The GameStop uprising,
the biggest thing to happen with video games
since Sonic got busted for doping.
But if you haven't heard the news, what happened was
that some Wall Street hedge funds bet a lot of money
that the stock price
of the video game store GameStop would fall.
But a bunch of people on reddit found out about those bets,
so they started buying GameStop shares
so that the price would go up
and the hedge funds would lose a lot of money.
And lose a lot of money they did,
in the billions of dollars.
So, as you can imagine,
wall Street is pretty unhappy with those reddit investors.
NEWSWOMAN: A handful of industry leaders are calling
for an investigation because of the angry mob
that's formed against them.
Last week wasn't a free market. It was a free-for-all market.
No doubt about it, for my 25 years in the business,
I've never seen this form of collusion
on such a widespread fashion.
This type of behavior is not the behavior
that you want to be replicating.
I think there is something obviously wrong,
and it's the gamefication of Wall Street.
Talked to an analyst this morning, guys.
He said this is dangerous.
They-they forget they're buying a stock in a piece of a company.
It's not just some symbol that you play hot potato with.
Just because you throw the Hail Mary pass in your backyard,
and it's caught for the touchdown in the wind
doesn't mean you're Tom Brady.
What's going through my mind is-is how irrelevant I feel,
and how every day, I just don't want to get out of bed,
and how it's the least amount of fun I think I've ever had.
Oh, man. These Wall Street guys are taking this so hard
that their interviews are just turning into therapy sessions.
I feel so irrelevant right now, and I'm not having any fun.
And I-I just remembered my parents never hung my paintings
on the refrigerator. (crying)
But the truth is, what the redditors did here
is nothing new.
In fact, the only thing that makes this so unique
is that this is just the first time that the little guy
has used the big guys' tactics against them.
Because when it comes to manipulating the market
and treating trades like a game,
no one is better at it than Wall Street.
I mean, they do this shit all the time!
In fact, let's take a look at a few examples,
starting with a scam
one big bank pulled just a few years ago.
NEWSWOMAN: The New York Times reporting over the weekend
that Goldman Sachs is running a scheme
to artificially inflate aluminum prices.
NEWSWOMAN 2: An aluminum warehouse controlled
by Goldman Sachs holds
the equivalent of a quarter of the annual north American demand
for the metal, but only offloads or distributes
a required minimum of 3,000 tons a day.
No more, no less, whatever the demand,
pushing prices of the metal higher
even as demand has declined.
Goldman profits from this practice two ways.
First, from the extended rents paid to store the metal,
and second, by the bets
made on aluminum futures by its trading arm.
NEWSMAN: The inflated aluminum pricing by Goldman
and other financial players has cost American consumers
five billion dollars over the last three years.
Yeah, that's right. Basically, Goldman Sachs
manipulated the supply of aluminum
by only letting out a little bit at a time.
You know, the same way Daniel Day-Lewis
limits the supply of movies he's in.
I mean, the dude's only been in six movies
over the past 20 years.
The Rock made that many movies yesterday!
Get to work, Danny!
By the way, for the rest of this segment,
I'm gonna be pronouncing it "aluminum,"
even the correct pronunciation is "aluminium."
But we had a vote, and all the people I work with
are American, and so they won,
and I didn't want to accept the election result,
but then I was like, "No, we don't want to do that again."
And I'm sorry, guys,
but aluminum should never be hoarded.
It needs to be used the way God intended:
to make condoms for robots.
Or for Marjorie Taylor Greene to wear as a hat.
And believe it or not, Goldman Sachs got away with this scheme
for years, until people caught on to it.
So I guess you could say that their aluminum plan...
was foiled.
Wow!
? Bowm, bowm, bowm...! ?
Now, as crazy as this is, it's actually a common tactic
with Wall Street-- you take over a market
and then manipulate its supply to drive up the price.
Like how JPMorgan used its control over electricity
to fleece California.
NEWSMAN: JPMorgan Chase accused of manipulating energy prices
and so driving up the electric bills
of millions of Americans.
At night, when energy prices are very low, essentially,
they would bid them up, so that in the morning,
the companies would go to buy energy
and find the price is artificially high.
It takes a few hours to get a power plant going,
so they would have to buy the energy in the morning,
when it was very, very expensive.
In one case, JPMorgan duped California utilities
into paying $999 per megawatt hour,
when the going rate was only $12.
Yo, this shit is crazy!
It's like these guys were sitting around a table like,
"I'm tired of just abusing our power metaphorically.
Let's do it for real."
Basically, because of JPMorgan, the cost of electricity
went up from $12 per megawatt
to almost a thousand dollars per megawatt.
Even Amish people were like,
"Yo, I don't even know what electricity is,
but that shit is messed up, B!"
I hope the Amish community
doesn't come after me on Twitter for that one.
I mean, at that price, I would actually be less upset
if you jumped me and robbed me.
At least then it feels like you had to work for it.
