A trillionaire from thin air

Hundreds of thousands of people piled into SpaceX's IPO this summer, and made Musk the world's first trillionaire. The company's financials had nothing to do with it.

Burning cash, breaking records

The rocket business works, but SpaceX is spending money at a prodigious rate. It still pulled off a record-breaking listing anyway.

Not a one-off

SpaceX is an extreme case of two trends now impossible to ignore: small investors are a huge force, and their feelings often beat the fundamentals.

One fifth of the market

Retail investors now drive over 20% of U.S. stock market activity, per Jefferies. That is double a decade ago, roughly matching mutual funds, hedge funds and banks combined.

Your stocks, your self

What you buy has become a statement about who you are. A dowdy utility, a racy games maker, crypto, a bet on a prediction market: each one signals something.

“what securities you buy have become almost like an extension of one's identity”

Blame 1917

The roots run back over a century, to the enormous bond program that paid for America's entry into the First World War.

The man with the pitch

Treasury Secretary William McAdoo, Wilson's son-in-law, got the job. Progressive on business and gender, regressive on race: he segregated the Treasury and was later endorsed by the Klan.

A market that barely existed

The government bond market had shriveled to under $1 billion, mostly locked in bank vaults. Bankers counted roughly 350,000 bondholders in a nation of 100 million.

Sell it to everyone

Bankers told McAdoo to cap the sale at $1 billion and court the rich with 5% yields. He refused, renamed the bonds "Liberty Loans" and built a machine to market them to the masses.

“It was true that [Americans] know little or nothing about government bonds, but we would tell them”

Chaplin and the shamers

Billboards, parades, cake sales and Charlie Chaplin sold the bonds, with Edward Bernays engineering the patriotic pitch. "Dollar slackers" who held back faced public shaming and outright intimidation.

“borrowing with a club”

Buying your way in

Despite the coercion, the loans were genuinely popular. Purchases became a way to prove belonging, and women and Black Americans hoped visible sacrifice would earn equal treatment.

$9 trillion in today's money

Five bond drives raised $21.4 billion, the equivalent of about $9 trillion now. Bondholders went from 350,000 to 34 million, over a third of the country.

The habit stuck

Counties that bought more Liberty bonds kept investing for generations. An NBER paper last year found 20% fewer Americans would own stocks without those campaigns.

The casino moved in

Social media and gamified apps have erased the line between investing and gambling. Dimon compares prediction markets to betting, and Buffett saw it coming.

“The casino now resides in many homes and daily tempts the occupants.”

Unity turned inside out

What once bound a divided country now splits it. Even members of Congress use their trades to signal beliefs, and markets built on feelings amplify the polarization they reflect.

“the stock market functions not only as a venue for wealth accumulation but also as a stage for identity signaling”