The story should be familiar to us: WallStreetBets, a community on Reddit, noticed that hedgefund Melvin Capital overshorted Gamestop’s price, and as a response, rallied behind $GME (Gamestop) in order to profit from billionaire hedgefund owners in a “short squeeze.” It was a classic David vs. Goliath scenario: Retail traders versus. Wall Street. Of course, Wall Street did everything in their power to prevent WallStreetBets from taking their money: Wall Street (at least according to WallStreetBets) launched ladder attacks, manipulated of the media, and shut down purchase of $GME from retail trading apps. As a result, GME’s stock price began to plummet (as of February 10th, 2021), until stabilizing from around $50 a stock from its initial peak of $400. Wall Street used a volley of disinformation tactics in order to force retail investors out from GME, so they could minimize their already substantial losses (Melvin Capital ended up losing 53% of its 12.5 billion assets under management[i]).
Still, the real losers are the everyday people who have lost a substantial part of their income from this whole fiasco. WallStreetBets, once a haven for young investors to rally against the elite, has been flooded by so much disinformation and bots that visiting the subreddit today will make anyone confused as to what is happening in the stock market. Meanwhile, those who bought into GME at the end of January have experienced heavy losses. One post in /r/PersonalFinanceCanada titled “21 years old lost $25k” encapsulates the trouble plenty of young investors are facing as the GME bubble bursts.[ii] User cryptoknightblaster replied to the original poster of the thread that “This is sad. Unfortunately we’ll be seeing a lot more stories like this in the coming weeks. WSB wants to stick it to the hedge funds, but the real damage is what you see right here.” Now in a sense, we do not know what the future holds, in part, because of the misinformation tactics employed by Wall Street. Nevertheless, it is this lack of certainty as to what is really happening with the GME stock that signals the downfall of the movement at large. Instead of reveling in the every person’s gain, WallStreetBets has turned into a place where people are devoted to hold their stocks no matter what the losses are. A whole subreddit culture emerged around “loss porn,” a subgenre of the WallStreetBets community that takes a jouissance to people losing substantial amounts of money to poor investments.[iii] No longer are there celebrations of beating Wall Street at its own game; instead, there is a blind hope that holding GME will somehow save retail investors from the red they are seeing over their life savings.
This mass movement of loss with respect to GME reminds us that there is no change within the system of capital itself. A whole tradition of Marxist literature (from Marx himself to Mark Fischer’s Capitalism Realism) understands how capitalism’s amphorous nature allows it to incorporate any opposition or critique to capitalism within its very structure. What the GME fiasco opens is the possibility for regular people of retail investing to grasp how capitalism’s vampire-like properties are affecting them in real empirical events. The horrors of capitalism on the environment, non-Western nations, and marginalized communities might seem less real to the relatively non-political retail investor, who probably is just trying to make it like everyone else, and can’t find the energy to get involved in a political cause. But, the GME fiasco might open the eyes of a few people as to how corrupt the system is.
What Slavoj Žižek points out in his article “Corruption for everybody! What the wallstreetbets story tells us,”[iv] that the GME fiasco is a “threat [that] comes from the very heart of the system not from outside.” Whereas most challenges to capitalism come from outside it, in the form of BLM protests to 2014’s Occupy Wallstreet, only to eventually become integrated into capitalism, the GME fiasco emerged from the very logic of capitalism itself. This is less the case of investors simply making a mistake by gambling on a stock, and more the active sabotage from billionaire hedgefund owners to save their profits. Members of WallStreetBets simply decided to do what billionaire hedgefund owners have been doing to the little guy for years. As a result, the system used every tactic it had up its sleeve to kick out the retail investor from potentially earning money at expense of the billionaires. WallStreetBets comes from within the system, but the ultimate crash of GME shows us that the system will change the rules of the game in order to prevent the profiteers of the system (billionaire hedgefund owners) from losing their profits.
The notion that the system is too large, even for those on the top, to comprehend and that capitalism is an inhuman monster that makes both capitalists and proletariats tremble to their knees, has been put to question after the GME fiasco. There is a certain theoretical tradition which, with the rise of cybernetic discourses, attempts to render the agency of humans in capitalism minimal. But what the GME fiasco shows is that those who have a lot of capital can twist and turn the logic of the system to their whims based off their wallets. The foundation of free-market capitalism is that, well, investors are free to buy what they choose. If that foundation is broken, as it has been, when several trading apps (such as Robinhood, and TD Armitage) restricted trading of $GME, $AMC, and $BB (among others), that should be a reminder that the system is not too large of a beast for the capitalist class to tamed. The system does not only produce billionaires, but billionaires change the rules of the system to keep their billions. The rules of investing are being made up as we go along. But they are being made up by the people who have money. To quote Bodie from The Wire “This game is rigged.” It is rigged, and everyone unconsciously knew that before investing in GME, but they still believed they could somehow beat the elite from out under. The tragedy is that WallStreetBets knew that it was going to end a tragedy before it started, and yet, they played the game. There was never any fair trade and the GME fiasco reminds us of this.
What is important to note, nevertheless, is a dimension of capitalism that the GME fiasco brings to light. We all know by now that capitalism will absorb any outside resistance into its structures. But now we understand that any resistance to capitalism from within will also fail, precisely because the capitalistic system has no troubles in changing the very grounds of its logic in order to keep the current power positions in order.
What the GME fiasco reminds us is not only that “The Master’s Tools Will Never Dismantle the Master’s House,” to quote Audrey Lorde[v], but that we are not even living in the Master’s house. We live in a Master’s funhouse. Houses are stable entities that follow a logic of architecture. Our current master’s house is a carnival ride, with surreal logics that rewrite itself whenever it pleases. Is it surprising that one of the most common ways of describing the GME fiasco is as a rollercoaster ride?[vi] The dream of wall street has turned into a nightmare for the regular investor. Let’s hope these everyday investors can wake up to join the fight against the masters.
[i] Juliet Chung, “Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets,” The Wall Street Journal, 31 January 2021, https://www.wsj.com/articles/melvin-capital-lost-53-in-january-hurt-by-gamestop-and-other-bets-11612103117. Accessed 2 Feb 2021.
[ii] throaway7372738. “21 years old lost $25k.” Reddit, 2 Feb. 2021, https://www.reddit.com/r/PersonalFinanceCanada/comments/lavxcb/21_years_old_lost_25k/. Accessed 2 Feb 2021.
[iii] An example of a loss-porn post is the following:
” “GME loss porn – 💎🙌.” Reddit, 1 Feb. 2021, https://www.reddit.com/r/wallstreetbets/comments/lag1h3/gme_loss_porn/. Accessed 2 Feb 2021.
[iv] Slavoj Žižek. “Corruption for everybody! What the wallstreetbets story tells us.” Spectator, 1 Feb 2021, https://spectator.us/topic/corruption-for-everybody-slavoj-zizek-wallstreetbets/
[v] See Lorde, Audre. “The Master’s Tools Will Never Dismantle the Master’s House.” Sister Outsider: Essays and Speeches. Crossing Press, 1984, pp. 110- 114.
[vi] CNET has called the GME saga a “epic rollercoaster ride” in
Ian Sherr. ” Reddit still wants to send AMC, GameStop stock to the moon. Here’s how and what’s next.” CNET, 2 Feb 2021, https://www.cnet.com/personal-finance/reddit-still-wants-to-send-amc-gamestop-stock-to-the-moon-heres-how-and-whats-next/. Accessed 2 Feb 2021.