The Robinhood Revolt as an Expression of the Fourth Turning

Published on
January 27th, 2021
Duration
30 minutes

“GameStonk” Lunacy: Is Speculative Fervor Reaching Epic Proportions?


The Robinhood Revolt as an Expression of the Fourth Turning

Daily Briefing ·
Featuring Peter Cooper, Max Wiethe, and Ed Harrison

Published on: January 27th, 2021 • Duration: 30 minutes

Real Vision managing editor Ed Harrison sits down with Max Wiethe to discuss how Ed is making sense of the retail assault on short-sellers as an expression of the unfolding of The Fourth Turning. Harrison argues that intergenerational conflict has been brewing outside of the market; however, it now has found its way to Wall Street in the form of Robinhood traders looking to take out the old guard of finance and make a killing in the process. Real Vision’s Peter Cooper kicks it off by examining the various short squeezes occurring across U.S. and European equity markets.

Comments

Transcript

  • JR
    Jorge R.
    27 January 2021 @ 23:41
    A small number of WSB is making a killing on the back of Melvin (who nobody will cry over) and also on the back of other retail investors (who they claim to represent in their revolt) with the assistance of other hedge funds (their ostensible enemies). Their accounts are now rich but their ideology is totally bankrupt.
    • JC
      Joshua C.
      31 January 2021 @ 16:46
      What's the ideology behind allowing short interest to exceed the total number of shares of a company?
  • MJ
    Markku J.
    30 January 2021 @ 18:12
    Great stuff! Ed was absolutely on fire - really clear thinking - and Max's somewhat opposing comments benefited the discussion. Thanks guys!
  • DP
    Duane P.
    28 January 2021 @ 03:36
    I miss that creepy snowman drawing that used to be behind Ed. Where did it go? I think he should make a cameo sometime. 😄
    • ac
      anthony c.
      28 January 2021 @ 06:05
      It seems that the discussion wasn't interesting enough to maintain your attention
    • JL
      John L.
      30 January 2021 @ 16:24
      anthony c..... Reading your comments here and below, "If you can't say something nice...."
  • VT
    Virginia T.
    30 January 2021 @ 12:26
    yes also seems like part of "Angrynomics" -- great video interview from this summer
  • tc
    thomas c.
    29 January 2021 @ 10:39
    Great Ed. Real, honest straight forward commentary. I'm a boomer and glad to hear someone call out the rot and the change that is taking place. But I have to blame everyone who have voted in the Bidens, Bushes, Obamas, Clintons and all the crooked crony politicians everywhere and just never stood up and said NO. As Lemony S said below "we get the leaders and policies we deserve" I have a lot of international friends and in no country are people as gullible as America. American exceptionalism was real until everyone took it for granted and let selfishness and greed swallow it up.
  • LC
    Lee C.
    29 January 2021 @ 04:10
    The game is buy low sell high. This isn't investing, it's fortnight. Millennials are expert at playing and winning games. The technique was perfected on Hertz. Keep pounding the stock causing the dead cat to bounce and on every bounce buy low sell high with compounded profits, playing with the houses money aka 600/wk stimmy chex. This has NOTHING to do with the 4th turning, it has to do with Metcalf's law and creative destruction. Each ant is independent and inconsequential but a coordinated army of ants joined by a network, some aggregate of stimmy chex as a weapon and some laid off bankers pulling the attack levers on the war machine makes a force to be reckoned with. There are something like 20M hoodies accounting for 20% of the market vol. The attack was made against a bunch of lazy doe eyed hedge fund types, easy pickins for an army of ants. The exact same force that will propel BTC and ETH to dominate is at work here. The force is decentralized. The collateral is decentralized across the entire army. The funding is thanks to Ms Yellen, Mr Biden and company so the risk is also decentralized. Stimmy chex can be viewed by recipients as gaming money, so in the end the stimulus goes into the market anyway. It's only the hand me down government snobs who think they are virtue signaling to the poor. It's the ultimate boomerang: the elites are giving handouts to the hoi pilloi and the hoi pilloi open hoodie accounts (designed to rip them off of their money) and in the mean time the hoodies develop a decentralized intelligence that out smarts and blitzes the elite, using the power of decentralization and creative destruction and Metcalf's law. It's the dystopia of behavioral economics. Those being manipulated often respond with free will. You call it 4th turning I call it hunger games. It will be interesting to watch the old man in the WH and is puppet master at treasury from the 1930's do battle with the ants. Millennials now have more votes than anybody. It will be the hoodies first experience with fascism, and a dem is in the WH. It will be interesting to see how they respond.
    • JD
      John D.
      29 January 2021 @ 10:08
      Good points of view and I agree with a lot of it. What you describe in a way is a 4th turning movement...a fundamental change/shift from an established way to a new and different way that is shaped by a generational cohort. I believe we will see similar changes/shifts across many other institutional system that are in need of reform. We are at the very early stages of these big shifts but I feel like I am seeing glimpses of real world applications vs theoretical discussions of the 4th turning.
  • JT
    Jayne T.
    28 January 2021 @ 17:22
    No cost trading and the free flow of information has been a game changer in the “investment” world. No longer do hedge funds and large money managers have these advantages and thus the playing field is now fairly level benefiting the the average investor with some intelligence.
    • JD
      John D.
      28 January 2021 @ 23:00
      It is not a level when the common man is being shut off from making financial investments, which is what is happening right now.
    • CP
      Chamil P.
      29 January 2021 @ 04:06
      Does 'zero cost' trading really exist though? https://www.marketwatch.com/story/youre-saving-a-penny-to-lose-a-nickel-why-robinhoods-65m-fine-is-a-cautionary-tale-for-retail-investors-2020-12-17
  • MT
    Mark T.
    28 January 2021 @ 20:36
    Why do people put money in a business model that is the equivalent of Blockbuster? GameStop is a failing company. Some savvy investors used Reddit to pump and dump. Let the buyer beware.
    • CP
      Chamil P.
      29 January 2021 @ 04:04
      More like a Gamma squeeze though. Why have they only halted retailers from buying and not selling on RH if it's a pump and dump?
  • BC
    Bill C.
    28 January 2021 @ 05:28
    There's so much to take issue with in regard to the much ballyhooed "intergenerational conflict" narrative mentioned in this video. And trust me, I get the "why." I get it. After all we've gone through, and are still going through the "debt super cycle," actually increasing in speed in this regard. As a society we've built in mandatory government spending and increases in spending in the form of UNFUNDED future entitlement promises to the tune (presently, according to some major economic voices) 7-8 times the amount of our present unfathomable debt. At least this is the case in the United States. As bad as this sounds other countries are worse off. So, what clarity and reasoning do the "angry" younger generations bring forward to fix this situation? Do they recommend cutting spending? Should they be or are they concerned with how much of everyone's money goes for goods not made by them or their fellow citizens? (I'll leave the - quickening - transference of wealth and future prosperity traveling out of the country and/or west for another day) They wonder why they and their friends so often are still living with their parents. Are these angry people doing anything - like starting a company - or making any effort to build something? I would submit what has happened recently with the likes of GME and AMC is simply that this group has realized there simply is a new high-tech opportunity that has paved the way for what they're doing - gaming the system, gambling, and they're doing so as a big hipster single minded social group. An orgy of sorts. Like those burning our cities (though so much of this isn't covered by "news" outlets) so many have nothing else to do! And! ...the government is sending them free money! These people aren't stupid. They are smart...but not wise. And woefully lack in creativity. For the first time in their young lives they are getting the thrill of being a part of 'something big.' How "kewl!" Their movement and actions and...power! are in the news! Yea! Look at me/us! They've suddenly realized acting as a group, and with enthusiasm, they can be world shakers. Used productively it can be a great thing. But this modern day tulip trade will end in a big poof, pop, or crash. YOLO! In past generations, though they made their mistakes, too, this type of fun, excitement, and making one's mark, could be had building (real) companies, hiring people. And after half a century of exporting jobs (but weren't we so smartly importing deflation!?) there are astounding opportunities to rebuild this country and the west's economies. But it takes...work, a word that some will have to look up. In light of the truth of debt figures...around the world, would they be oh-so bold to start building a future less dependent in vacant (laughable) government promises? Or working toward a country or world in which if and when one does decide to build a company the amount of regulation doesn't crush the idea? So what I wish for is that these angry generations use their time and intelligence in a more productive way. Instead of going down the opposite path. The "angry" bore me. Show me what you can do or make. I have some money and I'd prefer to exchange it for a product or service from someone I know is making a real effort.
