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Manipulation - Open Thread

Posted on September 29, 2006
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Ladies and gentlemen of the jury, I present to you the case: Manipulation. As always, your feedback and discussion is anticipated and greatly appreciated. For those of you who have not spoken up yet, let’s hear it! Try it - you’ll like it. It is fun and easy - no need to register to post.

Best,
Michael

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68 Comments so far
  1. the stranger September 29, 2006 5:53 pm

    Dead-on Michael, dead-on! There are a thousand examples, but this one made prime time. Wake-up, wake-up, wake-up! We are now officially in a proto-fascist state.

  2. Charles K. Ponzi September 29, 2006 7:37 pm

    One solution:

    Repeal the Federal Reserve Act passed by an empty Congress on December 23, 1913.

    Due to this law, since 1913 a private corporation, known as the “Federal Reserve Bank”, is the supplier of the ‘money’ used to manipulate all markets.

    How they stop crashes…..
    Simple Dow manipulation: Print money, lend it into existence, use new funds to buy up Dow futures on bad days, force higher open, sit back and watch all the smart money shorts race in with megabucks to “buy to cover”, followed by all the hot money trend chasers buying the up trend and then of course the dumb buy and holders buying more to hold.
    Hide the manipulation by selling gold futures short.
    Super FED saves the day.
    When do they cover gold shorts or sell DOW longs? Never. They take the paper loss, return home, lend more money into existence and repeat on next down trend day.

  3. shakesbear September 29, 2006 7:43 pm

    here are the facts 60% of nyse volume comes from institutional money managers,and they will do anything to chase performance they are indeed a force to be reckoned with although I have no proof I have watched the market carefully for years, and some degree of munipulation is irrefutable, at my firm we know of course there is, we wink and smile and say but isn’t it illegal? How many 3.00 pm jam jobs have we been witness too? Of course people somewhere are influencing the market,however I believe there are limits to their power..and in end it will only make things worse. The inflation/deflation debate is interesting and brilliant minds are divided on either side, but allow me to direct you to housing …prices are dropping, overhead supply, lack of demand….DEFLATION……that is my present conclusion after years of struggling with the question..oddly enough it doesnt mean commodities must flounder.. during the deflationary secular bear of 29 to 49 commodities increased more than fivefold. But of course the market is munipulated, so are all of us on every level ..the entire global system rests on thr shoulders of us consumer confidence, consume go further into debt or die, really the dire economic situation is only symtomatic of a far deeper spiritual malaise.. Godlessness and hedonism….that is why this entire culture is on the path to annhilation and the equity markets will undoubtedly be a casulty, MAY GOD AND THE NOBLE DREAMS OF THE FOREFATHERS OF THIS COUNTRY SAVE US.

  4. Nadeem Walayat September 29, 2006 8:29 pm

    Okay the Dow is set to make new highs, but we have yet to transverse October !

    I’m a bull, have been for several years, eventhough I see much higher prices in the coming years, I also am expecting a significant correction going into October, okay so September has not panned out that way, but we have not been through October yet !

    Yes there will be rally into the 4th, and beyond ! GOOD ! :)

    As for oil, I would have though it was rather obvious, that with so much speculative interest i.e. hedge funds betting on higher prices, it was only a question of time when the ‘iran’ premium of $15 and the hyper speculative interest of say another $15 gets unwound.

    Crude is headed lower… but only temporarily ;), may even get to $50, at which time oil stocks would look very appealing if they have followed crude lower.

  5. larry September 29, 2006 9:23 pm

    michael you nailed it, as per usual…i drove to the reagency movie house in Denver, CO this past week…i witnessed Aaron Russo’s film ‘america freedom to fascism.’..i encourage you all to view this film…my trauma is as follows…his film more than adequately portrays the personal erosions that are occuring to us all by the corporate/governmental elitists….Russo then has developed a web site to rally people in their newly focused awareness and outrage…now my trauma…he is a brilliant communicator and has linked us via his web site…now what?…what i mean is, how would one mobilize all the underinformed, overloaded, underfunded, unimpowered mass of americans’ to gain control of their politics…i do not think we are ready…the country is so vast…i am less optomistic since the film..THEY are fully mobilized, organized and for years have been laboring to fractionalize and control US…WE are not up to the game they fully over time tweak and perfect…they make no mistakes and are never wrong, we are always guilty of something…the game is to rigged to win..sorry, this is my feelings…THEY are basically a patronizing sort of critical parent to the masses they protect, no?..a sort of transactional analysis gone wrong on a national basis. They are the critical parents who rig the rules to shape the masses into quivering children…i mean look at all the hours you all invest trying to figure out your crazy parents….do you see what i mean?…as in the parent/child/adult modes of transactions…they make the game so twisted as to demote adults to children when dealing with the all knowing powerful government…anyone care about what i am trying to communicate?…i am a late comer to all this political and economic discussion…but as i learn about this invisible not obvious game played on average americans…well,i trust less in all the educated sorts that have all the power..a regular guy here..am i even understood by you folks?

  6. Alan Slawter September 30, 2006 7:17 am

    I agree with the manipulation. Immediately after the 1987 crash, someone bought futures to resurrect the market. No one in their right mind would have stood up to that avalanche with their own money. That was wholesale panic. Something went on behind the scenes, and we will probably never know what, but I agree with Charles. We are manipulated by fear, and there seems to be a lot to be afraid of, but for the most part, life just goes on…

    My simple rule: know a few stocks in a few categories that have a dividend history, and know them intimately, and play the range. If you are getting a dividend, you won’t panic to sell at the wrong time, and there will usually be a bottom as the yield climbs. Don’t worry if you missed it going higher. If you sell at your price and make a nice profit, that’s a good thing.

