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The Revolution That Wasn't: GameStop, Reddit, and the Fleecing of Small Investors by Spencer Jakab

4chan, activist fund / activist shareholder / activist investor, barriers to entry, behavioural economics, Bernie Madoff, Bernie Sanders, Big Tech, bitcoin, Black Swan, book value, buy and hold, classic study, cloud computing, coronavirus, COVID-19, crowdsourcing, cryptocurrency, data science, deal flow, democratizing finance, diversified portfolio, Dogecoin, Donald Trump, Elon Musk, Everybody Ought to Be Rich, fake news, family office, financial innovation, gamification, global macro, global pandemic, Google Glasses, Google Hangouts, Gordon Gekko, Hacker News, income inequality, index fund, invisible hand, Jeff Bezos, Jim Simons, John Bogle, lockdown, Long Term Capital Management, loss aversion, Marc Andreessen, margin call, Mark Zuckerberg, market bubble, Masayoshi Son, meme stock, Menlo Park, move fast and break things, Myron Scholes, PalmPilot, passive investing, payment for order flow, Pershing Square Capital Management, pets.com, plutocrats, profit maximization, profit motive, race to the bottom, random walk, Reminiscences of a Stock Operator, Renaissance Technologies, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robinhood: mobile stock trading app, Saturday Night Live, short selling, short squeeze, Silicon Valley, Silicon Valley billionaire, SoftBank, Steve Jobs, TikTok, Tony Hsieh, trickle-down economics, Vanguard fund, Vision Fund, WeWork, zero-sum game

And some who did hold on past the peak expressed regret at fortunes that got away rather than satisfaction at having stayed true to a cause. A separate subreddit was started at the tail end of the meme-stock squeeze, r/GMEbagholders, where Redditors commiserated about their losses on the meme stocks. It was unrealistic to expect so many apes to “hold the line” that short sellers would be forced to pay any price and incur infinite losses. As prices of the meme stocks climbed higher, the refusal on principle of many retail traders to sell weakened. That wasn’t part of the romantic narrative, but it is the natural thing to do when you have made the equivalent of several years of your salary in less time than it takes the milk in your fridge to expire.

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It held that hedge funds were engaging in something called a “short ladder attack,” somehow buying and selling from one another to artificially push down the prices of the meme stocks. There is no such thing. It is almost impossible to say how many of the millions of degenerates who participated in the meme-stock squeeze made money, but the episode made their forum hugely influential. Now WallStreetBets had to grapple with the downsides of that runaway success. It had drawn so many new members and so much attention in a week that the forum had begun to look for new mountains to conquer. Some suspected outside manipulators when many newer members on the board began to tout silver. Starting on the Thursday of the meme-stock squeeze, the day that trading restrictions were imposed on certain stocks, a silver exchange-traded fund saw a surge in activity.

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He said, “It’s a chance for Joe and Jane America—the retail buyers of stock—to flex back and push back on these hedge funds.”[16] It was a hopelessly romantic view of the situation. Notwithstanding those few that got whacked by the meme-stock squeeze, many hedge funds did very well and couldn’t wait to see Joe and Jane’s next bright idea—especially now that computer programmers have built algorithms to trade off what they are chatting about on Reddit more quickly than a human can read it. And even if that whole class of professional investor had been permanently disadvantaged by the meme-stock squeeze, it wouldn’t be to retail investors’ benefit. Ironically, as will be explained later, times when funds that can sell stocks short are running for cover can be the most dangerous ones for mom and pop.

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

It’s a new name for the rope that part-time gig workers can use to hang themselves. Millions have opened investment accounts on their mobile phones, where they leverage scant savings to speculate on flaky investments like meme stocks and crypto scams. Using their keyboards to close the stubborn wealth gap is doomed to fail, and to turn frustration to anger. The 2021 GameStop and other meme-stock narratives, featuring a united front of heroic small day traders fighting evil short-selling hedge funds, masks an ugly reality. A cohort of hopeless, jobless, skill-less, saving-less, debt-burdened individuals is being exploited once again.

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Using leverage provided by an online stock trading service, they bid up stock prices far beyond levels that earnings could justify. The motive: beat short sellers whose strategy counted on GameStop’s demise. This was a boom-bust-crash scenario in miniature. A debt bubble fueled an unsustainable asset bubble. When GameStop and other shares returned to earth, small investors suffered massively. Indeed, many meme stocks—shares of a company that gained a cult-like following through social media—lost over 70 percent of their value in 2022 from their 2021 bubble valuations. A similar boom-and-bust cycle occurred in 2021-22 for cryptocurrencies, another asset class with no intrinsic value and whose bubble was driven by the FOMO (Fear of Missing Out) frenzy of retail speculators.

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Many experts brushed off these episodes as a fleeting departure from rational judgment. But can we overlook the fact that the US government had just sent checks to millions of adult Americans? Is this how some of them spent the money? Millions were day trading and gambling their little savings in meme stocks or crypto assets with no fundamental value. It did not help them and did not help the economy as policy makers had intended. Their money just vanished into thin air, leaving behind debts and a commemorative sweatshirt with an image of the Fed chair as a Christ figure ringed in a halo of golden light, as the Times reported.