    • SL
      Steven L.
      28 January 2021 @ 06:55
      I’m from Gen X, and am financially independent...so I want to offer this in whatever light I can shine by saying that. I have many, many friends and associates from the Millennial and the next, younger generation. I understand the view you’re offering, but I will say that it is a very blinded, misguided view. The world for them is far, far more difficult than it was for me. They’ve inherited an America that is fully a failed State, and going further into decline. America is now on a par with, I don’t know, Brazil probably. There was little opportunity before COVID...now, nothing but subsistence. MORE than 50% of Millennials are living w/ their parents. That’s not by laziness or design. The problem with actually rebuilding America, as you allude to, is that we need a real Leadership to make that happen. We have none. Nothing but sock-puppets for the extortion class. So go easy on them. If the world now seems insane to you...remember that You weren’t born into it.
    • BC
      Bill C.
      28 January 2021 @ 20:21
      Steven, Make a list of how you think the economy should be in contrast to how it is now. When I think about it unfortunately it does down to a political considerations. Some here don't like the discussion of politics in this regard. But here goes. Should Americans make efforts to buy what Americans make thereby building employment. ? Or is it better that they send their money elsewhere to make sure those in other countries are employed at the expense of Americans. Interestingly, in these modern times suggesting Americans should support American jobs with their buying ruffles the feathers of so many. But the alternative is making sure everyone gets a check - UBI, welfare by any other name. But anyone with a brain knows welfare destroys self-initiative and self-motivation and this destruction often extends itself for multiple generations working like cancer in neighborhoods, cities, on up the ladder. Should the US and other economies expect balanced trading with their trading partners without the rigged game of our products being blocked from being imported by so many nations? There are many countries even in the West that want to maintain their long held trading advantage with the United States. Running a trade surplus with the United States means better employment figures in their country at our expense. And should the jobs here be increasingly concentrated in the tech fields that sport sky high percentage profits? How about the average person not in these high tech field hotbeds? Wouldn't it be great to have another millions jobs in what Jim Chanos classifies as "body shops?" His definition for "body shop" businesses are those that more and more people are required to grow the company. A shoe or garment company might be considered a "body shop" company. It use to employ millions in the US. Why not make the garment industry if manufacturing is done here tax free for a decades or more? So, how about salaries? A few decades ago some car makers union employees were making all in pay of around $72 per hour. How is a company supposed to be able to include non-labor content at any decent amount if they're paying $72 per hour? And that per hour figure is in 2 decades ago, or so, money. To say the list of bizarre union rules really, really, long would be an understatement. Add to this the extreme antipathy unions have traditionally had for corporations with which they are intertwined - more understatement. Is it any wonder American car manufacturers had to hollow out their models. And that foreign manufacturers had the edge of lower cost labor that increasingly made a better and better product. So now the move for minimum wage is $15 per hour - $30,000 per year. Kewl!," you say. Well, what happens to the people that were already making $30,000 suddenly they see themselves as making minimum wage and they want a raise "because they're worth more than minimum wage." So, they get a raise to $35,000, some maybe to $40,000, then those people want more in comparison...and on up the ladder. And increasingly these businesses are priced out of the market, especially compared to very often high quality and motivated foreign labor that works for $1 per hour, give or take. Sorry, I could continue but your negativity was to great to ignore. I would argue that some of the younger generations situation is the result of laziness, shortsightedness, and a lack of creativity. And no doubt to a degree they've been dealt a bad hand. But they are perpetuating the problem the complain about. A vast percentage still think that "staying connected" with the mind numbing digital orgy is the future for everyone. It's a con. And, a substantial percentage of the population does not and will not fit with employment in these (often useless) fields. Now if we can just get Americans (and others in their respective western economies) to support their own labor with their purchasing power. My understanding is in Italy some entire villages are packed with Chinese workers that make garments. But because they're made in Italy they can be labeled "Made in Italy." Make your list of how you would improve things. Then start working on making things better.
    • JD
      John D.
      28 January 2021 @ 23:05
      Amen Steven L.!
  • TT
    Tokyo T.
    28 January 2021 @ 09:28
    Ed, your commentary today was an eye-opener. Any chance of an extended interview on the idea?
    • JD
      John D.
      28 January 2021 @ 14:57
      I second this
    • EH
      Edward H. | Real Vision
      28 January 2021 @ 15:24
      I think I'd like to invite Tyler Neville in for a conversation on the political economy of 'intergenerational financial conflict'. Whenever I listen to him, there's always an undercurrent of this in what he says. As a Gen X-er I have tended to downplay the inter-generational aspects. But I am coming around to the view that this is an important consideration. So I will try that with him.
    • JD
      John D.
      28 January 2021 @ 23:03
      Your the man ED, Xer or not!!!
  • LF
    Liam F.
    28 January 2021 @ 01:02
    @ed...you nailed it on the US healthcare system. This is a truly obscene, ecosystemtic clusterfuck of epic proportions; whether we're discussing the care models, the insurance middlemen vampires, the rationing, or the byzantine payment models. The entire edifice only serves to highlight how far down the rabbit hole the industrial complexes and their big government servants (ummm...politicians) have screwed the citizens of the USA. $1T annual cost in fraud and waste. The USA is TRULY exceptional!
    • JD
      John D.
      28 January 2021 @ 02:50
      Could not agree with you more Liam...I am in the industry I know and am trying to do something about it from my small space.
    • LF
      Liam F.
      28 January 2021 @ 22:38
      Thank you for your service JWD I!
  • WG
    Wesley G.
    28 January 2021 @ 19:39
    And I have always loved the word bloviate!
  • TO
    Timothy O.
    28 January 2021 @ 18:52
    Great job Ed Harrison! You nailed the situation and were very honest and forthcoming in your analysis of The "committee to save the world" and how we got to our current situation. I'm not used to a journalist being so honest. Really refreshing, keep up the great work.
  • LS
    Lemony S.
    28 January 2021 @ 18:47
    Of course it is generational, boomers and older aren't giving up any of the status quo for future generations - ideas of selflessness like that aren't on their minds. These are the same people that with enough numbers want to shut down your businesses, close the economy, and force vaccinate you too. What we are seeing is people who love the lie more than important virtues like freedom - because in one way or another they are paid off. I say Live free or Die and they call me a murderer. No, we aren't the same America, anymore, in large part. Virtue gradually was replaced with covetousness and power hunger, the only two values of anything LEFT related in the political sphere.
  • MF
    M F.
    28 January 2021 @ 14:51
    Ed...thank you for your heartfelt commentary, as ever. Your question, how can the richest country in the world have problems such as your friend had with not being in a position to pay for his medicine. Well, unfortunately, Americans are led to believe they live in the richest country in the world...but they are not..at least not nationally..just pockets of wealth...the top 1% own 40% of the wealth and top 10% own 70% of the wealth..it has not been this skewed for 85 years.....so a relatively small group of Americans are very very wealthy...the rest have nothing (50% of Americans have zero savings)..and the country's debt to GDP is off the chart, and that is being paid by debased dollars.(and the US--and Europe--cannot pay their entitlements as well)..so, where is the wealth...its a mirage, based on the construct that the USD is still being --for the time being--as the reserve currency (which is backed by the real fact the US is still indeed the military top dog). The moment the USD gets debased/debagged enough that people stop taking it, the American Dream becomes a nightmare. I say this not in any way to disrespect the situation. I love the US and for what it used to stand for....free markets, free speech, opportunity, home to diverse peoples, which honoured hard work, fairness...those values have been debased. As long as the US Treasury and Fed keep debasing and overspending with zero accountability, the richest country on the planet is a hollow description that regrettably was only accurate in the past.
    • WM
      Will M.
