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Bonus 
Food: Gamestop. Economic Populism and how Robinhood weaponized the Occupy Wall St movement https://sytaylor.substack.com/p/bonus-food-gamestop-economic-populism
Food: Gamestop. Economic Populism and how Robinhood weaponized the Occupy Wall St movement https://sytaylor.substack.com/p/bonus-food-gamestop-economic-populism
TL;DR 
A group of Redditors spotted that Gamestop was
* Potentially undervalued
* Being "shorted" by a large "Wall St" hedge fund called Melvin capital
* If they could push the price up, a short squeeze would rocket the price up further and cause damage to Melvin capital
A group of Redditors spotted that Gamestop was
* Potentially undervalued
* Being "shorted" by a large "Wall St" hedge fund called Melvin capital
* If they could push the price up, a short squeeze would rocket the price up further and cause damage to Melvin capital
Melvin Capital is a Hedge Fund that had taken out a massive short position against Gamestop 
This resulted in more than 139% of existing Gamestop shares being shorted, making Gamestop the most shorted stock in the world.
This resulted in more than 139% of existing Gamestop shares being shorted, making Gamestop the most shorted stock in the world.
Redditors 
* Bought call options, betting the price would increase
* Used Meme's to drive anti-wall street sentiment and get attention for the cause
* Bought call options, betting the price would increase
* Used Meme's to drive anti-wall street sentiment and get attention for the cause
It worked 
* Gamestop price rocketed
* But Robinhood had to halt trading
* Cue outrage
* Gamestop price rocketed
* But Robinhood had to halt trading
* Cue outrage
Robinhood 
* Put out a vague blog post that made no sense
* Appeared on TV making no sense
* Actually had to 10x its deposits with its CCP (Central Clearing Counterparty)
* Robinhood risked going insolvent
* Put out a vague blog post that made no sense
* Appeared on TV making no sense
* Actually had to 10x its deposits with its CCP (Central Clearing Counterparty)
* Robinhood risked going insolvent
PLOT TWIST 
* Melvin Capital was in trouble and seeking capital
* A company called Citadel swept in to help
* BUT
* Citadel is the company buying the order-flow from Robinhood
*
What's order flow? Glad you asked...
* Melvin Capital was in trouble and seeking capital
* A company called Citadel swept in to help
* BUT
* Citadel is the company buying the order-flow from Robinhood
*
What's order flow? Glad you asked...
Every time you trade on Robinhood, a company called Citadel gets to see what you want to buy, and buy it just before you do. This jacks up the price slightly.
* Citadel profits from Robinhood users
* Citadel saved the Redditors enemy (Melvin Capital)
* The anger intensified
Stepping back 
The reason people are so angry because the mainstream economic policy (printing money, inflation targetting and rising asset prices) is widening the gap between rich and poor.
The reason people are so angry because the mainstream economic policy (printing money, inflation targetting and rising asset prices) is widening the gap between rich and poor.
My Take* People are angry because mainstream economic policy sold out main st by bailing out the banks
* They're also angry because mainstream economic policy is hollowing the middle class
* This anger is not political
We're witnessing economic populism driven by 
* Instant global communication
* Amplified by meme's
* Democrotized by fintech
Exposing the structural unfairness in the system and mainstream policy
* Instant global communication
* Amplified by meme's
* Democrotized by fintech
Exposing the structural unfairness in the system and mainstream policy
