The Thousand Point Drop: When You Smell a Rat…
It is interesting to note that in a country rife with so much fraud and corruption that America still refuses to face the bull in the china shop. America remains the only country not to be outraged at the rampant ruling Plutocracy enough to rise up and voice their discontent against social vampires. We have not arrested any of the major players who have committed fraud on a scale that simply hasn’t been seen before, that makes the S&L credit scandal look like someone swiping the tips jar at a lemonade stand.
Given the phenomenal levels of fraud reported in the US as early as 2004: So far the best the US Government has done is throw bail-outs at the problem and ‘bandage’ it over, staving off a financial collapse, so far the worst the Government has done is bow to their demands. For me, the drop is nothing but further evidence of fraud and shows just how deep the tentacles of the octopus of corruption have sank into financial institutions.
In a mere half-hour on May 6th, there was an unprecedented thousand point drop in the stock market. I watched it all play out on the television as it happened, watching money go up in smoke as I thought to myself ‘Well, that is it now isn’t it? The whole thing is going to go down faster than a drunken Goodyear blimp pilot on happy hour.’ It suddenly halted just before bouncing back six hundred points and stopping after having lost a total of three hundred and forty seven point eight points. Investors and traders alike were left scratching their heads in bewilderment as stocks took on huge losses. Two of the thirty stocks in the Dow Jones Industrial sector, Proctor & Gamble and 3M dived down thirty percent in value in roughly fifteen minutes. So what happened?
The two most popular theories at the time of the crash were the nation of Greece was responsible, or that there was a fat-finger trade. Hackers, cyber terrorism, a computer glitch and other possibilities were considered and cast aside. Since Citigroup itself said that it found no trade made that could have triggered the crash (which doesn’t mean much), Greece has essentially become the scapegoat for the market crash. There is a problem with this however. Greece as a culprit largely doesn’t make much sense. While it is true that Greece has suffered a financial crisis, it is hardly the plague-bearing ‘bad debt’ economic black death that it has been made out to be. The economy of Greece is only two percent the size of that of the United States, and only point one percent of imports from the United States are sent there. Greece is in bad shape, yes, but the chances of it demolishing the European market are very slim. I’ll talk more about the over-hyped and up-played Grecian crisis in a future article and why International Bankers love an economic situation like Greece.
If it wasn’t Greece or an actual panic brought on by the fear of a European collapse, then what was it? Max Keiser, a former broker and options trader has a few thoughts on the issue:
May 6th was an unequivocal act of domestic financial terrorism in America. A day that will live in infamy. To scare the lawmakers, themselves large owners of the very banks and stocks that they are supposed to be regulating, a financial Weapon of Mass Destruction was put to their head and they acquiesced. As the inventor of the continuous double-auction, market-making technology (VST tech. US pat. no. 5950176) that is referenced 132 times by program trading and HFT patents since 1996, I can tell you that Goldman, JP Morgan and the gang simply pulled the ‘buys’ from their computer trading programs and manufactured a crash. And when the coast was clear, and it was clear the politicians were not going to vote for anything that would break up the ‘too big to fail’ banks; all the ’sells’ were pulled from the computers and the market roared back. This is a Manchurian Candidate market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go – and then hundreds of thousands of day-traders watching Cramer on CNBC jump on the momentum bandwagon and commit the crime for the Wall St. financial terrorists, who then say, ‘It wasn’t us, it was ‘the market!’
Some of you might be thinking ‘that is quite an accusation, why would they do that?’ Well, consider this. The day after the thousand point dive, the amendment to break up the banks whom were bailed out by the US Government was defeated by a sixty one to thirty three margin in the Senate. Goldman Sachs was meeting with the SEC to work out a settlement based on its allegations; and key sections of the Federal Reserve Audit bill were removed. Is it possible to fine tune trade the market in such a manner? Before we look at answering that question, let’s go back to April of this year.
In April, Goldman Sachs stock elicited some strange behavior. While every other stock in the S&P 500 dropped, it rose. The Daily New York Times also reported over the incident, you can practically feel Michael Daily’s admiration for his masters as he gushes. It is pretty clear who’s feeding the dog here.
