The Week - UK (2021-02-06)

4 NEWS Politics

THEWEEK6February 2021

Controversyof theweek

Wild times on Wall Street

ThetradingfrenzyoversharesintheailingUSvideogames

retailerGameStophastobethemostsensationalbusiness

storyofourage,saidRanaForooharintheFT(seepage 46 ).

It’saDavidandGoliathtaleinwhichthebigbeastsofWall

Streetwerehumbledbya“flashmob”ofamateurdaytraders

• agroupofpeoplewho,ratherliketherioterswhostormed
  theUScapitol,feltpowerlessinthefaceof“asystemof
  Americanoligopoly”andsoroseuptostrikeablowagainstit.

GameStopwasacompanythatlookedsettodie,saidKenan

MalikinTheObserver.Ithashadtoclose 450 outletsbecause

itscorebusinessissellinggamesondisc,whereasgamersprefer

increasinglytodownloadthemonline.Andsensingblood,the

bighedgefundshaveforsomeyearsbeen“shorting”the

company–sellingGameStopsharesthatthey’veborrowedbut

don’tactuallyown,waitingforthepricetofall,thenbuyingthesamequantityofsharesatfarlower

costandreturningthemtothelender.Asaresult,thecompany’sstocknosedivedfrom$56asharein

2013 tobetween$ 3 and$1 0 ashareformuchoflastyear.Buttwoweeksagosomethingextraordin-

aryhappened,saidTomLeonardintheDailyMail.Thestrugglingvideogameseller’sstockprice

skyrocketed.BytheendofJanuary,ithadhitahighof$483andthecompanywasvaluedatabout

$10bn–morethanAmericanAirlines.Andasthepricesoaredvarioushedgefundsfoundthemselves

indeeptrouble:insteadofbuyingbackthesharesthey’dborrowedatalowerprice,theynowhadto

dosoatamassivelyhigherone.Intotal,shortsellersarebelievedtohavelost$19bnonGameStop.

So“aragingmobofangrysmall-time retailinvestors”brought down the “short-sellingmoney

bags”,saidJeremy Warner inTheDailyTelegraph.Andoneshouldraise acheerforthem:it isa

victoryforthe smallguy.Theseday traders domostoftheirtradeson acommission-freeonline

platformcalledRobinhoodand compare noteson WallStreetBets,amessageboardon Reddit.A

band ofthem, led byatraderwhoseYouTubenameis “Roaring Kitty”, hadbeencookingup ways

of puttingthesqueeze onshortsellersformonths, saidDerek Thompsonin TheAtlantic.But their

detailedplantobuy upGameStop’sstock and pushup the pricewasn’tjustanact ofhigh-minded

revenge;they sawit as“atastyinvestment”.Andforsomeit certainlywas,saidJackRivlininThe

Spectator:theuserwhofirstpitched GameStopon Reddithasseenhisinvestmentof $50,00 0 peak

at$50m.Solet’snot gettoosentimentalabouttheWallStreetBetscrowd.They’re mostly bored

young menaddictedto riskybets.As thisoneturnedouttobe, saidJosephRachman on Reaction.

life. This week the stock price crashed, after Robinhood, fearfulit couldn’t meetitsobligations,had

to putahalt totradingin GameStopshares.Andsoweendup with thefamiliar storywherethefew

whobuyearlyand sellearly“make fortunesattheexpenseofthelaggards”, saidRossClarkin The

Spectator.Whatwe’vehereisnotanoblepopulist crusade, but “aPonzischemein moralclothing”.

“RoaringKitty”:notjustidealism

Spirit of the age

Good weekfor:

HMRC,with reports that five top musicacts have contributed

more than £50m to thepublic finances inayear. According to

The SundayTimes TaxList, Ed Sheeran is thelargestpop star

taxpayer:he paid£28.2m. Adele,Queen,Robbie Williams and

The Beatles were theother big contributors.

GeorgeOsborne,whoissimplifying hisprofessionallife by

givingupsomeofhis manypart-timejobs tobecome afull-time

banker.The ex-chancellorhasbeenmade apartneratboutique

firm RobeyWarshaw. Hewill leavethe London Evening

Standard andthe USinvestmentmanagerBlackRock next month.

Contagion,the 2011 fi lm aboutaglobalpandemic, withreports

that ithelped inspireMattHancock’s responseto the current

crisis. Apparently, theHealth Secretary oftenreferencedthe film

in meetings, citing inparticularasceneillustrating theimportance

of havingnot just avaccine, butadequatesuppliesof it.

Jared Kushner,DonaldTrump’s son-in-law ,who wasnomi-

natedfor aNobel PeacePrize forhis workin the Middle East.

His name was put forwardbyAlanDersh owitz, inhiscapacity

as emeritusprofessor atHarvard Law School.Thousands of

peoplehave theright to submitnominat ions,andbeing nomi-

nateddoes notimply theendorsementofthe N obel Committee.

Bad week for:

Foreign holidays,after DowningStreet insiderswarnedthat

there was littleprospectof Britons being able to traveloverseas

this summer.“Internally the view is that UK holidays may be

possible, butgoing abroad isvery unlikely,” saidasource.

Testingfornew variant

Ministers have ordered door-

to-door testing in eight

postcode areas of England,

where cases of the more

infectious South African

variant of the coronavirus

have been detected in people

with no travel link to the

country. Residents of those

areas have been urged to

only leave their homes when

it is essential to do so. The

“surge” testing, of 80,

people, which also involves

mobile clinics and home kits,

is taking place in parts of

Merseyside, three London

boroughs, Kent, Surrey,

Hertfordshire and the West

Midlands. Tests are also

being conducted in parts of

Bristol and Liverpool where

mutations have been found

in the original and Kent strain

of the virus.

Visaschemelaunches

Ascheme that offers visas to

live and work in theUK to the

five million residents of Hong

Kong who holdaBritish

National Overseas passport

(BNO) went live this week.

The scheme, which offers a

pathway to citizenship, was

unveiled last year following

Beijing’s imposition of new

national security laws on the

territory. Last week, the Hong

Kong authorities retaliated

by declaring that BNOs were

no longer regarded as valid

travel documents for

entering or leaving the city.

Pollwatch

17%of Britons believe the

country will be able to open

up as normal by the spring.

67%of men and58%of

women say they would like

life to return to exactly how

it was before the pandemic.

23%of men and31%of

women say they would not.

BritainThinks/Sunday Times

40%of Britons say they are

doing less exercise during

this lockdown than the

first one, and only13%are

exercising more.19%are

watching more TV;13%are

watching less.Athird are

working more, but time

spent on volunteering and

hobbies has decreased.

UCL/BBC

If the coronavirus vaccine

became available to them

for free, only41%of

Americans said they’d get

it as soon as possible.

KFF/Times

Onlinegiantssuchas

Amazonhavesoincreased

theirdeliveriesinthe

pandemicthatsmall

retailersarestruggling

tobuyenoughcardboard

boxes.JawboneBrewing,a

craft brewery in southwest

London, told the BBC that

they’d had to ask customers

to bring their own boxes.

Ealing Council’s attempt

to “decolonise” its streets

has not proved simple. In

Southall, Havelock Avenue

–named for Sir Henry

Havelock, who led the relief

of Lucknow–was recently

renamed after Guru Nanak,

thefounder of Sikhism.

Therehadbeenaconsul-

tation in the largely Punjabi

community, but some Sikh

leaders accused the council

of cultural appropriation,

for namingastreetafter a

figure who is regarded as

a“manifestation of God”.

©Y

OUTUBE