Thursday, Fox News Channel’s Tucker Carlson opened his program with his thoughts on the fallout of the GameStop short-squeeze situation unfolding that has caused financial elites to question the retail investor’s role in financial markets.
Carlson said the backlash showed the U.S. economic system was not living up to its intended billing.
Transcript as follows:
CARLSON: Quite a day in financial markets, not a phrase we use a lot on this show, but a lot happened today and there are massive implications for all of us. Dave Portnoy joins us in a moment to explain what those are, but first some context of what we’re watching right now.
Last March, as the country began to panic about the arrival of a strange new coronavirus from China, a billionaire called Bill Ackman went on television in an attempt to make America even more afraid than it already was. “Our economy may be done at this point,” he said, over, dead, not coming back.
Bill Ackman went on like this for 28 full minutes, terrified CNBC viewers watched slack-jawed as he ranted. Here’s part of his performance.
(BEGIN VIDEO CLIP)
BILL ACKMAN, CEO, PERSHING SQUARE CAPITAL: Hell is coming. This was a feeling like I’ve never had like there’s a tsunami coming, right? The tsunami is coming in and you feel it in the air, right? The tide starts to roll out. Okay. And on the beach, people are playing and having fun, like there’s nothing going on. And that is the feeling I’ve had for the last two months. Okay. And my colleagues at work, okay, thought I was a lunatic.
We need to shut it down now. America will end as we know it, okay, I’m sorry to say so. Okay, unless we take this option.
(END VIDEO CLIP)
CARLSON: Bill Ackman was afraid, and he wanted you to be afraid. Ackman was especially frightened for the future of Hilton Hotels. Hilton Hotels, Ackman proclaimed quote: “Is going to zero along with every other hotel company in the world.” Every hotel is going to be shut down in the country — everyone. Talk about scary.
But in the end, not for Bill Ackman. Not long after that appearance, we learned that Ackman’s firm had made more than $2 billion from trading in the stocks that many people believed he had pushed down with the hysterically dire predictions you just saw, including Hilton Hotels.
So, it was Ackman’s rant on CNBC part of a very dishonest investment strategy? It seemed pretty obvious, so we said so on the air. Ackman’s lawyers immediately threatened to sue us.
In a long phone conversation later, Ackman swore to us that his public attack on Hilton Hotels had nothing at all to do with his desire to buy hotel stocks at a lower price or with the billions in profit that his firm subsequently reported. There was no connection whatsoever he promised, and he sounded emotional as he said it.
We will let you assess Bill Ackman’s sincerity. We do know that this kind of behavior is common on Wall Street. Ackman himself wants to attack the company Herbalife on television, it’s going to zero he once again predicted in an effort to profit from Herbalife’s decline, pretty ugly. But that kind of thing happens a lot on Wall Street.
Hedge fund managers bet money that a specific stock will decline in value. That’s called short selling. Short selling has no obvious value to the American economy. Short selling exists for the purpose of enriching the people who do it. Short selling hurts companies, obviously, it hurts their investors, it hurts their employees, ultimately, it hurts our country itself. Yet it continues. No one does anything about short selling.
Regulators ignore it. CNBC applauds the brilliance of the people who do it. Oh, they’re so clever, those hedge fund managers. In fact, NBC’s business regularly lends its airwaves to unscrupulous short-sellers who use free TV airtime — you may have seen this — to tank American companies for profit. They do that all the time.
The last administration did nothing to stop this. The current administration certainly won’t. The Biden White House is more tightly controlled by business interests than any administration in history. Virtually every person there is beholden to the finance establishment.
What’s happening on Wall Street is so clearly awful and so obviously destructive, the question is, who is going to fight back against it?
As it turns out, a bunch of guys on Reddit will. It fell to them to push back against the short-sellers because no one else even tried, so they did. A group of independent investors in a Reddit group called Wall Street Bets learned that hedge funds planned to short the stock of a fading retail company called GameStop. So the Reddit investors began buying shares of GameStop.
GameStop surged in value ultimately up by more than a thousand percent. The hedge funds, for all their calculation hadn’t seen that coming and they lost billions as a result of it. One hedge fund lost so much money it needed a bailout from two other hedge funds.
Meanwhile, some of the investors on Reddit got rich, but getting rich was not the whole reason they did it. They also wanted to send a message for the hedge fund managers. Here is one of the Reddit guys, a man called Justin Speak, explaining.
(BEGIN VIDEO CLIP)
JUSTIN SPEAK, REDDIT USER: I’d be lying to say if there wasn’t some pleasure out of the fact — you know, I’m a pastor and Jesus tells a story about this rich fool who has an overabundant harvest that’s more than he can store, and rather than give the excess to those in need, he chooses to build bigger and bigger barns to store it for himself.
