Never underestimate how deeply the unfairness and corruption on display during the 2008-2009 financial crisis still rankle. From Matt Taibbi at taibbi.substack.com:
Raised in a family devastated by bubble economics, one Reddit investor saw GameStop as a way to send a message to “cancerous rent-seekers”
Thursday, January 21st was a critical day in the story of the video game chain GameStop (ticker name: GME). Retail investors, including many subscribers to a Reddit forum called wallstreetbets, pushed the company’s stock from $6 to $43.03, but experts said playtime was over. It was time for the big shots to clean up.
According to Citron Research, one of many funds that had bet on the brick-and-mortar store to fail, those investing in GME were “the suckers at this poker game,” and would soon be sorry when the stock went “back to $20 fast.”
They were wrong. Instead of amateurs being shoved aside by hedge funds, it was the pros who had their backs broken, as GME soared to $65.05, beginning a steep ascent that would become an international news phenomenon.
It was the “We’re gonna need a bigger boat” moment for Wall Street. The pros had been sloppy. By late 2020, shares in GameStop were well over 100% short. A sudden rise in value would force shorts to pay exorbitant prices just to get out of the trade. By the afternoon of the 21st, all the “suckers” on Reddit had to do to beat them was nothing, and they did just that, behind the rallying cry “diamond hands,” signifying a determination to hold at all costs.