      28 January 2021 @ 15:35
      MF although I wish I didn't...... I do have to agree with what you said above. As I mentioned elsewhere "There are lies, dammed lies and statistics" and folks can toss out figures to show proof either way on what richest or most indebted means. However, your last statement is so very true. Trouble is, irrespective of your political leaning, governments, in not just the USA but most of the liberal West, are not caught in a debt death spiral. To alleviate the discontent of the people they are going to "print" more and more and more currency. It won't matter what they spend it on, it will mostly be misallocated. Social contracts are going to either be significantly adjusted or in many cases broken. Its just a question of how many more years can this go on before the music stops.........
    • WM
      Will M.
      28 January 2021 @ 15:36
      sorry *now* caught in a death spiral
    • LS
      Lemony S.
      28 January 2021 @ 18:43
      Yup, what Ed doesn't report is that his friend is in that position because (odds are) he voted for a system that resulted in that scenario. We get the leaders and evil policies we deserve, and this is coming from someone who has fought against the changing of America that MF points out - as much as I can (little success).
  • WM
    Will M.
    28 January 2021 @ 18:33
    Great piece. Loved Ed's commentary overall and about the farce that took place following the 2008 crisis in particular. The "committee to save the world" was a disaster in terms of failing to spot financial bubbles and allowing malfeasance to continue. That Greenspan was given the medal of honor was a travesty of justice indeed; he set us up for the .com mania, the 08 crisis and indirectly the latest crisis (which was always coming and Covid just accelerated it).
  • DS
    David S.
    28 January 2021 @ 02:16
    As everyone knows by now, I think the Forth Turning is a poor structure searching for a fit. It might work here, or it might work there. No way to make future financial bets. It does sound good when it fits an anecdote. DLS
    • SB
      Stephen B.
      28 January 2021 @ 02:31
      I agree. Was never impressed with the logic.
    • WM
      Will M.
      28 January 2021 @ 18:32
      Sorry DLS I disagree a bit on your the 4th turning comment. I thought Strauss and Howe did a great job looking at history albeit with a broad brush. Few can predict the future but I am impressed the way their thesis is playing out after reading the book in the mid to late 90s. The one thing I was, and still am unsure of, was the suggestion that the Millennial cadre will be seen in the same light historically as The Greatest Generation. We shall see I guess.
  • KR
    Kel R.
    28 January 2021 @ 18:10
    Kudos to Ed for telling the Truth regarding the fraud of the BS ....'Change you can believe in.' #TheFourthTurning
  • CT
    Cherry T.
    28 January 2021 @ 01:15
    What's fascinating about WSB is their lack of care for their own financial well being. They're willing to incur massive losses if it means they can send a message and take a few of the big players down. Doubtless a lot of the current GME buyers are bagholders, and WSBs as a collective knows this. They even take pride in this. The hedge funds here represent everything wrong with the financial markets, the economy, the wealth and opportunity inequality in our systems today for Millenials and Gen Z. In some sense there really is a generational revolutionary war being fought in the markets; the common folk have revolted and are willing to die (go to zero) for a cause they truly believe in. I'm reminded of Chris Cole saying Volatility can not be suppressed, it can only be transmuted.
    • JL
      J L.
      28 January 2021 @ 01:38
      It's important to understand the distribution here. What you say is probably true for about 70% of WSB participants. They are the cannon fodder and the civilian recruits. But there is another contingent, maybe 30%, who know exactly what they are doing, and know how to manage risk and manage their positions, and are using the concentrated buying power of the 70% to make a lot of money. This isn't a true movement or a revolt. It's a brilliant hack disguised as one, for the percentage of players who know what they are doing, and who use the larger naive group for firepower and cover.
    • JD
      John D.
      28 January 2021 @ 02:48
      JL...that sound like a revolution to me.
    • CT
      Cherry T.
      28 January 2021 @ 03:31
      I agree with you in some sense JL but JWD makes a better point... The 30% of revolutionaries seizing massive benefits at the expense of their allies sounds exactly like any other political revolution in history. A minority group seizes control and seizes the majority of the gains while the rest are no better off in the end.
    • GH
      Glen H.
      28 January 2021 @ 03:48
      We’ll see just how happy about going to zero they are. And, if you keep playing that game you will go to zero.
    • NP
      Nathan P.
      28 January 2021 @ 15:38
      Cherry, Yes you are correct there is a cohort of players in the space that have taken a "zero or hero" approach to trades, just take a moment to google "purple gang" or even the CORN debacle a few months ago in the reddit and you can get a sense there are always a few folks willing to just send it. But, make no mistake, there is a new apex predator making the rounds in the market.
  • JM
    Jonathan M.
    28 January 2021 @ 02:58
    I'm rooting for r/WSB. If you turn on the financial news, they are being vilified and for what? Finding hedge funds way over their skis in a short position and not taking the proper risk management to cover a bet that's gone way wrong for them? Good. Squeeze them for all their worth. Vilifying them isn't fair at all when we routinely praise HF guys who've shorted housing, raided corporations only to cut costs and employees, LBO a company, saddle them with exploding debt and then dumping them on retail in an IPO. The suits get away with so much more destructive financial engineering and get praised for it so if for once a bunch of retail guys can catch some HF with their pants down, then by all means do it.
    • JT
      John T.
      28 January 2021 @ 03:56
      Well said.
    • WM
      Will M.
      28 January 2021 @ 15:13
      Yes I think your comment is a nice summary indeed.....and I am a boomer.
  • NI
    Nate I.
    28 January 2021 @ 02:44
    Sorry Ed, but the US isn't the wealthiest country in the world or even the country with the highest standard of living in the world. It's just the most indebted. $27.8T and climbing exponentially with no end in sight - at least until the inevitable currency collapse.
    • WM
      Will M.
      28 January 2021 @ 15:12
      As I am reminded by an old famous 19th century political comment.... "There are lies, dammed lies and statistics." The problem with terms "richest" or "most indebted" etc is that you always have to understand by what benchmark you are looking at the figure being touted. For example, does "most indebted" take into account debt as a total figure, or debt as a percentage of GDP. Does it take into account future unfunded liabilities? Does it take into account debt owed in the home currency vs foreign currency? Does it take into account assets? My point here is only that "it depends" seems more and more to me to be an incredibly important factor when looking at figures and statistics that some factions today never want to have to explain as it detracts from the narrative being pushed. For the record I believe the USA could be described quite plausibly, as the richest country in the world AND the most indebted country in the world. However I certainly do AGREE with your last comment......
  • DS
    David S.
    28 January 2021 @ 13:48
    When many people from different generations are frustrated and angry which is radically amplified by COVID Times, how can this be one generation against another? Historians may see this as different manifestations of similar frustrations into anger across the generations from QAnon to Robinhood investors. DLS
    • MW
      Max W. | Real Vision
      28 January 2021 @ 14:32
      You are correct that all generations are in on the outrage. I think the generational aspect is important for how it will evolve over time. Younger generations that will bear the brunt of the resulting change. I.e. what form of populism will win out in the end.
    • JD
      John D.
      28 January 2021 @ 14:54
      It’s not just generations that have outrage it’s also different groups of people (race, political, socio/economics) it’s all manifestations of the same underlying problem. Dee Williams and Neil Howe have discussed this...our institutional systems need to change because our trust in them is eroding further and further.
    • JD
      John D.
      28 January 2021 @ 14:55
      Our institutional systems are not meeting their social contract.
    • JD
      John D.
      28 January 2021 @ 15:05
      It would be a mistake to just label this issue as generational...in aggregate it is the common man (in all its colors, shapes, and stripes) fed up with the system that shelters the .05-1%. People want fairness, they want more transparency, and they want a real chance to improve their life and they feel like the system is rigged against them in such a way that it is impossible to get out of.
  • DS
    David S.
    28 January 2021 @ 05:47
    Who's "Gen Y?" I know Gen X, and Millennial. Y?
    • SL
      Steven L.
      28 January 2021 @ 06:35
      Generations used to inherit a convenient label which came about organically to describe them...that is until the Millennials, when it suddenly became exceedingly ‘necessary’ to pre-empt a generation’s Label. Because Marketing. Anyway, ‘Millennials’ was easy enough a ‘patch’ on the issue, but then succeeding generations were deemed to be nothing worthy of note: thus Gen Y...and Gen Z is already saddled w/ that marketing pitch. After Gen Z I believe the media will adopt something similar to the ‘Version 4.01’ model.
    • JD
      John D.
      28 January 2021 @ 14:58
      @Steven ...ha ha but true!!!
