Some More News - Some More News: How The Stock Market Made Money Even Faker

Episode Date: February 4, 2026

Hi. In today's episode, we talk about the histories of the stock market & the Federal Reserve, and how rich bozos have always manipulated money to come out on top. Get the world's news at https://ground.news/SMN to compare coverage and see through biased coverage. Subscribe for 40% off unlimited access through our link.Hosted by Cody JohnstonExecutive Producer - Katy StollDirected by Will GordhWritten by Amanda ScherkerProduced by Jonathan HarrisEdited by Gregg MellerPost-Production Supervisor / Motion Graphics & VFX - John ConwayResearcher - Marco Siler-GonzalesGraphics by Clint DeNiscoHead Writer - David Christopher BellPATREON: https://patreon.com/somemorenewsMERCH: https://shop.somemorenews.comYOUTUBE MEMBERSHIP: https://www.youtube.com/channel/UCvlj0IzjSnNoduQF0l3VGng/join#Money #StockMarket #somemorenews Double up the love this Valentine's Day and buy ONE DOZEN roses and get ANOTHER DOZEN for free at http://1800Flowers.com/NEWS. Love!Pluto TV. Stream Now. Pay Never.This year, skip breaking a sweat AND breaking the bank. Get this new customer offer and your 3-month Unlimited wireless plan for just 15 bucks a month at https://mintmobile.com/morenews – Upfront payment of $45 required (equivalent to $15/mo.). Limited time new customer offer for first 3 months only. Speeds may slow above 50GB on Unlimited plan. Taxes & fees extra. See MINT MOBILE for details.Chapters:0:00 - Introduction3:33 - A Brief History Of Our Capilalist Hellhole9:57 - Wall, Meet Street24:40 - A Fed Is Born28:16 - America: A Work In Progress35:35 - America Gets Real Dumb With Real Estate47:24 - Why? F*@ing Christ, Why?See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Oh, hey, cats and dogs and horse, singular. It's me, hello, hi, hey, listen, meow, woof, nay. Quick cue. Have you ever heard of this thing called the stock market? I thought it was like the soup section of the grocery store. But I guess it's this whole other thing where people bet money on other people's money and then make money. Sometimes a lot of money.

Sometimes negative a lot of money. I guess there's also a sound effects machine involved, but I'm not entirely sure how. So on any given day, there's so many stocks that can make us money. Right, that drunk man is correct, technically. Because here's some news. Despite being fake, money has been doing pretty well lately. Sort of, kind of.

What I mean is that the S&P 500, which is what tracks 500 of the biggest companies listed in the stock market, added over $9 trillion in 2025, and continues to break records. In other words, the money graph go up. The stock market so high, it forgot where it left my van, which is weird because, hey, do you feel rich right now? I mean, I feel rich in spirit. But money, what with the 1.1 million job losses,

student loan, late payments, homelessness, and a record high. So if everything sucks, how can the stock market be doing so great? It's almost like money's fake. And the stock market is stupid. Yeah, it is like that. Because the reason why the stock market is booming while everything sucks for most people is actually simple. It's not even what this video is actually about.

It may have something to do with the fact that the top 10% of America's wealthiest patriots own 93% of all stocks, with the top 1% cornering nearly half of the market. But I'm just spitting on balls. So as the wealth of America's top 1% hit a record high of $52 trillion this year, a quarter of their fellow countrymen who were taking out by now pay later loans were doing so to pay for groceries. This is making America what's known as a K-shaped economy.

And that K doesn't stand for kudos kid, you're killing it. It just means that people in different economic brackets experience vastly different outcomes. You know, like, it's like inequality. For wealth, it's wealth inequality. So again, this video isn't about explaining the discrepancy between the stock market and what actual people are experiencing. Instead, we're just going to ask, why? Why did we do this?

Why is the stock market the main thing the media uses when it talks about America's economic health? What purpose does it serve our society? Who does it actually help? Because while money is fake, I get why we felt the need to invent it in the first place. I don't want to barter every time I buy a cow. I buy so many cows these days. Milk is back.

Did you hear? Whole milk. I kind of get the cows. But the stock market is even faker than money. So it's probably worth exploring why we invented it in the first place, which unfortunately is going to require talking about history and numbers. Disgusting. The Polymarket NewsHour presents.

Professor Cody presents, a brief history of our capitalist hellhole, presented by Polymarket. Polymarket. Because why not gamble on the outcome of a complicated pregnancy? So the first real corporation to sell stocks was the Dutch East India Company, founded in 1602 with the reasonable goal of stopping Spain from colonizing Asia. Love it, no notes. did so by brutally colonizing Asia for themselves, well, some notes actually. But at any rate, the East India Company was granted a 21-year monopoly over the Dutch Empire's

economic and military activities on the continent, which ranged from plunder to slavery to genocidal massacres, because of course the story of money's origins started with cruelty. I think they also killed the Cracken at one point, if I remember history class correctly, which I do, That happened, RIP the Cracken, we miss you every day. So the East India Company issued bits of stock ownership to outside investors to raise capital for its mellow schemes. For those of you who don't watch those shows about young business hotties, buying stocks means forking over some money in exchange for a small amount of equity. You then own a tiny piece of a business for which you are granted a security certificate,

your mom can frame and hang over your bed. Anyway, this caught on, and soon, in major 17th century European cities, proto-stock brokers wandered coffee houses and taverns, helping over-caffeinated and or drunk people buy and sell shares in business enterprises. Eventually, these transactions centered around formalized stock exchanges. It wasn't long before this financial game of Tic-Tac-toe evolved into 4D chess, and not everyone had the right cardboard glasses to keep up. savvy early brokers realized selling off many shares of a given stock could depress its value, which would spook their less cunning peers into selling their own further pushing down that value.

