Market Manipulation & Speculative Abuse
We have commented many times in this blog about Adam Smith's "invisible hand" of the "free market" being an academic's fable.
We firmly believe that market interventions occur regularly and that the markets (currency, bonds, commodities and equities) are subject to governmental and institutional manipulation and control which can be used for speculative advantage and abuse.
Our coverage of this subject can be found in The Name of the Game, Meet the New Boss and 35 Trillion Reasons series.
I wish to thank Barry Ritholtz at The Big Picture for pointing me in the direction of this gem. Barry referenced CBS Marketwatch's Peter Brimelow in his missive A Few Words on Richard Russell
CBS Marketwatch's Peter Brimelow ran an excellent article on market manipulation titled Sprott's researchers connect the dots.
Brimelow refers to a report by Sprott Asset Management titled "Move Over Adam Smith: The Invisible Hand of Uncle Sam."
Said report outlines activities of the “Plunge Protection Team” which is comprised of key government agencies, stock exchanges and large Wall Street firms and whose primary responsibility is the prevention of destabilizing stock market declines.
Also covered are some of the Fed's past interventions in currency, bond and equity markets. Heres a sample:
Most people probably assume that the U.S. stock market is free of government interference. It is acknowledged that the bond and currency markets are influenced by policy-makers, but equities are considered different territory altogether.
Current mythology holds that share prices rise and fall on the basis of market forces alone. Such sentiments appear to be seriously mistaken.
A thorough examination of published information strongly suggests that since the October 1987 crash, the U.S. government has periodically intervened to prevent another destabilizing stock market fall.
And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent. Some of these interventions have apparently occurred with the active participation of selected investment banks and brokerage houses.
We strongly recommend reading both Mr. Brimelow's article and the Sprott Report. The Sprott Report validates our position that current markets are subject to institutional and governmental manipulation and control which can be used towards speculative advantage and abuse.
We firmly believe that market interventions occur regularly and that the markets (currency, bonds, commodities and equities) are subject to governmental and institutional manipulation and control which can be used for speculative advantage and abuse.
Our coverage of this subject can be found in The Name of the Game, Meet the New Boss and 35 Trillion Reasons series.
I wish to thank Barry Ritholtz at The Big Picture for pointing me in the direction of this gem. Barry referenced CBS Marketwatch's Peter Brimelow in his missive A Few Words on Richard Russell
CBS Marketwatch's Peter Brimelow ran an excellent article on market manipulation titled Sprott's researchers connect the dots.
Brimelow refers to a report by Sprott Asset Management titled "Move Over Adam Smith: The Invisible Hand of Uncle Sam."
Said report outlines activities of the “Plunge Protection Team” which is comprised of key government agencies, stock exchanges and large Wall Street firms and whose primary responsibility is the prevention of destabilizing stock market declines.
Also covered are some of the Fed's past interventions in currency, bond and equity markets. Heres a sample:
Most people probably assume that the U.S. stock market is free of government interference. It is acknowledged that the bond and currency markets are influenced by policy-makers, but equities are considered different territory altogether.
Current mythology holds that share prices rise and fall on the basis of market forces alone. Such sentiments appear to be seriously mistaken.
A thorough examination of published information strongly suggests that since the October 1987 crash, the U.S. government has periodically intervened to prevent another destabilizing stock market fall.
And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent. Some of these interventions have apparently occurred with the active participation of selected investment banks and brokerage houses.
We strongly recommend reading both Mr. Brimelow's article and the Sprott Report. The Sprott Report validates our position that current markets are subject to institutional and governmental manipulation and control which can be used towards speculative advantage and abuse.
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