What will happen to the US$1,400 stimulus checks that look set to hit the bank accounts of all those earning less than US$75,000 sometime soon?
For the truly needy, it probably won’t be enough, of course, and more will probably be needed down the line.
But for those young middle class people, who tend to earn less because they are in the earlier stages of their careers, and who are helped out by support in kind or in cash by the bank of mom and dad, the extra US$1,400 might just present an irresistible opportunity to stick it to the man, once again.
Will the Gamestop (NYSE:GME) issue still be live by the time the checks arrive?
That’s open to question, give the speed with which institutional alliances have been formed between high finance and online trading platforms.
The tricks, as usual, play to the weak spots in the American psyche.
Thus Discord, which has banned the reddit group that promoted Gamestop, cited racist comments as its primary reason for the ban, rather than anything to do with actual trading patterns.
Robinhood, once the archetypal rebellious teenager of the internet, has now brought down a class action lawsuit on itself for not allowing its users to be rebellious enough. And other platforms have disabled the buy function for certain stocks, and only allowed selling to take place.
It’s a grotesque distortion of usual market practice, when the high-ups in high finance are usually trying to stop people from selling rather than buying.
But so be it.
Although measures can be taken here and there and on an ad hoc basis, it seems unlikely that any part of the business community and their online allies actually wants to deplatform retail investors as a general class. Oftentimes the big investment houses rely on retail investors to trade in and out, creating the liquidity that sets the price on a day-to-day basis, albeit that the final arbiter of value likely sits behind reflective glass on a floor towards the top of a tall, tall building.
And given that fundamental truth, it may just be that the game of Whack-a-mole currently being played by executives at Discord, Robinhood and 121 at the behest of their hedge fund allies, is going to crank up several gears when President Biden pumps a whole lot of new money into households full of bored young people with nowhere to go, and not much, in the grand scheme of things, to lose.
Share price manipulation has been going on ever since there have been shares. Indeed, from a purist’s point of view, manipulation at a certain level that falls just short of fraud could be regarded simply a natural part of the price setting process.
That reddit groups have now discovered how to do it shouldn’t really surprise anyone. Whether they should be able to get away with it begs another question: if not them, why everybody else?
And note too, that the market is awash with regulation, but that its effectiveness has been negatory, and only the deplatforming has had any really impact.
That’s the way the world is ruled now, by deplatforming: it’s happening to MAGAland, to JK Rowling, to the Intellectual Dark Web, to Covid dissenters, to comedians, to Jermaine Greer.
Will it happen those who pushed Gamestop?
Certainly, they are being pushed around, from platform to platform.
But no-one seems to be coming out in support of the hedge funds who took a beating at the hands of the reddit investors. Not the left, like Ocasio-Cortez and Elizabeth Warren, nor the right, as embodied in its currently fractured state, by Tucker Carlson.
For the left, Wall Street represents everything that’s wrong with capitalism in general and brooks no defending whatsoever. The right, meanwhile, increasingly views high finance as backing Democrat identitarians against the average working class American. And on that basis there’s also little sympathy.
The hedge funds are, at least for now, going to have to suck this one up.