Then investors in the know would promptly gobble those cheap shares back up and watch the depressed value soar like it just popped some fiscal Zoloft. Even savier brokers realized they could pre-sell high value stocks to any old putts, give him an IOU, then promptly deflate the stock's value, and then buy back the now worthless shares to be delivered to one sad senior puts. So the stock market was coming into its pimply adolescence, and nobody had warned it to use deodorant. Over in London, there was a boom of innumerable joint stock ventures, many with pretty questionable business plans. These included inventing a perpetual motion machine, manufacturing radish oil, which had no known use, and upcycling

sawdust. You gotta love the sheer doofiness of the entrepreneurial spirit. These businesses issued stocks, especially at one coffee shop, which later became the London Stock Exchange. Anyone with money to burn was down to fund, and prices invariably went through the roof. Early buyers would resell shares to their stupidest friend who went out and sold the them to an even stupider friend. Wow, so in the early days of a booming new economic system, a lot of very dumb people invested in obviously dumb ideas that were destined to fail? That's so

interesting. That's so interesting. But I'm sure that won't come back into play in the modern digital age of valuable monkey drawings and meme currency. So, all my lessons from history gone. So while this was all happening, over in Paris, one schemer named John Law owned a company with, quote, land rights in the, quote, new world where certainly nobody already, quote, comfortably, quote, lived. He spread rumors about American mountains filled with gold, silver, and copper, which he intended to plunder. Law's scheme was to encourage rich dummies to buy French government bonds and then use those

bonds to buy his stocks to fund a trip to those big copper candy mountains. Bonds are different from stocks in that they are much lower risk. When you buy bonds, you're essentially lending the government money that they would later repay with interest. So short term, this helped France's government cope with bad war debts, which made everyone happy, especially Mr. Law, who became one of the richest men alive. Unfortunately, his con job caused a massive market bubble so frenetic that, supposedly, one hunchback rented out his hump as a desk for businessmen frantically buying and selling, shares on the street, which feels like the only smart financial decision I've seen so far,

actually. Prices climbed so high that some speculators became suspicious. So law actually hired thousands of criminals to march down the street holding shovels and cosplaying gold miners bound for the Americas. For one solitary time in history, a parade of hooligans instilled market confidence, but only for a little bit. and no plundered gold poured in, the bubble burst, painfully blowing up the entire French economy.

Law got put under house arrest and people threw rocks at the wealthy fraudster's window. A pastime we can't legally suggest we should bring back. It was mentioning that it happened. Law fled to Venice where he died a destitute gambler, a consequence we're legally comfortable saying we should consider bringing back. But to recap, one guy earns, then loses,

a fortune off a fake plot to mine other people's land for imaginary precious metals. Wow, so, so a rich guy conned a bunch of people into thinking he was a visionary by lying. Thank God that never happened again. Except this just in, here's some news. Zing, I was being a kidder, because I'm not sure if you've picked up on this, but this pretty much set the tone for the rest of history. But you're probably thinking if things were this nuts and you're, What the heck was it like in Colonial America?

We'll grab your powdered wig and strap the F in. Polymarket presents Wall meet street. Colonial America's largely agrarian economy was pretty humble. But that didn't stop some 17th century New York businessmen from gathering in Lower Manhattan to pursue their side hustle. Trading enslaved people. Of course. As fledgling businessmen, As fledgling businesses began developing, lively trade started going down in, you guessed it, coffee shops,

which I guess were always the meeting ground for insufferable people. Without regulation, things were chaotic and predatory, and also, I can't stress enough, revolved a lot more around slavery than you should feel comfortable with. Not to high road anyone, but personally, I only feel comfy with zero or less slavery. Where's my Nobel Peace Prize, you know? So, in 1792, two dozen fed-up brokers met at 68 Wall Street, where they wrote the Buttonwood Agreement, aka the first rules to govern America's stock market. These were completely fair and totally neutral.

