Tag Archives: stock market manipulation

Government’s Plan for the Stock Market

Although we don’t know what it is, we know there is a plan to keep stocks moving higher. How do I know? Fantasy free means that we study people and institutions according to how they function and pay no mind to how they are perceived. Government is commonly perceived as a fatherlike benevolent entity that spreads fairness and goodwill across the land. In real life, government belligerently promotes the interests of the most politically powerful citizens.

Representation in government goes to the highest bidder. Representation is easily transferred. Send a representative to Washington and you have in actuality hired a thief. But, the thief is not loyal to you necessarily and you get outbid. You only voted. Money counts for much more than your vote.

Few doubt that for many decades, fiscal and monetary policy have been pointed towards enhancing asset prices on behalf of the highest paying political players. More is done in government with winks and nods that is ever accomplished by legislation. The public normally deals only in short, concise packaged ideas. What government actually accomplishes goes right under the average person’s radar.

From 2006 to present, support of stock prices has been massive. There is great public and private cooperation. The Federal Reserve denies directly buying stocks. They do accept equities as collateral and that amounts to about the same thing. They work with the primary dealers who, with winks and nods, provide assurance that newly created money will support the stock market. With off the record conversations, corporations are assured that if they buy back their own stock, the Federal Reserve has their back. Foreign central banks buy stocks with no reservations or restrictions.

Many lofty reasons are given for Federal Reserve activities but their only real purpose is to move stocks higher. Talk is that the Federal Reserve is out of tools and the market is about to fall under its own weight. It is pointed out that corporate buybacks are waning despite constant coaxing by the Federal Reserve and others. The Federal Reserve actually still has plenty of options and these options will be used. Over the coming weeks expect game changing, unbelievably good news for stock prices. The good news will be repeated despite being manufactured for the occasion.

The last thing the Federal Reserve will do is find a way to directly absorb any excess supply of stock by buying directly. So what if it is illegal. They will do it anyway. There is no limit to how much Federal support is available for the stock market. Honest investors only have access to what they earn. Central banks can buy stock with dollars that are really no different than monopoly money. If more is needed, more is made available.

Don’t automatically expect that the financial markets will finally reset and normal free market conditions will be reasserted. There is no incentive on the part of anyone in power to make it turn out that way. Chances are much greater that central banks will continue buying stocks until the majority of assets in the world are owned and controlled by governments.

There are many paths back to totalitarianism. The most likely one to enslave the world population is for government to control the factors of production, just by buying the institutions which own those factors now. Of land, labor and capital, capital is the hardest to control but there is a process currently in the works by which that task can be accomplished.

World Series of Stock Market Manipulation

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indexFirst understand these things. Quantitative easing is a political agenda not an economic remedy. Economic forecasts coming out of the Federal Reserve have been wrong 100% of the time. Greek debt exceeds the assets of the Greek banking system. Friends of the Fed trade risk free as a reward to assisting the Federal Reserve in the execution of  its political agenda.

When there is an issue overhanging the market, central banks buy with both hands for the purpose of providing confidence to investors who still believe the financial markets are largely pristine. The worst time to short stocks, therefore is on a day or days when a global financial problem is in the process of running its course. As long as Greek insolvency is in the news, do not expect the market to drop.

Prior to the resolution of something like Greek insolvency, negativity is encouraged up until a particular day. This is to draw in shorts so that their stops can be run, driving prices suddenly higher. Short positions serve as demand for stocks on a day when bad news comes out.

After a strong opening, the averages are held in a consolidation pattern giving the impression that demand will soon give way to supply. All during the consolidation short sellers take positions waiting for the inevitable decline. Instead they get their stops run again and the market moves higher with a nice white candle.

Strangely, bears still haven’t adapted. They still use traditional technical analysis which only works in a market that is largely free from manipulation. This will change but it hasn’t changed yet. Usually the only cure for stupidity is suffering. Apparently bears have not suffered enough.

When will the market crash? Quantitative easing provides profits to those with the political power to control government. That is what Fascism is and it will eventually destroy even those who are reaping its early but temporary benefits. Misery starts at the bottom rung of the ladder and then starts moving up until the ladder just collapses. That could happen any day but on any given day, chances are that it won’t.

Never short. Just take positions in bear etfs on the S&P, Nasdaq and the Russell 2000. For now do not trade on margin and only use one third of your capital for etf positions. Odds still favor the Fed’s political initiative. Having cash is a priority. The best time to buy a bear etf is on a completely sponsored day such as what occurred on Monday. The market is being manipulated and this initiative will not be discontinued. It will end when it stops working. Then the market will crash.

Sweet Suzie’s Kool Aid, a timely tune by Curbside Jimmy

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Why Stock Market Manipulation Matters

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I have become convinced that individuals who harangue against discussions about market manipulation are losers who have a narrow view of how trading should be done. There is a certain mindset that says, “Practice good technical analysis and it doesn’t matter if the market is being manipulated or not.” These people are court holders, judgers of ideas and lifetime losers in the market. The truth is that practitioners of pure technical analysis lose money close to 100% of the time. It is a good bet that the ones who object to discussions of ideas that irritate them are somewhere close to the bottom with respect to trading results.
The awareness of the presence of market manipulation is relevant to trading securities for the same reason knowing that a set of dice is loaded is meaningful when playing craps. In either game, if one can determine that some kind of affirmative action is causing a certain outcome, it makes sense to use that knowledge in the decision making process.
There are certain parties for whom the knowledge of market manipulation really doesn’t matter. Those who practice mechanical systems really don’t need to worry with it. To others with a broader perspective it makes a world of difference.
1.) People with retirement accounts that are equity based.
2.) Equity mutual fund investors
3.) Any trader who works broad market moves.
4.) Anyone who trades long term
5.) People who want to game the manipulation
6.) People who want to try and profit from the eventual damage the manipulation will cause.
One of the things I learned early in my trading career is that anything that makes a difference can’t be proven. In 2005, when I first conjectured that there was an unofficial government sanctioned asset enhancement initiative in operation I was labeled a tin horned conspiracy theorist and dismissed. Doubt at that point was understandable. More recently the chairman of the Federal Reserve makes statements clearly implying that everything possible is being done to increase asset prices. So, am I sure stock prices are being controlled? I am sure enough to be short a portfolio of stocks, waiting for the destruction of the world’s financial markets to occur.
The relevance of all of this is that controlled markets face destruction. It is often argued that if markets are being enhanced higher, it makes sense to stay long and be happy with it. The problem with that is that the system such as it is, is prone to sudden collapse. Some argue that there has always been corruption in the market and always will be, so why worry about it? Frankly I wouldn’t worry about it if all it was, was organized crime skimming off a little illegal profit. This is the first time in history when stock prices have been managed with the cooperation of government agencies. I would agrgue that corruption, like radioactivity is in fact harmless until it reaches a critical level.
Sometimes I come across as a moral crusader but nothing could be further from the truth. When something is wrong I might point it out, but my motivations here are highly mercenary. This is an opportunity to profit from a coming disaster and I plan on doing just that.