The financial system is filled with interesting stories and questionable endeavors. Since the dawn of money, money has been a focal point for dubiousness. Here we explore the GameStop Saga and have the financial system versus the people. Satoshi Nakamoto would say it is the central control against the retail investors, we say it’s all fool’s gold and the house always wins.
If you want to explore every angle of the financial system there really is no better example than the GameStop Saga. It started with transparency into many hedge funds short positions betting against GameStop. It was the middle of the pandemic and an in-person retail chain that was losing money seemed an easy target. Yet, the people wanted revenge. It started with DeepFuckingValue a.k.a Roaring Kitty. People blamed him for hyping the stock, but if you can’t say anything what can you do? You must cater to your audience and swear it’s all true, and that is exactly what he did. With flair, and beer and a head band he advised on buying GameStop. How? Through Robinhood a free online app.
He did not make money for signing up investors to this program so he can cover his rear. He also can’t shut up and let this chance go by, so he passes it off as “my own opinion” and not gratified financial advice. So, he is off the hook as he is not a professional nor is he due to a fiduciary duty; he is more flexible and technically not technical. His posts were shame full boasts but never boring. He was better than financial advice because it was no holds barred for the cause. He dropped jaws with his antics and taught many young investors to practice trading on Robinhood to get better and richer. However, he was also under fire for his unorthodox wild methods. Being a pump and dump scheme schemer. As it turned out he was one of the best. He did have a license in securities from Massachusetts and was responsible for signing people up to the app, so that is a fiduciary duty to provide a good selection in the app.
Next came the app itself: Robinhood. Its claim to fame was to do what no one had done; it was free trading. The big guys wanted to shut it down too, but it fought back, by catering to the consumers’ needs with 24/7 trading. Plus, it provided raw adrenalin through dopamine increasing congratulations graphics after every trade. To some this was a point on rigging the system that had to be undone. On the other hand, they could have provided a huge disclaimer with danger and warning signs. Either way, this works to release dopamine in conservative investors not YOLOers looking to bring down the financial system. But we must look within the system, introducing the next player in our saga, Citadel Securities.
Citadel Securities probably started the whole thing. They are the bank providing liquidity to Robinhood and trading on margin. It is called payment for order flow. Where the liquidity provider buys each share for slightly more and sells for slightly less than the parties are asking, thus making a spread between the two buy and sell prices, even if it is just a few cents, over a long bull rise this adds up. And it is better if you can properly negate the crash, by having it happen faster than the upside rise. So, everyone trades on the way up and you owe nothing on the downfall. Thus, the motive for the hype is there. It is probably the smoking gun and where everything began and likely ended; as Citadel Securities stopped providing liquidity to Robinhood and that led to the domino effect of Robinhood taking out the Buy button. It was completely out of any kind of fairness proposition for the traders. The big guys kept winning. Thus, the only way to go was down. However, the market did rally on hype.
When it comes to pure math, the shorts (betting against GameStop) probably did not suffer nor cause too much of the rise in price as people thought! People thought the shorts would have to rebuy in at higher and higher prices, making the huge trading institutions look like fools. This did not happen, they were hedged, and not exactly greedy, they were smart. It was the hedging for the calls that caused further buying of the stock; when a call is made on the Robinhood platform the platform buys more stock to cover their exposure. It’s a nice little blip to make the stock continue to rise after you are all locked in. As time went on the pumping gained momentum. So, it wasn’t killing the puts it was investing in the calls that made all the difference for a new day. Still people wanted to have the David killing Goliath story, and it happened.
Ultimately we think it was a ploy by the liquidity provider Citadel Securities to create a huge bull run and owe no one on the quick and painless ride down. No one hurt right? Wrong. Roaring Kitty had a class action lawsuit brought against him because he could not shut up and invested in hype and not responsibility. It was dismissed as he had lived by the YOLO attitude, meaning it is always hype and he later said to his legions of followers “buyer beware.” Then Robinhood was slammed for taking advantage of poor uninformed investors with pumped up tactics and no disclaimers! They also took out the Buy now button and made no friends. They ultimately had a huge IPO and an exodus of users, because they could not treat them right, they were just money. As for the investors, if the ride down is sharper and nonlinear compared to the rise, it means a lot of people could not sell or get the opportunity to sell, thus promoting the house and damaging investors. Then many lost out on the Tulip Mania following the typical YOLO internet ride based on memes and Elon Musk tweets.