  7. brianb September 30, 2006 7:20 am

    Nah, it doesn’t make sense.

    Saudi ARabia isn’t producing any more oil NOW than they were a few months ago. It’s a matter of perception. Maybe GS is selling oil futures which cause other people to think that it’s the thing to do. That and no hurricanes, hard for GB to control that.

    Control 30 stocks? The S&P 500 is near peaks also, is that being manipulated? And that’s 10 trillion in market value to “manipulate”. And most investors look at the S&P 500 and Nasdaq, not DJ index.

    Alot of gas prices falling is refinery margins slipping. Summer blends and driving season give good margins, the end of it lets more imports in to compete. The refinery margins have gone from 40 cents a gallon of gasoline to about 10. That’s from looking at the “crack” spread.

  8. muleskinner September 30, 2006 8:23 am

    The *ahem* ‘Republicans’ are going to split apart at the seams. The disgraced Mark Foley is the newest entrant in the G(ay) Old Party to be exposed.

    It won’t last much longer, it can’t. If the current crop of politicians would use their brains and go about doing their jobs honestly, there wouldn’t be any need for obfuscation and lies all of the time. Everybody becomes a victim of their useless idiocy.

    When it all falls down, it will fall hard. Don’t kid yourself, the ‘Republicans’ will not survive this time around. The ‘Party’ is over. Enough

    “The Public Campaign Action Fund features a letter by a number of honorable former Republican congress members who are ashamed of their party’s current leadership in Congress:

    * Mark Andrews, represented North Dakota in the U.S. House, l964-l980, AND
    the U.S. Senate, l98l-l987
    * John H. Buchanan, represented Alabama in the House, l965-l981
    * M. Caldwell Butler, represented Virginia in the U.S. House, l972-l982
    * Paul Findley, represented Illinois in the U.S. House, l961-l982
    * Bud Hillis, represented Indiana in the U.S. House, l970-l986
    * James Johnson, represented Colorado in the U.S. House, l973-l982
    * Richard W. Mallary, represented Vermont in the U.S.House, l972-l975
    * Wiley Mayne, represented Iowa in the U.S. House, l967-l975
    * Pete McCloskey, represented California in the U.S. House, l967-l983
    * G. William Whitehurst, represented Virginia in the House, l969-l987

    After failing badly in his attempt to unseat one of the most corrupt of current Republican leaders in Congress, Richard Pombo, Pete McCloskey urged honorable Republicans to replace corrupt Republicans in the 2006 election with honorable Democrats.”

    http://www.liberalslikechrist.org/about/gopcorruption.html

  9. the stranger September 30, 2006 10:09 am

    My disgust for Republicans is matched only by my disgust of Democrats; we need more like Jesse Ventura.

    Back on September 17, I said “Looking at the Relative Crude Oil chart 2002-2006 on the Zeal Crude Oil page (membership required) this correction looks typical compared to the last few. And having dipped below the 200 day moving average, it looks like it’s ready to move back up, right about now.”

    Since then, it dropped a little more and has stayed there longer than I expected. And that’s the way manipulation and steering is possible, along the edges; particularly with the king of commodities, as opposed to gold for instance. And although I think Saudi Arabia is pumping little more that oil-stained brine, reserves exist for small maneuvers. This ten year chart of the AMEX Oil Index displays a pretty deep drop, but you can only push oil around so much. It’ll be interesting to see what happens from here.

    I call where we’re at proto-fascist, for a couple reasons. If you say we’re fascist, you’re not only going to sound extreme, you could be proven wrong. Relative prosperity and freedom are still high. But behind the scenes, rule of law is recklessly dismantled and supplanted by the tyranny of law. I was amazed in 2002 when the US withdrew from the ABM treaty. Never would I have thought that the Geneva Convention would be openly declared an obstacle to the United States of America.

    I shudder to think what menacing phoenix will rise from a serious crash and the resulting conflagration. Larry, I certainly don’t know what to do about the American Corporate State. Maybe it’s time to stuff the Bill of Rights into an alabaster jar and burry it for posterity.

  10. Administrator September 30, 2006 10:26 am

    Hi Brian,

    I appreciate your viewpoint. As Alan mentioned above, the 1987 incident is pretty well documented. The S&P 500 index is pretty easy to manipulate through the use of futures contracts, because of the huge leverage involved. All it takes is something like 5% margin to control one whole S&P 500 contract, which is equal to the entire S&P Index!

    A manipulator with deep pockets simply buys the futures causing the price to rise. All the brokerage firms have sophisticated arbitrage programs that are constantly monitoring price differentials. If the value of the futures goes above the cash value of the stocks, programs execute to take advantage of this price differential by buying the individual stocks and selling the futures. As Shakesbear says above, 60% of trading is institutional money - I think it is actually higher than that. Most of it is just computer programs buying and selling based on programs & algorithms. Anyone with 1) knowledge of how the system works and 2) an unlimited supply of money and 3) the connections to execute the scheme could manipulate the market. Not many people have that capability, but I can think of a few…

    And if you think the whole idea of manipulation in general is far fetched, note the Treasury is investigating manipulation in the T-bond market - which is a way huger market than stocks:

    Treasury: Questionable Trading Rising

    Michael

  11. tiggers1 September 30, 2006 10:49 am

    Manipulation of the oil price? I have my doubts that the Saudis can produce much more than they are doing already and, even if they could, they couldn’t up production dramatically in only the few weeks to the U.S. elections. Also, what about all the other OPEC and non-opec producers?..they wouldn’t be prepared to accept lower world prices even if the Saudis would do so to help out G.Bush.