No, I'm kidding. What did I just fucking say? Were you not listening to the breaking news? I'm a kidder! These 24 brokers essentially formed a cartel, set a fixed commission rate, and agreed not to trade with outsiders unless none of their rights. rider dies wanted in on a deal. This began the grand tradition of a few lucky brokers getting preferential treatment on the market. Officially, it meant the most reputable way to invest

was with those two dozen men. Finance was a weird insular world, barely on the radar of most Americans. After all, 90% of them were busy farming, aka actually working, and it would stay that way on purpose. As late as 1916, the vast majority of brokers on the exchange refused to carry out trades of less than 100 shares, making the stock market, like golf or harassing the mother of your children or swapping blood with your son, exclusively a rich man's game. But to be more precise, it's a game consisting of a bunch of people who don't have any actual value to offer the world. Insufferable wads with enough money to buy into an industry that completely self-perpetuates without anyone having to work. What could possibly go wrong? Good question, us. Thanks,

Cody. We are welcome. So as markets continue to grow, these rich dips created the New York Stock and Exchange Board with strict rules and a hefty initiation fee. The brokers gathered twice a day to solemnly exchanged trades in just 30 stocks and bonds. But by the end of the Civil War, there would be 300. Then in the late 1860s, we got the stock ticker, a telegraph service that gave up to the minute calculations about stock performance. Like Mark Zuckerberg refreshing a friend request, or a Hudsucker board member being hilarious,

every day people quickly became obsessed with monitoring every ebb and flow of the market. A fixation one worried, doctor dubbed, Tickeritis. Adorable. Adorable old tiny bullshit. But also a nice reminder that people have always been like this. Just scrolling for dopamine. Because Ticoritis combines two of America's favorite pastimes.

Gambling and inexplicably admiring the rich. But as I said, Wall Street was insular to the common folk. And so we invented a shadow market of little fake brokerages where regular people could place bet on how Wall Street stocks would perform. We called them bucket shops for some reason. Maybe they also sold buckets. You weren't buying actual stock shares.

You were just predicting how the stocks would perform. Betting on the betting. If that sounds shady and stupid as hell, that's because it was. Bucket shop owners were often con artists who would falsify information on stock ticker feeds or just lie. So gambling with them was what you were second.

ed teacher would call risky behavior. And like most risky behavior in human history, it caught on fast. By 1889, seven times more shares were wagered at bucket shops than traded at the NYSE. Real brokers look down on bucket shop trading, which they saw as gambling, unlike the stock market, which was a sober, predictable gentleman's game. You know, or not that, because from here on out, the American economy was in a constant state of frenzy. First about canals and then railroads, the last of which attracted lots of speculative investment. Speculative investment just means buying assets

in anticipation of future growth. If a lot of people do it, they'll often collectively drive the market value of those assets far higher than their actual literal value. But again, we wouldn't know anything about that here in the future with our AI hologram wifos that tell us how to dress.

Wakey, wakey, rise and shine. Definitely wear your favorite green jacket. Look, now we're really vibing. Oh, cool. Thanks for telling me to wear my favorite jacket. I wouldn't have worn my favorite jacket without your help. I'll take a thousand. Look, if there's any lesson to be had so far,

it's about how incredibly removed from actual currency or value the stock market immediately was. Everyday people were betting on rich people, betting on inventions and ideas that didn't actually exist. It's a bet on a promise of a guess. Our entire economy is propped up on what feels like a Dr. Seuss parable. And so naturally, the late 1800s were a financial clown orgy, especially considering, and I feel like I should have stressed this earlier,

America didn't have a central bank yet. That came later. In case you don't know, a central bank is exactly what it sounds like. It's an institution that dictates what money is for a country, so that everyone's on the same page. The point of a central bank is to stabilize the economy, mostly by managing a national currency and controlling the supply of money. So all this stock market madness was happening without that.

And in fact, unregulated 19th century banks would produce, count them, 8,000 different kinds of currencies, including a Santa Claus note, which could be redeemed for $5 at a Boston bank that had determined the true value of Christmas. Banks defaulted all the time, so nobody knew if their random currency was really worth anything, and anxiety was high. Wow, wow, I say. Thank God we'd know better than to do that here. here in the digital internet age, where we absolutely don't make up and trade in unstable currencies based on bullshit memes.

My goodness, I'm really, oh, I'm so kidding today. So yeah, as I stated, clown orgy. And like all clown orgies, the people on the top screwed others the most. I guess it's all orgies. Like in 1873, when US bank giant Jay Cook and companies, risky investments in railroads led it to bankruptcy, which had domino effects that ravaged the economy, but not in a sexy clown way. Within two years, 18,000 businesses had shuddered, unemployment ballooned, and America entered a long depression. Luckily, Jay Cook was able to pay

off his obligations and regain his wealth via investing in a Utah silver mine. Good for him! Meanwhile, this event contributed to massive inequality, and by 1890, the top 1% of Americans owned 50% of all wealth. This concentration of riches was so great that it allowed one person to functionally wield as much power as a central bank. His name was J.P. Morgan, not to be confused with his evil twin, J.C. Penny. In 1907, amid this economic turmoil, the 70-year-old Morgan physically locked a bunch of high-power bankers in his library until they agreed to pledge the $25 million necessary to prop up a flailing market, thus saving the economy at the time.

