>> The Securities and Exchange committee has officially weighed in on the battle between
small investors and Wall Street hedge funds. This is the saga that's been going on all
week long. The story is rapidly changing. And Brokerages like Robinhood, and Reddit
users, by the way, are now being warned by the SEC, that they're being closely monitored
to ensure that there is no Illegality or wrongdoing.
And so, Jen Psaki the White House press secretary reluctantly addressed this after reporters
asked some questions about whether or not the Biden administration is planning on doing
anything about it. Let's hear what she has to say.
>> Do you anticipate President Biden to address the GameStop controversy when he meets with
his economic team a little bit later this morning?
>> No. Do you anticipate him addressing it publicly?
>> You mean, talking about it with his economic team?
>> Well, the focus of the meeting is about the recovery plan about the status of via
economic recovery about obviously the data that we saw. Yesterday I'm sure they'll cover
a range of topics during that meeting, but that's not the focus.
>> Big story. >> I know it's a big story but doesn't you
know, obviously the our focus and our big story is getting the American people back
to work. Go ahead and GameStop not to belabor the point, but I love the effort here. Guys
are trying. >> So hard on this.
>> What is the broader message to the American public of people around the world that in
a large case is individual investors acting collectively against large of financial institutions
are shut down pretty much overnight while the big banks and financial institutions responsible
for the 2008 housing crisis gotta.
Get out of jail free card. >> Well, the message is that the US government
is starting to work how it soon. The SEC is a regulatory agency that oversees and monitors
developments along these lines. It is currently in their purview. They've put out several
statements this week. We will certainly defer to them.
The SEC has been around for a while, including during the 2008 economic collapse, which is
why that answer leaves much to be desired. But let me open it up to the panel right away.
What did you guys make of the way Jen Psaki, answered that question? Question, because
I think first of all, the reporters should just be more direct, right?
How are we going to ban shorting stocks? Because that's like a question that people wanna know
about. And maybe the fact that they weren't so direct led to that deflection, but what
did you guys think? I, you know, I press secretaries are always the for me they're always the person
who I look look towards first because of how they handle like how they handle situations
like this right like it's almost as if she has to come out swinging and showing people.
Hey, I'm a badass like, I can I don't want to say she's marking her territory if that's
a weird way of putting it. It's almost she's like, I'm proving to the American people that
I can be effective and still not give effective answers. I agree with you, right?
I think that the reporter should just go in for the jugular and get to the point. Point
and ask the questions like why and keep it pushing because right it's a space and time
and the wit and with the American people that we don't have time for bs anymore.
We've been through the most. And so any little thing that seems off seems fishy seems a little
shady. We're not here for not having it. So I agree with you. The reporter should come
in hot, and she has the right to not answer the question, but it will be refreshing for
her to be direct, as well, I guess.
>> Yeah, I think that either the reporter actually did kinda come in pretty hot, and
actually lob a very safe ball up to Jen Psaki to say. What the priorities of the Biden administration
at this moment? Aren't she was saying the before, right? We're trying to get people
back to work.
We're trying to you know, talk about and tout your $1.9 trillion stimulus plan talk about
the rollout of the vaccine. Talk about you know, housing moratorium on evictions. But
she's unable to do so. And this is where you're really seeing the difference between everyone
Bernie Sanders and a press secretary for Bernie Sanders up there who has a clear economic
vision of the fact that Wall Street has been screwing over Main Street for so long.
Now that, this group of investors on Reddit have exposed essentially, that the game is
rigged in so many different ways, and redirect that back into a message of, of economic justice
that I think the people the American people are ready to hear about. Because the Democratic
Party is used to getting their donations from Wall Street itself, they're not gonna do that.
They're not gonna touch that third rail when, man, we wanna hear it. I mean, it does certainly
put the Biden administration in an uncomfortable position because, remember, one of the stories
that got a lot of attention during the Democratic primaries was when he met with his Wall Street
donors in Manhattan.
These are people who are worried about their quality of life. Changing. And so in response
to that, he told them, don't worry, nothing will fundamentally change. So, he made that
promise to these donors. And so to come out swinging against these hedge funds isn't necessarily
something that's gonna sit well with the people who gave him.
Some material gain in winning this election, but when the SCC first announced that they're
keeping an eye on things Robinhood loosen some of their restrictions on buying. Some
of these shares like shares for companies like GameStop, AMC, you get the picture. And
at that point early today, the stock value did or share value did increase.