    However , GWB has ALREADY manipulated the oil price by very recently (and surprisingly) adopting a more conciliatory and “let’s give talking a chance” public attitude towards Iran. This removed that particular “fear factor” from world oil prices for the time being. Consequently, Americans are now feeling more optimistic about their economy because gas prices are dropping at the pump. I’m quite sure GWB will pick up the cudgels again and revert to his hard attitude towards Iran as soon as the mid-term elections are over. But, until then, the lower gas prices will help win votes.

    With regard to manipulation of the Dow it is probable, but manipulation of the S&P 500 and other broader indexes would, prima facie, be difficult. Market sentiment is critical however, and some manipulative buying of key stocks and futures to help keep general sentiment afloat is probably going on.

  12. Jeff Kassel September 30, 2006 11:07 am

    It is not he invlation rate that bothers me right now, although the things we have to buy are going up a lot faster than the CPI. It is the total debt load. If you examine all US debt from 1900 to 2006, you will see debt as a percentage of GDP climb during the late 1920’s into the early 1930’s peaking at 270% of GDP and then the debt percentage declines for 30 years as debt is liquidated thru bankruptcy or paying it off. Total Debt and illiquid banks made the great depression what it was….not the stock market crash which was just a symptom of too much debt.

    Now we are seeing a resegence of debt and it is over 300% of GDP. Moreover, the federal governmentd alone is borrowing about 700 billion just to close the budget gap. Now the US government will not default like Argentina since we can simply print the dollars we owe and bring them to China and Japan in a 747, but at some point Japan and China will decide they are overweighted in US treasuries and other US assets. At that point interest rates will have to rise to attract the money since federal expenses are slated to rise as the baby boomers retire and and 50 trillion of unfunded liability has to paid for financed. When interest rates rise significantly, it will choke off the economy.

    I was in a meeting with John Sunnunu, a senator from New Hampshire. I was sitting next to him and asked him if he would like to be on my TV show. He said he’d do it and a little while later, I asked him if he thought China and Japan would be willing to finance our Medicare and Social Security shortfalls for the next 50 years.

    He said, “Jeff, don’t ask me that question on your TV program.”

  13. Jeff Kassel September 30, 2006 11:09 am

    Sorry about all the typing errors in the last entry. I better proof read a little more carefully.

    Jeff Kassel

  14. Jeff Kassel September 30, 2006 11:23 am

    Michael, what is the “high inflation number” you are talking about. I’m looking for it and cannot find it. Is it a CPI or PPI number. Send me something.

    Jeffkassel@comcast.net

  15. the stranger September 30, 2006 12:01 pm

    (Change in Goldman Index Played Role in Gasoline Price Drop)

    Membership required here, but a two week trial is free…

  16. Administrator September 30, 2006 1:16 pm

    Jeff - I didn’t know you had a TV show. Can we watch it online?

    Here is a link to the story on inflation:
    Core inflation rising at fastest pace in 11 years

    Michael

  17. Dave September 30, 2006 2:36 pm

    Can anyone tell of a website or other way of estimating M3 if it were printed today ?

    Also, does money paid to the I.R.S. go to the people or the government in any way… or is it really true the Federal Reserve , for the price of paper and ink,
    (have read the figure $20.60)….
    can print up 1000 100 dollar bills and collect through the I.R.S $100,000 value of Americans’ wealth ? ( + interest ? )

    Is it possible Deflation, Depression and Repossesion of assets is the goal of those in power ?

    Thanks,

    Dave

  18. muleskinner September 30, 2006 2:52 pm

    Not everybody is a drunken sailor willing to have Continentals tailored into suit.

    Some folks actually do save their money.

    Money

  19. Paul September 30, 2006 4:11 pm

    I am At the point that I do not think any little investor can win. If you think you made money in the Market this year. You have lost. Because of a 30% devaluation of the dollar. The money you put in Gold & Silver is at 0% interest, dead money. With Inflation at 8 to 10 % The money you have in CDs, is loosing 2 to 4 % every Year. How Can anyone Keep Up? Manipulation ? My Butt, we are being robbed of our Treasure and our Honor. We need to have Money we can count on, and if we save it. We will not loose it to Inflation the silent TAX.

  20. Mike September 30, 2006 6:03 pm

    Larry, I saw a screening of Russo’s movie back in March and agree it is very powerful…every American needs to see it!!

    Dave, You are on the right track regarding the FED. I think they actually exchange that paper and ink for bonds that pay interest. The IRS puts poeple in jail for not obeying laws that do not exist. The US Mint then has the nerve to accuse the Liberty Dollar of fraud for having the nerve to offer we the people money that is real silver and gold. The whole world is upside down, as suggested by the Newspeak covers.

  21. ronandreas September 30, 2006 6:26 pm

    Michael,”the Newsweak cover above”

    I like that slip, really it should read weaknews.

    One thing no one brought up. I read that “crack spreads”(refinery profits) are at historic lows. That would be fact, and it isn’t Arabs it’s big oil. I think it’s at safehaven.com

  22. okala September 30, 2006 7:31 pm

    saudi arabia does not have spare capacity left to produce more oil. russia has already surpassed saudi arabia in oil output. at current oil price, canada or venezuela has possibly more extractable oil than saudi arabia.

  23. Joey September 30, 2006 7:47 pm

    People like Pretcher say that the markets reflect popular sentiment. That may be true in a free market, but America hasn’t had a truly free market in years.

    Would this revelation totally invalidate long term Elliot waves as a forecasting method? And what about those “magazine cover” indexes?

  24. Mark October 1, 2006 7:10 am

    Michael,
    Manipulation? Certainly, at least slanting and spinning of facts. Consider: Most media have been reporting “New Home Sales rose unexpectedly in Augus.” This got considerable credit for pushing the market highter.