In exchange, JP also used the opportunity to pressure President Teddy Roosevelt into abandoning his antitrust policies just once, for fun, to let Morgan buy out competitors in several industries he already dominated. Morgan saved some banks and trusts, but let others collapse. That included destroying a bank which was about to lend money to Nikola Tesla to create wireless electrical transmission, because at the time, Morgan was trying to corner the rubber market that insulated wired electrical transmission. This is all to say that America was so fucked that we were completely at the mercy of a single

rich guy with more power than our government, something that thankfully we have no concept of today. I'm depressed. And a kidder. But listen, if you correctly assumed this was finally enough for us to create the Federal Reserve, then good news. I'm sure that'll go great. But before we talk about that,

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Keep the offer code for when St. Paddy's Day comes around. Welcome back. Hi. Money. Is it fake? Yes. But also the stock market. And so on. Bad, I say. Now that we've recap the show so far, we can continue our history lesson. We were just at the part where all the rich shits of the 1800s were now entering the 1900s and noticed that everything in America was bad because they made it bad. Specifically, America's top financiers were up to their old pierced dicks with crazy market fluctuations that their rampant speculation was causing. And so it was time for those same idiots to solve the problem for some reason. Because there had to be a better way. So long as that better way required a group of massively wealthy bankers to pretend to go duck hunting at a resort club in Jekyll Island. No, really, that's the next thing that happened. A group of rich

moguls got together and dressed like Elmer Fudd in order to keep the press away so that they could conspire to create the framework for a new central bank, the Federal Reserve. Off to a great start! Polymarket Presents, a Fed is born! So the idea here was to create something that wasn't part of the government, but still had government-like powers to protect the system from instability. The result, after some congressional debate, became the Federal Reserve. That all-American double whammy of supremely boring and supremely powerful.

The monetary equivalent of those nine wizards in robes who decide whether women can control their own bodies or not. A weird mix between private entity and public agent. The Fed consists of one central seven-person board of governors and 12 regional banks scattered across the country. The seven governors gather with a revolving group of five regional bank, eight times a year in the Federal Open Market Committee to set monetary policy. They also have one of those eyes wide shut orgies, one assumes.

Clowns welcome and encouraged, one assumes. Although the system was meant to be relatively decentralized, so no single Craven banker had too much power, rule revisions have mostly consolidated power into the Board of Governors, whose members are selected by the President and approved by Congress. The Fed wears lots of hats, but their top hat, wink, is monitoring, monetary supply by adjusting interest rates. Lowering interest rates makes it cheaper to borrow money, a boon for slow economic periods.

Raising them makes it more expensive, which can help curb inflation. And thanks to these savvy yet cautious puppeteers, America's financial instability would be over forever. We did it! Don't look it up! Okay, fine, look it up! I guess there was some kind of depression soon after the Fed was created. A great depression, to be exact. So good?

Oh no, not good. In 1929, it saw the largest collapse of the stock market ever in American history. It went down like this. The Great Depression was preceded by the happiest decade America had ever seen. Stupidly convinced there'd never be another World War, people partied, went to the movies,

and invested in the stock market to major, major enrichment. And while less than 3% of Americans actually owned stocks, their buck wild behavior was going to come crashing down on the whole economy. Anticipating imminent disaster, the Fed got huffy and raised interest rates to curb rampant speculation. All this did, however, was contract the economy, cause a frantic run on banks, and tanked the stock markets. So the Fed tried to help and didn't, and maybe made it worse or maybe made it better. I don't know, the money perverts are torn on that. But what is for sure is that simply having a central bank didn't save us from economic chaos after all.

So when bespectacled superhero FDR came into office, he stood on business, rather against it. He declared a bank holiday, which put the financial system in timeout while its parents figured out what to do about its naughty behavior. His New Deal policy agenda did not make pouting bankers very happy. Among many things, it established the Glass-Steagall Act, which divided the industry between commercial banking, where regular people and small businesses borrow and store money, and investment banking, where people play stocks like slot machines. Problem solved, we did it.

Job done. We invented money and made a few regulations to balance it all out. The simmering avalanche of financial fuckery would never crash in on America again. He's waiting for the... Oh, here we go. It crashed again. America, a work in progress. Polymarket.

All right, so we made a central bank and some regulations, all in order to balance out this stock market system where rich people bet money on businesses and then less rich people bet money on those people. And I'm just throwing this out, if the economy was a screenplay, we might at this point simply delete the file and start over with a new draft,

one where the love interest doesn't turn out to be the hero's cousin. Weird twist didn't work, but there was no going back for America. This was, for some reason, The system we chose, and as we move forward, we tried to retain lessons as to how to avoid the next big depression. So, for example, remember how I said that the Fed potentially made the Great Depression worse by raising interest rates? That became a bit of a scary campfire story for them.

So when the American economy was greeted by two recessions between 1970 and 1975, they went the other way with it and lowered interest rates to generate economic activity. But this also triggered inflation without actually stimulating the economy. In response, a new Fed chair took a hard 180 and straight up strangled the market with interest rates that by 1981 peaked at a truly staggering 20%. Inflation did finally ease up, but nobody was exactly happy. It's like this dial they're turning back and forth to keep the ship afloat, but they have no idea which way to turn it and everything they do seems to create holes in the line. But okay, we got all our angles covered. It's complicated, but we're getting a hang of this whole economy thing.

Let's just make sure we don't invent some kind of completely new industry that upturns everything we know so far. It's described as nothing short of breathtaking, a points drop never before seen on the US markets. This closing bell might as well have been an alarm, so Savage was the selling. Shucks! I remember now. It's the thing. The internet thing. Also, just known as the internet, I could have just said internet.