Survival of the Richest: Escape Fantasies of the Tech Billionaires by Douglas Rushkoff

"World Economic Forum" Davos, 4chan, A Declaration of the Independence of Cyberspace, agricultural Revolution, Airbnb, Alan Greenspan, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, basic income, behavioural economics, Big Tech, biodiversity loss, Biosphere 2, bitcoin, blockchain, Boston Dynamics, Burning Man, buy low sell high, Californian Ideology, carbon credits, carbon footprint, circular economy, clean water, cognitive dissonance, Colonization of Mars, coronavirus, COVID-19, creative destruction, Credit Default Swap, CRISPR, data science, David Graeber, DeepMind, degrowth, Demis Hassabis, deplatforming, digital capitalism, digital map, disinformation, Donald Trump, Elon Musk, en.wikipedia.org, energy transition, Ethereum, ethereum blockchain, European colonialism, Evgeny Morozov, Extinction Rebellion, Fairphone, fake news, Filter Bubble, game design, gamification, gig economy, Gini coefficient, global pandemic, Google bus, green new deal, Greta Thunberg, Haight Ashbury, hockey-stick growth, Howard Rheingold, if you build it, they will come, impact investing, income inequality, independent contractor, Jane Jacobs, Jeff Bezos, Jeffrey Epstein, job automation, John Nash: game theory, John Perry Barlow, Joseph Schumpeter, Just-in-time delivery, liberal capitalism, Mark Zuckerberg, Marshall McLuhan, mass immigration, megaproject, meme stock, mental accounting, Michael Milken, microplastics / micro fibres, military-industrial complex, Minecraft, mirror neurons, move fast and break things, Naomi Klein, New Urbanism, Norbert Wiener, Oculus Rift, One Laptop per Child (OLPC), operational security, Patri Friedman, pattern recognition, Peter Thiel, planetary scale, Plato's cave, Ponzi scheme, profit motive, QAnon, RAND corporation, Ray Kurzweil, rent-seeking, Richard Thaler, ride hailing / ride sharing, Robinhood: mobile stock trading app, Sam Altman, Shoshana Zuboff, Silicon Valley, Silicon Valley billionaire, SimCity, Singularitarianism, Skinner box, Snapchat, sovereign wealth fund, Stephen Hawking, Steve Bannon, Steve Jobs, Steven Levy, Steven Pinker, Stewart Brand, surveillance capitalism, tech billionaire, tech bro, technological solutionism, technoutopianism, Ted Nelson, TED Talk, the medium is the message, theory of mind, TikTok, Torches of Freedom, Tragedy of the Commons, universal basic income, urban renewal, warehouse robotics, We are as Gods, WeWork, Whole Earth Catalog, work culture , working poor

., Utrecht University, 2012. 164   the more frequently retail traders transacted : Dalbar, Inc., “Quantitative Analysis of Investor Behavior 2011” (Boston: Dalbar, Inc., 2011). 165   The stock shot upwards : Eric Lam and Lu Wang, “Steely Meme-Stock Short Sellers Stare Down $4.5 Billion Loss,” Bloomberg , June 3, 2021, https:// www .bloomberg .com /news /articles /2021 -06 -03 /defiant -meme -stock -short -sellers -stare -down -4 -5 -billion -loss. 166   A platform like TikTok : Shelly Banjo and Shawn Wen, “A Push-Up Contest on TikTok Exposed a Great Cyber-Espionage Threat,” Bloomberg , May 13, 2021, https:// www .bloomberg .com /news /articles /2021 -05 -13 /how -tiktok -works -and -does -it -share -data -with -china. 167   “They all know the algorithms” : Taylor Lorenz, Kellen Browning, and Sheera Frenkel, “TikTok Teens and K-Pop Stans Say They Sank Trump Rally,” New York Times , June 21, 2020, https:// www .nytimes .com /2020 /06 /21 /style /tiktok -trump -rally -tulsa .html. 167   formed a union : Zoe Schiffer, “Exclusive: Google Workers across the Globe Announce International Union Alliance to Hold Alphabet Accountable,” Verge , January 25, 2021, https:// www .theverge .com /2021 /1 /25 /22243138 /google -union -alphabet -workers -europe -announce -global -alliance. 167   “sometimes the boss is the best organizer” : Kate Conger, “Hundreds of Google Employees Unionize, Culminating Years of Activism,” New York Times , January 4, 2021, https:// www .nytimes .com /2021 /01 /04 /technology /google -employees -union .html. 169   an open letter about the frightening potential : Wikimedia, “Open Letter on Artificial Intelligence,” https:// en .wikipedia .org /wiki /Open _Letter _on _Artificial _Intelligence, accessed August 10, 2021. 170   “Things are getting … currently doing” : Cat Clifford, “Billionaire Tech Titan Mark Cuban on AI: ‘It Scares the S— Out of Me,’ ” CNBC , July 25, 2017, https:// www .cnbc .com /2017 /07 /25 /mark -cuban -on -ai -it -scares -me .html. 170   “Is the country going to turn” : Evan Osnos, “Doomsday Prep for the Super Rich,” New Yorker , January 22, 2017, https:// www .newyorker .com /magazine /2017 /01 /30 /doomsday -prep -for -the -super -rich. 170   Employees protested : Peter Kafka, “Google Wants out of the Creepy Military Robot Business,” Vox , March 17, 2016, https:// www .vox .com /2016 /3 /17 /11587060 /google -wants -out -of -the -creepy -military -robot -business. 170   four thousand Googlers : Kate Conger, “Google Employees Resign in Protest Against Pentagon Contract,” Gizmodo , May 14, 2018, https:// gizmodo .com /google -employees -resign -in -protest -against -pentagon -con -1825729300. 171   “the one who becomes the leader” : Associated Press, “Putin: Leader in Artificial Intelligence Will Rule World,” CNBC , September 4, 2017, https:// www .cnbc .com /2017 /09 /04 /putin -leader -in -artificial -intelligence -will -rule -world .html. 171   “I think the danger of AI” : Elon Musk Answers Your Questions!

