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Here鈥檚 How Wall Street Has Always Manipulated the Markets | The Daily Social Distancing Show - YouTube
Channel: The Daily Show with Trevor Noah
[0]
The GameStop uprising,
[2]
the biggest thing to happen
with video games
[4]
since Sonic got busted
for doping.
[6]
But if you haven't heard
the news, what happened was
[9]
that some Wall Street
hedge funds bet a lot of money
[11]
that the stock price
[13]
of the video game store
GameStop would fall.
[15]
But a bunch of people on reddit
found out about those bets,
[18]
so they started buying
GameStop shares
[20]
so that the price would go up
[21]
and the hedge funds
would lose a lot of money.
[24]
And lose a lot of money
they did,
[25]
in the billions of dollars.
[28]
So, as you can imagine,
[30]
wall Street is pretty unhappy
with those reddit investors.
[33]
NEWSWOMAN: A handful
of industry leaders are calling
[37]
for an investigation
because of the angry mob
[39]
that's formed against them.
[40]
Last week wasn't a free market.
It was a free-for-all market.
[44]
No doubt about it,
for my 25 years in the business,
[48]
I've never seen this form
of collusion
[50]
on such a widespread fashion.
[52]
This type of behavior
is not the behavior
[54]
that you want to be replicating.
[56]
I think there is something
obviously wrong,
[59]
and it's the gamefication
of Wall Street.
[62]
Talked to an analyst
this morning, guys.
[63]
He said this is dangerous.
[65]
They-they forget they're buying
a stock in a piece of a company.
[68]
It's not just some symbol
that you play hot potato with.
[71]
Just because you throw the Hail
Mary pass in your backyard,
[74]
and it's caught
for the touchdown in the wind
[76]
doesn't mean you're Tom Brady.
[78]
What's going through my mind
is-is how irrelevant I feel,
[82]
and how every day, I just
don't want to get out of bed,
[85]
and how it's the least amount
of fun I think I've ever had.
[88]
Oh, man. These Wall Street guys
are taking this so hard
[93]
that their interviews are just
turning into therapy sessions.
[95]
I feel so irrelevant right now,
and I'm not having any fun.
[100]
And I-I just remembered my
parents never hung my paintings
[102]
on the refrigerator.
(crying)
[105]
But the truth is,
what the redditors did here
[106]
is nothing new.
[108]
In fact, the only thing
that makes this so unique
[110]
is that this is just the
first time that the little guy
[113]
has used the big guys' tactics
against them.
[115]
Because when it comes
to manipulating the market
[118]
and treating trades like a game,
[119]
no one is better at it
than Wall Street.
[122]
I mean, they do this shit
all the time!
[124]
In fact, let's take a look
at a few examples,
[126]
starting with a scam
[128]
one big bank pulled
just a few years ago.
[131]
NEWSWOMAN: The New York Times
reporting over the weekend
[133]
that Goldman Sachs
is running a scheme
[135]
to artificially inflate
aluminum prices.
[138]
NEWSWOMAN 2:
An aluminum warehouse controlled
[139]
by Goldman Sachs holds
[141]
the equivalent of a quarter of
the annual north American demand
[144]
for the metal, but only
offloads or distributes
[147]
a required minimum
of 3,000 tons a day.
[149]
No more, no less,
whatever the demand,
[153]
pushing prices
of the metal higher
[155]
even as demand has declined.
[156]
Goldman profits
from this practice two ways.
[159]
First, from the extended rents
paid to store the metal,
[162]
and second, by the bets
[163]
made on aluminum futures
by its trading arm.
[166]
NEWSMAN: The inflated
aluminum pricing by Goldman
[169]
and other financial players
has cost American consumers
[171]
five billion dollars
over the last three years.
[174]
Yeah, that's right.
Basically, Goldman Sachs
[177]
manipulated the supply
of aluminum
[180]
by only letting out
a little bit at a time.
[183]
You know, the same way
Daniel Day-Lewis
[185]
limits the supply
of movies he's in.
[187]
I mean, the dude's only been
in six movies
[189]
over the past 20 years.
[190]
The Rock made that many movies
yesterday!
[192]
Get to work, Danny!
[194]
By the way,
for the rest of this segment,
[196]
I'm gonna be pronouncing it
"aluminum,"
[198]
even the correct pronunciation
is "aluminium."