  • MG
    Matthew G.
    28 January 2021 @ 13:14
    Where is the discussion on the impact that algorithmic trading may be having? I simply cannot imagine that the trading engines that monitor twitter/reddit/etc are not having a magnifying effect.
    • AS
      Atul S.
      28 January 2021 @ 13:48
      My humble algo is long all these meme stocks.
    • JD
      John D.
      28 January 2021 @ 14:56
      Mike Green has been talking about this all the time...look it up!
  • PT
    Philip T.
    28 January 2021 @ 14:33
    I agree with Jeffrey. There have been several articles written on the benefits to the system in leveling the playing field of trading by imposing a fractional tax on all trades. The problem is the algo folks with huge computers next to the exchanges (so they can front-run trades) have the money and influence to block that, and the exchanges make tons of money from the algo traders. The whole system is corrupt, which brings me to Ed's comment on how no one was brought to justice for the GFC (too connected to be prosecuted). I would like to see some thoughtful folks (maybe Ed could work on this) come up with items needed to reform the Wall Street system to make it more equitable for the common folks. Surely, someone has already worked on this, and more effort just needs to be put behind a reform effort. This is not a generational issue. As a boomer, I am as upset with the insider Wall Street/Washington-connected guys as the younger generations are.
    • JD
      John D.
      28 January 2021 @ 14:49
      Well said Phillip...I second this recommendation
  • BV
    Bas V.
    28 January 2021 @ 14:23
    I always never agree with Ed... I almost never agree with Max... They don't agree with each other... I f*cking love this interview. #Thoughtful disagreement.
    • BP
      Brent P.
      28 January 2021 @ 14:47
      Indeed. Its hard to find this thoughtful disagreement in a world where everyone just wants to follow the status quo. Love it
  • jG
    james G.
    28 January 2021 @ 00:25
    The Barbarians are at the gate
    • WM
      Will M.
      28 January 2021 @ 14:47
      Good one James...
  • CK
    C K.
    28 January 2021 @ 09:01
    Clearly the astronomical rise of GME and other stocks is mind boggling - I'm not suggesting that last night's $347 close, or even $255 in the after hours trading, is a reasonable valuation. And there are some great arguments out there to explain the events that took place. Perhaps this is some kind of retail revolution, screw the suits moment. Going back to basics though, and without having done any fundamental analysis on GME to know whether $4 a share was reasonable pre-squeeze, isn't a short interest of 151.84% (31st Dec) or even 131.76% (15th Jan) an insanely alarming contrarian indicator to signal an oversold stock? Raoul mentioned how the 4 standard deviation short on bonds, or how everyone's short the dollar could lead to a bounce in both, and everyone looks at CFTc net long/short positions as contrarian indicators when overstretched in either direction. With a 151.84% short interest, wouldn't a small increase force one of the shorts to cover, which will increase the price slightly and perhaps forcing someone else to cover, until the snowball becomes an avalanche. Wouldn't this happen to a certain extent even without WSB, when a couple of the short hedge funds started covering or taking profits? Perhaps WSB exacerbated the move rather than caused the reversal? Or caused the reversal but then market plumbing dynamics exacerbated the move? I genuinely don't know, I'm just putting this out there... perhaps there's more than just retail money behind WSB. Perhaps there are some suits lurking in the shadows inside WSB?
    • GS
      Gretchen S.
      28 January 2021 @ 14:28
      supply of Stock - Shares are limited by the # outstanding. Futures are not limited by a structural # outstanding. perhaps that changes the amplitude of the move. also - this is perhaps a behavior that is not in the ML Algo training data set, so the algo has to re-learn a market with retail trade behavior = longer tails
  • jb
    jeffrey b.
    28 January 2021 @ 14:09
    Anyone for imposing a fractional trading tax on all financial trades? Why not slow the algo-systems some?
  • KD
    Kelley D.
    28 January 2021 @ 10:31
    great discussion..Ed very insight full...however I digress....I do remember the Resorts Intl squeeze....Home shipping Network squeeze and can only read about the great Northern Pac squeeze of 1901...etc..what is different this time is thousands of little piranha's feasted on an fat, dumb, and happy over-leveraged short, rather than the usual Great White . ...As Jesse Livermore's suicide note said.."Wall Street never changes..only the pockets change"
    • DS
      David S.
      28 January 2021 @ 13:51
      Great comment. DLS
  • AS
    Atul S.
    28 January 2021 @ 13:04
    Enjoying Peter's chill presentation style (and shirts).
    • PC
      Peter C. | Real Vision
      28 January 2021 @ 13:30
      😎
  • KT
    Kevin T.
    27 January 2021 @ 23:30
    I would pay good money to have a Peter Cooper screen in my home, with his reassuring voice playing 24/7
    • DS
      David S.
      28 January 2021 @ 05:13
      Great introductions. Quick market information. Then one theme and why it is important with examples. DLS
    • PC
      Peter C. | Real Vision
      28 January 2021 @ 13:29
      Thanks Kevin! I appreciate you.
  • JL
    J L.
    28 January 2021 @ 01:29
    I would argue you don't need the generational argument to make sense of this. I mean, it's a nice anecdotal fit, a nice narrative to riff on big-picture-sounding stuff... But really this is more about skillful innovation, social recruiting, and exploitation of a giant bug in the Wall Street system. Almost more of a "social media plus Silicon Valley plus market structure exploit leads to hedge funds getting hacked" kind of tale. If anything the "screw the man" aspects are just another nice marketing angle for the brilliant minds who pulled this off, in their recruiting of huge numbers of naive retail traders to help provide the brute force gamma squeeze firepower for their campaign. In my view, this was the action of a core group of savvy players recruiting an army of civilians (normal traders) to help them pull off an exploit. There is a lot of evidence that goes far back here. For example, the WallStreetBets community has been perfecting the art of the cannonball (piling into a stock), and the "gamma squeeze," for years. That community has known for a long time -- dating well before the pandemic -- about the impact of concentrated option purchases on market maker delta hedging. There has long been a core of WSB players who understood that, if you get enough players to buy weekly call options in unison, you can turn a retail investors $1,000 worth of purchasing power into six figures worth of market maker equity buying (via delta hedging) in a compressed window of time. That is a way deeper rabbit hole than 25-year-olds raging at the machine. The GME campaign itself was also very sophisticated. Consider what they did: -- They started targeting GME months in advance because of the huge short float -- Someone sniffed out Melvin Capital's huge put options position because of SEC filings -- They further gravitated to GME because Michael Burry (of Big Short fame) had a value position -- They waited a long time for the ideal catalyst, which was the Chewy.com founder getting a board seat When you put aside the memes and the crudeness and the awful jokes (all reminiscent of a 1990s Wall Street trading desk), the whole thing is razor sharp -- kind of like what a trading desk at SAC Capital itself would have done. But in a way it was even MORE sophisticated, because rather than risk client money, the players who knew what they were doing figured out how to recruit a wall of civilian money (unsophisticated retail traders along for the ride). That is an impressive feat. It is using free media to finance your gamma squeeze with other people's money -- hundreds of thousands of other people. That is a genuinely impressive feat. Once again, in terms of innovation and technological exploitation here. And make no mistake, a good chunk of players made a LOT of money from this. Not just in GME, but multiple other names. Those who understand the game likely took enough profit off the table to lock in substantial gains early on, and then continued to participate with the equivalent of a free deep-in-the-money call option. The other thing that explains this -- from a perspective of "why now" -- is: -- the rise of OTPs (online trading platforms) -- the introduction of zero-commission trading -- the marketing power of RobinHood drawing in millions of retail investors -- the dry gunpowder of stimulus checks in the hands of millennials who didn't need them And then last but not least, on the Wall Street bug they hacked: Brazen hedge funds have been playing with fire for years, if not decades, with these stupid pile-on shorts that result in more than 50% of the float being shorted. Like, that is practically an open invitation to get your guts squeezed out. It just so happens that the technology, and the media channels, came together for that tactically dumb practice to finally get its come-uppance in a brilliant manner. The whole thing becomes more impressive the more you look at it, especially if you know the history and how long the WSB model has been evolving. Yes the latecomers will get fried, but 20-30% of them will make hundreds of thousands to millions. In a way they used "social" to do the kind of thing hedge fund managers have been doing for decades -- and in so doing really did beat the hedgies at their own game.