So we've skipped ahead to the years leading up to the dot-com bubble going kaput. During this time, the Fed was being run by a one Allen Green span. Who's doing okay? Keeping in line with the Fed's dual mandate of price stability and maximum employment, he was laser focused on keeping consumer inflation prices down while also stoking economic growth. This amounted to regular, tame cuts and interest prices that pumped money into the economy, without making bread a luxury good. But simultaneously, all that cheap money swimming around

led to major asset inflation in the stock market. The NASDAQ 100 rose by 80% in 1998 alone, thanks in large part to boomers getting boners for companies like Pets.com, which they prayed would end PetSmart's brick and mortar reign of terror for good. In other words, we were all feeling great about the economy and this brand new and exciting frontier of capitalism seemed like an easy win, especially since the Federal Reserve generally had the backs of the banks.

For example, in 1998, when long-term capital management freeballed its way to near default, the Federal Reserve Bank of New York got 14 of its member banks to bail them out to the tune of $3.6 billion. The finance world slept easy that night, so thank goodness for that. What's the worst that could happen? Yes, another great question by us. Well, another thank you to you. Another, you're welcome. For me.

See, after telecommunications company Qualcomm stock rose 2,600% in 1999, it became hard to deny that the Fed was contributing to stock market inflation by keeping interest rates low. The board raised them from 5 to 6.5% in, just under a year, which led traders to do some real soul searching, in that they soulfully sold off their dumbest investments until they'd eliminated $1.76 trillion of market value for just 280 internet stocks in a mere six months. If it's starting to sound like the stock market is kind of all about the vibes,

congratulations, you're paying attention. You get a Cody point. Sound effect. Yeah. So when the dot-com bubble, got the flu, the Fed was ready with chicken soup and Gatorade. Unlike in the aftermath of the Great Depression, America didn't ponder whether the investors who'd wrecked the economy maybe needed some discipline.

They didn't learn the first time, so I guess there's no use punishing them this time. Instead, Greenspan soothed the system by aggressively cutting interest rates, which, as we know, lowers the cost of borrowing money and thus stimulates economic activity. And then he kept rates low for... Quite some time. This did get us out of the crisis, but it's kind of the equivalent of loaning your son, your Beamer, and then when he crashes it

through the window of a Waffle House, buying him his very own Porsche. Except your son is also that magic kid from the Twilight Zone who can turn you into a jack-in-the-box. Because you see, what this story really identifies is a moment in time establishing the fact that nothing has really changed since J.P. Morgan was running the show.

The Fed is understandably, terrified of another great depression. But it has to work in the system we've created with the tools they were given. And unfortunately, that's a system that inadvertently made us all hostage to the cocaine whims of corporate fail sons. This was of course made worse

by the loosening of regulations while these banks grew huge. Remember our pal the Glass-Steagl Act that separated good old-fashioned commercial banking from high-risk investment banking? Well, with the help of millions of dollars in lobbying by the banking industry, it was nerfed in 1999, freeing up commercial banks, investment banks, securities firms, and insurance companies to get together and have as many

babies as they wanted. Probably a coincidence, but the Secretary of Treasury at the time had helmed Goldman Sachs, the largest investment bank. After leaving office, he promptly became a chief executive at Citibank, the largest commercial bank. It's probably a coincidence. So, we'll just cut that actually. On top of that, between 1998 to 2007, the five largest banks saw their assets triple to $6.8 trillion, while the five largest investment banks saw theirs quadruple to $4 trillion. Meanwhile, the hum-drum dependable mentality of commercial banking was overtaken by the high-risk, high-potential reward culture of investment banking, where bankers are compensated mightily

with bonuses for short-term wins, invariably achieved by taking big risks. So these banks had all become too big to fail, and they were making sloppy bets. So it was really no surprise when the next thing happened. Polymarket America gets real dumb with real estate. So, cutting to 2008, it was closing time for the American housing bubble. And before America could finish its wisdom, whiskey or beer, real estate values had plummeted a full 20% by 2009. This wiped out $10 trillion of Americans' wealth.

The American stock market crashed in late 2008, contracting by $8 trillion over two years. The entire world followed it into recession. And while the banks caused this calamity, we couldn't just let them fail, remember? Too big, et cetera. So with the economy and free fall, the Federal Reserve wasted little time. They cut interest rates from about 5% at the end of 2007 to near zero by the fall. This was pretty extraordinary. It meant that borrowing money was essentially free, and it was basically worthless to keep

cash sitting in your bank's coffers. But they didn't stop there. The Fed needed to electroshock the very heart of the American economy back to life. They undertook this massive venture with the most boringly named policy initiative imaginable, Quantitative easing. Great, a new thing to explain. You're welcome. So, quantitative easing is when the Fed goes beyond manipulating monetary supply merely by setting interest rates. Instead, it injects money straight into the economy, specifically via its 24 primary dealers, which include Wells Fargo, Morgan Stanley, and Citigroup. Basically, the Federal Reserve

buys various kinds of assets from those banks who receive fresh new cash and It's like going to your friend's stand-up show and fake laughing in order to make them seem popular. The Fed was like, fuck it, just take some money in order to make the economy better. And they did this not once, but three goddamn times. First, they started buying shitty little mortgage-backed securities full of subprime loans, a full $1.25 trillion worth. Fun little fact, research from before and after this shows that firms who were bailed out were even more aggressively risky afterwards.

