Tag Archives: Wall Street

A Note To Investors/Enthusiasts Of Dogecoin

We live in a strange time. I know you could say that about almost any point in history, but let’s face it. The past year has been more eventful than most. The past few months have been even more eventful if you’re an investor or follow economic news. We recently learned that a multi-billion dollar hedge fund is no match for a bunch of shit-posters on Reddit.

I’m not gonna lie. That story still puts a smile on my face. Last year sucked, but when a bunch of shit-posters on Reddit tank a predatory hedge fund, the world is an objectively better place.

As much fun as that is, there are some other stories related to investing that are worth noting. On top of the craziness caused by r/WallStreetBets, it has been just as chaotic for investors of cryptocurrencies. When the financial world is in chaos, cryptocurrencies that thumb their nose at old economic institutions tend to thrive.

Now, full disclosure, I do own Bitcoins. That’s the only cryptocurrency I own and I don’t own much. I’m not a bold investor. I buy index funds and ETFs. I would not fit in on r/WallStreetBets, nor would I be a good evangelist for Bitcoin.

For that same reason, I’d like to send a special note to those currently caught up in the Dogecoin craze. If you don’t know what Dogecoin is, then that’s understandable. It is a cryptocurrency like Bitcoin, but it’s unique in a few very particular ways.

Most notably, Dogecoin is often treated as a joke. That’s because it started off as one.

That’s not my opinion. That’s literally part of its origin. Its creators, Billy Markus and Jackson Palmer, were legitimately surprised when people started using it. I guess they didn’t get the joke.

That doesn’t mean Dogecoin has absolutely nothing going for it. It is a functioning cryptocurrency that uses some of the same technology as Bitcoin. Its most notable difference is that, unlike Bitcoin, there’s no limit to how many Dogecoins can be mined. Whereas Bitcoin can only ever have 21 million, Dogecoins can be mined indefinitely.

It may seem like a small difference, but that difference matters if you understand the basics of scarcity in economics. Most people understand it on some levels. If you can make an infinite amount of something, then it’s not going to have much value. If something is incredibly finite and difficult to obtain, like gold or Bitcoins, it’s going to have more value.

It’s that concept that I’d like to convey to those cheering on Dogecoin. Thanks to the recent upheavals from r/WallStreetBets, Dogecoin has been surging more than most currencies and even people like Elon Musk are cheering it on.

That’s not unusual. Sometimes, certain assets get propped up for a brief period. That has happened a lot with cryptocurrencies over the past decade. However, with Dogecoin, it’s a lot more style than substance.

Whereas Bitcoin gains value as it becomes more accepted in various sectors of the economy, Dogecoin gains value because people are just cheering it on. One has long-term sustainability. The other ends as soon as people get bored or find something else to cheer on.

Today, it’s Dogecoin.

Tomorrow, it could be JackCoin, a cryptocurrency made exclusively for people named Jack.

Is that the dumbest idea in the history of finance? I don’t know, but entire economies have gone bust for dumb things before.

Again, I’m not an investment expert. I’m not giving investment advice to anyone. However, to those thinking about getting in on the Dogecoin craze, I offer one important message.

You can win with style over substance in a lot of things, but not when it comes to money. At some point, a product has to demonstrate its value. You can only prop it up for so long before basic economic forces take over. It’s not fair and it’s not rational, but that’s how economics work.

Dogecoin will find that out at some point. Investors may have to find out the hard way.

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Filed under Bitcoin, Current Events, rants

A Subreddit Exploited Wall Street Hedge Funds (And I Applaud Them)

Every now and then, a news story comes along that just puts a smile on my face for all the right reasons. Granted, a lot of those news stories involve comic books and sex robots, but certain news transcends my preferences. They’re just too inherently awesome and cathartic to ignore.

This recent story surrounding a sub-reddit beating a multi-billion dollar hedge fund on Wall Street is definitely one of them. In the process, it suddenly turned Gamestop, a store I haven’t been in for three years, into the hottest stock on the market.

It’s the kind of story that would make a ridiculous movie. It’s not “The Big Short.” Hell, reads like a “Robot Chicken” sketch, plus or minus a few poop jokes. Except, this actually happened in the real world.

For those who haven’t been following this story, here’s a colorful breakdown by Esquire.