    • JF
      John F.
      28 January 2021 @ 01:50
      Yes. The market has one decent down day after an extended move and it's the fourth turning..... @J L. Please tell us you're on Twitter (and provide your Twitter handle) or where we can more regularly catch your thoughts
    • CL
      Chad L.
      28 January 2021 @ 02:11
      Fantastic insights. Thanks J L.
    • MC
      Michael C.
      28 January 2021 @ 02:50
      "The whole thing becomes more impressive the more you look at it, especially if you know the history and how long the WSB model has been evolving. Yes the latecomers will get fried, but 20-30% of them will make hundreds of thousands to millions." That is why the SEC will step in...front running and no clear harbor.
    • JL
      J L.
      28 January 2021 @ 02:58
      The SEC is definitely coming. Gary Gensler, the incoming SEC head, is such a known hard-ass that Elizabeth Warren is described as a "big fan" of Gensler's. He is watching all this -- along with plenty of shady SPAC nonsense too -- as he prepares to take his seat. With that said, it won't be easy to figure this out. The smarter players will have avoided saying anything self-incriminating. And posting that you really like a stock, or have a bullish opinion on a stock and think others should buy it, is more or less free speech. And it would be very hard to say that making a lot of money, via buying call options off message board advice, is a crime. They will figure out ways to tighten things up. But they won't necessarily have traders they can prosecute.
    • DS
      David S.
      28 January 2021 @ 04:57
      Well done J L. - DLS
    • MK
      Martin K.
      28 January 2021 @ 07:21
      Pure quality, J..L. - absolutely superb analysis. However, there is one element I would challenge; the anti-Boomer animus was an essential element of the GME campaign. There is simply no way the WSB generals could have marshalled their troops with such effectiveness, and unleashed the barrage of market-moving firepower with such relentless accuracy, if there wasn't an overarching narrative. This was financial warfare at its absolute finest, and you can only get the cannon-fodder to charge over the top of the trenches if they believe they are on the side of righteousness. The portrayal of Gen Z and the Millennials as a bunch of feckless nihilists who are interested only in material gain is a convenient way to try and rationalise what happened with GME, but it misses the deeper issue. They deliberately targeted the shorts, not just because the WSB capos have evolved into sophisticated market operatives, but because they wanted to take out a couple of the apex predators of the Wall Street food-chain, as a warning shot across the bows. The message was, "we just killed some of your most sophisticated operators - notice has been served". Did the System pay attention? Its reaction was predictable: mobilise the regulators to deal with the "rogue actors". This will only serve to enrage the WSB army still further; Wall Street takes the World to the brink of financial Armageddon in 2007 - zero prosecutions, and some lightweight tinkering-at-the-edges regulations get rolled out. WSB takes out a couple of hedgies - the SEC is on it like white on rice. Pretty soon you will get a declaration of all-out war. WSB will roll the gamma squeeze strategy through the market, all the while accumulating capital and momentum, until they have enough in the war-chest to target systemically significant players. By that point, they will have evolved again, and the smartest amongst them will have worked out how to split the financial atom. They will deploy that firepower in a burnt-earth blitzkrieg assault the likes of which may never have been seen before in financial markets. They will each take the hundreds of thousands, even millions in some cases, that came easily over the last year-or-so, and they will happily burn it if they can watch the System consumed by the resulting conflagration. The mistake that is being made here is to underestimate the phase transition in consciousness that has taken place. This is not the Boomer revolution: travel to India, smoke some quality hash, maybe live in a yurt for a few months, learn about self-sufficiency and making goat cheese, get laid as much as possible, get back to civilisation, get a job, and get with the Program. This is not the Gen X revolution: travel to India, drop some E, maybe join a roving band of DJs for a few months, learn some superficially impressive moves on hacky-sack and the djembe, get laid as much as possible, get back to civilisation, get a job, and get with the Program. This time there is no way for them to just plug in to the System. The intergenerational inequality is now so extreme, that we have the first generation in many decades that essentially has nothing to lose. They are smart, they have time on their side, and they are seriously pissed-off. Buckle up.
    • JL
      J L.
      28 January 2021 @ 10:46
      @ Martin K. You could certainly be right, though I would question the "Boomer" part. Gabe Plotkin is 42, which makes him Gen X bordering on Millennial :) I would frame it more as a class and status revolt -- the little guy with no breaks, versus the big guys with their status and connections who capture all of the breaks. One could say the class-based animus was part of the perfect storm -- anger is helping this thing go even more viral, on a global basis. I am reading about retail investors in Germany and India and Australia getting into this. American redditors are calling on their "brothers" overseas to keep up the fight in overnight trading. And I am seeing meme posts in my Facebook feed from friends who never bought a stock in their life, whose idea of "Wall Street" is a movie with Michael Douglas, who are celebrating the Reddit vs Hedge Funds takeover. And that is another fascinating aspect of this "revolution" -- not only can it spread faster than lightning, you can get involved with a couple hundred bucks. There are people buying a single share in solidarity. Perhaps the interpretation is "both / and." The genuine class-based resentment is an accelerator for viral participation, and the story helps the word spread further. Sort of how, to get a true mania-style stock bubble, you need a compelling story to spread far and wide. "Be a part of the revolution" and triple your money too. It's kind of the perfect marketing vehicle. Which is why they might really pull this thing off...
    • JL
      J L.
      28 January 2021 @ 11:33
      Another key point as this unfolds: In Thursday premarket trading, GME is at $448 and making new highs. That means the Reddit army is showing a remarkable amount of staying power (because the GME short float is still +100%). Which in turn means that other hedge fund managers, who are NOT bleeding from their short books, are running the probabilities and seeing increasing chance of success in this "infinity squeeze" attempt -- and thus may decide to participate as a rational expression of trading opportunity. Think about what that means: If the Reddit army can show strength past a critical threshold, big money firepower will JOIN them. This could already be happening. In 1998, when Long-Term Capital Management blew up, the fund was attacked by other hedge funds who knew their positions. When a giant hedge fund with known positions is going into a forced unwind, other hedge funds respond like hyenas on a dying wildebeest. If the GME squeeze keeps going, that could happen here. This thing could conceivably go to $1,000 or even $5,000.
  • JK
    Jens K.
    28 January 2021 @ 09:52
    Wow Ed was great today!
  • GH
    Glen H.
    28 January 2021 @ 02:28
    With all due respect, I don’t think this is a revolt at all. This is the video game generation “gamifying” the market and they love winning the game over the enemy (aka big boys). I’m afraid this won’t end until there’s a wash out that crushes many of these players. My nephew is a Robinhooder and he plays video games all night and the market all day and sleeps all weekend. Crazy times!
    • SB
      Stephen B.
      28 January 2021 @ 02:42
      I agree. This is not a political uprising.
    • CK
      C K.
      28 January 2021 @ 09:38
      Couldn't agree more. If this is a "revolution" then the world is truly f*cked. We used to take to the streets and have guns pointed directly at our faces. What will the next generation do if there's another illegal war? Short Lockheed Martin on Robinhood? Let's not confuse things - the leaders of anti-war movements would never accept an offer to join the army based on their brilliant leadership skills. If anyone in the WSB community was offered a multimillion $ job in a hedge-fund based on their trading achievements they would take it in a heartbeat (n.b. no one wears suits in hedge funds so you're alright). I'm not criticising the WSB crowd - to the contrary, hats off to them!! Phenomenal achievment. I'm gutted I didn't know about WSB earlier so I could participate. After all, anyone who clicks on buy or sell is after the same thing - money.
  • ZK
    Zoltan K.
    28 January 2021 @ 08:00
    Interesting perspective. Revolution? Not sure. It rather looks like the mad max moment of financial markets. More regulation or more chaos to follow?
  • DS
    David S.
    28 January 2021 @ 02:33
    I agree with a comment by Mr. Farley in another interview that there might be more to all the short and gamma squeezes than a ton of millennials piling in. Is their risk lessened by a collective response to an isolated position? Are competing hedge funds doing the same thing? They have done this for years to each other. Is it a new way to make money from others' poor portfolio construction? Is it a paradigm shift or just a new way to implement an old technique? I bet there is more to this than just kids using leverage. If it is just kids, maybe they are just faster with a lifetime to make up their losses. In the meantime, they are having fun during COVID Times. There is no doubt that there is a ton of risk. That will become apparent. The old hedge funds will figure a way to profit from bursting this bubble. I hope the market is not collateral damage. DLS
    • DG
      David G.
