A toast to the Reddit day traders, the equalizers of Wall Street | COMMENTARY
By Matthew Pipkin Jr.
For The Baltimore Sun|
Jan 28, 2021 at 10:51 AM
I watched the Great Recession of 2008 unfold through its effects on my father sitting on our living room couch. Normally a jovial character, he was subdued as he silently sat and watched our television, like many of our fellow anxious Americans during this emerging crisis. As a local banker in Annapolis, he understood the stern consequences that this could have on the daily lives of ordinary citizens if the credit dried up and banks were forced to close. All the hard work that he did for our small-business, tourism-dependent hometown weighed heavy on him as our nation’s financial stability teetered before his strained eyes. It was difficult to witness both the mental and physical anguish leaving a deep toll on him.
Had it not been for the decisive actions made by the Bush administration in 2008, household names like Bank of America, Morgan Stanley and Goldman Sachs could begin languishing away in the back of our history textbooks. The trillions of dollars lost by American citizens would have been chump change in comparison to the utter and complete collapse of our financial system. But while the painful necessity of the banking bailouts may have been evident at the time, the lack of accountability for the mistakes brought on by the greed of a few seem to make less sense as time has moved on. Nearly 13 years since the beginning of that fateful crisis, and we have come full circle to yet another daring trial before us all as a nation.
But this time, the stage is different. While the wooden shutters nailed to the doors and windows of our favorite local bars and restaurants silence our main streets, the echoes whisper from the hustling inside the financial buildings towering in our skylines. In fact, it seems like more than a few of Wall Streets’ firms have come to flourish triumphantly amid the greatest pandemic we have seen in over a century. By shorting the stock market prices on the sick dog companies of the business world, billions of dollars have materialized into profit for some of the top-producing Wall Street hedge funds in 2020.
And yet, a new movement has come into view from over the horizon. With the assistance of complacency from these sleepy financial leaders, a disgruntled group mysteriously emerged from the depths of Reddit. Their goal? To seek out and to pillage from those who have sought to make profit off the destruction of a pandemic.
Armed with the democratization of day-trading tools, such as Robinhood and Ameritrade, these Reddit rough riders known as the “Wall Street Bets” have risen to fight and challenge the hedge fund goliaths in their own arenas. With the vigor of Teddy Roosevelt and his passion for a truer version of a free market in their hearts, these rough riders charged up San Juan Hill and flooded the depleted companies of GameStop and AMC Entertainment. Through the combined funding of these individual investors, seeking a common goal to steal the profit for themselves, stock prices soared to historic levels at the expense of the hedge fund orchestrators.
One must admire the audacity glaring out from this online community to come together in such a manner. The shocked and the speechless faces from the Wall Street Zoom calls to the newsrooms say everything that you need to know. Nobody could have foreseen such an insult would be hurled at these financial masterminds. A once easy strategy for obtaining wealth quickly in this market was forever ruined. Yet, I cannot help but feel that the egg on the face of this industry was long overdue.
And so, as I sit here from the safety of my own living room couch, several years after my father passed away, I offer up a toast to the Reddit Rough Riders. So many questions will come out of this. Was it legal? Was it ethical? Is this the start of a movement, or simply a social experiment? I will leave those excellent questions to the lawyers, philosophers and financial experts to ponder upon. But was it awesome? Absolutely. Cheers to all of you for waging a war on behalf of us, the average-Joe Americans who work hard for our families and strive to better our local communities.