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For some of these companies, like this community’s cherished but declining video game store GameStop, there was actually more short interest than there were shares. These hedge funders were so sure the company would fail—or could be made to fail—that they didn’t even worry about how they would cover their bets if the stock didn’t tank. So the kids on Reddit chose Gamestop as their first “meme stock” and used new, highly accessible trading platforms like Robinhood to buy as much as they could. All the gamers had to do was purchase enough shares and then hold them so that the billionaires couldn’t cover their bets. The stock shot upwards , and resulting losses for those who bet against the company were incredible.

The Price of Time: The Real Story of Interest by Edward Chancellor

"World Economic Forum" Davos, 3D printing, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, asset allocation, asset-backed security, assortative mating, autonomous vehicles, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, bitcoin, blockchain, bond market vigilante , bonus culture, book value, Bretton Woods, BRICs, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, cashless society, cloud computing, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, commodity super cycle, computer age, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cryptocurrency, currency peg, currency risk, David Graeber, debt deflation, deglobalization, delayed gratification, Deng Xiaoping, Detroit bankruptcy, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, double entry bookkeeping, Elon Musk, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, everywhere but in the productivity statistics, Extinction Rebellion, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global reserve currency, global supply chain, Goodhart's law, Great Leap Forward, green new deal, Greenspan put, high net worth, high-speed rail, housing crisis, Hyman Minsky, implied volatility, income inequality, income per capita, inflation targeting, initial coin offering, intangible asset, Internet of things, inventory management, invisible hand, Japanese asset price bubble, Jean Tirole, Jeff Bezos, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, land bank, large denomination, Les Trente Glorieuses, liquidity trap, lockdown, Long Term Capital Management, low interest rates, Lyft, manufacturing employment, margin call, Mark Spitznagel, market bubble, market clearing, market fundamentalism, Martin Wolf, mega-rich, megaproject, meme stock, Michael Milken, Minsky moment, Modern Monetary Theory, Mohammed Bouazizi, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, Northern Rock, offshore financial centre, operational security, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, peer-to-peer lending, pensions crisis, Peter Thiel, Philip Mirowski, plutocrats, Ponzi scheme, price mechanism, price stability, quantitative easing, railway mania, reality distortion field, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk free rate, risk tolerance, risk/return, road to serfdom, Robert Gordon, Robinhood: mobile stock trading app, Satoshi Nakamoto, Satyajit Das, Savings and loan crisis, savings glut, Second Machine Age, secular stagnation, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, stock buybacks, subprime mortgage crisis, Suez canal 1869, tech billionaire, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Haywood, time value of money, too big to fail, total factor productivity, trickle-down economics, tulip mania, Tyler Cowen, Uber and Lyft, Uber for X, uber lyft, Walter Mischel, WeWork, When a measure becomes a target, yield curve

The app-based broker offered zero-commission trading, margin loans at 2 per cent and options trading for the masses, and blended techniques developed in Silicon Valley to attract users to its app with those developed in Las Vegas to keep gamers hooked. Neophyte speculators gathered on WallStreetBets, a subreddit forum, where they styled themselves ‘retards’, ‘autists’ and ‘degens’. The WallStreetBets crowd mocked investment norms. Instead, they sought out the next ‘meme’ stock, or ‘stonk’ in their parlance. Their trading mantra was YOLO – You Only Live Once. They were driven by fear as much as greed – Fear of Missing Out. A bet that went stratospheric was called a ‘mooner’. More money was raised by US public offerings in 2020 than in any previous year, including at the height of the Dotcom frenzy.

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Known as Special Purpose Acquisition Companies (SPACs), they were used to purchase speculative ventures, in electric-vehicle technology, space travel, flying taxis, cannabis farming and a company to ‘augment humans to enhance productivity and safety’. Like the original bubble companies, some SPACs were obvious frauds. Others didn’t take themselves seriously, adopting emoticons (LMFAO, viz: ‘laughing my fucking arse off’) for stock tickers. Meme stocks weren’t confined to new technologies. The autists also pumped up the shares of bankrupt (Hertz) and near-bankrupt (GameStop, AMC Entertainment) companies. Their game was to squeeze the short-sellers on Wall Street, leveraging bets with stock options and margin loans. A share-buying frenzy in GameStop, a troubled retailer of electronic games, sent its shares from $20 in early January 2021 to over $480 a few weeks later.