If one could prove a connection between Roaring Kitty, his legions of followers, Robinhood and Citadel Securities we could justify the David vs Goliath story and rightly try to dethrone the large hedge funds and liquidity providers; the people were aiming for to being with. I do feel for the rebellion, the hype, the YOLO and the opportunity. It is pure capitalism, and we are connecting the dots stopping collusion and proving, logically, it could all be a conspiracy you don’t know about. It started with the UFO flagship Citadel Securities, embarrassing Robinhood and claiming it doesn’t have proper liquidity or ability to stop the rise of powerful internet memes (think Elon Musk). They in turn would blame Roaring Kitty for undue hype, who blames the people for following blindly. Just kidding, he is still supporting GameStop’s rise. So, we prefer to leave the system and laugh. We invest in forex, cryptocurrencies, NFTs, ETFs, and DeepFrickingValue stocks.
So, at the end of the day we learn and earn about collusion, greed, manipulation, and YOLO memes. We also learn in fact, there are unicorn stocks out there, so we support and “believe in the beautiful shockers” around the globe from right here in Canada. We are the cautious and curious investors that see all the angles, and the angels and investors too. After the dust settles we wonder what Robinhood will do, for its future; apparently a large IPO and legal troubles. Citadel Securities walks away, Robinhood loses uses and reputation, Roaring Kitty had a $50 million short position, and the last people are left holding the empty bag. We have learned to be cautious and careful and free thinking. We connect with that typical capitalist meme “what goes around comes around” and YOLO, so be a true entrepreneur.
Allegedly there was in fact contact from Citadel Securities to Robinhood about limiting liquidity and therefore trading in GameStop. What on earth. Robinhood claimed it was protecting investors but really the banks made that choice for them, unfortunately. If you can get any dirt on Roaring Kitty knowing Robinhood or Citadel securities, you have a lawsuit going on for you. Why? It is insider trading, false advertising, and a breach of fiduciary duty selling you shit, silence and no responsibility. So please rewind and find all you can, we will find you in the future, when capitalism is back to normal, with another ingenious story. Still people don’t learn from greed and pride, until next time; from the YOLO to the UFO we know the house always wins 😊.
For those in a time machine who want to study the past we bring you to the financial crisis of 2008 as portrayed by the Big Short, the government conspiracy, the greed and the blissful ignorance. We thought this was only possible in the movies and yet, there is one all about it, as well as a book. So, what really happened in this little episode? Allow us to explore.
As we know, international trade is good, but a rigged exchange rate is bad. Selling more things is good, selling out is bad. Wearing a smile is good, wearing a balaclava is bad. We hope your mother taught you a dollar is not just a dollar, it depends where it came from, so we shall put on our Sherlock Holmes hats and discover the true nature of the dollars printing press; who like the wiseman, has the only answer to be “more.” The real question is, "what is going to happen tomorrow?" and like any true politician with skill, that question was widely danced around if not dodged completely in the scandal. We forewarn you, you will have to learn about sacrifice, pure honor, and reading between the lines, it is exactly what our hero’s did to bring you this tale. And yes, they survived.
It starts with clever bankers peddling the American dream, and dreaming about never waking up. They created the monster literally in your backyard by bundling mortgages together. Of course, you should have no fear or problems, as money equals intelligence, just ask a gambling addict. And that is exactly what they are and forgot to do. Everyone pays their mortgage, let’s just assume everyone is as innocent as the Queen who puts chivalry over the dollar every time. If the rioters at the Capitol knew this whole story, they would still be inside claiming they have hostages, being the entire American banking industry and won’t let them go until Wall Street and Sesame Street are reconciled, and truly, this one tale is for the kids – there are no parents home and it’s party time. Luckily the party largely flew under the radar and only the government had a hangover.