But at least it saved the economy, right? Please tell me this saved the economy. Apparently not, because when that didn't work, the Fed announced a second round of quantitative easing, a $600 billion cash infusion to the banks in the form of purchasing long-term treasury bonds. By 2011, excess cash reserves in the banking system were $1.6 trillion, an increase of 96,000%

since before the crisis. Let me say that again, an increase of 96,000 percent. The only thing that should legally be allowed to increase by 96,000 percent, is hugs and rainbows, and even that might be too much of a good thing. But the craziest thing about these emergency measures is that they were no longer just for emergencies. They were just a bare necessity to keep the vibes good over on Wall Street. While the rest of Americans coped with the trauma of evictions and unemployment, The Fed did everything it could to keep bankers nice and calm, short of sending them to a day spa.

In 2012, the Fed announced that it would keep interest rates at zero for three more years, and even that wasn't enough. In 2013, when the head of the Fed so much is hinted that the Fed might taper these measures, it caused what became known as a taper tantrum on the stock market. Terrified that new money might not come pouring in, and they might not come pouring in, and they might actually be on the hook for their bad choices, investors played hot potato with their riskiest loans. The very idea that the water pressure on the money spigot might go down a little bit was enough to give everyone on Wall Street the willies.

So the Fed backtracked and continued to inject $85 billion a month that year, eventually tapering over the course of 2014. But it was all too late. Quantitative easing had officially become Wall Street's emotional. emotional support goblin. Get a saddle for that bull. After this, there was basically no going back. By this point, individual markets experiencing downturns

could provoke the Fed's seemingly limitless generosity so long as they got the board nervous enough. In 2019, the Fed sent hundreds of billions of new dollars specifically to bail out the repo market, a short-term loan market that had been hijacked by a few reckless hedge funds. Then, when COVID shut down, down the world in March of 2020, the Fed announced it would go further than ever before. It joined forces with the Treasury Department to form SPVs or special purpose vehicles.

These were temporary LLCs that the Fed and Treasury could use to bypass rules preventing the Fed from directly buying corporate bonds. This was truly wild. The Fed was helping companies that were too highly leveraged in debt to be approved for loans by giving them liquid money on hand. Every $10 the Fed spent would be backed by one taxpayer dollar from the Treasury for security. You're welcome, guys.

Credit would be injected into the market while taxpayer funds provided some cushion for the pushing. They didn't stop there. That April, the Fed announced it would also buy junk bonds, i.e. high-risk, high-reward loans and CLOs, which were packages of low-rated loans. Within 90 days, the Fed created $3 trillion, which would have taken 300 years at the rate before the 2008 crisis. Wall Street squealed with relief.

After the March announcement, the stock market saw its biggest boom ever. Its valuation surged 35% in just three months. The reason why was obvious. The Fed had officially proven that there was no asset too risky, no leveraging too stupid, not to be worth. of a bailout. For the small pool of Americans who own most of the country's assets, this was unfathomably, unimaginably, angelically good news. And that is where we are now. America's economy was perpetually demolished because we balanced it all on a made-up rich dude gambling system. We then created a central bank to offset the negative effects of that

gambling system, which in turn ended up becoming a system accidentally devoted to bailing out the rich people every time their gambling failed. And now our entire economy looks like the film Gremlins 2. And it kind of makes you wonder, why? The Fed isn't exactly the government, remember? So where's like Congress and the president and all of this? How is this being allowed? Well, we already kind of know why, but after the break,

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If you've ever been in the market for a new home, you know home shopping can be a lot. There's so much you don't know and so much you need to know. What are the neighborhoods like? What are the schools like? Who is the agent and who knows the listing or neighborhood best? And why can't all this information just be? in one place. Well, now it is on Homes.com. They've got everything you need to know about the listing

itself, but even better. They've got comprehensive neighborhood guides and detailed reports about local schools, and their agent directory helps you see the agent's current listings and sales history. Homes.com collaboration tools make it easier than ever to share all this information with your family. It's a whole cold sack of home shopping information, all at your fingertips. Homes.com. We've done your homework. Hi, I guess. Welcome to the final leg of the episode. It's been a hard road, I know. A long walk. A lot of words, money words. We've been detailing the long history of how America became, you know, all this. A slow takeover of our economy where the central bank exists solely

to be the hype man for rich jackasses. It is, dare I say, one that we should solve. Eventually, after the other fascism stuff gets sorted out, I guess. And we have to actually explore how it got this way in order to fix it. Because that's how you solve problems, excluding my problem with shoplifting addiction,

which is honestly God's fault. So... Polymarket poses, why? Fucking Christ, why? Good question, thanks, you're welcome. Very to the point. So how did a weird central bank that started on some rich guy's fake duck hunting trip, come to shape the entire American economy.

