Fantasy finally meets reality on Wall Street.
Two years ago the stockmarket was in the grip of speculative mania.
Shares in GameStop, a struggling video-game retailer, hit an all-time intraday high of $483 on January 28th 2021, up from around $5 at the beginning of the month.
Retail traders co-ordinated in a Reddit forum and snapped up shares using brokerage apps like Robinhood.
Empowered by technology, newcomers piled into GameStop, ostensibly because the beleaguered chain was one Wall Street had heavily sold short (ie, bet that the firm's shares would fall in price).
Short-sellers were the villains.
When GameStop spiked they lost their shirts.
What could be better?
The question at the time was how much of this would endure.
Manias are as old as the hills, but this one seemed different: it was enabled by new technology that wasn't going anywhere.
For a time, the GameStop crew were unstoppable.
They pumped up prices for companies that had attracted interest from short-sellers, such as AMC, a cinema chain, and Bed, Bath & Beyond, a home-goods retailer.
Battle-hardened short-sellers, including Andrew Left of Citron, a research firm, threw in the towel.
Melvin Capital, a firm that had shorted GameStop, which the Reddit hordes made the cartoon villain of the saga, decided to close its doors in May 2022.
When interest rates are zero the price of a dream can be infinite.
Higher rates change the dynamic.
Last year was therefore rough on the meme-portfolio, but its fans are nothing if not resilient, even when making losses.
Matthias Hanauer of Robeco, an asset manager, tracks the most heavily shorted stocks in the MSCI Developed Index, a benchmark of global shares.
Since December 31st 2020, a month before GameStop shares peaked, they have underperformed the market by around 15 percentage points.
If 2022 was a reckoning with professional investors, then 2023 will be a reckoning with reality.
A slowing economy is going to break many of the companies meme-stockers profess to adore.
Monetary tightening slows the economy with a lag.
As conditions worsen, struggling retailers, such as Bed, Bath and Beyond, are floundering.
On January 26th the shower-curtain purveyor was served a slew of default notices by its bankers.
Reuters, a newswire, has reported it may soon file for bankruptcy.
The end of more than a decade of rock-bottom interest rates is also beginning to reveal corporate misdeeds and sometimes outright fraud.
"Capital was free for 12 years," says a former Wall Street tycoon.
"We have no idea about all the places capital went that it should not have gone."
Some initial pockets of misallocation have become apparent.
The pricking of the bubble in cryptocurrency markets has exposed businesses including Celsius and FTX, the founders of which have been charged with defrauding their investors.