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In a year-end letter to clients, Klarman wrote that: The idea of persistent low rates has wormed its way into everything: investor thinking, market forecasts, inflation expectations, valuation models, leverage ratios, debt ratings, affordability metrics, housing prices, and corporate behavior … Moreover, by truncating downside volatility, forestalling business failures, and postponing the day of reckoning, such policies have persuaded investors that risk has gone into hibernation or simply vanished.10 Warren Buffett agreed that ultra-high valuations were supported by ultra-low interest rates. ‘Interest rates,’ said the Sage of Omaha, ‘basically are to the value of assets what gravity is to matter.’fn1 Once this gravitational force was removed, Dogecoins, NFTs, meme stocks and other speculative assets were free to float into the stratosphere. A disconnect between finance and the real world lies at the heart of all great bubbles. Defoe described John Law’s Mississippi System as ‘an inconceivable Species of meer Air and Shadow … making the meer speculations of Things, act all the Parts, and perform all the Offices of the Things themselves’.

The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees by Ben Mezrich

4chan, Asperger Syndrome, Bayesian statistics, bitcoin, Carl Icahn, contact tracing, data science, democratizing finance, Dogecoin, Donald Trump, Elon Musk, fake news, gamification, global pandemic, Google Hangouts, Hyperloop, meme stock, Menlo Park, payment for order flow, Pershing Square Capital Management, Robinhood: mobile stock trading app, security theater, short selling, short squeeze, Silicon Valley, Silicon Valley startup, social distancing, Tesla Model S, too big to fail, Two Sigma, value at risk, wealth creators

Usually, the deposit requirement was tied closely to the actual dollars being “spent” on the trades; a near equal number of buys and sells in a brokerage house’s trading profile lowered its overall risk, and though volatility was common, especially in the past half-decade, even a two-day settlement period came with an acceptable level of confidence that nobody would fail to deliver on their trades. To that respect, over the past week—even with the incredible volume of trading taking place in what were being called “meme” stocks, particularly GME—Robinhood’s deposit requirements had been high, but understandable. On January 25, the deposit requirement at the start of the day had been $125 million. By the twenty-sixth, as GameStop’s volume had exploded and the price had shot toward the moon, Robinhood’s deposit requirement had risen to a heavy $291 million—a significant figure, beyond anything they’d seen before, but still manageable.

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On his desk, one of his screens was open to the WallStreetBets board, which had been made fully public again and was now mostly chronicling a volcanic eruption of anger, conspiracy theories, and despair; most of it revolved around Robinhood—and could be summed up by one of the many tweets Keith had stumbled upon while riffling through the site that morning, this one by another YouTuber, whose Twitter handle was @OMGitsBirdman: An app named “Robinhood” stealing from the poor and giving to the rich can’t make this up Keith had read Robinhood’s blog post—and received their e-mail—at the same time as everyone else who had a Robinhood account; even though it was probably the result of an automated function that involved a massive mailing list, it had seemed directed squarely at him. We are restricting transactions for certain securities… In Keith’s mind, they should have just come right out and said it. The millions of Robinhood customers could no longer buy GameStop through the app, along with a half-dozen other meme stocks—basically anything that Melvin Capital and their Wall Street colleagues had shorted and were trying to cover. And it wasn’t just Robinhood that had restricted buying into GME; many of the other online brokerages, such as E-Trade, Interactive Brokers, Webull, TD Ameritrade, and Schwab, had enacted varying degrees of restrictions of their own—but the one uniting feature was that all of the restrictions squarely targeted the same group of traders: regular people, on their couches and in their basements.

Limitless: The Federal Reserve Takes on a New Age of Crisis by Jeanna Smialek

Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Bernie Sanders, bitcoin, Black Lives Matter, blockchain, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Colonization of Mars, coronavirus, COVID-19, crowdsourcing, cryptocurrency, decarbonisation, distributed ledger, Donald Trump, Fall of the Berlin Wall, fiat currency, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, George Akerlof, George Floyd, Glass-Steagall Act, global pandemic, Henri Poincaré, housing crisis, income inequality, inflation targeting, junk bonds, laissez-faire capitalism, light touch regulation, lockdown, low interest rates, margin call, market bubble, market clearing, meme stock, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Nixon shock, offshore financial centre, paradox of thrift, price stability, quantitative easing, race to the bottom, risk tolerance, Robinhood: mobile stock trading app, Ronald Reagan, secular stagnation, short squeeze, social distancing, sovereign wealth fund, The Great Moderation, too big to fail, trade route, Tragedy of the Commons, working-age population, yield curve

She made it clear that creating a digital dollar would be a serious process, one that would probably require buy-in from Congress, since it wasn’t clear if the Federal Reserve Act allowed it to issue a digital currency. She was outlining first, careful steps. The urgency to keep up with digital innovation only intensified as the months passed, though. Internet-famous “meme” stocks took off in 2021, and so did cryptocurrencies, with everyday investors and major banks alike piling on. Stablecoins, private-sector digital tokens that were backed by a bundle of currencies or other assets, were growing exponentially as that happened, in large part because people used them to transact in and out of the new crop of crypto offerings.

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In a memorandum for the congressional hearing titled “Game Stopped?” the committee argued that the episode was raising “important questions” about “whether technology and social media have outpaced regulation in a manner that leaves investors and the markets exposed to unnecessary risks.”[11] Meme stocks making national headlines in 2021 did, at some level, trace back to the Fed, as participants in the phenomenon would tell you. “Ty Jpow” (translated: Thank you, Jay Powell) posts were frequent on WallStreetBets, the Reddit discussion board at the center of the phenomenon. Memes abounded in which people took real CNBC footage of Fed press conferences and superimposed, in place of what Powell had said, the chyron “Powell: F*** Your Puts.”