So for instance, GameStop surged 83% on Friday. Friday after brokers including Robinhood ease
some restrictions on trading. Headphone maker costs Corp also doubled in value. Then there's
AMC entertainment and Express each up 60% on Friday, Bed Bath and Beyond added 13% and
the list goes on and on.
The stocks that we have talked about already, however. What is pretty fascinating is immediately
after I began researching and producing this story, there was already a big update, and
this next video will explain exactly what that update is. Hey, John Robinhood. Once
again, reducing the amount of securities that customers can buy on the platform is warning
they reopen trading of names like GameStop.
They are reducing the amount of shares you can buy from five shares to just one share
for a list of stocks here. That includes AMD, GameStop, Koss, Bed Bath and beyond American
airlines and a few others here. Robin who just updated their blog post that to update
customers here, again reducing the amount of shares you could buy for some of the stocks
that were banned yesterday.
They did open that up again today. I mean, so you can buy one share, you can buy one
share of GameStop. And I think that part of the deal with trading with Robinhood is you
get to trade like one stock for free. I don't even know something. So a lot of people who
open up a Robinhood account will decide on buying a share of GameStop.
But anyway, it's just amazing the kind of manipulation that's taking place across the
board. Right for me, that's the heart of this story. Like I think that this has really revealed
how the system is rigged in the favour of Wall Street and these hedge funds. I think
that finally for the first time that I'm aware of the general public is starting to really
reevaluate whether.
Shorting certain companies, provides any type of value to this financial system at all,
of course it doesn't. And then the other part of it is, it's really easy to manipulate,
in this case, you have these. I guess amateur if you wanna call them that, or retail traders
on Wall Street bets working collectively to essentially screw over these hedge funds by
buying and holding this shares for GameStop and other companies.
On the other hand though Robinhood which builds itself as this brokerage firm that can help
ordinary people invest in ways that they couldn't before. It's all about like taking from the
rich and giving to the poor like that's the whole idea. Behind the scenes they've been
working with hedge funds and and handing over data from these small investors to these hedge
funds are keeping a close eye on what's going on.
So there have been some hedge funds who have actually benefited tremendously from what's
been going on as well. Yes, exactly and the idea that they're getting the data before
those retail investors or before small time investors who. Yeah, it's great that there's
a low barrier to entry for buying and trading on Robin Hood or on you know, e trade or wherever
it is.
But at the same time, you know, the the hedge funds behind him are like, yeah, you can buy
some but we're gonna have the upper hand no matter what we. Which I think is really what
this story is about is that, look I don't think there are heroes.
I don't think that the you know, millions of people on Wall Street bets are heroes in
this. I don't know if they did this because they wanted meant to see a hedge fund cry
or if they wanted to make money themselves. Whatever it is, it's exposing and revealing
a bigger problem and getting us to talk about these issues like actual regulatio.
But it's just so funny that all these platforms that we're supposed to democratize, you know,
Wall Street are revealing that wall street's inherently undemocratic. It's not meant for
everyday people. It is meant for the 90 the 10% of Americans who own 90% of all stock
of all stock.
And meanwhile our retirement funds, schools, school funds, city funds, all of that is being
gambled with and played with. So, it is a question about regulation and it's a question
about the ethics of the stock market in and of itself. Well, don't worry Francesca because
the system is working the way it's supposed to.
Okay I defer to the SCC that again, obviously didn't do what needed to be done to prevent
wall street greed, collapsing the market in 2008 and, you know. Anyway, but go ahead.
Sorry about that, Jason. >> Yeah, I mean, you guys both make very salient
points. I'll just, all day today and in the last couple of days hearing GameStop over,
and over, and over again, all I could imagine is some smelly teenage boy walking in looking
for a Super Mario Bros.
game. Trying to find Zelda all the times I've traded in phones there for money. It's just
yeah, super, super exciting but I mean I've nothing more to add to the story. I think
you guys hit the nail on the head on all points but good luck. GameStop is having a moment
whether it's good or not.
>> Yeah, definitely and look. I think at the end in the end, any type of manipulation in
one way or the other is irrelevant to the health of that company. Right? That company
is, isn't performing well and you know, it has its own business practices that you know,
we haven't really gotten into in the context of this particular story.
Then I have issues with but when you really think about it, I mean you have online streaming
you have Amazon you have basically a huge change in the way that people are consuming
their entertainment and it's clearly hurting businesses like GameStop and no amount of
Wall Street bets collectivist action is going to change that unfortunately.
So we'll see where the story ends up. But it has been absolutely fascinating to really
keep a close eye on it. And of course we'll give you guys more updates as we learn them.