It began by bundling mortgages together into a bond, and just like James Bond most of this sort of work was done in secret. By the nature of the beast, the system wanted as many of these mortgages as possible, and the geniuses at the rating agencies kept giving them AAA ratings, is this because they were dumb or were they in someone’s pocket? We tend to lean towards the more sinister as calling bullshit has to be part of your daily grind. So, the blood sucking bankers on Wall Street, or oops our bad the “system” will give any 18-year-old a mortgage. Let us say it is for $100 so we can deal in simplicity, something the opaque banks never did. Little Timmy will take his $100 and screw off buying a house, car, motorboat and a soul. This gives $100 to America. Timmy will have to pay $10 a year for 15 years. He also has a mysterious interest rate fluctuation that hits in about year 3. He lives in bliss.
Now, a normal sane person would simply say time is money and hold on. But not the American banks. By bundling these mortgages together, they can sell them off early as a bond! Your nose should be smelling conspiracy, greed, and negligence at this point. But there is a certain art in all of this, like a toddler putting together a puzzle or finding his dads gun. It is magic propaganda like Las Vegas taking your money at the roulette wheel, but you don’t care, you're the high roller with the blond on your arm. The propaganda has us all on the train. But we should be playing chicken with it on the rail road tracks. We need to dig deeper than the superficialities, we need to get behind the curtain, be it iron or not. You have to see the big picture and the banks don’t want that, those who did the math are the ones who profited.
By bundling the mortgages together we get away with two sins. One we can put in more shit mortgages and call it diversified, and more importantly we can now immediately sell our bond for $30 without having to wait 3 years, it is the best thing in capitalism, time is money. Thus, another $30 is added to America coffers and, yes, it does sound like the Roman empire is expanding. These bonds were bought by unsuspecting funds, foreign governments like Iceland and regular down to earth people. Then after 5 years it appears a lot of people are defaulting on their golden mortgages, and the party is coming to a close, but there is still another bang. Those who did their research, the rebellious shorters have a contract whereby they can buy the bond for $60 and sell it to the bank for $100. So, those who bought the bonds spent $30, then made $50 and then sold at $60 for $80. Then those with short positions bought at $60 sold at $100 and made $40. Add that to $130 from the banks America makes $170. But they no longer have that $100 it is lost in cyber space. Not only that they can’t afford the $60 to $100 dollars for the shorters so the government comes in and bails them out for $50. This is our old friend "public debt private profit!" We advise you make your own profits. We wonder what Gandhi would say, probably something along the lines of “you can’t eat money.” and the black panthers would probably advise you to riot.
We do find it ironic that you would have to dig through the paper trail to make any kind of real paper with this scheme. A sane bank would not put their stamp on any of this paper, you may as well invest in TRUMP coin. A real bank during the crisis would literally shred the paper, and anyone with a brain on occupy Wall Street would turn it into a paper airplane so at least some of it would fly. However, this world was still reserved for the bankers that could look within the bonds and find the paper trail, and have the connections to make insane bets about the innerworkings all crashing down. Everyone is too vain to look in the mirror and get out the magnifying glass. You can bet on the infinite bull market or the rodeo clown saving the cowboy. Uncle Sam would say it’s hands-free capitalism, we would argue and say it is all for the crowd, the proud, the little guy and the illuminati. It all adds up. The real good news at the end of the day is; before you take my house you will have to take my gun. We were highly paranoid about big conglomerates buying up houses for cheap so luckily America manufactured a mobile army of Guru trained house flippers. These saintly types would try and get the most bag for their buck while helping the poor dying mortgage pools. Of course, Grandmother would say it is all a waste of time, however, as it appears time is money, and so is Voodoo economics.
