The news is not entertainment; it's something much worse than that
Story time: the Gamestop fiasco
(This post is going to get tense and irritated. But we’ll wrap things up happy and grateful.)
I have very little forgiveness or tolerance for people who still watch the news.
To be perfectly harsh, you have to be genuinely stupid to think that the news is a valuable thing to spend time on these days. I mean - the data is in. The experiment is over. Mainstream media is objectively a bad source of information. Period. There’s no more acting like it’s a good thing - we all know better at this point. All of us.
Now that I’ve put it harshly, allow me to be more reasonable.
They say that as you get older, paying attention to the world becomes a favored pastime. Taking in a steady stream of news and information becomes a cherished daily activity - maybe out of wisdom, maybe out of boredom. “Old folks watch the news - that’s just what they do.”
But then they also say that the news isn’t meant to be information - it’s meant to be entertainment.
No no no. I’m calling bullshit. Oxford defines entertainment as “the action of providing or being provided with amusement or enjoyment.”
The news does no such thing. It does not spark joy. It does not brighten people’s days. It does the exact opposite. The news is not entertainment - it is a psychological virus for which people willingly get software updates. It is a river of poison from which people willingly drink. It’s a polarizing mechanism designed specifically and meticulously to make our lives worse.
The mainstream media is the water cooler at which the miserable portion of the middle class can be found. The news is the trough of slop and waste that the rich feed to the working class to keep us occupied. It’s the mechanism by which the wealthy and powerful retain all the control - they make it so that we’re so busy hating each other, we don’t pay any attention to what they’re doing up top. They really have mastered the technique: they get us to blame all the country’s problems on each other, so they can run off with all the money. When, in reality, all of our problems are entirely caused by the rich, the powerful, the corporate interests. Republicans and Democrats shouldn’t hate each other - we should dislike the people who actually cause our problems.
I’ll stop the ranting and raving, before I get too negative. I’m certainly not trying to be negative, but these are things that need to be said. These are truths that need to be recognized by the adults of the West. If you still think your real “opponents” are regular middle class folks, you’re not paying attention. Those people are you. They’re the same as you. With the same struggles, the same priorities. You should like them, not hate them.
I want to highlight a story from 2021 as a perfect example of what the media does to us.
No, I don’t want to talk about George Floyd. Or Kyle Rittenhouse, or Seattle, or Portland, or Hunter Biden or anything to do with race or the vaccine or Covid. At this point, it is so loudly and painfully obvious that those narratives are riddled with lies that they aren’t even worth discussing here.
I want to talk about a much more subtle and believable narrative that the media fed to us. The Gamestop ($GME) story.
If you don’t remember, January 2021 saw a very unique and powerful phenomenon in the stock market: a gigantic short squeeze. For those not familiar, a short squeeze involves the panicked buying of a stock by people and institutions who have shorted it. Selling a stock short involves borrowing the stock from a broker or other market participant, and selling it with the intention of buying it back later to return to its owner. Obviously you want to buy low and sell high, which means you’re betting that the stock will go down over your chosen time horizon (instead of the traditional route of betting on a stock going up).
And when a surge of buying happens on a heavily shorted stock (GME), shorts are forced to hurry up and “cover” their positions - covering their debt by buying the stock. This can sometimes trigger an overwhelming cascade of buying and a huge rally in the price of a stock. And, for the shorts who hold on and hope for it to fall again, the situation can compound and compound until the losses are catastrophic.
Imagine for a moment that you shorted a stock at $20. And then the stock went to $22, and you covered your position because you were clearly wrong. You suffered a 10% loss. Now imagine that you held on out of desperation to be right - and you didn’t cover until $40, when your broker forced you to. That means you suffered a 100% loss - you have to pay double your sell price to buy the stock back. That’s a gigantic loss. That’s the kind of loss that you hear about in cautionary stock market lore.
Now imagine what happened with Gamestop. Over the course of 11 days, the stock went from $20 to $483. That’s a 24x short squeeze. If anyone happened to hold short that entire time, that would mean they had to pay 24x their short price to buy the stock back. That’s the kind of loss that takes away every penny you have to your name, closes your hedge fund, and puts you in debt to your broker. That’s the stuff of legends.
And legends are what we got.
We got overnight millionaires, we got retail traders who finally had a big win, and we had a story we could all be proud of. Because here’s the thing: Gamestop was a battleground stock. It represented the retail trader, the average investor, beating Wall Street at its own game.
However. That story got blown out of proportion. The legend of the retail investor went WAY too far with Gamestop. The short, simple, and true version of the story is that people liked the stock and so they bought it, and they got themselves a big winner.
The overblown, false, and pernicious version of the story is that retail traders conspired to take down Wall Street. That average citizens all got together in an organized fashion and aggressively tried to ruin the lives of bank managers and hedge fund managers.
(Side note: 99% of hedge fund managers are genuinely terrible at their jobs, or they’re downright charlatans, and they deserve what they get. But that’s not the point of this story.)
I mean sure, that sentiment definitely existed. The self-proclaimed “apes” of the Gamestop community did in fact want to “pull one over” on Wall Street and put the institutions in their place. That was part of the story. But do retail traders actually have the power to do that? No. Unequivocally no. Not ever in the history of this country have retail traders and investors had that kind of power, and it’s not likely that we ever will.
This is what’s so dangerous about the Gamestop narrative: the media used it as an opportunity to paint a false picture of power into the average citizens’ hands. And to make it seem like Wall Street was a victim. Or that Wall Street lost at their own game.
False.
Wall Street will never lose at its own game. Because they have informational advantages, all the rules of this country are designed exclusively for them, and they are backed by the Full Faith and Credit of the United States Government. The public will never win against Wall Street. Because this country is literally designed to make Wall Street win no matter what. That’s literally the fundamental design of this country. And it’s not likely to change.