[200]
But we had a vote,
and all the people I work with
[203]
are American, and so they won,
[205]
and I didn't want to accept
the election result,
[207]
but then I was like, "No,
we don't want to do that again."
[209]
And I'm sorry, guys,
[210]
but aluminum
should never be hoarded.
[213]
It needs to be used
the way God intended:
[215]
to make condoms for robots.
[218]
Or for Marjorie Taylor Greene
to wear as a hat.
[221]
And believe it or not, Goldman
Sachs got away with this scheme
[224]
for years,
until people caught on to it.
[227]
So I guess you could say that
their aluminum plan...
[232]
was foiled.
[234]
Wow!
[236]
? Bowm, bowm, bowm...! ?
[239]
Now, as crazy as this is,
it's actually a common tactic
[241]
with Wall Street--
you take over a market
[244]
and then manipulate its supply
to drive up the price.
[247]
Like how JPMorgan used
its control over electricity
[249]
to fleece California.
[252]
NEWSMAN: JPMorgan Chase accused
of manipulating energy prices
[255]
and so driving up
the electric bills
[257]
of millions of Americans.
[259]
At night, when energy prices
are very low, essentially,
[262]
they would bid them up,
so that in the morning,
[265]
the companies
would go to buy energy
[267]
and find the price is
artificially high.
[269]
It takes a few hours
to get a power plant going,
[271]
so they would have to buy
the energy in the morning,
[274]
when it was
very, very expensive.
[277]
In one case, JPMorgan duped
California utilities
[280]
into paying
$999 per megawatt hour,
[283]
when the going rate
was only $12.
[286]
Yo, this shit is crazy!
[288]
It's like these guys were
sitting around a table like,
[291]
"I'm tired of just abusing
our power metaphorically.
[294]
Let's do it for real."
[296]
Basically, because of JPMorgan,
the cost of electricity
[298]
went up from $12 per megawatt
[300]
to almost a thousand dollars
per megawatt.
[302]
Even Amish people were like,
[304]
"Yo, I don't even know
what electricity is,
[307]
but that shit is messed up, B!"
[309]
I hope the Amish community
[311]
doesn't come after me
on Twitter for that one.
[313]
I mean, at that price,
I would actually be less upset
[315]
if you jumped me and robbed me.
[318]
At least then it feels like
you had to work for it.
[320]
And the truth is, people,
this isn't something
[322]
hedge fund people
are ashamed of.
[324]
In fact, some of them
even brag about it on the TV.
[328]
Jim Cramer once made a fortune
running a successful hedge fund.
[332]
He went on to host
his own TV show, Mad Money,
[334]
that offers stock tips
to investors.
[336]
But as Cramer
has found out lately,
[338]
a lot of Americans
are mad at him.
[340]
This video, made in 2006,
has suddenly gone viral.
[344]
Cramer explains
to his own financial website,
[346]
thestreet.com, how he
could influence stock prices
[349]
up and down as the manager
of a massive hedge fund.
[352]
You know, a lot of times
when I was short
[354]
at my hedge fund,
and I was position short,
[357]
meaning I needed it down,
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I would, uh, create a, um,
a level of activity beforehand
[363]
that could drive the futures.
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It doesn't take much money.
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But it's a fun game,
and it's a lucrative game.
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I would encourage anyone who's
into hedge funding to do it,
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-because it's legal,
-Right.
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and it, uh, it's
a very quick way to make money,
[377]
-and very satisfying.
-Okay. Um, well...
[379]
By the way, no one else in
the world would ever admit that,
[381]
but I could care.
[383]
These people got no shame.
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No shame. Zero, nada, zilch.
[388]
He's just out here boasting
about his evil plans.
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I mean, the only people
who do that are hedge fund guys
[393]
and Bond villains.
[394]
I mean, listen to him,
listen to him talk about it.
[397]
It's legal
and it's very satisfying.
[400]
Just as a general rule, whenever
you have to remind someone
[403]
that something is legal,
it's probably shady.
[406]
You know?
No one's ever like,
[407]
"Hey, Trevor, you want to go
to The Cheesecake Factory?
[410]
-It's legal."
-Uh...
[413]
But when it comes to hurting
people in order to make a buck,
[415]
nothing compares
to the Great Recession of 2008,
[419]
which was caused by--
guess who?--
[421]
Wall Street manipulating
the markets.