      28 January 2021 @ 04:40
      DLS= dirty little secret? or are those your initials?
    • DS
      David S.
      28 January 2021 @ 07:27
      David G. - I never thought of that before. Maybe both. DLS
  • MC
    Michael C.
    28 January 2021 @ 02:47
    A few random thoughts. Occupy Wall Street didn't amount to much, did it? No white collar criminals went to jail, maybe one I think...Countrywide Financial. Instead of letting his Wall Street buddies go under and distributing the assets to more prudent banks because they were too big to fail, Paulsen's actions along with other accessories has made the financial institutions even more concentrated and fragile. The Robinhooders et al should be congratulated on their clever action....I just can't figure how they going to extract their profits as a community. Their actions tho' are not much different from the robber barons (not a pejorative) and the Hunt Brothers who cornered the railroads, copper, and silver...they are basically the modern version of forming a corner. (In finance, cornering the market consists of obtaining sufficient control of a particular stock, commodity, or other asset in an attempt to manipulate the market price. One definition of cornering a market is "having the greatest market share in a particular industry without having a monopoly") So basically in most of the issues the RH gang have targeted has "scarcity" due to shorts and lack of supply. I am a little foggy on my corner history but the corners are broken by supply or demand. In commodities, there's a new gold or silver strike so more supply. It would not take much for the bankers/brokers to get the target companies to issue more shares esp if the RH gang want them so badly...;) From the demand side, I'm sure the SEC, pressured by banks, brokerages, and hedge funds, can pressure higher margin requirements, investigate front running, whatever is necessary to cause demand and/or coordinated action to drop or cease. We shall see how that works tomorrow as Redditt has made Wall Street Bets a "private" board by invitation and another kicked WSB off for various cause. The old adage "Don't be the last one to leave the party" might apply. And the Fourth Turning incidents will continue to pop up in various areas and manners as I think intergenerational disagreement on policy and the role of govt continues.
    • JD
      John D.
      28 January 2021 @ 04:28
      Well said!
    • ac
      anthony c.
      28 January 2021 @ 06:12
      SEC was asleep at the switch for allowing shorting in excess of 100% available stocks
    • SL
      Steven L.
      28 January 2021 @ 07:21
      Never been on r/WallStreetBets, but what it instigated was a ‘decentralized’ manipulation of the markets...exactly on par with the various kinds of rebellion we’re seeing in every corner of societies worldwide. This is the new form of rebellion. This is why social media platforms are bending to regulatory whips. In the case of WallStreetBets, it will be taken down on Reddit, and evidently already has on Discord. J.P. Morgan is allowed to manipulate markets openly, because they are centralized and on a leash. Decentralization is the new “invisible enemy” for the State.
  • KS
    Kathleen S.
    28 January 2021 @ 04:42
    Ed, Great commentary that I agree with re: Change during Obama. We all had such hopes for a shake out of corruption in the markets. Also, our family moved in 1998 to Australia to escape the huge risks (financial and health) with the USA health/private insurance system. It is scandalous and completely unmanageable and unpredictable. I personally witnessed family in the US lose everything due to that system. We always ask, as you rightly said, how can the wealthiest (and most innovative, creative, etc.) country in the world not create a workable system to protect its citizens with good health care and an honest market system. We miss the USA terribly but this is an amazing culture to be a part of where NO ONE HAS FEAR of not getting health care. It is a hybrid system (not unlike the public school system) that works extremely well. If we need to go to a doctor or get prescriptions everyday (or need an ambulance or hospital care) we can and it is affordable. My heart breaks for Americans that are being crushed by that system. Good on you Ed for speaking honestly.
    • DS
      David S.
      28 January 2021 @ 05:26
      Kathleen S. - great comment. We use to care about each other, but personal greed and power is running rampant - not just the last four years. There is hope for change, but it will take the millennials to do it. It is hard to believe that the US has 4% of the world's population and 25% of the COVID cases. In hindsight it is logical. No masks, no distancing, no tracking, no tracing, super spreaders, etc. We can do better. We are not alone much of Europe is there too. DLS
    • SL
      Steven L.
      28 January 2021 @ 07:08
      Good on you Kathleen for the move to Australia. I contemplated the same thing in 2001, but decided to stay in the US and move to the country. It was a life-changingly correct move for me. My good friend & sister-in-law moved to Australia, and doesn’t regret it. I now find myself looking into an exit strategy outside the US. 20-years ago I thought I could ‘buffer’ my family from the American decline while staying here. That worked for a while. Now, not so sure.
  • AW
    Anthony W.
    28 January 2021 @ 06:56
    O
  • SL
    Steven L.
    28 January 2021 @ 06:24
    I’ve seen a number of analysts struggling to wrap their minds around the Game Stop development, and all of them offered pieces of something that I feel Ed encapsulated perfectly. To misuse an overused term, the Zeitgeist of this trade has certainly been, emotionally, of a kind with what is happening all over the world, and generationally. The vast majority of the younger generation are aware of and angry toward the way the older generations in positions of power (Boomers in politics/Gen X in business) has disregarded people for profits. This may be the way of the world, but its fractioning America. And I feel Ed nails it in this interview. We’re seeing a semblance of organized revolution happening in the markets now. Trader Tom Sosnoff believes Wall Street will take this revolution down so it never happens again. Maybe so...Discord has already deplatformed WallStreetBets. At any rate, a hoard of savvy traders is angry at the institutional traders, and pounding at their gates.
    • DJ
      Dennis J.
      28 January 2021 @ 06:26
      WSB is back up at reddit
  • GS
    Gretchen S.
    28 January 2021 @ 00:10
    There are many issues with the degree of fragility in market structures - causality flowing from the underlying to the derivative may not be a unidirectional phenomena. Having said that, retail crowd buying Bitcoin is not being touted out as a revolt, no? Long froth, Short tank bottom? I am curious as why this is no different than taking advantage of a market fragility axiom? This is an open market and the market maker doesn't "HAVE to" do much, they can quote a high premium
    • ac
      anthony c.
      28 January 2021 @ 06:23
      What's the difference between a Bitcoin pumper and evangelist?
  • LA
    Linda A.
    28 January 2021 @ 03:17
    My brother is Gen X & he recently made a fortune in the millions from ostk, amc etc. He is unemployed with no health benefits, has been unemployed many times & has a history of being unable to hold down a low paying job. He has a masters in english from NYU & has struggled for 2 decades. At one point he & has family has been on welfare. He's a smart guy but he just couldn't fit in with this white collar business system. He took a trading course last year, made many trading friends & now found wealth. He recently bought & closed on a coop apt based on my advice & help. I think people struggling are fed up with being fed bread crumbs, being told that they don't fit in, all the while the rich keeps getting richer during this 2 decade recession. U find this hedge fund guy, Griffin buying a $200 million condo and it gets news on CNBC- how insulting is that?. I lay a lot of blame on the Federal Reserve & govt policies- Trump included with helping his crony business friends. Trump pardons criminals rather than someone like Snowden who truly deserved the pardon. Such inequity - of course the flaunting of wealth & crony capitalism will get a back lash & an ass whooping at some time.
    • ac
      anthony c.
      28 January 2021 @ 06:09
      It should be obvious that CNBC is nothing short of being a cheerleader for Wall Street
  • DJ
    Dennis J.
    28 January 2021 @ 05:50
    This short squeeze narrative is going to crash the regular market. The hedge funds will then have to unwind their more popular positions to pay their way out of these overly aggressive shorts. GME started it but they also have AMC, FIZZ, etc on the books (short). Those are also way up now. Contagion (finally of something not covid). You'll see liquidity dry up as they unwind this daisy-chained short position and eventually, to pay the piper, their "darlings" of the hedge community (VIP). At some point, there's an inflection. Kudos to WSB for seeing the naked shorts on GME and Ryan Cohen's entry.
  • MN
    Mark N.