And rather than share the billions with the less fortunate, they’ve built bigger and bigger barns for themselves. And so yes, as a hundred percent, there is a part of me that thought, well, it will be fun to be a part of this moment to see this moment where at some level overnight, these investors are losing their investing lies that’s being demanded from them, and they’re left wondering what — who is going to get what they had prepared for themselves.
(END VIDEO CLIP)
CARLSON: “They’ve built bigger barns for themselves.” Well, that’s true, not to mention epically enormous art collections. The hedge fund people in case you haven’t noticed, in case you don’t read the business press are very proud of their art collections very, aggressively, flamboyantly proud, despite the fact that a lot of their so-called art is ugly, overpriced garbage, cheap, garish crap that people will laugh at a generation from now, and that tells you a lot.
It turns out that a lot of our financial wizards have awful taste, as vulgar as the way they do business. They don’t know that though, because no one dares tell them in a country that worships finance people.
They’re the kind of rich people who still think Frank Gehry is a brilliant architect, not a scam artist. So people like that — arrogant, lacking any self-awareness whatsoever, understandably generates some resentment from the rest of the population. They pause and say, wait a second, Bill Ackman and the many people on Wall Street who behave like Bill Ackman, what exactly did you do to make $2 billion? Did you improve anything? Was it just another sleazy inside deal that the rest of us were excluded from participating in?
Tell us now. Please speak slowly so we can understand your answer.
That was pretty much the message the Reddit guys were sending to Wall Street. Watching at home, a lot of Americans applauded that message. They feel the same way. But the hedge people don’t, they were unhappy. People who lose money rarely are happy.
But here’s what makes the hedge fund managers different from you. They have a lot more power than you. They control the game, so they immediately changed the rules of the game.
Today, the investment app Robin Hood, which is used by independent investors to buy and sell stock, banned its users from trading GameStop shares, as well as from several other company shares. No one even knew that was legal. Maybe it isn’t. But Robin Hood did it anyway, and they did it under pressure from the hedge funds, who they really work for.
So much for the free market, you’re always hearing about, there’s nothing free about it. That turned out to be a lie. It turns out that what Wall Street really hates is outsider trading. The idea that people from outside their world might be getting rich, that’s the one sin they can abide.
The management of Robin Hood, of course, didn’t admit any of this, they can’t. They’re still posing instead, as an outpost of inclusive progressive values in a sea of rapacious capitalism, the irony being, of course, Robin Hood is the most rapacious. They sell information they gather from their customers to the hedge funds who use it for their advantage and most customers don’t even know. How’s that for progressive?
On the other hand, they do support BLM. They are against hate and systemic racism. They’re for science, and they want you to know that. Here’s an ad from Robin Hood that ran just last month.
(BEGIN VIDEO CLIP)
ANNOUNCER (voice-over): Remember, when greed was good? When you had to look the part when you had to pay for a seat at the table. We set out to change the way the system works, to put the power in everyone’s hands, to make it feel, speak, sound and look just like you.
We all invest every day in ourselves, our communities, our future. We are all investors.
(END VIDEO CLIP)
CARLSON: It is so to watch that stuff after the fact. That ran a month ago, “We set out to change the way the system works,” says Robin Hood. Well, that’s for sure. In fact, that’s literally true.
Robin Hood changed the system at precisely the moment when people from outside the system started benefiting from the system. Sorry, proles. No trading for you. We are locking your account.
Other platforms took effectively the same position but felt the need to pretend a little more than Robin Hood did. They justified changing the rules by attacking the very people they were hurting by changing the rules.
The communication service, Discord for example, banned users from the Wall Street Bets group from using its platform. Why did they do that? It wasn’t all because the Reddit guys were beating the hedge fund guys at their own grubby game and that’s not allowed. No, it had nothing to do with that, of course.
No, instead, they were banned according to Discord because the Reddit guys had engaged in, quote, “hate speech.” Of course, the Reddit guys were racists. That’s when they humiliated the hedge funds. Only a racist would do that.
You can laugh if you want, but keep in mind, this is a time-tested tactic. It works. That’s why they do it.
Remember back if you can to the Occupy Wall Street protests of more than a decade ago. The 2008 crash wrecked an awful lot of families in this country, many have not recovered even now. People are angry about that and many blamed Wall Street and they said so.
But rather than address their grievances, some of them legitimate, Wall Street and its countless puppets in the media just changed the subject. So, it was right about this point that we started hearing an awful lot about identity politics. We can prove that.
