praha1

How to Profit from Market Manipulation

75% of investors wouldn't be in stocks anyway if a decent return could be earned in secure bonds. We're just forced to be in equities and assume risk we don't want because of a Federal Reserve that has been dropping interest rates continuously since 1983 (we can blame Volcker for that one). The end of that game has now arrived - interest rates cannot go any lower (oops sorry! - I forgot we have quantitative easing to drop interest rates even further at the right end of the curve so all of us will make absolutely nothing anywhere).

You have to be blind as a bat to not see the machinations of desperate government everywhere - in the equity market, the bond market and the commodity markets - to think otherwise is just being naive. The post 1971 financial system is simply dying. And the sooner it's gone the better for all of us. I have a right, thank you, to work and save for my retirement without submitting my savings to undue risk. I have a right to save my wealth and not have it confiscated by the govenment via incessant inflation. The system is going to die - If I could kick it and make it pass on sooner, I'd do it. You be a slave to the Fed and the Treasury department. I'll take freedom any day.

On Mar 26 02:34 PM Chris B wrote:

> 1) How sad. People who don't know how to calculate the fundamental
> value of a company are often awestruck at how the value of a company's
> equity can change by millions of dollars from day to day or hour
> to hour. They have no better source of information than past prices
> to inform themselves about the price they should be willing to pay
> or sell for. Yet, markets can't be efficient if we have swings of
> this magnitude! This leads some to technical analysis, and others
> to conspiracy theories! Only a handful of people learn how to figure
> out what "low" and "high" are and how to buy and sell at close to
> those points. Is education manipulation?
>
> 2) Rising price volatility is a sign of both bottoms and tops. In
> both situations, the number of buyers declines and transactional
> frequency becomes more erratic. In a top situation, fewer and fewer
> buyers are willing to take increased risk for less and less return
> which eventually turns the price once the sellers capitulate. In
> a bottom situation, many potential buyers are sitting outside of
> the market, waiting for it to go up a ways before they get in. Fast,
> sharp swings are the result of either situation.
>
> 3) I never heard complaints about manipulation when markets were
> going up. Yet hundreds of thousands of financial Neanderthals are
> now calling their 401(k) administrators demanding a return of their
> money, which they feel was taken away from them, obviously by nefarious
> conspirators. Ha!
>
> 4) Trading in and out of stocks is inherently a zero sum game. For
> party A to make a profit, party B must take a loss - or at least
> miss out on ownership of profits for a period of time. For manipulation
> to occur, party A would have to convince party B to pay too much
> for shares, while not themselves overpaying for shares from party
> C. I don't follow from this article how exactly such a scheme would
> be sustainable in a market with millions of well-informed participants.
> Perhaps the better question is this: How could short-term stock prices
> ever be predictable and not attract attention from the millions of
> participants looking for arbritage opportunities?

Bernanke Desperate, Fed Out of Ammo

Unfortunately modern economics has for all intents and purposes failed us in this crises. But ultimately what can you really expect from a 'social' science. Economics is not mathematics, it's not physics - it's closer to unproven theories of human behaviour. The economics of Bernanke and Greenspan will probably (not certainly) enter the dustbin of history.

Instead we should look to history for our answers for it is history that Mr. Bernanke is at war with. However history says it will win no matter how hard Bernanke and his henchmen try to change its course.

And what does history say? Basically that most of you including Bernanke will be wrong. That you have just gone through the greatest expansion of debt (oops I'm supposed to say credit aren't I) in history and you will now go through the greatest contraction of debt in history(after all insolvency removes debt, doesn't it). It's very simple, very unintellectual but very elegant - historically elegant. What's coming is not inflation, it is not hyperinflation. It's not even deflation. It will be a monstrous credit contraction called hyperdeflation. Mr. Bernanke should be worried - we all should be worried. We will not escape history.

Oh and BTW to conceptwizard's little tirade above - history says it will all all be blamed on the Jews! But of course - nothing really changes that much.

Historical Data Disproves 'Trough P/E Multiple on Trough Earnings' Myth

so what will it take to turn your amusement into hysteria - when the DOW is down 60% from its peak - probably in a week or two? Or perhaps when it's down 70 or 80% from its peak (likely this Fall). Will you be amused then? History clearly states that's where it's going.

Oh and BTW, it also states that you'll eventually blame it all on the Jews! (the historical scapegoat) rather than on youself for making bad investment decisions.


On Mar 08 08:28 AM Free2Speak wrote:

> I am constantly amused at comparisons with the "Great Depression".
> The press, along with the administration, have been hyping this recession
> to no end. When you normalize the data for population growth, this
> recession has been no worse than the last two. Based on the volume
> of layoff news, the employment issue has peaked. Moreover, couple
> the extraordinarily high level of shorts and the fact that there
> is far more cash on the sidelines this time around than during previous
> recessions, we are poised for a strong rally. When will it come?
> Who knows! But, when it does, the shorts will be running for the
> hills and the sideline money will pour back in to take advantage
> of the run. We may be in for more negatives for a few months. But,
> this market is grossly oversold and the money is there to drive it
> back to higher levels.

Historical Data Disproves 'Trough P/E Multiple on Trough Earnings' Myth

No the analysis is completely incorrect! It should be painfully obvious to any fool by this point that what we just went through in 2008 was a 1929 event and what we're currently going through is a 1930 event. The history that should be studied is the history of depressions - not recessions. Stop kidding yourself or be prepared to lose all your money. No one should be in stocks. History clearly states you're in the midst of downleg 2 which will bring the Dow down to between 5 and 6000. This will be followed by downleg 3 (Fall 2009) which will last about 14 months and bring Dow down to 1500 - 3000. You might want to consider buying at that point but even then you'll need a very strong stomach.