Esquire: How WallStreetBets Redditors Used Their Collective Power to Manipulate the Stock Market

News about the stock market rarely crosses over into the cultural mainstream, and historically when that’s happened, it’s meant some catastrophic financial event has taken place. (See: The housing and stock market crashes of 2008.)

But the stock market was the single biggest news story Wednesday, financial or otherwise, due to a group of Reddit shitlords pumping up a collection of stocks and pushing some billion-dollar financial institutions to the brink of bankruptcy.

Hedge fund Melvin Capital needed a $2.75 billion bailout on Monday after the stock price for GameStop, the video game retailer, spiked to more than $70 a share over the weekend. Just a month earlier, the stock was hovering near $15. Melvin was shorting the stock, hence the need for a bailout. Reports of Melvin Capital’s financial struggles sent GameStop’s share price soaring even higher, though, to more than $100 a share on Monday, putting the hedge fund in an even more precarious financial decision. As of this writing, the stock was trading for $330 per share—77 times higher than its share price of $4.28 a year ago.

The GameStop stock rally is the handiwork of r/WallStreetBets, a Reddit community where people share news, memes and personal anecdotes about playing the stock market.

Let’s all take a moment to shed a fake tear for a hedge fund that sought to make money by hoping a company would die. Let’s also take a moment to contain our rage that those assholes still got a multi-billion dollar bailout with little to no debate, but I digress.

That article gave us the basics. In short, a bunch of people on Reddit decided to exploit the short positions that a bunch of hedge funds had on Gamestop and make a ton of money on the side. It’s the kind of gimmicky stock trading tactics that you’d see in “The Wolf of Wall Street,” minus the strippers and ludes. The only difference is this didn’t break any laws and only fucked over hedge funds.

If you need a more thorough breakdown of just how those hedge funds were fucked over, here’s a video by the YouTube channel TLDR News. They break it down beautifully. I must warn you, though. If you get excited by seeing hedge funds get screwed over by a bunch of Reddit trolls, you might not be able to contain yourself.

Now, why do I love this story so much?

Why am I making such a big deal of it?

Why is this even news on such a large scale?

The answer is fairly simple. It’s not just that I love Reddit and have been an active user for years. This kind of thing just doesn’t happen that often. A bunch of normal, everyday people on Reddit getting the best of a Wall Street hedge fund? It just doesn’t seem possible.

Even if you’re a die hard capitalist or an dogmatic liberation, you can’t be too fond of hedge funds. In addition to being fertile grounds for fraudsters, con-men, and Gordan Gecko wannabes, they have just one goal. They seek to make rich people even richer. How they go about that varies, but they’re not above lying, cheating, and effectively gaming every capitalist system to their advantage.

They’re basically villains for both capitalists, socialists, and communists alike. They’ll screw over anyone, be they individuals or companies, so long as they can turn a profit. They don’t make anything. They don’t create or develop products that they sell to willing consumers. They mostly dick around with math, balance sheets, and stock prices to make money. That’s it.

I’m not a fan, to say the least. Watching them lose is like watching Lex Luthor get beat up by a five-year-old girl. You don’t think it’s possible, but it’s a glorious sight when you see it.

Honestly, this is the kind of story we need right now. A bunch of nobodies on the internet find a way to screw over a hedge fund whose business model involves screwing over struggling companies. What’s not to love? That’s a superhero narrative wrapped in true capitalism wrapped in American ingenuity. Ron Swanson himself would be proud.

There’s a lot more I could say about this. Since the story is still unfolding on many fronts, I’ll hold off. I’ll just say that if r/WallStreetBets does nothing more than screw over a hedge fund trying to profit from Gamestop’s demise, they’ll still have done a great good for this world.

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Filed under Current Events, psychology, rants

A Band, A Song, And A Music Video That Has Aged Too Well

It’s a sad fact of life. Certain movies, TV shows, songs, toys, and products just don’t age well. For every timeless classic, like “Citizen Kane” or Mozart operas or Betty White, there’s an “All In The Family” or “Gone With The Wind.” That’s not to say these pieces of popular media are bad or should be censored. They just have a cringy impact in today’s climate.

I love classics as much as the next guy, but even I can’t deny that the lyrics for songs like “Brown Sugar” or “Under My Thumb” by the Rolling Stones have some distressing connotations. I don’t judge anyone who still enjoys those songs or loves the Rolling Stones. Let’s just acknowledge that times change, societies change, and certain media just doesn’t fit anymore.

