Bonus Episode: How a Reddit chat room gamed the stock market


I'm robert evans hosted behind the bastards. And if you're like me you're probably worried right now in part because of the fascist insurrection on january six th in washington dc. but what. If i were to tell you that would happen in. Dc was just the latest in more than a century fascist attempts to take over democratic governments many of them successful learn about the history of these insurrections and the history of anti-fascist actions attempting to stop them. When you listen to behind the insurrections on the iheartradio app apple podcasts. Or wherever you listen to podcasts. The amount of debt that the baby boomers have created is never going to get back. Who is supposed to pay it back. Gen z and millennials you polluted our planet inscrutable financial system. And we're sick and so this is literally. He's young kids fighting back. It's like a giant middle singer to the system. Now we've got a whole universe of day. Traders that are out there both crypto markets and the equity markets And they're making money in their how fault it's a story that started in a reddit. Chat room it then took wall street on by storm and now it is all everyone is talking about. No one predicted the first big business story of twenty twenty one would be about a sleepy. Little video game retailer. That's been in decline for months. If not years now seeing its stock price go from thirty to three hundred and forty dollars over a matter of days why because a bunch of day traders who found one another on social media platforms and chat rooms figured out a way to take on the system push head funds out drive up the markets all well. We're kind of in-between administration. Don't even have the next. Se chair confirmed. I'm stephanie rule. Msnbc anchor nbc news senior correspondent and this is modern rules. A podcast from nbc. Think an iheartradio. We need to explain this story. So i brought in the one and only mike nova rats. He is the ceo of galaxy the digital currency firm former co founder of fortress who has a deep understanding of this cultural divide but also knows a lot about finance now. Michael novak bats. I am reaching out to you today. Because the general news audience needs some help and understanding. What in the world is going on last summer when we riots break out after. George floyd died. It wasn't just about racial injustice. It was bad economic injustice. Two weeks ago The capital riots. Again it was this anti establishment movement and now somehow the same spirit is playing out in the last few days in the stock market. It's all coming together with a company that i often would compare to like the radio shack of game stores game stock and it is the robinhood traders. The little guys versus the establishment. Can you tell us the story. Take us back. How did we get here will be here in over twenty thirty year period right since two thousand eight. The medicine that bank governors and ministry. It's the man's cheeks or department of treasury adds a gift to stick economies our were fiscal than a lot more monetary say. We don't know what fed governors our economy was sick in the financial crisis. They pumped money into the system and they put interest rates at zero which met wealthy people could borrow money to start businesses and buy houses but savers weren't making any money and you had to put your money in the stock market because it was the only game in town since two thousand and eight. We have grown the money supply right amount of dollars in circulation five x and so if you think about if we're sitting around a table and there's an apple want by the apple of five times as much money the applicants lot more expensive and so assets houses stocks. Bitcoin can you name. The asset art has gone up in value. Who owns assets risky. Move the medicine that our government officials continue to give the economy keeps extending the the gap between hassle to have roots. It got wildly supergiant because again devon so the pandemic kids it's the economy and so the only response sharon pal that the head of the fed mnuchin at that time new was to throw tons of money at the problem and we increase money. Supply faster than absence forward to We drove a deficit of four. You know four trillion dollars. Trillion dollars used to be a lot of money and now we're zona choi nour's around like matchsticks attorney dollars is five percent jean crave it is a staggered so running the biggest deficits we've ever run. Both were ward too and that money is being recycled into the hands of wealthy hedge fund managers. But also you know young robin hood. Trips were taking their stimulus. Shackles are extra savings. They're stuck at home. They can't go to bars and chase girls They're stuck at home their the computers and this is almost like addictions. So when we face pandemic crisis the fed comes in they pumped money. They stabilize markets but for the average small business. They were dependent on congress stepping in and helping them and the fed did a whole lot more. So how much did that worsen. Splinter this economic divide. It wasn't like demand went away. It just meant all that business is going to target and walmart and amazon was a crises. Often you use the most blended sure. Yeah and it'll monastery supplies the blunt insurance then buying everything. The fed larry bailed out bailed out the national system Party partyka's the chairman be had to Right there was no alternative. His mind hungers could have made a lot more distribution to individuals and less to corporates right. There was lots of decisions. Made it even the ppp away. That was done They tried their best. It wasn't an effective. Lots of wealthy businessmen took advantage of the pt bay was really meant for all businesses. But it's really hard in a fast moving environment like the world has seen so the drug. They know how to use as monetary pulse when they gave stimulus when had extended unemployment. We had mitch mcconnell saying well. We have to end that because people are getting paid so much money. They don't wanna go back to work. When that wasn't the case for the american poor half our country has no savings. And we've got fifty million people who are food insecure while the mega rich got mega richer. And the pretty rich for buying second houses. That's exactly what's happening. And that's why we're seeing. You know we saw the riots after. George floyd which racial justice looked around l. a. Eat the rich there. Is this growing friction. Growing i think uncertainty or in our economic policy political system in social in civil society civil society breakdown in dc. It's really complicated now. The genie so far out of the bottle. It's hard to figure out how it gets back in hill. This is also generation right. This is the younger generations. Gen z and millennials flipping the bird. The baby is insane in the baby boomers. You have taken way too much debt right in a lot of ways. It's white crypto was created crypto. Came in two thousand eighteen happened. It was middle finger to the system in. Its the same guys who are doing robinson that we're kind of the spirit of the rigid crypto revolution. And we're seeing it now rolling up in this thing. We call decentralized. Find

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