DeepF*ckingValue and His 25mm New Friends — Keith Gill, aka Roaring Kitty, aka DeepF*ckingValue, aka the King of Retail Traders, has amassed 25 million new friends since COVID-19 rolled up. That’s right, through a mix of volatility, boredom, excitement, and influencer inspiration, 25 million new brokerage accounts appeared in 2020 and 2021. From those, one thing is truer now than ever before: retail matters.

According to the WSJ and the analysis done by JMP Securities, an estimated 15 million new brokerage accounts were made in 2021. That’s a 33% increase from 2020 when everyone was debating if retail trading interest would last once more traditional forms of mass entertainment like sports and seeing friends were cool again. That debate was closed once Mr. Keith Gill and his legions of traders on r/WSB took centerstage.

One year ago, GameStop shares closed at $39.12 and would, in the next week, explode over 1,700% to a closing peak of $325. AMC sat at $2.97. Now, retail runs the market. Okay, not really, but compared to any other time in history, yes. On peak days in 2021, 40% of the daily equity volume was flows in and out of retail accounts. According to a Bloomberg survey, 85% of hedge funds and 42% of asset management firms analyze retail trading chat rooms to assess sentiment and attention and (probably) for some stock tips. J.P. Morgan, the suit-iest of banks, even said, “flow from retail is not something you can ignore.”

However, 2022 brings a different story. In addition to wondering whether retail would stick around when “real” entertainment came back, the question remains if retail traders can stomach a bear market. With the Nasdaq officially closing in correction territory on Wednesday (10% down from the recent high), we might find out soon.

The World Zigs, China Zags — While every other country and their mother is tightening monetary policy and raising rates, China just did the opposite. Never one to follow the crowd, the PBoC announced it had cut the nation’s 5-year loan prime rate, a benchmark for intermediate and longer-term rates like mortgages, to 4.6%. Granted, it was at 4.65% before, but hey, a cut is a cut.

And in this market, even a cut of 5bps will carry some large ripples. Other rates saw steeper cuts, like the 1-year loan prime rate, which was cut twice as much as the 5-year, going from 3.8% to 3.7%. It had been many moons since either rate was dropped by the PBoC, going back to April 2020 for the intermediate-term benchmark rate, but China is in a whole different ballpark than we in the US and other Western nations are.

For starters, growth is slowing. Thanks to property market troubles sparked by the infamous Evergrande, credit has been tighter, leading to a slowdown in the velocity of money and economic growth overall. A mild slowdown normally wouldn’t be too bad, but this is arguably the single most important year of President Xi’s rule. This fall, the National Congress of the CCP meets for the 20th time, with one of its main goals being to elect a leader as Xi’s second term will be up. Traditionally, Chinese leaders serve two terms of five years. In 2018, however, Xi conveniently removed the whole term limits thing, leading many to expect him to hold onto the reigns for a third term. Getting votes to do so will be a lot harder during an economic recession.

Don’t be surprised if China is a bit more relaxed than others when it comes to monetary and economic policy this year. Xi wants to remain at the helm of the CCP, and he wants it bad. Stay tuned to see how that plays out this fall.

From ♥ to $ — Put down your phone; we’re looking at Instagram together today. Teenagers’ third-favorite social media app (1. Snapchat, 2. TikTok) is releasing a brand new feature through the softest rollout in tech history. Starting yesterday, IG users are officially able to subscribe to creator accounts to get access to exclusive content like subscriber-only stories, lives, and badges.

But… there’s a couple of catches. First, as of now, only 10 accounts have the subscription feature. These include the most C-list celebrities you could think of, such as Oregon Women’s basketball star Sedona Prince, actor Jack Jerry, and several other self-appointed “digital creators.” None of these users have more than ~580k followers, which seemed weird at first, but I guess people like Kim Kardashian (281M IG followers) and Cristiano Ronaldo (392M) don’t really need the added income stream.

Now the second catch, there is an Instagram-set price range that creators can charge, and Instagram itself promised not to take a cut for at least a year (yeah, “okay” Zuck). Subscriptions will go anywhere from $0.99 to $99/month, with creators getting the ultimate choice. By not taking a piece of the subscription pie, this move is likely little more than an attempt to steal creators’ time away from other apps (aka, TikTok) and bring that classic influencer-cringe over to the Zuckerverse.

The rollout will be expanded to more creators over the next “few months,” given initial testing goes well. Meta’s not messing around in the subscription-content market anymore. Last year, Facebook Fan Subscriptions rolled out along with the firm’s announcement to invest $1bn in supporting creators. Zuck watched TikTok snap up creators and cash that should’ve been his for years, but now, it looks like he’s doing his best to make that change.