    28 January 2021 @ 05:06
    commentary on fomc statement vs degenerate gamblers on robinhood and reddit and as a manifestation of the 4th turning... i guess stonks win!
  • RT
    ROBERT T.
    28 January 2021 @ 00:26
    Sorry, but I can not watch another interview with Max! He would think he could understand and improve the design and performance of a Porsche after reading a few articles on automobile design....and then he would argue with the original designer if he disagreed with his recommendations.
    • JF
      Jack F. | Real Vision
      28 January 2021 @ 00:42
      With respect Robert, I think you are dead wrong. Max is very intellectually humble
    • RT
      ROBERT T.
      28 January 2021 @ 00:55
      Jack-then he needs to learn, as an interviewer, to exhibit that. He interviews people many times smarter and experienced and presents an impression he is on par with them in the discussion instead of interviewing, asking questions and learning from them. People watching don’t really care what he thinks just because he read a paper on a subject and is trying to regurgitate what he read to seem on par with the expert.
    • RA
      Robert A.
      28 January 2021 @ 01:13
      Respectfully Robert, I think Max did a great job today and Ed got the push back he’s been asking for. I enjoy watching all of Max’s interviews and I’m truly sorry you feel they way you do..fortunately you can remedy your concern simply by not watching. I’m reminded however of the title of one of my favorite movies about the film Producer Robert Evans., “The Kid Stays In The Picture”.
    • MW
      Max W. | Real Vision
      28 January 2021 @ 01:26
      Robert, I appreciate the feedback. I’m always trying to get better and will keep this in mind. I think it may be somewhat of a style issue. I do read up on what I’m going to discuss before and my restatement of the (often limited) understanding I’ve gained from that research is meant to establish a baseline understanding representing what an average person might think about the subject which can then be built upon by the guest, corrected for flaws, or even shot down as completely incorrect. With all this being said I hear you and keeping this front of mind can only serve to help me.
    • MW
      Max W. | Real Vision
      28 January 2021 @ 01:29
      Since Robert A. stepped in to the mix I wanted to clarify the above response was for Robert T.
    • MW
      Max W. | Real Vision
      28 January 2021 @ 01:30
      And to Jack... perhaps “intellectually humble” is a bit generous.
    • DS
      David S.
      28 January 2021 @ 02:09
      Mr. Wiethe - Keep up the good work. Some of us have forgotten what it was like to be a young tiger. For me it was a lifetime ago. Good luck on a long, successful career. DLS
    • JD
      John D.
      28 January 2021 @ 02:52
      Classy DLS!
    • JF
      Jack F. | Real Vision
      28 January 2021 @ 04:54
      @Max how about “intellectually meek and mild”? 😄 And cheers DLS for your magnanimous comment
  • TA
    Tom A.
    28 January 2021 @ 00:02
    Revolts usually do not have any soft of goal - people get swept up and emotion/mob mentality takes over. Ed is right, this is exactly what is happening.
    • JL
      J L.
      28 January 2021 @ 01:51
      That is the surface level appearance. If you look below the surface, it is sophisticated activity geared towards pure profit -- From a modest percentage of people who know what they are doing, who figured out how to harness the firepower of a "mob" to their own ends.
    • AB
      Alastair B.
      28 January 2021 @ 04:46
      Watch the magician, not the assistants.
  • AB
    Alastair B.
    28 January 2021 @ 04:22
    The idea that revolts have a goal is erroneous in the post-modern era. Power is not a ‘means to and end’, demonstration of power is the end itself. When society is assumed to have been set up by people of a certain type to support their own interests, simply upsetting the apple cart becomes a righteous act of taking back power. The extrapolation of this is if the hive mind figures a way to create a crisis (and profit from it) they will, simply because they can, and in the post-modern perspective it will be a righteous act. Almost like Robin Hood robbing the rich, and feeding the poor.
    • AB
      Alastair B.
      28 January 2021 @ 04:37
      As to why they call you ‘boomer’. It is a word that the powerless have at their disposal that their perceived oppressors fear - hence it is ‘weaponised’ as a tool of resistance and liberation. ‘Boomer’ doesn’t refer to the baby boomer generation, it refers to anyone older than you who is offended by the word. In postmodern politics, words have power and are weapons for rebalancing power dynamics. This is why Reddit use this word in this manner, it is a term for turning weakness into strength in an inter-generational conflict of the kind that Strauss and Howe predicted.
    • AB
      Alastair B.
      28 January 2021 @ 04:39
      For an intro to post-modern politics that is readable by the average person read ‘Cynical theories’ by Helen Puckrose and James Lindsay. This is also vital reading if you have university age children, or hope to send children to university within the next decade.
  • LH
    Lance H.
    28 January 2021 @ 04:36
    Ed Harrison is my freaking hero. Brilliant.
  • DA
    David A.
    28 January 2021 @ 03:29
    Let them eat cake....
  • MC
    Michael C.
    28 January 2021 @ 03:24
    WSJ 10PM 1/27 ... The number of WallStreetBets users has exploded in popularity in recent days, as more users have joined the forum to browse and weigh in on the discussions about stocks like GameStop. Users often use the forum to tout their trading profits and debate investing ideas. In some cases, the discussions have the potential to go viral, helping send stock prices up. GameStop and AMC are among the latest examples of that. WallStreetBets is run by moderators, who work to enforce a list of rules about what can and can't be posted. The forum's rules include bans on pump and dumps, or the practice of encouraging other traders to inflate a security's price in order to then close out one's own position at a gain. The forum's rules also ban market manipulation, "political bulls---" and SPACs. Users across Reddit, including on WallStreetBets, typically post with usernames that keep their identities anonymous, which can make it difficult at times to track who is discussing trading ideas and why. The growing interest on the platform has made moderating the discussions more challenging recently. After the forum came back online, a post from one of the moderators said that WallStreetBets had gotten "so many comments and submissions that we can't possibly even read them all, let alone act on them as moderators." .... SMH
  • ZK
    Zachary K.
    28 January 2021 @ 03:00
    Best video title, period.
  • NP
    Nathan P.
    27 January 2021 @ 23:48
    I think you guys covered a lot of ground here. Maybe more than you even realized. I am on the younger side, and I have several friends I have talked to almost on a daily basis about the market going on several years now. What you are seeing in stocks like AMC and GME is the manifestation of discussions that didn't just happen overnight and get executed. A close friend of mine used long call options to make a relatively small position on AMC with the logic it could come back post-COVID. She now has enough money to buy a house in cash. I think we are seeing an evolution of strategy happening where retail investors can make large moves in ways only investment banks used to be able to do. In this case the short sellers left themselves exposed and were eaten alive by the 18-35 year old crowd. Will the market correct itself? sure. Will some people get burned? absolutely. But I think it would be a huge mistake for regulators to step in right now in order to "save" people from themselves. I think traders would be wise to start factoring a new player on the block, and be reminded of the fact the market is still the jungle.
    • MR
      Michael R.
      28 January 2021 @ 01:06
      I think your point about a new player is very valid. Distributed, virtual IBank right here.
    • PB
      PHILLIP B.
      28 January 2021 @ 01:28
      I love this comment! Yes, there is a new player on the block. I agree that it would be a mistake for regulators to step in. But, it does seem that leverage should be tuned down. Good place to start is the gold contract. Why two or three is not enough, and even then(?), I have no idea.
    • JL
      J L.
      28 January 2021 @ 01:53
      Make no mistake, the regulators are coming... _____________________________ In a sharply worded statement earlier Wednesday, the Massachusetts Democrat and longtime corporate foe expressed astonishment at the rally while also criticizing hedge funds and others with short positions in company. ‘Personal Casino’ “For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price,” Warren said. “It’s long past time for the SEC and other financial regulators to wake up and do their jobs -- and with a new administration and Democrats running Congress, I intend to make sure they do.” https://finance.yahoo.com/news/yellen-monitoring-gamestop-market-activity-183420988.html
    • JD
      John D.
      28 January 2021 @ 02:58
      Excellent view on the matter!
  • EH
    Eric H.
    28 January 2021 @ 02:55
    As someone who would use wallstreetbets as a gauge in trends over the summer the vast majority of posts were about TSLA, then NIO once that started its move. There was some others, and a small window with Hertz, but the subreddit was really focused on those two EV companies vs going after some of the smaller cap names that we’ve seen the last couple weeks.
