‘Now this is how you occupy Wall Street’

How Wall Street laid the foundations for the GameStop affair

‘Now this is how you occupy Wall Street,’ wrote Reddit user u/highercal on 27 January, 2021, in the now notorious subreddit r/WallStreetBets (WSB). By then, the subreddit had reached fairly high levels of salience in public discourse. Either directly or indirectly, it had been tweeted about by Elon Musk, the richest person in the world at the time of writing, it had been reported on by CNBC, Financial Times, MarketWatch, Wall Street Journal, and addressed by Jen Psaki, the Biden administration’s press secretary at a White House press briefing, and Speaker of the House of Representatives, Nancy Pelosi. u/highercal was not the only one to use the phrase about Occupy, and the anti-Wall Street sentiment was more than commonplace amongst the subreddit’s users and their allies in other realms of social media. Again on 27 January, the Wall Street Bets Twitter account (@WSB) — which at the time of writing has amassed almost 400,000 followers — tweeted ‘It seems Occupy Wall Street had the wrong approach.’

Of course, the idea that the GameStop (GME) short squeeze, or WSB in general, and Occupy Wall Street are comparable in terms of even short-term ends is wrong. A grassroots coalition of left-populists and pan-leftists taking to the streets and occupying spaces vital to the operation of Wall Street is not the same as people on social media coordinating the squeezing of money out of investment management firms like Citron Research and Melvin Capital’s short sells, while also tanking their profits (as amusing as it is to see). The comparisons are especially wrong considering the lionising of Elon Musk by a great deal of WSB users, a man with a protracted history of egregious union-busting and defence of a right-wing coup in Bolivia, which saw the massacre of dozens of Indigenous Movement for Socialism (MAS) supporters, and the immunity of all soldiers involved by the Áñez interim Presidency.

Nonetheless, it is unavoidable to notice a distinct flavour of anti-elitism from the members of r/WSB. One user, u/ssauronn, posted ‘An Open Letter to Melvin Capital, CNBC, Boomers, and WSB,’ which has now garnered 139,000 ‘upvotes’ — Reddit’s edition of a ‘like.’ In it, u/ssauronn details their coming of age in the aftermath of the 2008 Financial Crisis. ‘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 around me,’ they said. u/ssauronn described how ‘I was fortunate,’ before going on to detail how ‘we lived off of pancake mix, and powdered milk, and beans and rice for a year. Ever since then, my parents have kept a food storage, and they keep it updated and fresh.’ The fact the family still keeps a frequently updated food storage demonstrates the long-term paranoia instilled by the crisis, how raw and real it still lives in the minds of those adversely affected by it. And given that u/ssauronn considers these ‘fortunate’ circumstances, it is heart-wrenching to think of what the actions of those in the stock market’s top brass, those who we are now expected by the Wall Street press to have sympathy for did to those around them.

For those on Reddit, for the 139,000 people who upvoted u/highercal’s post, for the unregistered readers of that post who could not upvote it, Melvin Capital — not the only investment firm to have placed that short on GME which sparked this phenomenon but the one that looked the closest to losing the most money — symbolised all the pain and injustice of the financial crisis. ‘To Melvin Capital,’ u/highercal singled out, ‘you stand for everything 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.’ These are not unpopular sentiments among the r/WSB users, aside from the upvotes, u/Apollo-Innovations echoed the same feelings the following day

‘Remember, after the 2008 financial crisis how these large institutional investors were bailed out? Sure a lot of them paid the money back, but what consolation was that to the millions that lost their homes and livelihoods because of their reckless actions? Right now these short-sellers are trying to put brick and mortar businesses out of commission because they can’t legally operate during the pandemic.’

This is all relatively unsurprising. The average age of a Reddit user is between 25 and 29, putting even the oldest of the average bracket at 16 years old at the time of the financial crisis. The coming of age of this constituency now reaping GME stock and the investment funds for all they are worth was marked by flagrant market mishandling, for which the general public were footed the bill, and the perpetrators bailed out. The idea that this could all have gone on without instilling a long-lasting detestation at the Wall Street elite and those who allowed and aided in it perfectly symbolises how effective the neoliberal model has been in placing these people in the most comfortable of positions.