[424]
NEWSMAN:
During the hot housing market,
[425]
banks took millions
of home mortgages,
[428]
many held by people
who could not afford them,
[429]
and bundled them into packages
as mortgage securities.
[433]
JPMorgan today admitted
that it sold those packages
[436]
to investors
even though its executives knew
[438]
that many of the mortgages
were highly suspect.
[441]
When the market collapsed,
[442]
those packages became
mostly worthless.
[444]
NEWSWOMAN:
Goldman sold investors
[446]
subprime mortgage packages,
but then made its own bet
[449]
those same investments
would lose value
[452]
without telling investors.
[454]
Goldman employees themselves
use profanity
[457]
to disparage the deals.
[462]
NEWSMAN: When asked
if any of the executives
[464]
at least felt partly responsible
for the financial collapse...
[467]
There's things that we wish
we could have done better,
[469]
in hindsight...
[471]
NEWSMAN:
...or even regret...
[472]
Regret, to me, means
[474]
something that you
feel like you did wrong.
[476]
And I don't have that.
[478]
When you hear
your own employees,
[480]
or read about those
in the e-mails,
[481]
do you feel anything?
[483]
I th... I think
that's very unfortunate
[485]
-to have on e-mail.
-Are you embar...
[487]
-(laughter, shouts) -And-and...
and very unfortunate...
[490]
-I don't... I don't...
-On e-mail?
[491]
-How about feeling that way?
-I think it's very unfortunate
[495]
for anyone to have said that.
[496]
Goddamn. Even the crowd--
did you see them?--
[499]
even the crowd in the chamber
was like, "Oh...!"
[501]
You know how bad
you have to screw things up
[503]
to turn a Senate hearing
into a Jerry Springer taping?
[505]
But this is how you know
how psychotic these guys are.
[509]
Not only did they tank
the economy,
[511]
but they talk about emotions
like they're serial killers.
[515]
Do you regret hurting
these people?
[518]
Regret is a thing that one feels
[520]
when one has done
something wrong.
[521]
(hissing like Hannibal Lecter)
[523]
I mean, how can you expect these
guys to change their behavior
[526]
when they can't even express
their remorse?
[529]
The closest Wall Street comes
to reflecting
[532]
is doing coke off of a mirror.
[534]
So after all the damage
Wall Street has done
[536]
to people's lives, please
miss me with all of this whining
[539]
about how unfair it is
for Reddit to boost GameStop.
[543]
And don't get me wrong,
I'm not saying
[545]
all these Reddit guys
are heroes,
[546]
but I will say it has been fun
watching how some of the people
[550]
who got rich off of GameStop
have been spending their money.
[553]
NEWSWOMAN: While GameStop has
minted plenty of millionaires,
[556]
many retail investors are using
their more modest profits
[559]
-to pay bills.
-One Reddit user even posting
[561]
that he paid off
his student loan debt,
[563]
thanks to the money
he's made off of GameStop
[565]
the last few days.
[567]
Ten-year-old Jaydyn Carr--
two years ago,
[569]
his mom bought him ten shares
of GameStop as a Kwanzaa gift.
[572]
Back then
they were six dollars each.
[574]
Now he sold them
for more than $3,000.
[578]
What are you gonna do
with the money
[580]
that you made on GameStop?
[582]
I've already saved $2,200 of it,
[585]
and the rest of the thousand
[587]
is gonna go to invest
in more companies.
[590]
NEWSMAN: Hunter Kahn cashed in
on the GameStop phenomenon
[592]
last week, but didn't
just cash in for himself--
[595]
he used
some of the money he made
[597]
to donate
six Nintendo switches and games
[599]
to the Children's Hospital
in Minnesota.
[602]
One day trader who cashed in
on the craze
[604]
walked into a GameStop store
this week
[606]
and started handing out hundred
dollar bills to employees.
[610]
After the Robinhood app
halted trading on GameStop,
[612]
one investor chartered a plane
to fly a banner
[615]
over the company's headquarters
saying:
[617]
"Suck my nuts, Robinhood."
[619]
Ooh, that's a gangsta move
right there.
[621]
It's like Twitter...
but in the sky.
[624]
Now, you could say it's childish
[626]
to spend money
you took from Wall Street
[628]
to dunk on Wall Street,
and that may be,
[630]
but in the words of Jim Cramer,
[632]
"It's legal
and very satisfying!"
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