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The Manipulated Market and the Middle Class : Follow Up

The previous post explored the consequences of the manipulated stock market in the US for the middle class.

A reasonable and trusting person will ask"How is it possible to manipulate the stock market?"

The Middle Class has been indoctrinated  by Wall St and its  minnions in business schools into believing that the stock markets can be implicitly  trusted because markets have no masters and therefore, cannot be subverted by the few at the expense of the many. All small investor/retail investor participation in the stock market for both tactical and strategic reasons is based on this one great article of faith.

The conditions for a free, fair and functional stock market are:

1. There are many participants

2. No very small sub set of participants accounts for  a large share of transactions, so systemic gaming of the market is not possible

3. The majority of participants have access to relevant information at the same time with the same convenience and at the same vanishingly small cost

4. Information processing and transacting capacities of most of the participants are quite similar , so there is no systemic asymmetry in in acquiring, metabolizing and acting on relevant information

5 Disinformation or false information is rapidly identified, isolated and rejected by most of the participants with the same speed and facility and purveyors of such information are tagged and ostracised

In the US equity markets, these conditions are far more breached than honored. A very small subset of participants accounts for most of the transactions; information acquisition,filtering,processing and  transactional capabilities are hugely and enduringly asymmetric. The assymetry has grown enormously with unequal access to and use of leverage, complex computer domiciled algorithms and the  force multiplying power of the internet. In addition, disinformation and false information is often not separable from truth for the small/retail investor or investor agent.

Moreover,the very existence of professional equity, credit , currency, commodity and market analysts( in free, fair and atomistic etc markets such people could not make enough money to buy lunch much less mansions) should be a source of alarm, not comfort to middle class investors. These analysts are mostly in the employ of Big Money and Big Media( they have obvious, demanding and ruthless Masters.....). They are provided a privileged platform at the intersection of Big Money and Big Media. The platform ,in turn, leads to potent global reach, in itself, a source of asymmetry.

The analysts are supposedly honest gatekeepers to the truth( the gatekeeper role clearly creates sustained, expolitable, temporal assymetry for the Masters, at a minimum). In fact, as authors and commenters on SA have noted repeatedly, several of the most avidly marketed analysts are, themselves, a source of misinformation and disinformation and therefore,instead of being tools of risk management for the middle class investor are generators of risk and channels of risk shifting from the few to the many. The more middle class investors outsource information acquisition, analysis and decision making to these analysts the more  peril they create for themselves.

US equity markets have Masters. These Masters view the small/retail direct or mediated investor the way hyenas view young, ailing or wounded herd animals.