The Joys of Life, Issue 7 – Stock

Welcome back to another edition of The Joys of Life. This week, as the very financial system that we hold so dear creeps towards the edge of madness, I thought we could cover the greatest type of soup base. The master of the taste buds and the leader in its field: Stock.

Stock, at its most basic, is a savory liquid. Like juice. Or tea. It is encapsulated by a taste known as “umami.” You mommy. Umami is the taste of a good steak, a hearty baked potato, or a meaty stock. Stock is when various ingredients are simmered in water. In this way, I will argue that EVERY liquid is a stock, just like every sphere is a bubble.

Stock is often called bone broth: where the collagen in bones is converted to a variation of liquid-y gelatin after being exposed to heat that makes bone stock taste just oh so good (Apparently I have to teach Chemistry of Cooking after…you know). There is also a type of stock known as mirepoix (I think this is pronounced mier-pwah, but we should probably ask Ms. Pritikin. (Note from Ms. Pritikin: … … Nevermind, she didn’t respond. That’s unsurprising) This is made by throwing onions, carrots, and celery into a pot and cooking it. 

What does that sound like? TEA! Stock is just ONION TEA! Or bone tea. OR FISH TEA if you live in Japan and use katsuobushi fish flakes (I don’t know what those are, but they sound cool and can make tea.) And if stock = tea, then tea = stock. And tea is just water with herbs. But water, like plain H2O, is just water with water. WHICH IS WATER TEA! stock = tea = water. And water is the basis of almost every liquid ever. Therefore, therefore. Therefore therefore therefore therefore therefore therefore therefore. Sorry, my copy/paste broke. THEREFORE! All liquid is stock. I’ve PROVED IT!

But what about the other kind of stock? The kind that is more…economic in nature. The kind that is, currently, in the process of falling apart like a poorly constructed Jenga tower (the Jenga tower is poorly constructed because Katherine pulled out a completely nonsensical piece and yet somehow gravity has not demanded that this abomination be pulled to the ground, and so we are stuck with Craig cautiously tapping on a block so that the loud crash doesn’t wake up the children. That’s the real journalism.) 

Let’s set the scene: the year is a couple years ago and some big hedge funds see that GameStop, an IN-PERSON video game retail company, is a dying business. Its intrinsic value is very low so they make a bet. This bet, called a short, allows the hedge funds to earn money off of Game Stops failure by betting on its failure. By making a calculated risk that the stock of a dying company will remain dying. 

People who like Game Stop saw this and decided, “Hey, with the rules set up now, if we buy a lot of stock and make it increasingly rare, the stock will increase in price drastically and all of those hedge funds will lose billions and billions of dollars for betting on the leveling of dying businesses.” And that’s what they did. GameStop stock rose well past its expected value and hedge funds went bankrupt (only to be bailed out by other hedge funds). 

However, everybody cried foul. “They broke the rules,” they screamed. “They engaged in market manipulation by participating in Greater Fool Theory which states that the price of a company’s stock is determined by the demand of a specific subset of customers rather than intrinsic value (like Bitcoin) which isn’t how the stock market works!”

However, this isn’t a new phenomenon. In 1637, the Dutch became so obsessed with tulips, the value of a certain tulip bud (did you know those were called buds) grew way past what the tulips was actually worth before drastically plummeting back to its expected value. This was known as Tulip Mania.

So what are the take-aways? Number one: No, this isn’t illegal but it is hilarious and a perfect way to show that hedge funds betting on the death of companies are screwed up on so many levels. Number two: the market, at the end of the day, is based on the demands of the people. Not the elite few in charge, the top dogs, the nepotistic capitalists. The people demanded GameStop be worth a ton and so it was. Number three: People should not be called “stupid” for doing this. They got exactly what they wanted. Number four: People should not be forcibly censored to prevent the furthering of the protest. If Wall Street is so threatened by the participation of “casuals” in their sanctified stock market, the big investors are as much of a threat to democracy as the rioters in the capitol (Parker parent or otherwise). 

And finally: Do not be condescending. One thing I’ve seen is a lot of relatively affluent people who build much of their capital from the stock market being overly and maliciously condescending towards those who did this. That’ll create more things like this. If you want more short squeezes, go ahead and be rude, but if not, we have to, as is Parker’s philosophy, treat others with empathy and kindness above all else. Deal?