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See employment/labor market Lamont, Thomas, 53n Laubach, Thomas, 115, 128 Lehman Brothers, 90, 93, 94 Lehnert, Andreas: “cover the waterfront” strategy for pandemic response, 163–4, 167–8; financial stability division and disaster planning role of, 163–4, 163n, 212; housing market presentation by, 91; pandemic rescue program planning by, 136–7, 151–2, 158–9, 162, 212 Leonard, Elissa, 15–16, 17–18, 18n, 141n Libra, 152–3, 153n, 274 Lincoln, Abraham, 48, 287 Linton, Louise, 140–1, 141n, 193 lobby, coining of phrase, 118 Logan, Lorie, 32–3, 34, 143, 149, 334n4, 334n6 Lombard Street (Bagehot), 50–1, 336n37 M macroeconomic management, 61–2, 82, 86, 130, 230, 341n9 Main Street program, 204n, 212–14, 238, 245–9, 294, 301, 349n3 Marcus, David, 152–4 Martin, William McChesney, Jr., 74, 76–8, 81, 108 masks and face coverings, 219, 222–3 McAdoo, William, 59–60 McCabe, Thomas, 72–4 McConnell, Mitch, 138, 178, 179, 191, 192, 251–2, 267 McFadden Act, 62 meme stocks, 274, 291–2 Mester, Loretta, 154n Metropolitan Club, 11, 333n1 Mexico, 139, 145, 197, 266, 334n11 Missouri, 59 Mnuchin, Steven: allocation of money for programs, 192, 199, 208, 211, 213, 247–8, 251–2, 253–62, 347n10; background, education, and expertise of, 140–1, 170, 192–4; character and personal style of, 140, 141, 192–5; confirmation hearing of, 193–4; deregulation under, 104, 169; economic ideology of, 256–7, 294; Group of Seven call by, 142, 143; January 6 riots and loyalty to Trump, 281n; junk bond–buying discussion with Powell, 210; pandemic rescue program role of, 161–2, 165, 175–81, 183–4, 188–9, 191–5, 199, 205, 206–7, 208, 212, 214, 251–2, 345n25; planning response to pandemic with Powell, 139–40, 141; post-government career of, 298–9; Powell firing threat from, 107; relationship with Powell, 139–40, 141; role in selection of Powell, 20–1; Treasury secretary role of, 104, 192–5; 2020 presidential election and continuation of pandemic relief efforts, 253–62, 263; wealth of, 140, 298–9 monetary policy: economic slowdown and, 108–10, 111–16, 341n9; Fed Listens outreach events on, 22–3, 27–8; financial crisis of 2008 and, 4–5, 24–6, 90–8; full employment and, 22, 77–8, 80, 96–7, 97n, 101, 233–4, 239–44, 250; inscrutability of, 23, 23n; interest rates, economic trends, and, 111–16; modern monetary theory and inflation, 351n1; pandemic and, 4–5, 29–35, 38–41, 238–43; Powell role in as Fed governor, 17–18, 129; review of under Powell, 21–2; Taylor rule, 341n22; voting on by Fed governors and regional bank presidents, 13, 13n, 130 money/currency: Bretton Woods system and linking dollars to gold, 75–6; cash supply and flow management by Fed, 3, 12–13; cash supply and withdrawals at start of pandemic, 39–40, 335n10; concept and history of, 44–6, 335nn11–12; control over by Fed and political goals, 8–9; creation by Fed, 5; creation of during pandemic, 4, 176, 185–6; Federal Reserve note, 57; fiat currency, 48–50, 272; global financial system with dollar at core of, 75–6, 82, 196–8; greenback currency, 48–50; impact of pandemic on currency markets, 141; money supply as driver of economic outcomes, 79–80; national bank notes, 48, 53; pandemic and role of the dollar in global finance, 196–8; specie, 49, 335n11.

Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud by Ben McKenzie, Jacob Silverman

algorithmic trading, asset allocation, bank run, barriers to entry, Ben McKenzie, Bernie Madoff, Big Tech, bitcoin, Bitcoin "FTX", blockchain, capital controls, citizen journalism, cognitive dissonance, collateralized debt obligation, COVID-19, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, cryptocurrency, data science, distributed ledger, Dogecoin, Donald Trump, effective altruism, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, experimental economics, financial deregulation, financial engineering, financial innovation, Flash crash, Glass-Steagall Act, high net worth, housing crisis, information asymmetry, initial coin offering, Jacob Silverman, Jane Street, low interest rates, Lyft, margin call, meme stock, money market fund, money: store of value / unit of account / medium of exchange, Network effects, offshore financial centre, operational security, payday loans, Peter Thiel, Ponzi scheme, Potemkin village, prediction markets, proprietary trading, pushing on a string, QR code, quantitative easing, race to the bottom, ransomware, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Robinhood: mobile stock trading app, Ross Ulbricht, Sam Bankman-Fried, Satoshi Nakamoto, Saturday Night Live, short selling, short squeeze, Silicon Valley, Skype, smart contracts, Steve Bannon, systems thinking, TikTok, too big to fail, transaction costs, tulip mania, uber lyft, underbanked, vertical integration, zero-sum game

CHAPTER 1 MONEY AND LYING This is a book about cryptocurrency and fraud: a parable of money and lying, or rather a parable of fake money and lying for money. Thematically, it bears striking resemblance to a popular folktale. Unlike that tale, however, this story is true. We begin during the wild speculative mania of the Trump years. It was the fleeting era of meme stocks, NFTs, and land sales in the metaverse. While the marketing may have been new, the economics were familiar: These get-rich-quick speculative schemes were merely the latest iteration of casino capitalism. Political economist Susan Strange populated the term in the 1980s, but its roots stretch at least as far back as the 1930s.

