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break free for something special. Fifth Hour with Ben Maller starts right now in the a everywhares we kick off the weekend and have some fun here on the podcast. He spin off. You know that by now he spin off. If you're new to the podcast, welcome of the Overnight show. Four hours a night clearly not enough. On the Overnight. We do some different things on the podcast. We don't stick to sports because we don't stick to sports on the podcast. Uh and hey, we do this eight days

a week. So this is our Friday podcast. Saturday got a brand new Pipe and Hot podcast. It will come your way. And then the mail bag. The staple of Sundays. You know, people think on Sundays a day of leisure, day of rest. You might go to church or something like that. But the mail bag a large part of the conscience of America. But it is the fifth hour in UH. It's a spind the wheel of podcast sidekicks here and see round and round and round and round.

Oh look at it. Look who's decided to leave west of the four oh five and come in here this week? David gascon joining us here? How excited? Is that? Unbelievable? I I thought it was a fitting occasion to come back this week after what went down earlier in the week, dude to UH due to the dark alleys of Reddit

and also the white collar sycophants in Wall Street. So it's well, you are referring to these So this is going to be a podcast related to Wall Street, but in s Polton terms, in Layman terms, is what it's gonna be. Yeah, it is a wild story. It does have a sports angle to it because a lot of the owners in professional sports, many of the new owners are hedge fund people, and this involves the attempt to

take down some of the hedge funds. And just to give you the thumbnail version, that's kind of set this up because we are going to be joined. This is an interview podcast by a financial guru, well media guru who covers finances and all that and has inside inside informational throw but it's plugged. Being plugged in would be

the way to describe it. So if you haven't been paying attention and you're completely in the dark on this on Wall Street a subreddit, Wall Street bets they started this movement investing on game Stop, which is a struggling video game retailer, and they roll the price of stock up. But that's screwed over the people that were investing in, betting it was going to go the other way. It's called shorting a stock, is what it's called. And we're

gonna get into that here. And I think we should welcome in now from the Street Live with Jim Kramer. You can see her with the Jim Kramer, that crazy guy from CNBC. They do a show every morning on the Street welcoming Katherine Ross, who joins us here on the fifth hour with Ben Maller and guesscon So, Catherine, welcome. I think we should start with the term shorting a stock.

What exactly does that even mean? So to break it down, short telling is basically saying that you're looking at a company stock, and you're looking at the company, you're saying, this company cannot survive. So for fun, let's let's pretend that we're trying to invest in sears and we're looking at those stock and we're saying, you know, this is

just gonna they're gonna declare bankruptcy sooner or later. So I'm gonna buy x amount of fear shares for five dollars from somebody who has um who owns shares, So I'm borrowing them and then because I'm betting that it's that it's going to fail when that when that share goes down, I'm selling it. I'm giving it back to the person who owns those shares at a profit. So, for example, if I borrowed at five dollars and it went down to one dollar, then I get to pocket

the four dollars. Yeah, yeah, yeah, I know, I know absolutely. So you're you're betting on failure, right, That's that's how that would work. You're betting on failure. And so this this reddit community Wall Street Beats has has gotten or bets rather, has gotten a lot of attention here and have they essentially at least for a couple of days beaten the hedge fund guys at their own at their own game. Yeah they did. Um, they were basically able to say that we believe in this company. We actually

think they's a turnaround story. And for full context, this comes after one of the cheery co founders not only invested heavily in game Stop a while ago, but then ended up joining the board and said the heat plans to help turn around game Stop. So these guys are

basically saying, I see this as a turnaround story. The hedge funds shorting this stock are wrong, and therefore they were able to drive it up because they came and drove and when they drove it up, then they forced the hedge funds to cover their short positions, which means that they have to spend money instead of get money. Yeah, and it wasn't just the Reddit, So it was all I saw. Elon Musk was in on there, and there's some other people, not just some people of high profile.

Uh So I know Elon Musk is a pretty good imprint on social media and all that, So that played in He's hasn't he had an issue over the years here Catherine with the hedge fund community in general, right with Tesla and all that. I remember reading something about that a while ago there, So this is a bit personal, I would think, yes, perhaps, Yeah, I think what you're referring to is maybe a couple of years ago when he tweeted out that he wanted to take Tesla private

at four twenties share. Is that what you're referring to? Yeah, And then there was that uproar and then so but that aside, though, you know, how what if you were to break up the percentage pie Katherine, like, how much of what happened the last week on Wall Street was the subreddit and how much of it was influenced by Elon Musk and a few other people of prominence that were,

I guess adding fuel to the fire. I'm not even a lot of the credit to Wall Street bets Um, and I think that when Elon Musk, Canton Winklevoss, and Champa Uh joined the prey, they kind of added to it. And we definitely saw stock the stock spikes on all three occasions. But I definitely think that this really started with WSB and their drive to say that a lot of them really believe that that there's a turnaround story. It wasn't just it became overheated really quickly. But the

core of it really was that they believe in the stock. Yeah, and and reading some of the stories that have come out, and you deal in this world all the time, but uh, the people say this, this is a revolution, this is a revel we've seen this week is not just kind of a one off situation against the people on Wall Street. Does it rise to that level or is this a story that's just a couple of days and then things will start to get back to normal, you know, next week.