Remember the Global Financial Crisis? Remember how Wall Street banks over-leveraged themselves into unwinnable positions by perpetuating an impossibly exuberant housing market? Remember how they essentially forced banks across the country to give mortgages to people who definitely could not afford them? Remember how Wall Street literally gambled away the entire world economy in the name of short-term profits?
Remember how they faced no consequences whatsoever?
Remember how the government bailed them out and the CEOs who directly caused the crisis walked away with multiple billions of dollars in severance packages and bonuses, and faced zero professional or criminal repercussions?
Well, I remember that. And you should too. Because it’s fucking embarrassing.
So how does that relate to the Gamestop fiasco?
Storytelling.
The media wants us to believe that these kinds of things aren’t Wall Street’s fault. And that the banks who run this country are actually competent and reasonable, which they definitely are not.
The media wants us to believe we have the power to beat Wall Street. That the Gamestop story was a moment of redemption, of evening the odds, of public triumph.
But it wasn’t. Not really. Because here’s the thing. The vast majority of the trading volume in Gamestop (or in just about any stock, on any given day) is institutional traders. Bank traders. Hedge funds, prop traders, whales, and well-organized trading desks in Corporate America.
You know what that means?
The institutions who lost money in the Gamestop mess lost it mostly to other institutions. They didn’t lose to the American public - they lost to their own cohorts. They weren’t really playing against us. They were playing against each other.
To make a stock move the way Gamestop moved last year, requires the movement of billions upon billions of dollars. Unbelievably massive inflows and outflows every single day. Do you really think retail has the kind of funds, let alone the kind of organization and cooperation, to cause that kind of movement? No. That’s fiction. That’s not real.
The media wants you to believe that there were, like, 400,000 retail traders on a Zoom call or something, all clicking Buy and Sell at the same time. Joining forces to take down the hedge funds. Organizing themselves into some kind of Short Squeeze Infantry Corps to push the stock higher and higher.
No. That’s not what happened. Wall Street lost to Wall Street. The public just happened to be laughing. And happened to walk away with a fraction of the profits.
I need to point out how absurd things had gotten to lead up to this event, to show how incorrigible and immune to consequences Wall Street is.
Most of the time, if 10 or 12% of a stock’s outstanding shares are sold short, it’s considered a heavily shorted stock. If that much of the float is sold short, it’s a big indication that lots of big money is betting on it to go down.
Most records show that the short float on Gamestop was around 140%. One hundred and forty percent. That means 40% more shares than even existed were sold short. That means the entire stock pool for Gamestop was debt - it wasn’t even real stock.
I don’t even have words for this. The fact that the short interest on a stock was ever allowed to get this high is not even believable. It is a sin against the very nature of logic. It is a mathematical farce. A violation against basic financial decency. It is a testament to the fact that Wall Street is truly allowed to do whatever they want, and no one is ever going to stop them. It is a reminder that Wall Street owns the stock market and the Securities and Exchange Commission. The SEC is nothing more than a whore that Wall Street has its way with.
There were some liquidations and some huge losses in a few institutions. Some funds and clearing firms lost big. Those names and details aren’t important here. But my sense is, if you were short a stock that was already past 30% short, and especially if that bet comprised a large portion of your fund’s capital… you deserve to be liquidated, and sympathy is not something I’m willing to afford you.
In short, the Gamestop story, just like almost all news stories, was a blatant and easily-disproven web of lies. A narrative passed down to us to make sure corporate interests aren’t harmed by any public critical thinking.
So, back to my point: the media wants us to believe we have power. That the citizens of this country are in control. The mainstream news feeds us helpings upon helpings of fiction and nonsense so that we feel like this country is ours. But it’s not. This country is 10,000 bankers and 300 million cattle. We are at the mercy of the politicians and bankers who own the place - not the other way around.
And so it is with the other stories you hear in the news. Everything about social issues, geopolitics, Covid, environmental concerns, corporate interests… all of it is fiction or, at the very least, deliberately misleading. It’s all carefully designed to fool us into doing things we shouldn’t be doing, and accepting things we shouldn’t be accepting. Again, I don’t want to talk about those other stories, but my point is that the narratives being fed to us are wrong.
Especially your standard everyday politics. If you still get your political compass from CNN or FOX, I genuinely don’t even know what to say to you. You are severely misguided. These news stations actively make you treat the people around you like shit by telling you lies about them. Please stop letting them do that to you.
Find a few circles of friends who are reasonable and insightful, and just pay attention to them. Get your daily helping of information and social feedback from them. Don’t watch the news, don’t drink the poison that is offered at the water cooler. If you pay attention to just your own friends, whom you genuinely care about, you will know what’s really going on in your world. Because the news - that’s not really what’s going on in your world. What’s going on with the people you spend your time with - that’s what’s really happening in your world. And that’s what your attention should be on.
Unless you are crusading for change, and out there really moving and shaking, trying to fix things - you shouldn’t be paying attention to the news anyway. I mean… what’s the point? Why would you want to be all riled up about things you have no control over and then also admit to yourself that you’re not going to do anything about it? What a waste of time and energy.
Care for those around you. Be honest about where and when you live. Pay attention to what you can control - being part of good social groups and making them better, more productive, and more loving. Don’t pay attention to “the world” if all you’re going to do is bitch about it.
This has been a pretty negative, tense post. And I am truly embarrassed to live in the current iteration of the United States of America. But… there are two sides to everything, and I’m still incredibly grateful to live here. I adore the people around me. Republican or Democrat, most people here are just like me - just trying to survive and build good families. And that’s all that really matters to me. That’s what I’ll pay attention to.