m not going anywhere. You can pay for thousands of reddit bots, I’m holding. You can get every mainstream media outlet to demonize us, I don’t care. I’m making this as painful as I can for you.
That is searing rage. And it’s one person of millions who likely feel the same way.
Emotions and feelings, though, don’t bankrupt hedge funds. Long positions on shorted stocks do.
Enter the Internet.
Forever, the power struggle between the classes and the masses has ebbed and flowed. Fear and poverty cause the masses to cede control to the classes in exchange for security and clarity. Prosperity of the classes when juxtaposed against the tragedy of the masses breeds a revolutionary spirit that inspires people to fight back. The classes set up institutions and policies that make it more difficult to shift power away from themselves. But when the masses can learn, organize and execute together, all hell breaks loose.
The democratization of information and ability to organize has been one of the most impressive aspects of the global internet. People can now get information at their fingertips, find others with similar opinions and connect. The barriers of geography and society have been erased. The speed with which ideas can be shared and used to bring people together has never been seen before.
For the ruling elite, this moment should send chills down their spine. The burnt generation has risen from the ashes and are looking for ways to disrupt the status quo. What’s hard about these movements is that they are macro-predictable and micro-random. We know there will be more instances of people pushing back and driving emotionally charged rallies, but we don’t know when or how.
It’s similar to water. A drop of water splashed on your hand is harmless. A bucket of water splashed in your face is inconvenient, but not a big deal. A tsunami crashing over your head will obliterate you and everything around you. Each rebellious individual is a drop of water. When unaligned, they represent a quiet sea, with contrasting tides and currents. When aligned, they are force that cannot be stopped. The fluidity of the group makes it impossible to find a weak spot. The tsunami must take its course and its victim must bear the brunt of its fury and pick up the leftover pieces.
Billions of dollars will shift from the classes to the masses. And those dollars being shifted will provide tangible, inspiring stories that fuel the fire.
This tangible impact fuels hope, the most powerful human emotion. This hope encourages others. This makes the tsunami even bigger:
This is not stocks, this is a financial revolution never seen before. And let’s be honest, the outcome will be a governing revolution.
I yolo’d $54k yesterday, and set a buy order for another $12k (Look at my history). I am not a money man, I lost my job in February last year and used my severance and took a risk.
I don’t want to live the life of Wallstreet. I just want to live my life. My kids will learn the value of hard work and honesty; hopefully, with less pitfalls than I have experienced.
Prior to this I invested for personal gain. This YOLO money I am truly willing to lose in pursuit of changing the system. I will hold beyond the peak, not because I am stupid, but because I know we have a better chance of breaking the system if we force the shorts to cover everything. Every last fucking cent.
We’ll see if the inevitable crash of $GME changes people’s minds. The sentiment out there appears to be that regular people are willing to lose hundreds or even thousands of dollars to make a point. Hopefully, potentially losing this money will be less painful to them than the billions hedge funds may lose due to the short squeeze.
More importantly, this is a material moment in the people’s history of America.