Now we are expected to be shocked and repulsed that the relationship has been inverted. On the same day u/highercal’s post hit the subreddit message board, Jeremy C. Owens, MarketWatch’s technology editor, tweeted ‘These are stock traders conspiring to manipulate the markets in open view of us all and using the ‘nah, its for the lulz, and the other side sucks’ as an excuse.’ Owens is right, this is obvious market manipulation, but why should anyone care? The other side do suck, a lot. And it is ‘for the lulz.’ After the actions of goliath businesses and their governmental and media allies over the past fifteen years in particular, it is funny to see mega-rich investment firms struggle like this, and everyone is laughing at Melvin Capital now. The website TechDirt published their coverage of the WSB affair. The comment section of their article spans from the confused to the gleeful, as one commenter wrote

‘Wall Street is a casino. Whoa, what a revelation!

So now some retail investors have a communication channel and hundreds of them can do what one or two big investors always try to do: squeeze short plays. A hedge fund is hurt. Dozens of retail investors win big (for now). Chamath is laughing. I don’t see the harm, in fact this is more entertaining than Bernie’s mittens.’

Moreso, why should anyone be shocked at Owens’ hollow revelation of market manipulation? This is all these Redditors know, and they learned from the best: gamble — make money — foot others the bill. At least Melvin Capital put themselves up to play this game — those who lost their homes, their jobs, had their welfare slashed, lost loved ones in the decade ensuing the financial crisis never did. Gabriel Plotkin, head of Melvin Capital, is seeking approval from the Miami Beach Design Review Board next week for a 14,010-square-foot mansion to be built for him — including a lighted tennis court, basketball court, playground, and a cabana. No matter how much the WSB traders squeeze from Melvin’s short-selling disaster, he is never going to be living off pancake mix, powdered milk, rice and beans for a year.

Gambling is the correct word for what has been going on recently. Wall Street is a casino, and WSB, as their name suggests, know this. The group’s founder, Jacques Rogozinski, published a book in January last year on the subreddit he founded, its subtitle is aptly put ‘How Boomers Made the World’s Biggest Casino for Millennials.’ And much like a casino, the system is rigged in favour of its operators and allies. Recently, trading app Robinhood — particularly popular amongst the WSB crowd, though it is amusingly banned from their subreddit — heavily restricted trading movement of GME and AMC stock, widely regarded as WSB’s next short squeeze target. In response to the GME boom, Robinhood, as the class-action lawsuit it is now undergoing as a result states, ‘purposefully, wilfully, and knowingly remov[ed] the stock ‘GME’ from its trading platform.’ Similarly, on 28 January, both of these stocks had seen a rapid and intense appreciation in value, AMC boasted an overnight increase of around 250%, greater than the boom GME had seen in the same time. Those attempting to get a foot in with GME and AMC through Trading212 were met with a warning message

‘In the interest of mitigating risk for our clients, we have temporarily placed GME and AMC Entertainment in reduce-only mode as highly unusual volumes have led to an unprecedented market environment. New positions cannot be opened, existing ones can be reduced or closed.’

Why then, should anyone care about Owens’ critique of WSB’s ‘market manipulation’? For the sanctity of the market? Is it not market manipulation for these trading apps to pull out all the stops to protect investment firms? To so heavily restrict the flow of trading through apps popular with the amateur day trader? It clearly is, and I have yet to see any of the Wall Street bigwigs or their allies in the media lamenting this flagrant gerrymandering, nor should anyone expect to, to quote u/benafflecks ‘This is a big moment. A tug of war between tradition and the future.’ While the future the frequenters of WSB wish to see is libertarian in nature — their concern is not with the structural inequalities which Wall Street or the stock market plays a part in, but that it is insufficiently free — the chance to see wealthy Wall Street barons lose a load of money, though it would be naïve to imagine this will be the end of investment funds, or even Melvin Capital altogether, at least partially sates the appetite of those who remember 2008. u/ssauronn perhaps put best how many of us who grew up in the aftermath of financial crisis, through austerity, through migrant scapegoating, through blatant and open manipulation, corruption, and collusion by the neoliberal parties in government and their allies in Wall Street or the City:

‘This is personal for me, and millions of others. You can drop the price of GME after hours $120, 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.’

He/Him