Did You Miss The Four Guaranteed Greatest Stock Trades Ever

The Greatest Stock Market Manipulation of the Century

There is no doubt in my mind that the US stock market particularly the DOW has been subjected to the greatest manipulation ever by large financial institutions using high frequency trading and other highly dubious methods to introduce high volatility into the DOW so they can make a killing. If they can send just 30 stocks into massive gyrations they know the rest of the world will follow.

The thing to note however is that it is all legal. The Financial Institutions are doing what they are paid to do, make money for their organizations. But now the power to trade vast numbers of stocks with huge quantities of money is in their control and they can move markets.

The DOW is used to manipulate the world stock market system for the benefit of a few large financial institutions protected by central banks, the ECB, IMF and the World Bank. Whilst ever politicians control the country’s money, the financial institutions know they are on a winner, whatever they do.

It’s All About Computer Power, Bandwidth and Large Money Pools

Since the Financial Crash these firms have spent billions (of taxpayers money) on ramping up their computer power and in cahoots with the trading floors been able to install their servers right next to the trading servers. This cuts down the time it takes for millions of high frequency trades to be executed – or not. They have purchased favoured status with their servers and can purchase a few milli-seconds of “look-ahead” time to see what trades are coming in.

Then like a great flock of birds these high frequency trades can be executed or not, all in a millionth of a second.

That coupled with the concentration of wealth including your retirement money into the hands of a few very large institutions adds to the power to move markets.

You ask why the markets went down and up twice over four days. It is because it can. There is so much computer power and bandwidth available today it is almost parallel processing trading. Millions of transactions can be executed in a fraction of a fraction of second.

By the time you call your broker to sell your 1,000 shares in a DOW stock, fortunes can have been won or lost, maybe even yours – it’s that fast.

Expect Bonuses to be through the Stratosphere

Can you imagine the bonuses the traders will get at the end of the quarter with several hundred points moves down and up over four days? I haven’t heard any cries of doom from these financial institutions yet so I assume they all made pots of money.

Well may you say how come I am so smart? I’m not. But if I was a financial guy in a big institution and the DOW was going sideways, I’d be looking for a way to make it move – up or down – I don’t care. I don’t make money in a flat market, I need volatility. That’s my job – to make money.

I’d be looking for a catalyst that my algorithmic trading system will jump on. To really move the markets the trading systems have to act together and they do as they are all basically the same and are checking each others trades as they go. It is not insider trading as no human has to say anything. The computers do the talking and they are much more efficient at it too.

Standard & Poors provided the excuse they needed,  with their down-grade of the US credit rating. The dithering at the European Central Bank was a great help too for the four greatest trades of the century.

US Bonds still the safest despite the S&P Downgrade

The fact that the US Bonds are still, and always will be whilst there is the vestige of Freedom in America, the safest place for your paper money, even at near zero interest rates. This was proven by the increased demand for US Treasury Bonds during the market volatility last week. My prediction is if Europe melts down over its debt the US dollar will “necessarily skyrocket” to use Obama’s words. Or are you going to put your money in the Chinese Yuan? 🙁

The quickest way to make money is to find a way to send the market down. The old adage of the markets going up on a slow escalator and down in a fast lift applies.The algorithmic computers spy on each other and wham send in several million shorts on the 30 DOW stocks almost in unison. The tsunami of sell orders send all the other stock markets crashing down too, all without human intervention. There is no time for a human to even type in a sell order.

But then you say why did it rebound so quickly? How could they know to do that. Easy – too big to fail and maybe a few re-assuring phone calls between the FED, the White House and the To Big to Fail Club. The so-called Plunge Protection Team comprising the FED, the Treasury and others were probably at lunch or just a few milli-second late taking action.

Just think about it. As a trader while you are out to lunch your friendly high frequency trading system decided to sell all the stocks in the DOW. On your return from lunch you check your screen and see you have just made several million dollars commission on a 600 point fall on the DOW. So you go out and celebrate and when you come back the next morning your faithful trading system has delivered you a 500 point rise in the DOW and another few million dollars into your personal bank account.

Not only that your faithful high frequency trading system did it twice!

Statistics, Manipulation and Damn Manipulation!

The last time I looked statistically a 3% move up or down on the DOW has a 1 in 10 to about 67th power or something – I can’t locate the page in Google. So we have 4 such moves virtually twice that in 4 days and you believe there is no manipulation going on?

Where there is blind faith in high frequency trading systems that few humans understand and even less can control, if it makes money what the hell….

You know your insurance is the implicit backing by the FED to bail out any failing financial institution for the good of the country –  you know this to be true! It is already estimated that something like $20 Trillion has been back-doored from the FED printing presses to banks all over the world. Doesn’t it make you angry? It should.

When Perry mentions the FED and Treason in the same sentence he was right on the money – no pun intended. A return to the Gold Standard is the only way to prise our currency away from the politicians but that is for another time.

Your government’s first responsibility is to protect your borders and that included protecting the value of your currency. Failure to do so is fraud and maybe even theft. Most countries governments are guilty of debasing their currency for their own political ends.

Anyway suffice to say as a trader in a large financial institution I am a protected species. So why not bet the house when I get the chance. It’s my job to make money for my employer. I now believe that one of the greatest wastes of human resources is the large financial institutions trading systems employing thousand of gifted people who’s sole purpose in life is to game the market and make a profit trading stocks, currencies or derivative for no productive value.

As there was a tax on Windows in 16th Century England, maybe we need a tax on Computer power in large financial institutions.

You see we pay people based on their productivity. But people fail to understand that apart from learning their job the main productivity increase comes from technology they are provided with by owners, shareholders and investors.

Right now the large Financial Institutions have paid out billions of shareholders dollars to build massive lightening speed computers to perform algorithmic trading. Where once a trader placed an order for several thousand shares that can now place millions in less time and can move the market.

Now all is quiet again on the DOW front. The trading systems are silent for a little while. The billions of dollars made are safely tucked up at the FED where they are kept warm and safe and earn 3% for doing nothing for the economy. There they will sit until the next market volatility hits the financial markets.

Lament your Poor Retirement Nest Egg for the third time in 12 years

The problem is your money was in the stocks that got destroyed and it is likely your investment was not protected against a downside move. Then your fund manager may have traded out because there was a rule written down somewhere, but he did it just as the market turned around and went roaring up. Too late you missed it and probably got in at the top of the rebound. Never mind your fund manager got a second change the next day as the market dived again. Oops! never expected that and he wasn’t ready. You got hit again from buying the previous day’s high. There is no way the market will come back again after that so your fund manage sits this one out. Oh dear wrong again and you lose even more of your nest egg.

Don’t you worry though. The fund manger is not going anywhere. They’ll just take a small percentage of what retirement money you have left and try to do better next time. Remember you are in for the long term so don;t you worry about a thing.

If you have any money in stocks you have to think very seriously about that.

 

 

 

 

 

Leave a Reply

CommentLuv badge