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I want to breakdown and discuss Elizabeth Warren's letter to the SEC. Because there are still people talking about how she's championing for the people. So... let's discuss.
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Her first paragraph is about why she's writing. Not bc billionaires looted $1.7 trillion from the working class during a pandemic. Not bc vulture capitalists shorted 140% of $GME stock. She's writing bc "a flash mob with money" (the retail traders of Reddit) disrupted the market.
Her second paragraph brings in Melvin & their vulture tactics. "However". This transition is key. Melvin isn't the problem. Their plan to profit from GameSpot's death was disrupted when the price of $GSE surged. A deliberate effort by retail traders to "target large investors."
Her third paragraph extends her concerns for potential outcomes of "these wild fluctuations", and here she mentions the regular players who have for decades been "treating the stock market like a casino," and notes how it doesn't help the companies or their workers. Okay, cool.
But in her fourth paragraph she focuses her concern to traders "cloaked in anonymity" questioning if they're working class or "scam artists executing a ... stock scheme."
So her first two pages are concern about r/wsb, who she suggests may be fraudsters rather than Robin Hoods.
So her first two pages are concern about r/wsb, who she suggests may be fraudsters rather than Robin Hoods.
Her fifth paragraph expresses concern that this situation could "exacerbate inequalities and the impacts of the ongoing pandemic-related economic collapse."
Remember, this letter *wasn't* triggered by billionaires looting $1.7 trillion from the working class during a pandemic.
Remember, this letter *wasn't* triggered by billionaires looting $1.7 trillion from the working class during a pandemic.
Warren's letter was triggered by hedge funds losing $6 billion in a week bc of retail traders.
She mentions how billionaires have been profiting during the pandemic while "working families" suffer and notes growing disparities. But then there's a twist!
She mentions how billionaires have been profiting during the pandemic while "working families" suffer and notes growing disparities. But then there's a twist!
Everyone involved in this situation is, according to Warren, exploiting "these growing disparities and the companies and workers that underlie their gambles."
Let's unpack this. For DECADES the US government has facilitated the capitalist class's absolute depravity.
Let's unpack this. For DECADES the US government has facilitated the capitalist class's absolute depravity.
Blatant exploitation of workers through stagnated low wages, poor or no benefits, and unsafe working conditions, as capitalists rake in unprecedented and ever-increasing profits. Profits for which they pay little to no taxes on bc the government has legislated this looting.
Meanwhile, as the rich accumulate & hoard trillions, housing, healthcare, healthy food, education, etc. have seen consistently rising prices. The working class has been getting squeezed for forever, but some hedge funds are getting squeezed and now Warren wants answers?
Anyway, her sixth paragraph talks about SEC rules & demands they "act to ensure the markets reflect real value" not "the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those wealthy traders."
This is important wording.
This is important wording.
Warren isn't just demanding the SEC protect the market; she's demanding they protect the "wealthy traders". She's not making demands to help the working class. She already said the market doesn't help them. She wants to protect the market and the billionaires who profit from it.
Her seventh paragraph is about market manipulation. She wants the "woefully unclear" standards and enforcement clarified. She wants them to redefine "what it means for traders to manipulate securities prices in violation of the law".
She wants r/wsb outlawed and them informed.
She wants r/wsb outlawed and them informed.
Warren's eighth paragraph gets into risky betting that's wreaked havoc on the market forever & resulted in burst bubbles.
Remember again, this isn't what triggered the letter. It was working class using this old system against the wealthy that did.
And NOW it's time to act.
Remember again, this isn't what triggered the letter. It was working class using this old system against the wealthy that did.
And NOW it's time to act.
Her ninth paragraph demands a response with a plan and timeline by the end of next week. In it, she wants a series of questions answered.
1. Why did $GSE's price rise? What role did hedge funds' short sells play, and what role did r/wsb play?
1. Why did $GSE's price rise? What role did hedge funds' short sells play, and what role did r/wsb play?
2. What are the potential implications of such "trading schemes" for financial systems and the stock market?
3. What steps will the SEC take to "ensure the securities markets better reflect the [real] value of underlying companies?"
3. What steps will the SEC take to "ensure the securities markets better reflect the [real] value of underlying companies?"
4. What steps will the SEC take to update and implement rules defining market manipulation?"
And within those last two questions, there's a bit of "Explain why the SEC has been a failure for so long, and how have those failures harmed everyone?"
And within those last two questions, there's a bit of "Explain why the SEC has been a failure for so long, and how have those failures harmed everyone?"
That's Warren's letter. While she mentions the long-term manipulation, the disconnect b/t the stock market & the economy, the growing inequality, & the harm caused to already suffering "working families" - an oddly narrow framing - this letter isn't really about any of that.
Warren's letter to the SEC is about protecting the wealthy, her people. In the broader context, #3 is asking how the SEC will adjust the rules now that the working class figured out a way to profit from the market. And #4 is asking how they'll punish them for their insolence.
Elizabeth Warren has proven time and again that she wasn't lying about being a capitalist to her bones. She's lying when she claims to be a progressive. Look at the big picture. She's not meaningfully fighting for us.
Here's the full letter: https://twitter.com/SenWarren/status/1355187260514250754?s=20
Here's another thread that makes some additional observations that I didn't get into. https://twitter.com/jamie_maz/status/1355337053161054212
Muting this thread now so my notifications can nap, haha.
