(ThyBlackMan.com) From 2005 to 2009, returning to the states after living and working in South Africa, I ran a Blog talk radio show with a friend of mine who lived in Panama at the time (RIP Kelso). The majority of what we discussed was foreign policy as it related to equity markets, Forex activities, the federal reserve, fractional reserve banking and the stock and bond markets. Kelso had to leave the country for tax reasons. He was lucky to accomplish this with more than $10 million in his coffers. I had been involved in investing since 1993 but eventually had to go at it on my own, leaving Sterne, Agee & Leach, Fidelity, TIAA-CREF and Merrill Lynch in order to put my interest over theirs. Upon doing such, I noticed my returns as a self-taught retail trader resulted in higher profit margins than any of the investment houses I was involved with prior. So today, it is with pleasure I can finally speak on this subject with a simper, chuckle and the full throttled pleasure of knowing that the little man can make a successful stand against the big bad wolves of Wall Street.
Personal disclosure, I still invest in the market but not as much as I did 30 years ago. Since 2011, Bitcoin and other cryptos, Silver and land have been my preferred vehicles of investment. However, I do have some funds invested in several major markets. If I didn’t mention the three decades prior, I speculate that a corpus of my readers could have discerned from the title that I am somewhat up in years. Pushing 60, I cannot deny my affinity for old movies or at least movies I enjoyed during my childhood and adolescence. Among the many I have a strong appreciation for, Little Big Man (1970) and the 1964 musical, comedy gangster flick Robin and the 7 Hoods with Frank Sinatra, Dean Martin, Sammy Davis Jr., and Bing Crosby. I use both of these to summate a metaphor for what I think can best communicate the actions and the rage many Americans feel and was just merely reflected through the actions of Reddit’s r/WallStreetBets in the driving up share prices for GameStop and other stocks against villainous and predatory hedge fund short sellers. Funds specifically that were highly over leveraged toward a negative position by billionaire wall street big wigs. So please bear with me for I am attempting to write this without laughing too much.
Little Big Man was a retrospective of a world of the past recounted by 121-year old Jack Crabb (played by Dustin Hoffman) when he lived as an Oglala Lakota Sioux. To make a long story short, he was looked down upon by the establishment equally when he was poor white trash or a Lakota warrior (by the Union Army & the White man mainly) yet excepted by the Sioux. Through all his experiences, he prevailed over the people who looked down upon him eventually when the Human Beings defeated Custer’s 7th Cavalry and Custer is killed. Little Big Man is the representation of the overlooked man, who not by any fault of their own, persist and wins against the arrogant regardless of resources. Likewise, Robin and the 7 Hoods is about prohibition era gangsters stealing on behalf of the poor and keeping the loot themselves until one day a simpleton played by Bing Crosby comes out on top. In this example, the Hoods are like individual massive crooked hedge funds, with Crosby comparable to Little Big Man (Charging Bear) being likened to the common retail trader.
The same sentiment of these movie themes can be observed in the collective short squeeze implemented by the common individual traders associated with WallStreetBets, that persisted and against all odds, defeated the arrogant feudal hedge fund lords of Wall Street and their CNBC knights. As a result, they have returned the power of investment back to the hands of the people.
Most of the Wall Street insiders found the actions of this group of common men as despicable. YouTube segment upon segment from channel to channel went in hard. So much so that they have conflated what has happened to these hedge funds as the entire stock market – which it is not. They were trashed all day by CNBC being called “unsophisticated” and “manipulative.” Some questioned if this was due to interferences by RUSSIA or other foreign influences. But they never asked, if they are so inexperienced then how was the biggest collective pressures on shorts carried out by a bunch of 20 and 30-year-old on a Reddit forum crushing multiple hedge funds in route?
Evidence is not needed in the age of “orange man bad” because it’s all good if your pockets are supported by the international banking cartel and the Wallstreet investment houses. From the view at the castle, only people that work for hedge funds can manipulate the market, for anyone else who uses the methods they do to profit is a criminal. Moreover, if you as an individual do but do not have a plush financial district office, you can be quickly labeled a racist bigot let Discord tell it. Today the rule is if you can’t beat them, lable them as alt-right Trump supporters and censor them from the land of the interwebs. All this vitriol because regular citizens who invest openly addressed the raping of main street via a process called shorting the market. “Shorting” a company makes the fund loot when the value of the stock goes down. This means legally, hedge funds can do anything, even trash a company on TV to drive down share prices. What these little big men saw was an injustice that made wealthy investors rich at the expense of the average citizen. Shorting was just a profit scam run at the expense of the millions of mom and pop shops across our nation. When these people go under it doesn’t matter, they are just told to suck it up and fill out a form to request an unemployment check from the government. When the hedge funds fail, they get billion dollar bailouts.
