The financial news last week was rocked by an upheaval in stock purchases and sales of GameStop stock by both day traders and large financial institutions. The best analysis of this market event was provided by The Atlantic's Derek Thompson. And, of course, the email bearing today's TMW 'toon also contained the following explanatory message from Tom Tomorrow (Dan Perkins):
It feels like it has been a long time since I tackled a complicated topic not directly involving specific politicians. Hell, it feels like it’s been a long time since I tackled a topic that didn’t involve Donald Trump. Writing this one reminded me of trying to get a handle on the subprime mortgage stuff in the late 00s. I went through a *lot* of drafts, trying to figure out how to approach this. And I understand that my summary of the situation leaves out a lot of details — for instance, I didn’t have room to discuss the main trading app, Robinhood, which shut down the day traders’ ability to purchase more Gamestop shares when things started getting out of control, under pressure from its business power Citadel, which has a separate hedge fund which helped bail out Melvin Capital, the fund that took the biggest hit during the bubble. The house always wins, one way or another.
Also the Reddit forum, Wall Street Bets, is apparently full of 4chan style nazi shitposters, which was another reason I wanted to counter the narrative of plucky outsiders pulling a digital Occupy Wall Street.
This story had a lot of complicated details.
There were a couple notes I definitely wanted to hit. Melvin Capital shorted 140% of Gamestock shares. Even if you accept shorting as a rational facet of the market, shorting significantly more shares than exist seems like … a problem?
And despite the narrative of a David and Goliath battle between small investors and giant hedge funds, other giant Wall Street firms profited enormously. Black Rock is reported to have made (I would not use the term “earned”) somewhere between one and two billion on the rise in Gamestop prices. And a plucky outsider named Elon Musk did, in fact, egg the whole thing on, on his Twitter.
The Invisible Hand is usually a mindless cheerleader for the free market — no matter what’s happening, he always explains that it shows the wisdom of the market at work. In this case I decided to portray him as a little worn out and exasperated from the whole thing, with a touch of implied pandemic fatigue as well (hence the masks). God knows we’re all feeling it.
Next week, I expect I’ll be back to seditionist Republicans, the impeachment of Donald Trump, or something else along those lines. But even though this cartoon was a bit of a struggle to write (and whether or not it was ultimately a successful effort), it was nice to have the luxury of taking a week off from the usual focus. Trump always sucked all the oxygen out of the room, and made it almost impossible to write about anything else.
Until next week,
Dan/Tom
And if you're confused by last week's financial news, so be it.
[x TMW]
The Irritable Hand Of The Free Market
by Tom Tomorrow (Dan Perkins)
[Dan Perkins is an editorial cartoonist better known by the pen name "Tom Tomorrow." His weekly comic strip, "This Modern World," which comments on current events from a strong liberal perspective, appears regularly in approximately 150 papers across the US, as well as on Daily Kos. The strip debuted in 1990 in the SF Weekly. Perkins received the Robert F. Kennedy Award for Excellence in Journalism in both 1998 and 2002. When he is not working on projects related to his comic strip, Perkins writes a daily political blog, also entitled "This Modern World," which he began in December 2001. More recently, Dan Perkins, pen name Tom Tomorrow, was named the winner of the 2013 Herblock Prize for editorial cartooning. Even more recently, Dan Perkins was a runner-up for the 2015 Pulitzer Prize for Editorial Cartooning.]
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