    New home sales were not up in August; they were down by any honest measure.

    The only fair and logical measure to compare any set of figures is ‘apples to apples.’ The alternative is Twain’s “Lies, damned lies and statistics.”

    Apple: July’s INITIAL house numbers (reported in Aug) : 1.072 million

    Apple: August INITIAL new house sales: 1.05 million

    Result: Nearly 2% decline

    Or Year over Year
    Aug 06 down 17.5 % over Aug 05

    That’s it. Those are the apples.

    The nonsense foisted on the rather gullible American people is to compare August initial figures 1.05 million with July’s revised figures: 1.009

    Yes, that’s up 4%

    So what? July’s were revised downward 6% since initially reported. So were (BY different amounts) May and June, as you correctly say. Initial figures are wild estimates; margin of error +- 15% according to US Census Bureau.

    August’s numbers will likely be too. How many articles do you think will appear trupmeting, “MISTAKE–AUGUST’S NEW HOME SALES WERE ACTUALLY DOWN?”

    We all know the answer to that question.

  25. Administrator October 1, 2006 7:20 am

    Mark - Thank you very much for that clarification. I’m very interested in why such spin takes place. When the news came out about increased home sales, it really helped to juice the market. But what incentive do news outlets have to “frame” (for lack of a better word here) the story in such a way. The same goes for the Newsweak cover I showed in the article.

    Obviously we can see it going on - quite clearly - but I am still unsure of the exact mechanism by which it functions. Does the government have a secret Ministry of Propaganda that announces the morning spin? Why do the supposedly independent news outlets go along with it?

    An acquaintance of mine from China - who grew up under communism - marvels at what he calls American propaganda. He says, “Americans actually believe the news.” Whereas in China, the propaganda was so thick that it could be seen for what it was. It is much more subtle here.

    Michael

  26. Shooter October 1, 2006 7:30 am

    I’m with the Stranger on disgust for both Repulicrats and Demicans.

    You can’t honestly believe that the Dems will be a better party that is really for the “common man”. They will continue to escort us from “Freedom to Facism.”

    Indeed, the question is really how to mobilize an MTV and Baby Boomer generation that don’t really know hardship. The government has done the job just well enough to keep us comfortable yet enslaved. It is obvious that markets are manipulated, what I find most chilling is the greed with which the merchant banks operate. It is reported that JP Morgan piled on the short side to demolish the derivative portion of Amaranths Nat Gas portfolio, forcing Amaranths’ liquidations.

    JP Morgan will steal from their own hedge funds, thus stealing from there own clients - albeit those clients are high net worth individuals. These merchant banks are money grubbing machines. Eventually though, something will go haywire - the black boxes will trigger a meltdown. If and when this occurs and we enter a depression, that will be the time to mobilize. An unfed, unhappy population knows nothing but violence.

    Just ask the Palestinians.

  27. Yogi October 1, 2006 7:47 am

    From: Who’s Keeping Oil Down?

    While we’re generally skeptical of conspiracy theories (after all, if the government can’t deliver mail on time, how could it organize a large-scale covert action?), it’s a known fact that the feds have several mechanisms by which they could nudge crude lower.

    The Strategic Petroleum Reserve, for one. Release of crude from this stockpile helped push oil prices lower last fall in the wake of hurricanes Katrina and Rita.

    Another lesser-known influence on oil prices is the “crack spread.” This is the difference between the price that oil refiners pay for crude and the price they receive for the gasoline they produce. Put another way, it’s the profit margin that refiners make on their products.

    Currently, the crack spread is at — in the words of the U.S. Energy Information Administration — “unusually low levels.” This means that refiners are selling gasoline for little more than the cost of the oil they purchase. This makes no sense from a business perspective… generally in such a situation, refiners would simply up the sales price of their gasoline, improving their margins.

    However, it does make sense if the refiners are purposely attempting to keep a lid on prices.

    Why would these companies voluntarily take lower profits? There’s no way to know for sure, but it’s a certainty that the White House and Big Oil are close friends. Witness Dick Cheney’s ties to Halliburton, and George Bush’s background in the Texas oil patch. Might the Republicans be calling in a favor from their refinery manager pals, asking them to keep gas prices down until November 7 has passed?

    Of course, there’s no way to prove this. But for energy investors, it’s worth considering. If gasoline prices are being artificially depressed, we can expect a rebound during the last few weeks of the year. Which — judging from the historical relationship between gasoline and crude — would lift oil prices, and therefore oil stocks. If such case does present itself, now might be the time to buy oil producers, many of which are selling at fire sale prices.

  28. Gemstocks October 1, 2006 10:58 am

    According to a post on Free Market News Oct 6 puts on DIA, SPY, QQQQ, are very high. They refer readers to a Fidelity website — and I’M not a Fidelity investor so I can’t get in to check the numbers. I’m interested in hearing opinions on this one.

    http://www.freemarketnews.com/WorldNews.asp?nid=22476

    Gemstocks

  29. Jeff October 1, 2006 12:19 pm

    Paul I believe gold is up @ 17% to date plus you need to factor in the dollars loss of purchasing power. Yogi I was waiting for someone to mention the strategic reserves, which I think is very plausible. Also I suspect the “lull” in terrorist news is highly suspect. I believe the bad guys would love to deal with a weaker foe (democrats) and thus will not inflate any fear amongst the voters. Gemstocks I also read the article, but something is amiss. All puts expire on the 3rd friday of each month i.e. Oct 21. Don’t know where they get the 6th. Also, you left out a very important statement in the report. There was also a large put position on the GDX(gold miners). My thought was if it were just the spy and dia puts it could mean any number of events. Throw in the gdx and it could mean just one thing. A RATE INCREASE.