So I've been in contact with a lot of the community over on WSB and they have assured me that this is as you just said, this is a movement for them. This is more than just making some money off of the trade. And especially now on Thursday we saw a bunch of brokerages m restrict buying of these stocks. That that message has kind of been reaffirmed that they want to really, in their words, take it to Wall Street.

They think that Wall Street doesn't in their in their eyes, that they that Wall Street doesn't seem to care about the retail invector. Whether that's right or wrong, that's up for debate, but that is their view. Yeah, and you brought up the I'm on I'm on robin Hood. Uh, you know, I play around there a little bit. But for them to take and I guess some of the other day trading apps took uh the stocks that they were betting on on the on the subreddit, they took

them off. So how much damage do you think that's gonna do it to robin Hood, which is thriving right now, that when things get a little crazy, they's gonna not allow you to purchase the stock. I would think that's that's gonna do some damage to their business model. How do you think that plays out? Oh, it's gonna It's definitely gonna do damage. I mean, I've been assured by

many that they're leaving robin Hood as soon as they can. Um. The other interesting thing actually is that robin Hood plans to go public, and so this is I'm sure that right now they're very happy they're a private company, but going forward, this has really hurt consumer trust in robin Hood, and therefore I could see them having some trouble with

the I p O. Catherine. When you when you look at this, and I know you you're talking about the community with Wall Street bets and you've been in contact with those people throughout the week. What about on the

opposing side. I mean, don't some of these people, the people that are up and above us, like, don't they understand the gravity of this situation given the fact that one we're in a pandemic and two there's all kinds of people in this country that are at home and have nothing else to do, and then just got six dollars from the government. I think that's definitely part of it. I think that they're Wall Street that's really struggled at the beginning to makes this known as being seen as

a serious thing. And then when it when they were able to drive the stock price up so much, suddenly there was like a panic and there is a lot of worry on Wall Street of the traditional power structure being upset. And I think that that's kind of why you're seeing what could be construed as a class back right. And I was gonna say with regards to that too, because now you're trying to pick up the pieces of where this shutdown was coming from. Who called it? Is

it Robin Hood or is it someone else? But on Thursday there were reports that Treasury Secretary Jett Yelling had received over eight hundred thousand dollars in speaking fees, and that came from Citadel, which is a hedge fund company founded by Ken Griffin. So like that influence is there from somebody deep down? Like where does this come from? Because we've seen the class action lawsuits on Thursday? Like, how does this? How does this play out? How do

you see it? I think that there's going to be a lot of back and forth and pointing fingers. I saw an interview with Andrew rost or Kin of CNBCS who basically said that this he worries that when this, when the dust settles here, we're going to see everyone pointing fingers at one another. And I believe that to be the case. I think that no one trust each

other right now, and it's very divided. What I think will happen now because of the action that we've seen on Thursday, is that we're going to see more regulation of these online brokerages, because the question now is being raised by both Democrats and Republicans. Is it okay for them to be able to restrict buying of stocks? You know that? Is that fair to the to a free market? Yeah?

I mean because we've gone through, We've gone through days, weeks and months now about what you can and what you can't tweet, what you can you can't post on social media, whether it's YouTube, Facebook, whatever it is. And now, if you're gonna have these restrictions on how you can trade, whether it's shorting or buying these options, what's next? Yeah,