And the truth is, people, this isn't something
hedge fund people are ashamed of.
In fact, some of them even brag about it on the TV.
Jim Cramer once made a fortune running a successful hedge fund.
He went on to host his own TV show, Mad Money,
that offers stock tips to investors.
But as Cramer has found out lately,
a lot of Americans are mad at him.
This video, made in 2006, has suddenly gone viral.
Cramer explains to his own financial website,
thestreet.com, how he could influence stock prices
up and down as the manager of a massive hedge fund.
You know, a lot of times when I was short
at my hedge fund, and I was position short,
meaning I needed it down,
I would, uh, create a, um, a level of activity beforehand
that could drive the futures.
It doesn't take much money.
But it's a fun game, and it's a lucrative game.
I would encourage anyone who's into hedge funding to do it,
-because it's legal, -Right.
and it, uh, it's a very quick way to make money,
-and very satisfying. -Okay. Um, well...
By the way, no one else in the world would ever admit that,
but I could care.
These people got no shame.
No shame. Zero, nada, zilch.
He's just out here boasting about his evil plans.
I mean, the only people who do that are hedge fund guys
and Bond villains.
I mean, listen to him, listen to him talk about it.
It's legal and it's very satisfying.
Just as a general rule, whenever you have to remind someone
that something is legal, it's probably shady.
You know? No one's ever like,
"Hey, Trevor, you want to go to The Cheesecake Factory?
-It's legal." -Uh...
But when it comes to hurting people in order to make a buck,
nothing compares to the Great Recession of 2008,
which was caused by-- guess who?--
Wall Street manipulating the markets.
NEWSMAN: During the hot housing market,
banks took millions of home mortgages,
many held by people who could not afford them,
and bundled them into packages as mortgage securities.
JPMorgan today admitted that it sold those packages
to investors even though its executives knew
that many of the mortgages were highly suspect.
When the market collapsed,
those packages became mostly worthless.
NEWSWOMAN: Goldman sold investors
subprime mortgage packages, but then made its own bet
those same investments would lose value
without telling investors.
Goldman employees themselves use profanity
to disparage the deals.
NEWSMAN: When asked if any of the executives
at least felt partly responsible for the financial collapse...
There's things that we wish we could have done better,
in hindsight...
NEWSMAN: ...or even regret...
Regret, to me, means
something that you feel like you did wrong.
And I don't have that.
When you hear your own employees,
or read about those in the e-mails,
do you feel anything?
I th... I think that's very unfortunate
-to have on e-mail. -Are you embar...
-(laughter, shouts) -And-and... and very unfortunate...
-I don't... I don't... -On e-mail?
-How about feeling that way? -I think it's very unfortunate
for anyone to have said that.
Goddamn. Even the crowd-- did you see them?--
even the crowd in the chamber was like, "Oh...!"
You know how bad you have to screw things up
to turn a Senate hearing into a Jerry Springer taping?
But this is how you know how psychotic these guys are.
Not only did they tank the economy,
but they talk about emotions like they're serial killers.
Do you regret hurting these people?
Regret is a thing that one feels
when one has done something wrong.
(hissing like Hannibal Lecter)
I mean, how can you expect these guys to change their behavior
when they can't even express their remorse?
The closest Wall Street comes to reflecting
is doing coke off of a mirror.
So after all the damage Wall Street has done
to people's lives, please miss me with all of this whining
about how unfair it is for Reddit to boost GameStop.
And don't get me wrong, I'm not saying
all these Reddit guys are heroes,
but I will say it has been fun watching how some of the people
who got rich off of GameStop have been spending their money.
NEWSWOMAN: While GameStop has minted plenty of millionaires,
many retail investors are using their more modest profits
-to pay bills. -One Reddit user even posting
that he paid off his student loan debt,
thanks to the money he's made off of GameStop
the last few days.
Ten-year-old Jaydyn Carr-- two years ago,
his mom bought him ten shares of GameStop as a Kwanzaa gift.
Back then they were six dollars each.
Now he sold them for more than $3,000.
What are you gonna do with the money
that you made on GameStop?
I've already saved $2,200 of it,
and the rest of the thousand
is gonna go to invest in more companies.
NEWSMAN: Hunter Kahn cashed in on the GameStop phenomenon
last week, but didn't just cash in for himself--
he used some of the money he made
to donate six Nintendo switches and games
to the Children's Hospital in Minnesota.
One day trader who cashed in on the craze
walked into a GameStop store this week
and started handing out hundred dollar bills to employees.
After the Robinhood app halted trading on GameStop,
one investor chartered a plane to fly a banner
over the company's headquarters saying:
"Suck my nuts, Robinhood."
Ooh, that's a gangsta move right there.
It's like Twitter... but in the sky.
Now, you could say it's childish
to spend money you took from Wall Street
to dunk on Wall Street, and that may be,
but in the words of Jim Cramer,
"It's legal and very satisfying!"