the gamestop email

Because these emails come out on Wednesdays – please do not check previous publication dates, they always come out on Wednesday and have never been late – I tend to write them on Tuesday evening.

This is good, because apparently 2021 is the year in which news happens on Wednesday. So far this year, I've managed to send out an email three times which was immediately followed – or in some cases, even slightly preceded by – a massive news event which was clearly what the email should have been about. The Capitol Hill riots, Trump's impeachment and removal from YouTube, Joe Biden's inauguration and the rejoining of the Paris Agreement and World Health Organisation, and last week, the massive rally and subsequent collapse in GameStop.

As an aside: let's take a moment to appreciate one of the little-known gems of Wikipedia, which is the list, for every date in the past decade, of which news events happened on that day. Look at January 20 2017: "Japanese toilet industries agreed to standardize the iconography of electric toilet seat controls in order to make them less confusing for use" listed next to "Donald Trump is officially sworn in as the 45th President of the United States." It feels like one of those things that is beloved by novelists working in the recent past, journalists looking for a bit of colour in their features, and almost no-one else.)

This time last week, this newsletter would have been perfectly timed to address the GameStop farrago, which lies at the intersections of, what, basically all my interests? But a week on, with the takes overflowing already, it feels like there's little to say that isn't either passé, a stretch, or just plain wrong.

That said, I do want to use the relative safety of my newsletter to confess to one take that I can't be arsed to take the heat for in public: I don't really think someone who has a spare quarter million to throw into junk stocks is the "little guy", even if they do view themselves as going to war with Wall Street.

When a bunch of radicalised middle managers invaded the US Congress last month, social media was full of people pointing out that, despite the group's attempts to paint themselves as Real Americans, they were clearly some of the most privileged in society. I'm sure you saw some of the checklists, totting up the market value of the militarised gear that people were touting around Congress and earlier protests: on top of guns that cost thousands, there were night vision goggles, helmets, laser sights, and more. "Don't talk to me about economic anxiety" was a common refrain.

I feel a similar approach needs to be had here. Yes, someone with $250,000 of investment capital is still a tiny minnow compared to Wall Street, and the system is undoubtedly rigged against them. And yes, there are many people who really do have very little, and fell prey to a get-rich-quick-scheme that encouraged them to use money they need to pay rent or eat to instead buy a single share of an already-wildly-overpriced stock.

But WallStreetBets, the subreddit at the heart of the pump and dump, is a community of day traders, a position almost defined by having access to more cash than the vast majority of the world.

There's still things to discuss about the small-p politics of this. The fact that day trading has become more accessible to the merely well-off, as opposed to the actually rich, has changed the game, as has the fact that Robinhood and its competitors have opened up advanced financial techniques such as options trading and buying on margin to the same group of well-off people. The US government's stimulus program, and the K-shaped recovery in general (where middle-class homeworkers in stable professions have actually benefited financially from the pandemic, compared to those who are out of work or forced to risk their health to continue earning), has definitely increased the group of people with significant amounts of spare cash over the last year. 

And, of course, the hellish nature of modern American capitalism means that having access to $250,000 doesn't necessarily mean you're swimming in assets; it could just mean you have a college fund for your two teen children, whose life trajectory you have irrevocably altered.

But I'm uneasy with a framing of the affair as the 99% vs the 1%, when we're really talking about the 1% taking on the 0.1%, while conning an unpleasantly large number of people who should have no part in it on either side into throwing cash they don't have at a fight they can't win. 

(It's not even the case that Wall Street is all on one side of the fight, to boot; I know people with day jobs in the financial industry who bought low and sold high on this one, and you don't have to spend time pouring over a Bloomberg terminal to spot that some institutional players were getting in on the action too.)

I don't want to come off as too heartless. The only reason I was saved from losing a chunk of cash myself – I came within a heartbeat of clicking buy on a GameStop share at $200 – is because the broker I use charges £8 a trade. (The account is in a tax-free ISA wrapper, so it's still cheaper than switching to a free-trade platform.) That's great for buying and holding in the long term, but not so good if your plan is to try and buy on Monday and sell on Tuesday. Greed gets to us all.