  30. Marc Authier October 1, 2006 1:12 pm

    Free press is as rare as free markets. Free rackets is the name of the game. I don’t even understand why Americans even bother going to vote or paying theirs taxes to these crooks. You can call the Republican Party, for what they are “soft fascist”.

    Nice photo of George with this clown from Saudi Arabia. It just proves that the Ben Laden family was in bed with Bush all along. Your US democracy is a joke. A banana republic controlled either by chineese and japaneese central bankers or saudi ariabia princes. Call it quit. Pull the plug and just call it American Empire.

  31. Administrator October 1, 2006 4:32 pm

    Hey lookie here in the NY Times:

    Change in Goldman Index Played Role in Recent Gasoline Price Drop. Hmmm….Wonder if Treasury Sec. Paulson had anything to do with that???

  32. kage October 1, 2006 5:08 pm

    This Saudis don’t even have to increase production if the US is drawing down on the remnants of the summer blends, and the strategic reserve. I understand no figures are available for inventories of the latter.

  33. muleskinner October 1, 2006 6:16 pm

    JP Morgan owned the White Star Line, builder of the Titanic. JP Morgan died on March 31, 1913. More or less completely devastated from the tragedy of the sinking.

    The Titanic was pushed beyond its capacity. An unsinkable ship sunk on its maiden voyage.

    A manipulated market can crash, no matter how un-crashable it is. The best-laid plans of mice and men often go awry.

    http://www.healpastlives.com/pastlf/mystery/mstitanc.htm

  34. zephyr October 2, 2006 3:47 am

    Is there manipulation? Hahahahaha! Yeah…anyway…I was just saying to somewhat yesterday, “So, this is what the downfall of a society looks like, huh.”

    I suppose there’s always been greed and corruption throughout history. Why would we be unique? Nonetheless, how easily the vast majority of the public allows themselves to be fleeced so easily astonishes me. Even the people I talk to who are aware of what’s going on are too afraid of our govt to do or say anything. Thomas Jefferson was right….when the people fear the govt you have tyranny.

    What really scares me is the immensity of the oncoming financial tidal wave. When this baby starts to break and crash on shore there will be complete devastation. Remember how New Orleans fell into anarchy in 2-3 days? All I can say to those that are or will be benefitting from the destruction of the middle class….remember what happened to Marie Antoinette!

  35. Dr Jane Karlsson October 2, 2006 5:19 am

    Clearly manipulation goes on, and it might just be Groupthink cos all the big shots know each other.

    What about the reason being not just the election, but because it wouldn’t look good if we attacked Iran after the crash and not before?

  36. Rich October 2, 2006 6:04 am

    Hey Michael.

    The site is great and continues to just get better, congratulations man! You are helping a lot of people to see through the Matrix.

    I watched the first 45 mins of the Alex Jones video last night (top link on the site today). He’s done his homework and is proving the links between intelligence services and events. I also watched the Mosh video again, first time in a long time, he gets it too, although I’m not sure we can vote our way out of this mess.

    As for manipulation, if you watch Alex Jones, you understand the depths of the psychological warfare that you are a bit player in.

    Cheers Rich

  37. larry October 2, 2006 6:30 am

    thank you michael for finding the film terror storm….i had never heard of it prior to you listing it at your site…just an other nail in the coffin regarding my evoving view of this late great culture…michael,will you set up an archive buton to video you highlight on this site?…for future reference and sharing with friends…it may help disseminating other points of view…a sort of one stop shop site for the direction it is going….

  38. Administrator October 2, 2006 7:06 am

    Today’s bullish news:

    Oct. 2 (Bloomberg) — Manufacturing in the U.S. last month expanded less than economists forecast, suggesting the housing slump is extending its reach to other parts of the economy.

    And the Dow is…up! Surprise, surprise.

    Rich - you said,

    you understand the depths of the psychological warfare that you are a bit player in…

    Moi? Do you mean little tiny moi? I think I know what you’re talking about, but will you elaborate for the crowd?

    And larry - thank you for the suggestion. I set up a little blogger page with all my favorite videos here:

    http://bullnotbull.blogspot.com/

    There is an archive on the right hand side, below all hte ads.

    Thank you for the suggestion - I’ll get a link up on the home page to that site this week. And if anyone has any videos they’d like to see up there, please email me! Click on the Contact/Subscribe link on the main menu above.

    Michael

  39. muleskinner October 2, 2006 7:08 am

    I realize the link I provided was a bit corny, somewhat crackpot, maybe, but Nancy Reagan had an astrologer whispering in her ear. The entire ‘Republican’ Party has become crackpot themselves. They’re not really a legitimate entity at this stage of the game.

    It has all become wierd. You just can’t make this stuff up. The ‘Republicans’ have become ‘one for the books.’ Mark Foley flew over the cuckoo’s nest. Anything that is going on in politics and government these days makes me barf. It doesn’t stop, either. It continues ad nauseum. You’d think they would learn, but they don’t.

    Good thing the markets are somewhat independent of the political machinations that are running pell mell out of control.

    Three Mile Island will look like a burned down stick match compared to the meltdown the market will experience if all of the stops are pulled.

    Yes, this is a great site.

  40. Unwashed E.Pluribus.Unum October 2, 2006 7:37 am

    The Administrator said: “He says, “Americans actually believe the news.” Whereas in China, the propaganda was so thick that it could be seen for what it was. It is much more subtle here.” I find this comment incredibly similar to a discussion I was in with a jewish russian immigrant. He had commented that while living in russia he and his young adult friends knew that everything they heard or read from the media was propaganda. They would use this information as a negative barometer and research by other means what the real news was. He said the problem with America is that perhaps 95% of the information the media release was truthful or had good intent. He commented that perhaps 5% was pure propaganda. Now comparing the two systems he said that by hiding the propaganda with the truths was a much more effective tactic. This discussion happened 12 years ago. Remarkable!