Largely, because we let it. Because nobody likes dealing with money. And the moment we could kick it to a third party, we did that. You couple that with decades of corporations lobbying politicians, and the days of FDR fade away like a bad car decal. Probably that co-exist one.

Because like, sure, we talk about the economy in the broad sense. But when was the last time voters actually had a say. It's hard to believe this, but monetary policy used to be a topic of spirited public debate. It was actually the main issue at the heart of the 1896 election, which was fought over whether the country's currency should be gold or silver. I would have went with silver, so that way we keep the werewolves out of our stores, but whatever. The establishment of the Fed to regulate monetary supply took this all out of our hands entirely. And you can argue that's a good

thing to some extent, because the decisions they make have to move quicker than, you know, Congress. Also, that independence is very good if the president is like, a total maniac who tries to extort Jerome Powell, the head of the Fed, into lowering interest rates in order to make his terrible economy seem better, which is yet another example of why this entire system is a kind of a big sham. And it's weird. It's weird to be rooting for the Fed right now, because resistance hero Jerome Powell is in charge of organization that much like the Supreme Court, we have no control over, but makes huge decisions that will affect everyone. Great, I'm happy the current head of the Federal Reserve has integrity.

But for how long is that going to remain in place? Ultimately, it would be better to reform that entire system instead of just hoping it'll hold up to every roaming cluster of authoritarian dildos. But in order to do that, there's a second hurdle to conquer. It's the fact that money is... along with being fake, confusing and hard. It's hard to explain, which is why movies like the big short had to stop and let people look at the camera

and explain stuff. It's why making this video you are watching was hard. It was hard. It's why we have an entire industry of people we hire to do our taxes for us. And that's of course all by design. The Fed has perfected the art of being really, really goddamn boring, using a vocabulary capital hill

dubbed Fed speak. It uses snoozer names for important things, like term auction facility, term securities lending facility, primary dealer credit facility, all of which are impossible to parse even if you wanted to, which I frankly don't. The Fed's penchant for deliberate obfuscation was perfected in the 1990s by Greenspan,

who was lauded across the political spectrum as a genius, primarily because nobody understood what in the ever loving shit he was saying half the time. How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? Uh, what? If you're wondering, he was saying that when too many people get excited about a stock, it

might surprise them and fall. That's all that cluster chert of words was actually saying. So you have this quasi-governmental institution using overly complicated insular code speak to make sweeping decisions about the country, which means that it's extremely important to have somebody in place to translate this for the American people. You know, like if a piece of paper existed that told you the new stuff going on in the country, we'd rely on this mythical new stuff paper. Sadly, such a thing does not exist.

But it used to. In the early 20th century, progressive muckrakers pioneered accountability journalism about the monopolistic industrial giants of the Gilded Age. But this would become increasingly rare. The sheer quantity of business journalism exploded in the 1970s as more average Americans became interested in stocks and personal finance.

But that didn't amount to more, for better information. Financial deregulation had slashed a lot of disclosure requirements for corporations, eliminating the legal documentation that once fueled investigative business journalism. Writing about economics became increasingly a matter of offering investment advice.

If reporters question, say, sky-high stock valuations, they did so as warnings to prospective investors, rather than to question the myth of endless growth. That's in part because, of who business journalists get their information from. Reporters have long maintained cozy relationships with financial and business power players who serve as valuable sources.

As a result, business leaders themselves wield a great deal of control over the news, strategically choosing when to report earnings or new products or leak tips. It's frighteningly similar to entertainment news. Like video game journalism, which I'm told has an issue with ethics, often relies on getting advanced copy, of the games and therefore can't give honest reviews for those games. So for example,

during the dot-com bubble, fawning coverage of tech CEOs and investment bankers proliferated in glossy new business sections coupled with euphoric coverage of the stock market that disguised the imminent collapse. The business media declared that America was witnessing the birth of a new economy, a term which was mentioned 22,848 times in business print media in 2000 alone. Things only got worse on the other side of the bubbles pop. The internet's decimation of traditional journalism models got rid of the money necessary to fund investigative journalism, while making vulnerable media organizations more antsy about calling out big business.

Some outlets cut business journalism entirely, while others like Reuters and Bloomberg primarily wrote for an audience of wealthy investors. In classic history repeating itself fashion, the run-up to the 2008 recession, was characterized largely by flattering coverage of financial power players, sometimes too retroactively, let's call it hilarious ends. In 2006, Fortune called Lehman Brothers CEO the improbable power broker who had turned the firm into a super hot machine. Lehman Brothers collapsed two years later would be a primary trigger for the not very hot global recession.

A 2007 Forbes article described Goldman Sachs' daring and interesting. Innovative practices, practices which ended up landing Goldman Sachs a $5.1 billion fine for deceptive marketing. On March 11th of 2008, our Jim Kramer assured viewers, Should I be worried about Bear Stearns in terms of liquidity and get my money out there? No, no, no. Bear Stearns is fine. Do not take your money out. Oh, cool, thanks. Except mere days later, Bear Stearns was all but insolvent and had been bought out by J.P. Morgan. The company, not the man, who I'm pretty sure has died.

