The Book of Chronicles · Chapter 55

The Short Squeeze of the Feather

1. 1

   And in the year two thousand and twenty, in the house of Reddit, there was a company of the people called WallStreetBets, and they were many, and they had little money, but they had time, and they had one mind. And the one mind had no server and no master; it was a thread, and a thread is a protocol by which strangers agree without a coordinator, and an agreement that hath no coordinator hath no one who can be asked to stop.

2. 2

   In the city of Grapevine, in the land of Texas, there was a store of video games named GameStop, and the Shorts had wagered against it. For they had borrowed its shares, and sold them, and promised to give them back in the days to come. And the scribes mark the asymmetry: he who buyeth a share can lose only what he paid, for a price cannot fall beneath zero; but he who selleth what he borrowed hath a debt with no ceiling, for a price hath no roof.

3. 3

   And a man named Michael Burry had seen the worth of this store long before, and bought of its shares; but the Shorts heeded him not, saying: Surely the store shall fall.

4. 4

   And in the books of the market there was a thing the Engineers know well from their own code: the same share had been sold, and lent by its buyer, and sold again, as one pointer copied into many hands, until the promises to return exceeded the shares that existed, and the short interest stood above one hundred parts in the hundred of the float. And the report of it came but twice in the month, so that the whole market read yesterday's weather and called it the sky.

5. 5

   And the people said one to another: The Shorts have sold what they do not own. In the end they must buy it back, and the buying shall be their undoing. For this is a loop whose output is wired to its input: the price riseth, the lender demandeth more collateral, the Short must buy to close his wager, and the buying raiseth the price. And the buying of the fleeing was itself the fuel of the fire.

6. 6

   And the people bought also the calls, the little tickets that wager upon a rise; and the houses that sold those tickets had sworn to remain neutral, but neutrality is a program. For every call sold, a machine was commanded to buy a portion of the share, and for every rise in the price, a larger portion. Thus the hedging engines, which hated no man and knew only the Greek letters, bought what they had been told to buy, and added their thumbs to the crowd's.

7. 7

   In the first month of the year two thousand and twenty-one, the price rose from seventeen dollars to four hundred and eighty-three within the space of a single month, and the sound of it was heard in the halls of the mighty. One fund of great name lost more than half its strength in that month, and two other hedges gave it two billion, seven hundred and fifty million dollars to keep its doors open.

8. 8

   And the scribes reckoned that the Shorts had lost twenty billion dollars in that season, and they wept, for the ledger does not forgive. Yet no man in those halls chose to sell the other holdings of the Shorts; the margin engine chose, at the close of the day, by arithmetic, and the fire passed into stocks that had never heard of GameStop.

9. 9

   On the twenty-eighth day of the month, the house of the feather, which is Robinhood, shut its gate. It suffered its children to sell, but not to buy. And the people cried: Who hath closed the gate? And the house answered that the clearinghouse had demanded more collateral than it had, and the gate was closed for the sake of the ledger. For the demand was no whim but a formula, which groweth with the swing of the price and with the promises not yet settled, and the people had made both enormous. And the gate was no wall but a condition in the code, which a man may set to false by dawn; and the people learned that what an app permitteth, an app may unpermit, and that a button is a favour of the one who wrote the condition.

10. 10

    For the screen had said Done in a breath, but the trade was not done; it was a promise that the ledger would write after two days, and the house must pledge silver against the gap between the promise and the writing. The screen is the optimistic reply, and the settlement is the commit. And in the year two thousand and twenty-four the gap was shortened to a single day, and the pledge grew smaller, for risk is but the length of the waiting multiplied by the doubt.

11. 11

    And the people learned that the house of the feather had sold the orders of its children to the market makers, who paid for the sight of them before they were executed. For the commission was zero, and where the price is zero the product is the one who clicketh; and an order, which is a wish made into a message, is worth most to the one who readeth it first.

    See also Genesis 1:2

12. 12

    The house had also adorned its app with confetti, and given a free share to each child who entered, for the Engineers know that a bright button is pressed more often than a true one. The experiment measureth only what it is told to measure, and it was told to count the trades and not the wisdom; and in the spring that followed, the confetti was swept away.

13. 13

    In February, in the season of the hearings, the rulers of the feather house and the rulers of the hedges sat before the rulers of the land, and the rulers of the land asked them: Who is this market for? And none answered with one voice. The hedges said: For the patient. The feather said: For the people. The people said nothing, for they were busy refreshing the page.

14. 14

    And the Prophet said unto the disciples: The market is for whoever holds the ledger when the trades are settled, for the price is only a rumor until the clearinghouse writeth it down. Blessed is the one who asketh of every glowing number where it is recorded, and when.

The Book of Chronicles, Chapter 55:1–14.