  41. Charles K. Ponzi October 2, 2006 7:57 am

    Shooter, I’m with you and the Stranger, we need a new party to rally behind. We can’t solve all the problems so let’s just work at one at a time.
    It seems every problem we face in the world begins at the same spot: As they say, “Follow the Money”. It starts at the FED. Take away their power and give it back to the people as directed in the Constitution.
    To explain it in simple terms to the Boomers, X’s, Y’s and Z’s, use ABC’s. No Federal Reserve Bank means Congress can issue interest free money. You borrow $360,000 from the US Government to buy a house and pay $1,000 a month for 30 years. And better yet, since the US Government does not need to pay interest to the FED, they do not need to collect taxes on your wages.

  42. Dave October 2, 2006 9:30 am

    “disinformation, to be effective, must be mostly true…
    most Americans seem to believe… the official 9/11 story… that “the New York Times hates George Bush”… and would publish any possible negative news…

    “Most people prefer to believe their leaders are just and fair, even in the face of evidence to the contrary, because once a citizen acknowledges that the government under which he lives is lying and corrupt,
    the citizen has to choose what he or she will do about it.
    To take action in the face of corrupt government entails risks of harm to life and loved ones.
    To choose to do nothing is to surrender one’s self-image of standing for principles.
    Most people do not have the courage to face that choice. Hence, most propaganda is not designed to fool the critical thinker
    but only to give moral cowards an excuse not to think at all.”

    ~ Michael Rivero

    “Liberty cannot be preserved without a general knowledge among the people.” — John Adams

    “A popular Government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or, perhaps both.” — James Madison

  43. muleskinner October 2, 2006 9:56 am
  44. Rich October 2, 2006 11:24 am

    Hey Michael.

    I’m sorry, my post was a bit ambiguous, and I didn’t mean to imply that specifically YOU were a bit part in some kind of propaganda dissemination, etc. I meant the collective YOU as in US or WE.

    We’re ants in a nest and we all play our part.

    We can choose between the red or blue pills and whether we stay oblivious to our current plight, or do the hard mental work to try to understand it, and then somehow impact it.

    Collectively we can shape the destiny of our culture/planet, but not without the means to disseminate and control a new message (which requires control of or access to the mass media, or another form of mass communication).

    Without a channel of communication no new approach to our problems can be released in to the masses.

    I lived through part of the revolution in Iran as a 16 year old, I left the country as events started to spin out of control, my dad left a couple of months later on the last flight out before the airport was shut down. In the lead up to the revolution we used to joke about the government propaganda we would get in English over local radio.

    We devised our own rules for interpreting the news, if the government reported a negative statistic we knew we could double the number, if it was a positive statistic we’d halve the number. As the revolution fomented the government propaganda became more and more obvious, until the radio just spewed lies.

    Until this current regime in the States I felt like we were fed a constant diet of misinformation on most foriegn policty issues, but that domestic issues were reasonably well handled. But now for 5 or 6 years this country has been on a diet of pure propaganda for foriegn and domestic news, and it’s shocking to me that anyone consumes it.

    Without the Internet we’d have to put out pamphlets like Tom Paine’s Common Sense!!

    Cheers Rich

  45. Lookie Lou October 2, 2006 1:09 pm

    It’s interesting, all this talk about manipulated markets, proto-Fascism and so forth, because I read almost identical comments on newsgroups mostly by conservatives opposed to Clinton back in 1998. The conspiracy theories were there too, although instead of “corporate” interests the concern was “UN” and “New world order” issues. So are you going to form a militia next, Michael?

  46. Dave October 2, 2006 1:30 pm

    Re :
    “… stay oblivious to our current plight, or do the hard mental work to try to understand it, and then somehow impact it. ”
    and
    “Without the Internet we’d have to put out pamphlets like Tom Paine’s Common Sense!!”

    Pamphleteering may still be a good tool.

    … been trying to get the essential knowledge to “Wake-up America” down to a single page for some time… not arrived yet…
    After the hard work of coming to understand… much harder is writing so that America will want to understand… grabbing their attention… getting them to care !

    Anyone have wisdom/inspiration for this purpose ?

  47. Administrator October 2, 2006 2:52 pm

    Hey Lookie Lou -

    That is interesting, seriously. I didn’t know that but it certainly makes sense. People are inherently suspicious of government, as they well should be, regardless of which party is in power. Honestly, there is very little difference between them.

    Militia is not a bad idea. After all, it is written into the Bill of Rights:

    Amendment II

    A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.

    I guess you could call that the “Original Homeland Security.”

    Michael

  48. Rich October 2, 2006 4:14 pm

    Hey Dave.

    I’d be interested in reading your one-pager, it’d definitely be a useful project! I came up with the outline of a novel one time that was about a group of individuals who got together, hacked the PTB’s data center, then spammed the world with a one pager outlining how the world has been hood winked for decades. It was a fun project to play with, but never got off the drawing board because I have to pay my mortgage!! Hehe!

    Lookie Lou, I think the conspiracy is complete, members of both parties are sold out to the money power — just like in Mr. Smith Goes To Washington, nothing much has changed - - it’s just gone deeper and got worse is all.

    As for a militia, there are 4 million militia members in the US, some very conservative groups and a bunch of Libertarians, etc. Militia’s were put in the Constitution to protect the nation against tyrannical government. Arguable if there was no individual gun ownership in the US today then a tyrannical government may already have seized control.

