Many average Americans, perhaps you, are confused about the GameStop financial scandal. You may be asking, ‘What does this all mean?’ And, ‘Will it affect me and my family’s financial stability?’
The short answers to these important questions are:
Number 1. It’s complicated.
Number 2. Yes, it means certain financial devastation for you and your family.
It is complicated, but with a brief lesson on US security law, you should have a solid handle on it in no time.
First, you need to understand some of the fancy Wall Street terminology. Here are the two most important words you need to know:
“Short Selling.” Short selling sounds really complicated, but it isn’t at all. Short selling is when anyone under 5 feet, 5 inches tall, sells something. For example, I’m 5 feet, ten inches. So, while I can buy, and I can sell, I cannot “short sell.” On the other hand, my wife Julie, is an expert at short selling (but mostly, at short buying).
“Hedge fund.” A hedge fund is a sophisticated group of investors who pool their financial resources to create a “monetary fund” with which to invest and amass even greater wealth by purchasing and maintaining tall, and very impressive, lawn hedges. I have often considered participating in a hedge fund, but since it requires climbing up tall ladders with an electric trimmer, I’m afraid that by the end of my first day, I would qualify as a “short seller.”
The important thing for you, the average American, to remember, is that while it may appear that your political representatives in Washington DC are spending all their time bloviating about how hard they’re working for you (i.e., scarfing down expensive steak dinners with fat cat lobbyists), they are actually laser focused on making sure that Wall Street works to create a steady and secure stream of revenue for our society’s most vulnerable and important members ̶ themselves.