…

Some investors claimed that the short squeeze plan was being pushed by big CEL holders looking to dump their own tokens on the community. These warnings were generally ignored. Like doomed soldiers charging at the Somme, there were periodic short squeeze pushes that led nowhere—except to more losses and charges of market manipulation. Like many failed meme stock pushes, short squeezers weren’t sticking it to the man, and they never would, as long as the game was rigged. For Celsius and its hundreds of thousands of community members, there was no easy ending. The litigation would likely go on for years. (As always, congrats to the lawyers.) James sounded the alarm on Celsius, but few wanted to listen.

Trillion Dollar Triage: How Jay Powell and the Fed Battled a President and a Pandemic---And Prevented Economic Disaster by Nick Timiraos

"World Economic Forum" Davos, Alan Greenspan, asset-backed security, banking crisis, Bear Stearns, Bernie Sanders, bitcoin, Black Monday: stock market crash in 1987, Bonfire of the Vanities, break the buck, central bank independence, collapse of Lehman Brothers, collective bargaining, coronavirus, corporate raider, COVID-19, credit crunch, cryptocurrency, Donald Trump, fear index, financial innovation, financial intermediation, full employment, George Akerlof, George Floyd, global pandemic, global supply chain, Greta Thunberg, implied volatility, income inequality, inflation targeting, inverted yield curve, junk bonds, lockdown, Long Term Capital Management, low interest rates, managed futures, margin call, meme stock, money market fund, moral hazard, non-fungible token, oil shock, Phillips curve, price stability, pushing on a string, quantitative easing, Rishi Sunak, risk tolerance, rolodex, Ronald Reagan, Savings and loan crisis, secular stagnation, Skype, social distancing, subprime mortgage crisis, Tesla Model S, too big to fail, unorthodox policies, Y2K, yield curve

But what if the Fed were forced to stomp on the brakes? Given record levels of corporate and government borrowing, sharply higher rates could wreak havoc on global financial markets. Emerging markets in particular might have to raise rates as well, though many lagged behind the US on vaccinations. Of meme stocks and stimmies Before the Georgia elections at the start of 2021, few economists inside or outside the Fed predicted that, by spring, the economy would be pulsating with $2.8 trillion in new spending. It made some at the Fed uneasy. “In some ways, you might say there’s too much spending there, I think,” said James Bullard, president of the St.

…

When the stocks began to decline—for example, when ViacomCBS found tepid demand for an offering of new shares—Archegos was forced to liquidate its holdings, triggering some of the biggest and most sudden trading losses in the history of Wall Street. Japanese investment bank Nomura took a hit of $2.85 billion, while Credit Suisse recorded a staggering $5.5 billion write-down.12 The debacle followed an earlier frenzy in a handful of “meme” stocks promoted on social-media platforms by retail investors. In the last week of January, the shares of GameStop soared 400 percent, while those of movie-theater chain AMC jumped 278 percent—moves that appeared completely divorced from the companies’ less-than-stellar financial performance. Some investment advisers attributed the burst of trading to the “stimmies”—stimulus checks—newly filling traders’ accounts.

You've Been Played: How Corporations, Governments, and Schools Use Games to Control Us All by Adrian Hon

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", 4chan, Adam Curtis, Adrian Hon, Airbnb, Amazon Mechanical Turk, Amazon Web Services, Astronomia nova, augmented reality, barriers to entry, Bellingcat, Big Tech, bitcoin, bread and circuses, British Empire, buy and hold, call centre, computer vision, conceptual framework, contact tracing, coronavirus, corporate governance, COVID-19, crowdsourcing, cryptocurrency, David Graeber, David Sedaris, deep learning, delayed gratification, democratizing finance, deplatforming, disinformation, disintermediation, Dogecoin, electronic logging device, Elon Musk, en.wikipedia.org, Ethereum, fake news, fiat currency, Filter Bubble, Frederick Winslow Taylor, fulfillment center, Galaxy Zoo, game design, gamification, George Floyd, gig economy, GitHub removed activity streaks, Google Glasses, Hacker News, Hans Moravec, Ian Bogost, independent contractor, index fund, informal economy, Jeff Bezos, job automation, jobs below the API, Johannes Kepler, Kevin Kelly, Kevin Roose, Kickstarter, Kiva Systems, knowledge worker, Lewis Mumford, lifelogging, linked data, lockdown, longitudinal study, loss aversion, LuLaRoe, Lyft, Marshall McLuhan, megaproject, meme stock, meta-analysis, Minecraft, moral panic, multilevel marketing, non-fungible token, Ocado, Oculus Rift, One Laptop per Child (OLPC), orbital mechanics / astrodynamics, Parler "social media", passive income, payment for order flow, prisoner's dilemma, QAnon, QR code, quantitative trading / quantitative finance, r/findbostonbombers, replication crisis, ride hailing / ride sharing, Robinhood: mobile stock trading app, Ronald Coase, Rubik’s Cube, Salesforce, Satoshi Nakamoto, scientific management, shareholder value, sharing economy, short selling, short squeeze, Silicon Valley, SimCity, Skinner box, spinning jenny, Stanford marshmallow experiment, Steve Jobs, Stewart Brand, TED Talk, The Nature of the Firm, the scientific method, TikTok, Tragedy of the Commons, transaction costs, Twitter Arab Spring, Tyler Cowen, Uber and Lyft, uber lyft, urban planning, warehouse robotics, Whole Earth Catalog, why are manhole covers round?, workplace surveillance