I mean that's the ultimate question, is it there? The The argument for the online brokerages does make sense, and it's when you just look at it and it's black and white. These brokerages are trying to protect themselves. They're worried that and they're trying to protect the consumer. They seeing this volatility, and they're worried that people who are not they they're all well enough known around won't they don't know enough that they could really hurt themselves if

they continue to trade such volatile stocks. That makes sense. They also don't want to get sued. That also makes sense. The issue then is do you have a right to tell someone that they can't trade that stock or do you try to educate them better? You know, instead of allowing, for example, Margin calls it out of highood alatail stock, do you force them do you somehow educate them before

they make these decisions. And I would be the question, and I have a tough time with that because the instant pushback for me, and you heard it throughout the week, is that you have people they're treating the stock market like a casino. Well, when you go into a casino, you have no parachute. I mean, you go in there, there's there's some disclosures, there's some things that you warn you about for you know, gambling for gamblers, anonymous and whatnot,

if you have a gambling problem. But once you go in, you lay down the money. It's it's there, it's there for the taking. So like I don't I don't fully comprehend that nature of saying, well, we need to regulate, we need to inform and educate. I mean, that's that's part of who you are. It's part of who we are as as adults. We have free random use our money as we choose. No, I mean I would personally,

as a journalist agree with you. I would say that there should be tools in place that if you, for example, if you're going to allow people to um buy margins, then what you should be doing is for some take an education course or something of the sword before you really allow them to dive deep into the technical part of that. But if they're looking to buy a stock, what what better way to get people into the market.

And I think that this overall based on the conversation as I've had with the younger investors who have recently gotten in via Robin Hood, Um, they really feel like there's no trust anymore. Yeah, it is interesting. I mean, you brought the average investor the person used like Robin

Hood and things like that. But back a few years ago, I remember when these things, these apps came around and they were like talking about how excited everyone was on Wall Street because they were gonna draw in the average investor, I guess, to get their money. But is this a

cautionary tale? This this subreddit where the savvy veterans got played here at their You know, they thought they were going to get all this extra money, and maybe they still will in the end, but you know, right now, they're not looking so good right now, I think so. I think that this is definitely kind of a wake up call that there are retail investors who are really interested in the market, and they're not only interested in

investing in companies that they believe in. They also feel that they need to for right or for better or worse, they feel like they need to target these hedge funds who are heavily shorting these companies. How long have you been in the game, Katherine? Has it been been a while?

It's been about three years. I got to imagine this time and everything going on in the world, but with the president and President Trump and twenty six and now this this has got to be discovered some of the stuff that that journalists like yourself dream about, right, I completely agree there. I mean, yes, it's it's been quite a ride. I'm really proud to be a journalist in

this moment of history. I know that you know, mainstream media gets a lot of um negative attention, But I think that what I try to bring and as a journalist is just to try to get everyone a voice. And I think that's being able to quick cover stories that we've been covering in the past couple of years. As you said, the President Trump now President by now Will Street bets. I really hope that I can bring

a voice to everyone. So being in the industry, now, what's it like because you work you work with Jim Kramer on the regular. Right. Yeah, we host the daily show UM the Street LIVEE with Jim Cramer and Kathin Ross at time three am every day. So what's it

like working for Jim. Jim is awesome. He is very I didn't know what to expect when I first started working at the Street UM and he had one day just come up to me and I was just a breaking news reporter at the time, and he said, I walked you on camera and I was like, Okay, I think that you've got the wrong person, but he was like, no, you're really talented. And so we started doing videos together

and he is exactly how he is on camera. Very excitable, UM, incredibly smart, great to work with and he just genuinely cares. Like We'll be walking down the street in the normal times and we're together and fans will come up and he will stop and take selfies with every single one of them. He is that like the guy interesting. Hey. As far as back to the story with game Stop and all this, like we've seen, I think it was a the subredd it's as we're doing this in real time,

is still up. But uh, there are some other things that have been taken down on the Internet related to this, So, uh, how long does this subred at last? Are they Are they going to be shut down or the people from Wall street and what's your your guestimate on how how much life this subreddit has because we do live in the age of cancel culture, So are they going to

be canceled wall Street Bets That's a great question. I actually think that even if, as we saw Wednesday night, even if people try to shut them down, they're going to come back. So immediately after um they were kicked off Wall Street Bets was kicked off of Discord, I believe I started getting d ms on Twitter from Wall Street bets um members who were sending me their Discord links and saying like, we're now on this channel. So

I think that they're really focused on coming back. They're very united um and more more than just you know, trying to put together a short squeeze on game stop. The one thing that people don't really see about Wall Street Facts is that it's actually like an investing community

where they really build each other up. I've ben't said so many posts about like people learning how to invest and other members will walk them through it, or they'll say you know, like I just made X amount of money on this investment and now I can pay off my parents mortgage. Like it's it's actually a really really nice community when you just get past kind of like

the craft words that they tend to use. Yeah, And I was also I was reading a story somewhere about the reason they targeted game Stop and a couple of these other companies is because was it the hedge fund? Actually, most of these hedge funds, from what I was reading, do not announce their intentions, meaning that you know, there are ways to avoid getting the information out on who