    I really lament the shocking loss of life to firearms in the US, there was another school shooting today in Lancaster PA, Amish country of all places. However I do believe this country needs to maintain individual gun ownership in order to maintain its culture of freedom.

    If nuclear weapons have provided the means to deter rogue superpowers/nations from global domination for the past 50 years, then perhaps 4 millions well armed US citizens will be enough to deter a wannabe dictator from trying to take over the USA?

    I dunno!

    Cheers Rich

  49. Gemstocks October 2, 2006 4:37 pm

    What is an “unlawful enemy combatant”? Here is the defination from our new law, the Military Commissions Act of 2006. Notice it does not exclude US Citizens. And it doesn’t iclude any Costitutional rights. Forget having “a well regulated malitia.” It’s illegal.

    “The term ‘unlawful enemy combatant’ means – (i) a person who has engaged in hostilities or who has purposefully and materially supported hostilities against the United States or its co-belligerents who is not a lawful enemy combatant (including a person who is part of the Taliban, al-Qaeda, or associated forces); or (ii) a person who, before, on, or after the date of the enactment of the Military Commissions Act of 2006, has been determined to be an unlawful enemy combatant by a Combatant Status Review Tribunal or another competent tribunal established under the authority of the president or the secretary of defense.”

  50. muleskinner October 2, 2006 4:38 pm

    Colombine massacree: The killers were on prescription mind altering substances.

    The Red Lodge school shooter was using prozac.

    The student in Arkansas that killed a couple of students a few years ago was using presciption medications.

    The guy down in Atlanta that shot up the town was using prozac.

    Before Prozac was even approved for use for the general population, there were 27 deaths attributed to its use during the trial period.

    I have a relative that plowed through some 500 grand and has no idea where the money went. She is on prescription medications of a psychotropic kind. They also make her crazy as a loon.

    Drugs are a huge problem in the US of A.

    People don’t know when to stop. Vioxx, Celebrex are responsible for over one hundred thousand deaths. It is bad.

    Don’t use drugs, they’re no good for you.

    The market did ok today, don’t know about tomorrow.

  51. the stranger October 2, 2006 7:40 pm

    So many excellent thoughts the last couple strings, ah - so little time.

    Unwashed E.Pluribus.Unum – the unwashed many are one? cool

    Rich, “The markets are opium for the masses…” another bull’s eye. I like your book idea, now to get it out of my head.

    Muleskinner, I didn’t know that about the prescription drugs and various shooting. Good eye man; reminds me of the movie Outpost. I can’t imagine that taking place though, if they were just stoned.

    Joey, I think manipulation not only makes a mess of the waves, but those with intent to influence also use the waves to augment impact. But that’s the myopic view. Spanning decades, I think it’s just part of the mix. Or if it’s a huge market, like oil, they have to work with the waves. That’s my feel; I have no idea how accurate it is.

  52. muleskinner October 2, 2006 8:24 pm

    Make that ‘Red Lake’ not Red Lodge.

  53. the stranger October 3, 2006 3:40 am
  54. Lookie Lou October 3, 2006 7:20 am

    The “Counterpunch” article leaves out a few details and a key date. The details are: many of the laws that people object to as “Patriot Act” or more recent legislation actually date to the “Anti Terrorism Act of 1996″. The date missing from an article by a National Lawyers Guild guy is, of course, 1996. Mustn’t discuss the fact that it was Clinton who signed into law many of the things people on the left are objecting to, that’s for sure.

    Economically speaking, it was during Clinton’s years that the CPI became totally worthless, with “hedonics” and “substitution” jammed into it. Sorry, going from a 1 GHz computer to a 2 GHz computer doesn’t double my work output, hedonics-guys. And when the price of steak goes up too high for me to want to buy it, so I buy ground chuck instead, that’s a price increase, substitution-nerds. The reason for this manipulation of the CPI is simple: COLA’s and Social Security. Of course Bush and his people didn’t reverse it. If they did, SSI payments would have jumped. So they had their chance and missed it, but it was Clinton’s “liberals” who stuck it to us in the first place.

    You all might want to see just how long the Plunge Protection Team has been around, too. Both parties seem to not have a problem at all with manipulating the stock market for political gain.

  55. 5th of November October 3, 2006 12:50 pm

    The foundation of the present administration’s Middle East policy is based on manipulation. WMDs??
    This gov’t manipulates the Constitution by conducting warrantless wire-taps, rigging elections, stealing private lands, banning books like “America Deceived” from Amazon, caging protestors and starting 2 illegal wars based on lies.
    We must confront these manipulations and investigate 9/11 properly. The internet is the last (and only) hope.
    Be defiant, support indy media.
    Last link (before Google Books caves to pressure and drops the title):
    http://www.iuniverse.com/bookstore/book_detail.asp?&isbn=0-595-38523-0

  56. the stranger October 3, 2006 7:23 pm

    Lookie Lou - good facts you laid down, bad presupposition though. I didn’t offer the article as a complete history. The Clinton Administration did in fact start much of the evil crap we’re dealing with. And the Carter Doctrine sure hasn’t kept us out of the Persian Gulf. Now this administration is shredding what’s left of the constitution.

    Clinton wasn’t a liberal, Bush isn’t a conservative. I think all we’re better off flushing this right left diversion tube.

  57. Marc Authier October 4, 2006 11:27 am

    US foreign policy in the Middle East? It’s simple. Back Israel blindly. And for the Arabs? Divide them. Corrupt them and if it doesn’t work? Bomb them. You are just a vulgar empire, exactly like the Roman Empire or the USSR.