For everyone involved, the game was all the more entertaining because of the effect it was having on the real world, where newspapers and politicians were forced to explain the meaning of r/wallstreetbets lingo like “stonks” and “tendies.” The excitement reached its zenith on January 28, when Robinhood began limiting the purchase (but not sale) of GameStop shares along with AMC, BlackBerry, and Nokia shares, three other “meme stocks.”67 Though Robinhood said this was because they temporarily ran out of cash to cover obligations to their SEC-required clearinghouse, many onlookers were dismayed—not just r/wallstreetbets users but also politicians as ideologically varied as Democratic representative Alexandria Ocasio-Cortez and Republican senator Ted Cruz.68 As other brokers including TD Ameritrade and Interactive Brokers also restricted trading, the GameStop share price began slipping, adding to the confusion.

…

In an interview with The Information, Raj Gokal, chief operating officer of Solana, a DeFi company that raised $314 million in 2021, made the comparison explicit: “I think what happened in the last year is that the traditional capital markets for large enterprises started to look like games, too. And that’s what we saw with GameStop and all the meme stocks. And Elon Musk. So I think those worlds are going to continue to merge together. And yeah, I mean, if it’s more fun, why not?”92 CHAPTER NINE THE TREASURY OF MERIT ONE WAY TO PREDICT THE FUTURE IS BY EXTRAPOLATING EXISTING TECHNOLOGICAL and social trends. It’s a blunt tool lacking nuance, but it can identify possibilities and areas of interest, especially in the near future.

Buy Now, Pay Later: The Extraordinary Story of Afterpay by Jonathan Shapiro, James Eyers

Airbnb, Alan Greenspan, Apple Newton, bank run, barriers to entry, Big Tech, Black Lives Matter, blockchain, book value, British Empire, clockwatching, cloud computing, collapse of Lehman Brothers, computer age, coronavirus, corporate governance, corporate raider, COVID-19, cryptocurrency, delayed gratification, diversification, Dogecoin, Donald Trump, Elon Musk, financial deregulation, George Floyd, greed is good, growth hacking, index fund, Jones Act, Kickstarter, late fees, light touch regulation, lockdown, low interest rates, managed futures, Max Levchin, meme stock, Mount Scopus, Network effects, new economy, passive investing, payday loans, paypal mafia, Peter Thiel, pre–internet, Rainbow capitalism, regulatory arbitrage, retail therapy, ride hailing / ride sharing, Robinhood: mobile stock trading app, rolodex, Salesforce, short selling, short squeeze, side hustle, Silicon Valley, Snapchat, SoftBank, sovereign wealth fund, tech bro, technology bubble, the payments system, TikTok, too big to fail, transaction costs, Vanguard fund

The suits of Wall Street were about to be toppled by people power. ‘This is the regular Joes versus Wall Street,’ a young Texan, Colin McLelland, told news reporters. ‘Even if I lose everything, I like being part of it.’4 The GameStop trade was David and Goliath meets Revenge of the Nerds. The company itself became a meme stock. GameStop shares were hot because a critical mass of people had determined it to be so. The underlying business and the price didn’t matter as much as the fact that the digital collective had decided they wanted it to go up. Then reality collided with the market’s plumbing. Robinhood, the brokerage that processed most of the buy-orders, had to stump up hundreds of millions of dollars in cash to assure sellers that their customers were good for the money.

…

But Zip had a large cohort of retail traders, and Gray’s argument seemed to resonate with them. Remarkably, Zip was often the most traded share on the CommSec retail stockbroking platform, owned by Commonwealth Bank, even though it was not among the 100 largest companies in Australia by market capitalisation. Indeed, Zip had become something of a meme stock in the Australian market. While the strong trading update on 21 January 2021 had led to a near 25 per cent share price pop, Zip’s stock kept rising until 16 February, when its valuation reached $7.7 billion. In three weeks, buyers added $3.6 billion to Zip’s market value, more than it had created in the six years since its backdoor listing.