In 2011, when the Occupy Movement was at its peak, mentions of the word “racism” in “The New York Times” and “The Washington Post” and “Los Angeles Times” skyrocketed. In the case of “The Washington Post,” which is America’s most committed defender of entrenched power, literally owned now by the richest man in the world, mentions of racism nearly tripled at the height of Occupy Wall Street.
Oh, and of course it worked. They changed the subject. They’re doing that again. They always do that. Always.
Over in CNBC, home of the professional short seller, the ones who tell you to sell when they profit from it, they haven’t started yet yelling about the scourge of white supremacy on Reddit, though, obviously, that’s coming. It’s inevitable. But they started their defense of big finance a little more tactfully than that.
The problem with humiliating hedge funds explained anchor and professional hedge fund shill, Andrew Ross Sorkin is that, in the end, humiliating hedge funds only hurts the people who do it. So, for their own good, they don’t want to stop this nonsense immediately.
(BEGIN VIDEO CLIP)
ANDREW ROSS SORKIN, CNBC ANCHOR: What I’m concerned about is that this is a pump and dump scheme that effectively is being cloaked, you know, as Mother Teresa has arrived on the scene.
I think there are real underlying issues with the system that need to be resolved. I do not want to protect the system. I love watching the little guy beat the big guy as much as anybody, but what I wonder is whether these folks trying to quote-unquote “stick it to the man” are ultimately going to be sticking it to themselves.
(END VIDEO CLIP)
CARLSON: They only hurt themselves with their scheme. Not at all like what the guests on this do. This is a scheme. And Andrew Ross Sorkin is deeply concerned about this scheme. He’s just really, really worried that average people might be hurt by this scheme. He can barely sleep thinking about it.
He was so fraught with anxiety last night. He was almost late to SoulCycle this morning. That’s how much he tossed in turned beneath his Goose Down Duvet as he pondered the fate of America’s beleaguered middle class, which is hilarious.
But even if you were to believe it, it’s a little late, honestly. Where was Andrew Ross Sorkin for the last dozen years as the Central Bank shoveled trillions to Wall Street, thereby enriching a few devaluing the American dollar, guaranteeing hyperinflation, and of course, destroying the value of the average person’s savings? Did Andrew Ross Sorkin even notice that any of that happened?
The Reddit guys noticed that’s why they’re mad.
Janet Yellen might have something interesting to say about all of this. Janet Yellen ran the Federal Reserve for years beginning under Barack Obama. As much as any single person on earth, Janet Yellen is responsible for creating the distorted financial system that made the Reddit revolt possible, indeed inevitable.
So where is Janet Yellen now? And what does she have to say for herself? Oh, yes, as of last week, Janet Yellen is Joe Biden’s Treasury Secretary. Here’s what Joe Biden’s fleck had to say yesterday about Janet Yellen.
(BEGIN VIDEO CLIP)
QUESTION: Is the White House concerned about the stock market activity we’re seeing around GameStop? And now with some other stocks as well, including the subsidiaries or whatever the company that was Blockbuster. And have there been any conversations with the S.E.C. about how to proceed?
JEN PSAKI, WHITE HOUSE PRESS SECRETARY: Well, I’m also happy to repeat that we have the first female Treasury Secretary and a team that’s surrounding her and often, questions about the market, we will send to them, but our team is, of course, our economic team, including Secretary Yellen and others are monitoring the situation.
It’s a good reminder, though, that the stock market isn’t the only measure of the health of our economy. It doesn’t reflect how working in middle-class families are doing.
(END VIDEO CLIP)
CARLSON: So, as her first answer, Jen Psaki is, quote, “happy to repeat the Janet Yellen is the first female Treasury Secretary.” Let’s translate. Actually, Janet Yellen has nothing to say about Reddit or GameStop or short selling or even the dangerously corrupt condition of American Finance more broadly. She hasn’t thought about those things, probably doesn’t even care.
Janet Yellen herself has made millions from hedge funds, including from funds that lost money to the Reddit guys, but whatever. Buzz off. We’d like to remind you that Janet Yellen is a woman and so are many of the people around her.
These brave leaders have broken glass ceilings. They are empowered and that’s enough. We can’t give you an answer. We won’t improve your life. But we do have diversity so you should be happy. That’s their position.
Has there ever in all human history, a clear distillation of the essence of neoliberalism than that? Probably there never has been. Maybe at this point people will start to catch on to the game.
Suddenly, people are catching on to a lot of things it looks like. Looking back, we may see the Reddit guys and their effective defense of GameStop as a kind of turning point in this country’s history.
Whatever our current system is, it is definitely not the capitalism we were promised, not even close.
Follow Jeff Poor on Twitter @jeff_poor