you're in, which stocks you're shorting. And for some reason, I guess because of transparity, which is transparity which is good, they actually let it out that they were shorting this stock and that's why the game Stop was target Is that Is that? Am I reading that right? Is that? Does that mean it's going to continue the one the way it's been going here or just have a little

bit dip your toe in the water, but don't jump in. Okay, Okay, I think that bitcoin is here to say so I think that what's going to happen is that we periodically see these dips in it and I think right now a lot of the momentum that it had for going down actually was kind of put off by this all this game stock as games top sorry, game stop news. Um. So I I could see the argument that it's not only here to say, but it will come back to

maybe close to the levels that it's that. I think the selloff that we saw, what was that like a month ago? I'm beginning to lose track of time here. Um, I believe it off that we saw like a month ago or so was you just for the fact that it was hitting all time his and and it's normal for investors to take profit, you have to think about a little bit like a sock. Yeah. As far as what's what's next, we'll we'll try to become the great

Nostrodamis and predict what's gonna happen. So my gut tells me that we're going to see Congress get involved, like they'll be hearings on Capitol Hill over what has happened. Uh, Ultimately, what do you think is gonna you know, I know you you touched on it earlier, But what do you think comes out of this? I would imagine more regulations and more more red tape. But how far does this thing go? You definitely see more regulations or red tape, as you just mentioned. I think that there's gonna be

a lot of questions brought up. I mean what you mentioned at the beginning of us talking with with the questions around canter silence people? You know that that is to a certain extent applicable in this sense of can investors have their investments, how are taken away from them at a certain regard um. So there's gonna be a

lot of back and forth. But I think that this might be the one time that we really see Democrats and Republicans united, at least that we've seen so far this year, and that there needs to be more regulation on a very heavily regulated space, just because online broker does have opened up so many doors, especially now that

there's commission free. When that kind of came into play two a year ago, two years ago, there there were a whole there was a lot of speculation that this is going to change the way that we invest forever, but there wasn't necessarily a task to show how. And I think that this incident shows that this will change the way that retail investors are approaching the market. So Katherine, this is we've always heard of insider trading and that's your taboo and you get in trouble for that. But

this is the reddit. This like I was on there on the Wall Street bet subreddit and it's just like seems like regular people. I don't know, you never know. It's the internet. You could at least people could have been information. But it seems like it's this would be outsider trading, right, It's not insider trade. These are people on the outside that are that that that have figured out the cheat code here. That's my read on it too.

When this first started happening, one of the questions that I kept asking, I know a lot of finance journalists kept asking, was is this market manipulation? And the short answer is, if you want to look at just what the definition of market manipulation is technically, if that would be a yes. But they're not, from my viewpoint, doing anything illegal. So what's wrong with having a bunch of people decide we want to go in on this stock? Is there is there any different than what we see

from hedge funds and other institutional investors. I mean, that's that's a question that have to be asked, Catherine, what's the uh? I guess what's next on the horizon for for you guys, And obviously I don't know how long this thing will be, But like, what else are you guys monitoring at the moment right now? Or has it just been the frenzy on on Reddit? I've been kind

of side tracked with the frenzy on Reddit. But next is definitely what's going to happen with the stimulus package because those stimulus checks, if we do get those checks, what are these redd inventors going to be doing? Or if I could say whether or not it's first or not? And in doing this every day, what's the what's the read you get from the people you talk to? And obviously uh Cramer and whatnot about the Joe Biden presidency. I know there were people concerned when the election was

going on. With Trump wins, it will be better for the stock market if Biden wins, not so much. Does it really matter though who the president is? I mean, I feel like the stock markets is such a big monster, it's almost beyond that. But but what are you hearing on the changes coming with the new president? So honestly, the Stoctwak has kind of shown us so far that it doesn't care. The tradition there is that Wall Street

loves gridlock. They want to see political gridlocks. But when we saw the runoffs in Georgia back in UM early January, Well Street loved it. Well Street took it in stride. The two Democrats had taken those seats and therefore had a majority. And I think that we're just going to continue to see investors put money into the market because they like the fact that a tweet can't send the downs down UM and that is really going to change the kind of name of the game that we've seen

for the past four years. Awesome. And so Kavin, how can people find you on Twitter? And we'll put this all on the podcast, the page and whatnot. But you're on the Street Live with Jim Kramer every day right Monday through Friday. There every day, all right. You can find us over on the Street dot Com. My Twitter handle is at by Katherine Ross with a K and I'm the same thing on Instagram. Awesome. Thank you so much for your appreciate it. Thank you guys for having me.

Be sure to catch live editions of the Ben Maller Show weekdays at two am Eastern eleven p m. Pacific,