The Internet Is Not What You Think It Is: A History, a Philosophy, a Warning by Justin E. H. Smith

3D printing, Ada Lovelace, Adrian Hon, agricultural Revolution, algorithmic management, artificial general intelligence, Big Tech, Charles Babbage, clean water, coronavirus, COVID-19, cryptocurrency, dark matter, disinformation, Donald Trump, drone strike, Elon Musk, game design, gamification, global pandemic, GPT-3, Internet of things, Isaac Newton, Jacquard loom, Jacques de Vaucanson, Jaron Lanier, jimmy wales, Joseph-Marie Jacquard, Kuiper Belt, Mark Zuckerberg, Marshall McLuhan, meme stock, new economy, Nick Bostrom, Norbert Wiener, packet switching, passive income, Potemkin village, printed gun, QAnon, Ray Kurzweil, Republic of Letters, Silicon Valley, Skype, strong AI, technological determinism, theory of mind, TikTok, Tragedy of the Commons, trolley problem, Turing machine, Turing test, you are the product

In light of this, one way of understanding the crisis into which the internet has thrust us is that it has deprived us of this character that reading, writing, and communicating naturally share with philosophy (and indeed with hunting) by aggressively metricizing them. One might put this another way and say that whatever is metricized or gamified, whatever keeps itself centered before the user’s mind with the promise of accumulating more points of some currency (likes, faves, followers, up-votes, not to mention also—with the rise of “meme stocks” and cryptocurrency exchanges—real money), has the power to harness and hold the user’s concentration, but not their attention. In its current form it is as if we have had imposed on ourselves a gadget that does nothing more than count the number of ducks we have killed, broadcast that number to the entire world, rank us with that number alongside all other duck hunters, and invite all of them, as well as whatever interlopers feel so inclined, to praise, criticize, or mock us for our ranking.

Nothing But Net by Mark Mahaney

Airbnb, AltaVista, Amazon Web Services, AOL-Time Warner, augmented reality, autonomous vehicles, Big Tech, Black Swan, Burning Man, buy and hold, Cambridge Analytica, Chuck Templeton: OpenTable:, cloud computing, COVID-19, cryptocurrency, discounted cash flows, disintermediation, diversification, don't be evil, Donald Trump, Elon Musk, financial engineering, gamification, gig economy, global pandemic, Google Glasses, Jeff Bezos, John Zimmer (Lyft cofounder), knowledge economy, lockdown, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, Mary Meeker, medical malpractice, meme stock, Network effects, PageRank, pets.com, ride hailing / ride sharing, Salesforce, Saturday Night Live, shareholder value, short squeeze, Silicon Valley, Skype, Snapchat, social graph, Steve Jobs, stocks for the long run, subscription business, super pumped, the rule of 72, TikTok, Travis Kalanick, Uber and Lyft, uber lyft

During January 2021, shares of GameStop (GME) skyrocketed $1,900% from $17 to $348, before correcting 90% over the next month back down to $41. This was one of the biggest roller-coaster rides I have ever seen, and I have been to more than my share of amusement parks. The GME rally was a dramatic short squeeze featuring Bullish options bets that helped popularize the concept of meme stocks—stocks that are popular with millennial-aged retail traders and move more on hype than on underlying fundamentals. Comments on Reddit’s WallStreetBets forum suggested a lot of momentum day-trading activity with one popular goal being to go Long the most heavily shorted stocks in the market, of which GME was certainly one.

There Is Nothing for You Here: Finding Opportunity in the Twenty-First Century by Fiona Hill

2021 United States Capitol attack, active measures, Affordable Care Act / Obamacare, algorithmic bias, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, Boris Johnson, Brexit referendum, British Empire, business climate, call centre, collective bargaining, company town, coronavirus, COVID-19, crony capitalism, cuban missile crisis, David Brooks, deindustrialization, desegregation, digital divide, disinformation, Dissolution of the Soviet Union, Donald Trump, Fall of the Berlin Wall, financial independence, first-past-the-post, food desert, gender pay gap, gentrification, George Floyd, glass ceiling, global pandemic, Great Leap Forward, housing crisis, illegal immigration, imposter syndrome, income inequality, indoor plumbing, industrial cluster, industrial research laboratory, informal economy, Jeff Bezos, Jeremy Corbyn, Kickstarter, knowledge economy, lockdown, low skilled workers, Lyft, Martin Wolf, mass immigration, meme stock, Mikhail Gorbachev, new economy, oil shock, opioid epidemic / opioid crisis, Own Your Own Home, Paris climate accords, pension reform, QAnon, ransomware, restrictive zoning, ride hailing / ride sharing, Right to Buy, Ronald Reagan, self-driving car, Silicon Valley, single-payer health, statistical model, Steve Bannon, The Chicago School, TikTok, transatlantic slave trade, Uber and Lyft, uber lyft, University of East Anglia, urban decay, urban planning, Washington Consensus, WikiLeaks, Winter of Discontent, women in the workforce, working poor, Yom Kippur War, young professional

McMaster, Battlegrounds: The Fight to Defend the Free World (New York: HarperCollins, 2020). malicious leaks: Entous, “What Fiona Hill Learned in the White House.” “Tariff Man”: Jen Kirby, “Trump called himself ‘Tariff Man.’ The internet did the rest,” Vox, December 4, 2018, https://www.vox.com/policy-and-politics/2018/12/4/18126061/tariff-man-trump-china-tweets-memes-stock-market. “ultimate catastrophe”: Glenn Plaskin, “The Playboy Interview with Donald Trump,” Playboy Magazine, March 1, 1990, https://www.playboy.com/read/playboy-interview-donald-trump-1990. fruitless effort: Paula Span, “From the archives: When Trump hoped to meet Gorbachev in Manhattan,” Washington Post, December 3, 1988, https://www.washingtonpost.com/lifestyle/style/from-the-archives-when-trump-hoped-to-meet-gorbachev-in-manhattan/2017/07/10/3f570b42-658c-11e7-a1d7-9a32c91c6f40_story.html.