  • sh
    steve h.
    28 January 2021 @ 01:59
    Hi Ed.. I know you are mad at the crooks that got away with it...But the robinhood speculators dont have a clue about the resent past history. Agree the income disparity is going to make this country a very rocky place going forward.
    • GH
      Glen H.
      28 January 2021 @ 02:53
      Agreed. My two nephews are Robinhooders and I bet they don’t know who the president is or that there was even an election... planning a revolt couldn’t be further from their minds. The media is simply greatly sensationalizing the current environment and words such as revolts, insurrection, treason, etc are being grossly overused.
  • SW
    Serge W.
    28 January 2021 @ 02:12
    Ed, Thanks for that perspective. I find myself rooting on the Robinhood Revolt crowed despite being a proud Boomer, actually more in the Caboose part of that generation. How can I get these Robinhooder’s to target my stocks? It will be interesting to see how this evolves. Reddit has apparently banned the group, alleging......”Shazam” that they have engaged in hate speech. Will the Robinhooder’s go after advertisers now on Reddit? Why not.....? Will Social media finally get’s its comeuppance?
  • SF
    Stuart F.
    28 January 2021 @ 02:11
    Well said.
  • SM
    Sean M.
    28 January 2021 @ 01:30
    Ed, maybe they called you a boomer because they recognized you from Trading Places.
    • EH
      Edward H. | Real Vision
      28 January 2021 @ 01:55
      That’s good!
  • JA
    John A.
    28 January 2021 @ 01:51
    Not sure about Ed at first, he rules. I will always listen. to his viewpoint. Veery cerebral.
  • pk
    philip k.
    28 January 2021 @ 01:15
    We are no longer the richest country in the world........Singapore, Norway, Denmark, real countries
    • JL
      J L.
      28 January 2021 @ 01:40
      Not even remotely true. The U.S. government has access to hundreds of trillions worth of real assets just on its own balance sheet, and then you have Silicon Valley and the FANGs on top of that, etc on and on... America has problems, but it's easy to get carried away with ungrounded anecdotal sentiment.
  • JC
    John C.
    27 January 2021 @ 23:34
    Revolt? Change? I think your wrong. Why GME and AMC? Cheap stock with high short interest which allows them to pump the stock so THEY can make money. The rest of the world be damned...
    • PB
      PHILLIP B.
      28 January 2021 @ 01:31
      It's an organized attack to take make the shorts get out of their positions. It's a giant middle finger to the elites and traders who think they have it all locked up. I interpret it as a response from people who are fed up.
  • JD
    John D.
    28 January 2021 @ 00:40
    ED...glad your friend could pay for their bill....so many people cannot. I am in the healthcare industry and that system is just as broken as are other major intuitional systems.
    • DT
      David T.
      28 January 2021 @ 01:03
      The Big Pharma is the Third Reich of this century
  • RM
    Russell M.
    28 January 2021 @ 00:16
    Maybe the problem is with the options market? Too much leverage! Leverage kills. Read "Demons of Their Own Design" by Richard Bookstaber. View from the standpoint of a risk manager.
    • MR
      Michael R.
      28 January 2021 @ 01:00
      Agreed. The tail should never be allowed to wag the dog.
    • JF
      Jack F. | Real Vision
      28 January 2021 @ 01:03
      as Weston Nakamura says, "the options market IS the dog." He, Nick, and I just filmed something about $GME, it should air today or Friday on the Exchange
  • DT
    David T.
    28 January 2021 @ 01:01
    Max, great job. Challenge all those established perceptions about market and its participants. It's a casino right now. RobinHoods decide where they put their chips and they are turning the wheel for now.
  • MC
    Michael C.
    28 January 2021 @ 00:10
    7PM 1/27 Reddit bans Wall Street Bets, converting it to private invite. Another forum (didn't catch the name) also banned WSB My thought is they were concerned with liability issues.
    • MC
      Michael C.
      28 January 2021 @ 00:13
      And some people are going to learn the meaning of "doing your homework" tomorrow morning. Wonder if they're on margin...wow!
    • MH
      Michael H.
      28 January 2021 @ 00:58
      update one hour later... the subreddit has been restored. they are struggling with moderation and staying within the site guidelines. GME and AMC rally from low in AH minutes after... are you not entertained?
  • MR
    Michael R.
    27 January 2021 @ 23:56
    I don't think it is the actual stock being the ironic generational issue. I think it is the process which the Reddit crowd is doing by doing the other side of the coin that the established firms have always done: Short, badmouth in the press, cover; VS Buy Calls, pumpup in the press, force the other firm to cover higher.... sell for profit... Ironically two sides of the same coin....
    • MR
      Michael R.
      28 January 2021 @ 00:55
      Additional comment after the completion. Very interesting discussion, recognizing the difficult times and strong emotions. One additional area that I was hoping got covered was the breakdown of the Reddit crowd. And I do have to admit that I have read nothing of the reddit posts. It seems that the original Reddit crew understands how shorts work, both theoretically and actually, and have formulated and implemented a strategy against them. These are the guys that are sitting on hundreds of dollars a share of profits. I heard discussion of a guy who put 50K into this and is sitting on 15 million$US ... I doubt the people entering now have that base set of skills. I am thinking these new guys might be nostalgic of the brick and mortar games sales and not going to sell. These might be very different than the original Reddit guys that are mad at "the Man" and therefore the second group are more likely to get taken to the cleaners. This will result in "retail" being viewed as only those who lost everything rather than what sounds like the original "I can play your corrupt game as good as you", not to mention that the second group essentially helps the first group of retail but comes away with nada.
  • JD
    John D.
    28 January 2021 @ 00:40
    ED...glad your friend could pay for their bill....so many people cannot. I am in the healthcare industry and that system is just as broken as are other major intuitional systems.
  • JW
    Jim W.
    27 January 2021 @ 23:18
    Hello Ed, Do we have any data to support the Robinhood revolt theory?
    • TA
      Tom A.
      27 January 2021 @ 23:59
      LMFAO - data?!? Just go read 90% of the posts and comments on r/wallstreetbets. I have been tracking it and it's all a big middle finder to the legacy financial world. They're actively trying to wipe out short positions from hedge funds that have talked smack about them.
    • LF
      Liam F.
      28 January 2021 @ 00:38
      Couldn't happen to a more meritorious bunch of a-holes
  • JD
    John D.
    28 January 2021 @ 00:36
    No major dips in the crypto markets...would have expected some correlation today...
  • JD
    John D.
    28 January 2021 @ 00:29
    this could be the pin that pops the bubble of all bubbles...we will see...
  • AD
    Andrew D.
    28 January 2021 @ 00:28
    Go to Silver
  • GT
    Guillaume T.
    28 January 2021 @ 00:23
    Interesting topic. I'm super curious to see how it is going to happen once communication platforms will be more decentralized. I bet Signal/Whats-app private groups will keep doing well until governments get better at knowing what the internet is, and bring some regulation there as well. (they haven't been very smart so far...) It reminds me of the time when I had to explain what Facebook is to the elderly...
  • CL
    Carlos L.
    28 January 2021 @ 00:23
    It's always a pleasure to listen to Ed.
  • LM
    Lee M.
    28 January 2021 @ 00:18
    Interesting idea Ed. I never thought of this before. I think the extra money from the stimulus checks seems to be playing a part of this as well. Those long on AMC and Gamestop are treating these stocks like pulling the handle on a slot machine.
  • RM
    Russell M.
    28 January 2021 @ 00:11
    Allowing shorting 130% of float in the first place is a big part of the problem! In fact, naked shorting by other than market makers creates the risk of too much leverage.
  • NL
    Nikola L.
    27 January 2021 @ 23:46
    Small investors were locked out from placing their money with large, sophisticated funds and banks. These institutions have very high entry points (sometimes their own decisions and sometimes by law they lobbied for) which technically locked small guys out. Greed allowed this not common sense. Why politicians could not impose legislation where all large funds and banks have to take certain % of retail money without charging any fees and pool them in order to be able to spread/hedge the investment. Now technology allowed for few small but smart investors found a way how to build scale via social media by attracting large crowds of retail investors (or call them what you like) and use this muscle to short squeeze short sellers. No one knows how long this will last but it is fun to watch.