On January 28, congresswoman Alexandria Ocasio-Cortez took to Twitch to discuss the ongoing news surrounding stocks like GameStop and AMC, which have been surging greatly in recent days as retail investors attempt to drive the price up while short-sellers aim to keep it as low as possible. Thus far, the fiasco has cost hedge funds billions of dollars, and even Biden’s White House has begun monitoring the situation. The market is extremely volatile and with the average person potentially capable of making big money from the stocks, expert advice can help.
You can re-watch the full video broadcast on AOC’s Twitch page here.
During the presentation, she spoke with The Stock Guy, who emphasized that if you “rob from the poor,” or take advantage of those who aren’t in a position of power–much like was seen in the 2008 subprime mortgage crisis–there isn’t an immediate backlash. He mentioned one unnamed person who stole from the wealthy during this time–we infer he was talking about Ponzi scheme operator Bernie Madoff. But the banks that engaged in risky mortgage practices did not suffer much in the way of consequences.
The Stock Guy took time to explain the absurdity of companies stopping the average person from being able to day trade because of volatility in certain stocks while it’s perfectly legal for them to go spend all their money gambling at a casino. With donors for politicians often being hedge fund managers, themselves, the laws being written can skew in their favor.
“We now need to know more about Robinhood’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit,” AOC said in a tweet on January 28. “As a member of the Financial Services Committee, I’d support a hearing if necessary.”
AOC is not the first politician to weigh in on the stock market upheaval this week. President Joe Biden’s administration is watching the situation, while US Senator Elizabeth Warren has also weighed in with a comment of her own.
She urged the SEC and other financial regulators to step in. She also delivered sharp criticism of private equity firms and investors for treating stock as a playground for gambling.
“With stocks soaring while millions are out of work and struggling to pay bills, it’s not news that the stock market doesn’t reflect our actual economy. For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price. It’s long past time for the SEC and other financial regulators to wake up and do their jobs–and with a new administration and Democrats running Congress, I intend to make sure they do.”
GameStop’s stock price has been on a rollercoaster ride in recent days, due in part to the WallStreetBets subreddit taking on hedge funds and short-sellers who bet against the retailer. GameStop’s stock price dropped after Robinhood and others halted trading, but it has rebounded since. This situation is not going to be finished anytime soon, so keep checking back with GameSpot for the latest news on the market.