• What’s going on? r/WallStreetBets (WSB) – an irreverent Reddit forum (or ‘subreddit’) where users discuss stock and options trading – has dominated financial news over the past week, as retail investors from the forum piled into the shares of games retailer GameStop in a ‘short squeeze’ aimed at hedge funds betting against the company.
  • ~~Short squeeze? Redditors identified that a number of hedge funds held significant short positions on GameStop - that is, they were betting its share price would fall. By coordinating the buying of shares in enormous quantities, retail investors sent the price skyrocketing, making short sellers lose money – e.g. as of Sunday, hedge fund Melvin Capital had sustained a 53% loss of $4.5bn.
  • ~~Explainers. Vox’s Emily Stewart offers a good overview of the situation, as does economist and trader Gary Stevenson on LBC (video here).

  • Next stop, silver? Retail investors also poured into silver markets– seemingly in an attempt to apply the same tactics – but this market is much harder to influence and, unlike GameStop, there is no significant short position on silver amongst speculators. Hedge funds and other speculators would likely gain from a rising silver price.
  • ~~Who is driving the squeeze? Many WSB members have objected to the media narrative that the forum is behind the silver squeeze – indeed, posts warning against the squeeze dominate the forum, unlike with GameStop stock – and have alleged some sort of false flag operation. FT coverage raises the possibility that “silver promoters may have used Reddit to advance their own agenda”, speaking to broader dangers (see below).

  • Why is this happening? The astronomic rise of GameStop’s share price clearly transcends any argument based on “business fundamentals” – yesterday’s falls suggest the bubble may already be bursting. What explains the rise, and what lessons can we draw from it?
  • ~~David and Goliath? It is tempting to project an underdog narrative onto these events – ordinary people taking on the hedge funds. The fact these funds were “betting against” the fortunes of a bricks-and-mortar store adds to its memetic/political charge. Indeed, it’s notable that the companies targeted by Redditors (GameStop, Blackberry, Nokia) have nostalgic appeal. But this is an oversimplification:
  • ~~Goliath wins. Investment management firms (e.g. BlackRock), as owners of GameStop stock, stand to benefit hugely from the saga. FT Alphaville suggests the saga is probably “a phenomenon born of a clandestine action between several hedge funds”. Financial institutions will almost certainly have got in on the Reddit action, perhaps in bad faith (see silver, above), for their own gains. All this undercuts the populist narrative.
  • ~~David loses. When the bubble bursts, the danger is that amateur investors are left holding the bag, losing savings they cannot afford to lose – and while the saga benefits GameStop’s owners, it’s unclear how it benefits its workers.

  • Money to burn. Some traders have been motivated by political cause, perhaps enough to bear a loss, but most are looking to make money. Covid-19 has dramatically reduced consumer spending and, for those who haven’t lost their jobs and incomes, this has translated into a rise in savings. Stimulus cheques have given middle-class Americans even more money to burn, and interest rates are at record lows. These factors all increase the appeal of riding the GameStop wave in an attempt to outsmart other, amateur investors and make a quick buck.
  • ~~Decade of asset price inflation. The backdrop to this exuberance is that since 2008, a reliance on monetary policy and protection of the financial system in times of crisis has pushed asset prices – including stocks – up, as wages have stagnated, driving wealth inequality. This has been true during Covid-19 too, as stock markets have performed well despite a shutdown of the real economy and spiralling unemployment.
  • ~~Where to channel this money? James Meadway proposed "recovery bonds" as a vehicle for increased middle-class savings in the UK - highlighting how increased public investment (and "crowded-in" private investment) could provide an alternative destination for these savings to financial speculation.

  • Regulation. Trading of meme stocks will not address the fundamental problems of wealth inequality and financialisation. But the saga has shone a light on hedge funds and is expected to expedite a regulatory review under Treasury Sec Janet Yellen.
  • ~~Politicisation. More broadly, the perceived hypocrisy of hedge funds complaining after they have “treated the stock market like their own personal casino” (Sen. Warren) and the decision of Robinhood to stop GameStop stock trading – whether or not this was the result of a regulatory need to cover the risk from volatile trading – has strengthened the narrative that it is one rule for ordinary people, and another for the hedge funds. Alexandria Ocasio-Cortez and Ted Cruz have both sided with the former. The question is how this diffuse political force translates into addressing wealth inequality.
Weekly Updates

Environment and climate change

  • Global Biodiversity Framework. WWF released the Kunming Plan for Nature and People, proposing a transformative, comprehensive and measurable post-2020 Global Biodiversity Framework to address the root causes of biodiversity loss.
  • ~~Calculating natural capital. The Guardian’s Patrick Greenfield explained how measuring the financial value of ‘ecosystem services’ will become a central issue at the UN Convention on Biological Diversity in Kunming later this year.
  • ~~Transforming the financial system. Ann Pettifor argued that saving the ecosystem requires removing rentier interests from the financial system, drawing from research by Yannis Dafermos, Daniela Gabor and Jo Mitchell on the ‘Wall St Consensus’.