So, they decided to do something about it. They saw which companies were being heavily shorted in terms of percentage of shares and put pressure on those that held these massive over leveraged short positions (called a short squeeze). Puts and Calls have always been a part of the options trade, just most on Wall Street considered the average Joe and Jane too dumb to understand such concepts.
The real issue is embarrassment. Members of a reddit group through transparent and open communication were able to turn the Wall Street and the stock market into a meme. Common men in the form of retail traders have shown that the power can be handed back to the people and exposed the elite trader game of forcing businesses to fail is up. And it was done by studying the market and using basic math to reveal short sellers and burst their propensity for using short squeeze after sort squeeze to get rich and destroy the businesses of main street.
From the Wall Street perspective, almost $15 billion was lost by short sellers just on Game stop. The average retail trader sees it as the opposite, that nearly $15 billion was taken from the 1 percent and returned to main street representing a win for the common person.
Using a classic wall street maneuver and via collective action, they realized that they could push up the stock value collectively, make more loot and give a big FU to Wall street elite and the hedge funds. In basic terms and symbolism, it is an extension of the times in the form of a populous financial uprising or that the Bastille has been stormed. It has the uber rich nervously quaking in their shoes because this revolution cannot be won at the barrel of a gun, but rather in the minds of the people: potentially destabilize the hedge fund business model. This also shows that the average citizen is just as smart as those pulling the strings. These amateur investors have started and will eventually get to other heavily shorted names like Dillard’s, leaving Wall Street analysts stuck behind the eight ball.
This is a lesson for all, and it denotes that that people are tired of the establishment on all fronts. GameStop stock is a manifestation of the fact that retail investors have the power to move the market. Moreover, it shows that the members of WallStreetBets probably have more of an accurate and fundamental knowledge and understanding of stocks and other financial instruments than many of the so-called experts. Yet these individuals are problematic, not high frequency traders that cause “flash crashes’ or House Speaker Nancy Pelosi and her husband who can purchase 25 call options on shares in Tesla valued up to $1 million after being briefed on the Biden Administrations support for electric vehicles, their plan to lift the cap on sales and give electric vehicle buyers tax credits again. Since the calls were purchase by, she and her husband, shares of Tesla have risen from $640.34 at the time to $890 today and as of January 27, they were valued at $1.12 million.
When poor people lose money, poor people are “irresponsible” but when rich people lose money, the poor people are responsible. This is a new front; it may even be a form of revolution. Their Achilles is greed and maybe their downfall. GameStop is just the start is their fear. A few of these firms had to be bailed out and have their positions covered at a cost of close to $3 billion. Why, because some hedge funds themselves in this position of shorting a stock 140 percent. One doesn’t need a massive herd of people to recognize that to do such is dumb – it takes no coordination for this. What remains is what will the SEC and the other team members, who meet in the Hampton’s do to deal with this? Nothing. The Hedge funds will not face any repercussions because they’re somehow better than retail investors. They will not lift one finger to investigate why companies can shut down trading, so their hedge fund partners don’t take a loss: because in their worldview only they can manipulate the markets. They are billionaires and warrant this. To them regular folks have no place in their markets. This cannot be tolerated by them because they could no longer be the scavenger Turkey Buzzards they are and corner the market on a company and put them out of business for profit. The members of WallStreetBets and many other Americans see this and ask, why do we even allow short positions? Instead of helping the retailer they amass short positions to bankrupt and destroy these companies. These mechanics of money management which promotes voting against stock to fail basically by borrowing shares from a broker then the selling the shares later hopefully with a plan to buy them at a lower price are un-American and need to change. If not, the people have demonstrated what needs to be done and what can be done, and more importantly, that Bear hunting season has just begun.
Staff Writer; Torrance T. Stephens
You can follow this brother over at; Daily Thought Crime. Can also purchase any of his books over at; Amazon – TTS Books.