That being said, it’s also possible for something to age a little too well. Again, I’m not just talking about Keanu Reeves or Betty White. Every now and then, you revisit an old movie, show, or song that doesn’t just fit right into the current cultural climate. It almost fits too well.

That’s how I felt recently while going over some old music. I was updating my workout playlist when I came across some old songs I had from Rage Against The Machine, a band I hadn’t followed closely since high school. In re-listening to some of those songs, I realized two things.

One, they still rock. They rock every bit as much as they did when I was a teenager.

Two, their music has aged way too well in the current political climate.

Now, if you know anything about this band, the kind of music they play, and what they stand for, you’re probably not surprised. Rage Against The Machine is not subtle. Their music is very political. It always has been, going back to their formative years in the mid-1990s.

They’re anti-authoritarian, revolution-heavy act that you don’t see much outside the heyday of the hippie era in the 1960s. As a teenager, I didn’t appreciate that kind of political rhetoric in music. At the time, the only politics I cared about involved how many snow days we were allowed at school.

Now, having grown up and become painfully aware of the current state of politics, I find myself appreciating Rage Against The Machine even more. I know it’s a couple decades too late, but it’s still profound. Just listening to the songs I have, I feel like they could’ve come out today and be just as relevant.

The best example that I came across just happens to be my favorite Rage Against The Machine song of all time, “Sleep Now In The Fire.” When I hear this song, it blows my mind that it came out in 1999. It feels so long ago, but it still rings so true.

Even the music video, which I remember seeing on MTV regularly, has aged remarkably well. I would argue it aged too well. Just see for yourself.

To anyone born after the year 2000, please take a moment to appreciate what the band did here. They defied a decision made by New York City. They played on the steps of the Wall Street Stock Exchange for this video. That could not happen today. In a world after September 11, 2001, they wouldn’t get off with a fine or a warning. They’d go to prison.

Then, there are the lyrics. Just take a moment and read over these lyrics. How much more relevant are they now compared to 1999?

Yeah
The world is my expense
The cost of my desire
Jesus blessed me with its future
And I protect it with fire
So raise your fists and march around
Just don’t take what you need
I’ll jail and bury those committed
And smother the rest in greed
Crawl with me into tomorrow
Or I’ll drag you to your grave
I’m deep inside your children
They’ll betray you in my name

[Chorus]
Hey, hey
Sleep now in the fire
Hey, hey
Sleep now in the fire

[Verse 2]
The lie is my expense
The scope of my desire
The party blessed me with its future
And I protect it with fire

[Pre-Chorus]
I am the Niña, the Pinta, the Santa Maria
The noose and the rapist, the fields’ overseer
The agents of orange, the priests of Hiroshima
The cost of my desire
Sleep now in the fire

[Chorus]
Hey, hey
Sleep now in the fire
Hey, hey, hey
Sleep now in the fire

[Verse 3]
For it’s the end of history
It’s caged and frozen still
There is no other pill to take
So swallow the one that makes you ill

[Pre-Chorus]
The Niña, the Pinta, the Santa Maria
The noose and the rapist, the fields’ overseer
The agents of orange, the priests of Hiroshima
The cost of my desire
Sleep now in the fire
Yeah

It’s downright eerie. The whole song is about how the rich, powerful, and well-connected can get away with anything. They lie, cheat, and steal with impunity. They’ll pay lip service to revolution and change, but never hesitate to throw people in a fire if they get out of line.

It feels like a perfectly dystopian indictment of the current political rhetoric. People on both sides of the political spectrum, liberal and conservative, jealously protect their power and influence. They’ll tell people what they think they want to hear, stoking hatred and fear, all while enjoying the fruits of their position.

Regardless of your politics, you can’t help but appreciate this kind of hard-hitting message. It feels like we’re always at the mercy of the rich and powerful. They play political games. We’re just brought along for the ride.

Rage Against The Machine was making music about this long before the internet, social media, and cable news made those politics so hateful. They dared to rage against a corrupt system before it became a common tool of political theater.

They warned us.

They yelled it out in song.

We didn’t listen and we should’ve.

At the very least, they still rock.

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Filed under Current Events, media issues, music, political correctness, politics, YouTube