  • Businesses call for binding interim targets on net zero progress. The Aldersgate Group and several of its members called on the government to support an amendment to the Environment Bill to supplement long-term environmental targets with regular, legally-binding interim targets. The Bill’s passage was delayed for a third time last Tuesday (Guardian).

  • Greenwashing. Economist Daniela Gabor highlighted how coverage of financial institutions’ environmental commitments is open to “greenwashing” in her critique of an FT article on Wall St’s “new green mantra”.

  • Policy menu for a just transition. A new study from researchers at the University of Cambridge has reviewed ten types of decarbonisation policy and proposed how they can be designed to benefit local small firms and lower-income families.

  • Environment and Brexit: ICYMI, Carbon Brief has extracted the key components relating to climate and energy from the 1,250-page UK-EU trade agreement.


  • Gender inequality in 2021. The women's Budget Group released a report to set out the lessons of 2020 and the recommendations that policymakers must consider if they are committed to improving their response to the pandemic and tackling the inequalities it has exacerbated.

  • Levelling-up and racial inequality. The Runnymede Trust’s Micha Frazer-Carroll argued in Politics Home that “without a nuanced and robust analysis of how poverty manifests along racial lines, the levelling up agenda will prove to be little more than a fad”.

  • Global Britain? Neoliberal think tank the Adam Smith Institute released a paper proposing “a fairer pathway to British citizenship”.

  • International inequality. The Jubilee Debt Campaign responded to the International Development Committee report on the impacts of Covid-19 in poorer countries, and called on the UK government to use its G7 leadership to “unlock multilateral action to tackle the Covid-19 debt crisis, and most importantly take action to ensure cancellation of debt owed to private lenders”.


  • Underestimating unemployment. The Women’s Budget Group analysed the potential unreliability of ONS official unemployment figures, arguing that they may underestimate the extent and unequal impact of the pandemic on employment.

  • ‘Future-proofing’ the economy. A pilot of the four day week is already underway in Valencia. Autonomy’s Julian Siravo outlined other ways that Valencia is “future-proofing” its economy here - offering a blueprint for other regional governments.


  • Grenfell. Over three years after the Grenfell fire, hundreds of thousands of people still live in flats with dangerous cladding, putting their lives at risk and causing financial misery, as their homes are rendered unmortgageable and they have to bear the cost of e.g. 24/7 fire wardens. Politico Playbook has a great summary of the scandal.
  • ~~Transparency. openDemocracy found that the Ministry for Housing, Communities and Local Government has told local authorities they can block Freedom of Information (FOI) requests that may identify high-rise buildings with aluminium cladding.


  • NAO COVID-19 Cost Tracker. The NAO has produced an online data tool to “increase transparency, promote scrutiny and parliamentary accountability for government spending”.

  • Procurement judicial review. The Good Law Project has criticised the Government’s response to its judicial review of awarding Covid-related contracts to “VIP associates”, claiming the Government is spending an “unprecedented” sum of money fighting the action.
  • ~~Not in the public interest? To avoid having to abandon the case on financial grounds, the Good Law Project has proposed a “cost cap” - a proposal rejected by the Government as they did not believe that these were “public interest proceedings”.

  • National suppression strategy. Independent SAGE’s Christina Pagel proposed how the UK could “break the cycle of lockdowns” in the British Medical Journal, proposing a national suppression strategy - zero tolerance for community transmission - which would also protect against vaccine-resistant strains.

  • Supporting self-isolation. Lydia Prieg from the New Economics Foundation proposed five ways to make sure everyone can afford to isolate safely” a minimum income guarantee, public equity stakes in struggling businesses, increasing support for families, renters and more.  


  • Who will pay for the crisis? Robert Palmer argued“tax justice should be at the heart of a recovery package” in Tribune, pointing to the growing consensus around equalising income and capital gains tax to end the unfair advantages of the wealthiest in society.

  • A new development strategy? Tax Justice Network’s Naomi Fowler spoke to Ben Phillips and John Christensen on Taxcast about fighting inequality and reforming shareholder capitalism to compete with the Chinese economy.