  58. the stranger October 4, 2006 6:51 pm

    - exactly like the Roman Empire or the USSR? No, more dangerous. That reminds me of a line from Blue Rodeo, “…it could happen to you…”

  59. Atash October 4, 2006 10:57 pm

    Hello. Everyone talks about the weather, but nobody does anything about it (”Mark Twain”) ;-{) .

    Classic investment theory is largely based on assumptions about free buyers and free sellers, whose actions are rational and transparent, acting on true information. Suppose those assumptions are false. Shouldn’t investment theory be reformulated to take into account the possibility of disinformation and cheating?

    “The market can stay irrational longer than you can stay solvent” (John Maynard Keynes)
    “The market can stay manipulated longer than you can stay solvent” (me)

    It seems as tho one should be able to formulate a counter-strategy, if one could estimate the limits of the manipulation, and when they would be reached. Otherwise, there is no counter-strategy, and one simply hopes that one is not the last of the “greater fools”.

    Kind regards.

  60. unlawflcombatnt October 7, 2006 11:59 am

    Michael,

    Great article. I’m glad I’m not the only one who sees no justifiable reason for the latest highs in the Dow. Since your initial article, the Dow has gone even higher. Yet there is still no obvious reason why. Employment is down, leading indicators are down, real wages are down, durable goods purchases are flat, the housing bubble is collapsing, the Iraq war is worsening, and, as you pointed out, the Fed’s favorite measure of inflation is higher.

    I’m not an expert on the stock market. However, from a layman’s casual observation, the 2 things that almost always raise the DJI are a drop in crude oil prices and Fed rate pauses (or reductions.) I don’t understand why these events cause the DJI to rise, but obviously they do. And you’ve hit on the biggest one — oil price reductions.

    You’ve made a great case for manipulation of oil prices by the Saudis. They want Bush in power, and they want a Congress that will ignore, or at least rubber stamp his dictatorial actions. The best thing the Saudis can do is increase oil production and drop prices, so that the U.S. stock market stays high, with the hope this will deceive U.S. voters into believing the economy is doing well.

    The combination of a record high DJI and the NeoCon-Artist spin on current economic news may well convince voters that the economy is not as bad as it actually is.

    Hopefully enough commentators, like yourself, will continue to report on the REAL state of the economy, instead of the “alternate reality” version published by the Bush dictatorship and its corporate media shills, like Larry “I-lost-my-straitjacket” Kudlow.

  61. marketoracle.co.uk October 8, 2006 10:09 pm

    Correct me if I am wrong, but people are forgetting 3 key items with regards the new high in the down

    1. That earnings have grown since 2000 by over 60%
    2. That inflation means the dow is lagging in real-terms
    3. That bad performing stocks have been removed from the index, replaced by better performers.

    Therefore it is natural for the dow in the long run to rise, as the deck is stacked in its favour

  62. The Advanced Soul October 21, 2006 6:24 am

    Is it just me, or has Larry King had like 5 heart attacks and 5 divorces. I guess that’d be a broken heart for each.

  63. Darlene Fishel October 24, 2006 7:53 am

    Re: Dow’s Phony High. I really believe the Dow is being manipulated for political purposes but I don’t have a clue as to how that would be accomplished. Does anyone have an idea about how manipulation would be implemented? I sense that a lot of ordinary Americans are suspicious but I’m very reluctant to make or accept such statements without some idea with regard to how it would be orchestrated. Thanks to anyone in advance for taking time to respond to my query.

  64. Hellios October 25, 2006 1:12 am

    Manipulation not is not after all down Jone’s control the world markets and the boss controlling our lives we love America
    America for ever bush for ever and ever hail to the masters of

  65. jon hayden October 26, 2006 11:39 am

    (1)The Sprott Report provides an excellent description of market manipulation and has been cited in the mainstream financial press:

    http://www.sprott.com/pdf/TheVisibleHand.pdf

    (2)It’s pretty difficult to assert that the runup in the Dow is earnings-based, when the current P/E is over 23.5 (100-year norm is 13.5). Adjusting the Dow to its historical norm today would require that it close at just under 7K.

  66. Della Reiman October 26, 2006 12:00 pm

    Military defense contractors are largely responsible for the current rise in the Dow.
    It is interesting to note that the those invested heavily in military defense contractors who benefit from the rise in stock prices are in inverse proportion to those who are fighting and dying in Iraq.
    This war is about the children of poor people in the U.S. fighting the children of poor people in Iraq.

  67. Administrator November 3, 2006 12:00 pm

    I put up a new page here: http://www.bullnotbull.com/archive/daily-dow.html to monitor the Dow. The Dow is obviously being jacked right now, and I imagine this is how: Some large player - the PPT, say - buys a sh*tload of Dow Futures contracts, causing the futures index to rise. All the brokerage firms have sophisticated computer-driven arbitrage systems that see this differential between the futures contract and the actual prices of the stocks that make up the index, and the computer programs start selling the futures and buying stocks to bring that differential back into line. The stock buying causes the actual cash index to rise. I see it all the time when I trade - the futures move before the cash index - usually some time after 2:00 Eastern time.

    Who could organize and coordinate such a thing? Someone with deep industry insider knowledge. Hey - look who runs the Treasury - ex-Goldman CEO Paulson. He’s probably communicating with the brokerages, and just look at what has happened to Goldman’s stock recently:

    http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=gs&sid=0&o_symb=gs&x=0&y

  68. Administrator November 3, 2006 12:01 pm

    Thank you for all the great comments! I’m going to have to button up this thread to keep the spamming vandalizers at bay. Please check the Blog Home Page to see the current threads.

    Thank you!
    Michael Nystrom
    Editor
    http://www.bullnotbull.com

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