Yet, because everyone was thinking in terms of the improbable and impossible the unpredictable happened. We use that term lightly as the banks knew exactly what they were doing. Just like everyone who stashes $20 million offshore, they were circumventing the system and simply trying to put one more notch on their belt. In this case, defrauding the American people was not all that sexy. Luckily for us, we don’t kiss and tell. We would like to test the IQs of these so-called bankers, lawyers, politicians and fat cats, and give them some advice, it takes in fact only one well-armed journalist to bring the darkness into light. It is rare for people to break from the herd, but when they do they go farther. Armed with probing questions, viral potential, and the ability to make the rules up as you go, the journalist’s job is to bring the story to the people, and not to hide behind the all-mighty dollar. They are friends and familiar with Armageddon, without profiting from it! We are sure the snake has two heads and there is some sort of nursery rhyme here. A hymn to the rebellion and the covered up. We knew a kid who was obsessed with conspiracy theories, and it did not make him more paranoid it made him smarter. You can really learn a lot on the Dark Web and we hope you surf it with a VPN a hunch and a chip on your shoulder. Thus, people like Edward Snowden are heroes to us as they reiterate David versus Goliath, or the system vs the people, or the fools versus the wisdom, or the chopsticks versus cutlery. For storytellers, from the ancient Chiefs to Snowden, teach us to switch from the bandwagon to the silver screen and, thus, maybe tomorrow will actually be well earned, profitable and responsible. You should get on stage, and according to Shakespeare the entire world is only that, so therefor never fear, and put the bright white spotlight on those behind the curtain. The good news in this case is a true reporter will never die. As soon as you kill him his story gains five times the coverage. This happened with Danny Casolaro and the Octopus murders. It also happened with Jesus. Well, you may as well go out with a bang, and blame it on the Romans. Of course, Christ comes back to turn the whole Roman empire to Christianity. Do the reporters every turn fake news into wisdom?
We use that term with the most poise as you could say it is just a propaganda buzz word. Of course it is our job to throw around words like propaganda, grass roots revolution, and conspiracy buzz words, and carefully place the blame, like a preacher, so congratulations on turning the tables. In this case fake news is very real. It started with the Spanish Flu. What a racist term, and it was. The Allied powers that be in World War I could not admit a plague was going around. Of course, a sniffle could never stop us. If you care to look at the hubris, only Spain reported about the flu, and why is that? Because the American media was corrupt and racist. That is the beginning of fake news: play the blame game and don’t explore questions. If you are demonetized on YouTube for promoting fake news, get a lawyer who will say, "just brush it off by calling it your own opinion." it is guaranteed in the constitution. We can play the system as well as they play us! We don’t claim to be holier than thou, only invested in thous ability to beat the odds, the conspiracies, and the juvenile delinquents, who these days profess themselves journalists.
Throughout this episode we are familiar with safety, and also with getting a little wild. We skillfully robbed the bank only because the bank robbed you. We were the menace to society for all the right reasons. We hope to shake up the puppets in democracy and the banking and ratings sector and to say, don’t just put your stamp on it, put your name on it, and if your sexy maybe a phone number! This could bring some pride and maybe create a new brand, like Nike or Google. The whole act was a rabbit out of the hat trick, whether you view that to be clever banking or rampant greed, the floor is open to you. Just don’t say we didn’t warn you; capitalism does believe in fool’s gold, the herd mentality, and time is money. Now our fool’s gold is cryptocurrency that anyone can use anywhere. Instead of backing it up with layers of complex opaque financial instruments we shall back it up with technology and open the secret trade books, to let you see inside me mind of the movement. The future is now not owned by some banking conglomerate, it is owned by the people.
We illustrate these true tales from the trip simply to familiarize yourself with the revolution. We need new finance, and we need new banking. We will next explore Blockchain where banking is done right in the open like a soap box rant, or sexy natural tan. We can use tokens and Automated Market Makers to always profit, and we can use DeFi (Decentralized Finance) to create loans and income streams that will cut through cryptos volatility. It truly is a great promise, and we promise to deliver. Blockchain is the future of finance that has learned from its past. It is still an infant, but it should be the friend of coders, investors, and even mystical Gurus who claim it can do almost anything and take business to the next level. It is philosophical, mathematical, practical and even a bit magical and helps keep crypto the way it was meant to be, open, accessible and smart.