He was like 70 more than 100 years ago. He's probably dead. Hey, that drunk sound effects guy should like be fired or something, huh? In fairness to everyone, but Jim Kramer, the financial world had become even less transparent and much harder to parse than ever. Increasing complex Wall Street practices made accessing information harder, preventing journalists from understanding important volatile markets,

like derivatives. And in the after-mastrope, of the 2008 recession, as the American media soul searched, it missed the story again. The historic boon to Wall Street that was quantitative easing was barely a whisper in the news, with Fed Chair Ben Bernanke appearing in just 0.13% of published stories. This boring Federal Reserve was operating virtually without public attention. And as long as its actions resulted in a sunnier stock market, the business media would obediently churn out the good news. But here's the important thing about all of this that I need to

get across. This cycle where the Fed is forced to feed corporations money in the hopes that it'll save the economy, most of that money never really reaches us. That first question of how the stock market can be good while the economy seems very bad. Well, it's because this weird insular system has completely abandoned the entire point of why it existed in the first point. place. So, for example, that triple round of quantitative easing, aka the Fed just giving money to the banks to then lend to other people. Well, people didn't borrow the money from the banks and then spend the money on stuff. Or rather, not stuff that helped most people. They borrowed money to acquire assets like real estate, fine art, and stocks. It's a lot like, well, trickle down economics,

in that it's stupid and people who think it works are stupid. So for example, as one Fed board member noted in 2012, the CFO of Texas Instruments had told him that he borrowed $1.5 billion in cheap debt thanks to quantitative easing. And despite borrowing, I'll say it again, $1.5 billion, he declared he would not be adding a single job. Instead, he was using the loan to buy a single job.

buy-back shares of Texas Instruments' own stock. Texas guy's choice is a reflection of one major change in the US economy that has been happening since the 1970s, financialization. That is the increased dominance of simply managing and growing money through stuff like investing instead of making anything. That's the key here.

Like, back when the American stock market was created, it was because of things like building the railroads, Back then, investment poured into publicly traded companies to support the very real production of a very real thing. But thanks to deregulation and the slowdown of American industry since the 1970s, finance stopped being about investing in stuff. It's now about abstract financial assets that don't actually do anything. So when stuff like crypto and NFTs sprung up,

you can kind of see why that was immediately and very naturally embraced by some. It's just rich people larping with numbers, fantasy baseball shit where nothing is actually getting produced, and it helps nobody in any practical way. And this is all evidence of the same conclusion, the thing I keep saying and we'll always say, Money is fake. Money is fake.

It's a hallucination we all agreed upon. Now, it being fake doesn't mean it's unnecessary, but it's fake. And it's never been more fake than right now. The first corporation that ever went public, the Dutch East India Company, raised money to support its colonization. That sucked. But today, when companies issue stocks,

they don't pour the profits into anything real, not R&D or wage hikes or expansion, not even an evil real thing. No, they pay their earnings out as dividends, then proceed to do stock buybacks to elevate their market value temporarily, both creating wealth and short-term gains for stock owners without actually producing anything. And if things fall apart,

the Fed just lends them more money, which the companies use to just keep larking the economy. For real, most U.S. corporations' entire capital investment comes from their earnings. Their borrowing from banks is merely about financial engineering to facilitate machinations like buybacks or mergers or corporate raids, which often deplete real production because many companies that do buybacks or mergers

often downsize or outsource. while corporate raiders typically strip their acquisitions and sell them for parts. It's one big sham completely separated from the actual value of the products they're supposed to represent. And we've, for some reason, used all this larping to define our economy, our country, our financial system, kidnapped by people who scammed their way into getting and staying rich without offering anything back, who gamble with everyone's money and then get bailed out the money, the moment they screw up. There's a word for that.

It's leeches, scumbags, low lives. Seriously, anyone who tries to rant about welfare queens should be thrown in that pit from the Dark Night Rises. It's hard for your average Joe to do anything about the hogwash I just described, so we at least need to recalibrate what we as a country think a degenerate parasite looks like. They don't look like a single mother on food stamps.

They look like Ellis from Die Hard. That's a low life, played by Hart Bockner, who directed the film High School High for some reason, but that's actually not really, that's not important in this video. I got distracted. Money is fake, that's the point, all right? The stock market is fake, and corporations and the rich

are leached low lives gobbling up your hard-earned money and giving nothing in return, except even faker money. Unlike the very real money you can get using Polymarket, Polymarket, because you too can be a degenerate gambler like Cody and like the folks on Wall Street. I bet on Polymarket that I wouldn't do a bit at the end, so... Fuck! Well, there goes all my money.

End of the episode. Now what? Say thanks for watching. Thanks for watching. Say like and subscribe. Like and subscribe. I'm gonna stop this. Okay, so thank you so much for watching, like and subscribe. What else? We've got a podcast called Even More News. You can listen to it. here and watch it on YouTube twice a week,

or just as a podcast you listen to it, where you get the podcast. And also, why am I angry now? Also, this show some more news. You can listen to it as a podcast if you want, or you'd watch it again on YouTube. There's all kinds of options. Why am I flustered?

This is the easiest part. We got a patreon.com slash some more news, so check that. out we've got a merch store and folks there's merch there so that's it