I would be happy to let the whole United States Senate curse at me for just a fraction of the $2.8 million Goldman Sachs CEO Lloyd Blankfein made while he was testifying before a subcommittee this week. The opinions of the senators carry so little weight that Goldman stock actually went up more than a buck, from $151.63 to $153.04, on a day when most of the market dropped. And since, by one recent report, he owned 2,035,364 shares, Blankfein was getting more than $2.8 million richer even as he was being vilified.
What has happened to the state of American journalism? Instead of getting nosey and asking questions, you can practically feel him begging Blankfein, a fleecier in the highest degree, for the opportunity to lick his toilets in his penthouse clean. Unfortunately, Michael Daily isn’t alone in his take on Goldman Sachs’ rising stock. Similar articles by Business week and Portfolio.com, respected news sources ran articles along the same lines as Daily’s article. Not suspicious, but full of praise. How does no one think that this is even a tad bit odd? The answer is Goldman Sachs PR department. Think about it; if you were a sleazy slime ball like Lloyd Blankfein and had a PR department, wouldn’t you use it to turn the most embarrassing day in the history of your company into a victory march?
Matt Phillips found some rather incriminating evidence concerning the stock rise, particularly an email from a trader which was in all caps and very annoying, so I won’t reproduce it here. Mr. Phillips however, finds himself among very few journalists as the majority ran stories like this one or this one. It is as if everyone has conveniently forgotten that Goldman Sachs didn’t tank the market, ruin the middle class or gorged themselves on tens of billions of tax payer funds. Instead, the investigative team put together the Senate is made to be the bad guy, while a pillager of millions of people is turned into some sort of underdog. It’s like we live in some screwed up universe where birds talk and dogs keep human pets. Was Goldman Sachs PR department involved in the sudden spike of Goldman Sachs stock, as a constant pro-Goldman spin filled the media? Was the price of the stock manipulated? And if it was manipulated, would it be a criminal or a civil matter?
For me, there is evidence to suggest that Goldman manipulated their stock during the Senatorial hearing, and the thousand point drop is further evidence of that some sort of market manipulation. Certainly, a motive to do so is there. The over-arching theme of all these newspaper articles is that politicians can’t be trusted. It is as if no one suspects anything, not that it could have been a PR Department ploy. It is one hell of assumption for these papers to make that the market operates ‘pure’, untouched by the smorgasbord of corruption that has plagued it for years, it is also a hell of an assumption to make that parties independently and suddenly decided that the politicians were liars, not Goldman-Sachs and that on the most critical day in that corporation’s life, decided to buy enough stock to have it sell for more. Just to further my point, here are two columns from the same newspaper. One pre-Goldman Sachs PR department getting kicked into high gear, one post, see any differences?
The question is then, if it is possible for one firm to manipulate its own stock, is it possible then for multiple firms to do so? Again, we only need to go back to answer this question, during the first financial panic when the first bailouts were originally given by the Bush Administration back in 2008. At the time, I did not follow the news that frequently like most Americans my age, and only knew that something ‘bad’ was happening. It wasn’t until I went back after witnessing the 1,000 point drop and poking at Goldman-Sach’s possible manipulation that the picture became complete. And what a grotesque image it was.
The financial panic that occurred and threatened to cripple the nation forced Congress to act to ‘bail-out’ these corporations, funneling trillions of dollars into the pockets of those whom that bet when their firm was sent hurtling into the ground that the Government would bail them out rather than risk collapse. This is nothing less that corporate theft and corporate terrorism. America was blackmailed, beaten, and robbed blind. This showed the very people who were willing to tank a country to deepen their accounts one thing: Exert pressure on the Government, and it will cave for you and do as you say. If you are wealthy enough, and powerful enough, then toying with a computer algorithm to make the market go where you want it to is hardly out of your grasp. Whatever happened to ‘We don’t negotiate with terrorists?’ That last crash was seven hundred and eighty eight points in a mere ten minutes. High Frequency Trading, which can account for seventy percent of all trades with stock executed with computer programs showed who ran this country then, as they did now.
Therefore, it is my solemn opinion that to call the market ‘free-trade’ is a ghastly indecency to the meaning of the word. To see the thousand point drop as ‘an accident’ when coupled with other times that such drops and rises have benefited firms and the action of a lowly trader or a nation as small as Greece is to stick your head in the sand and deny the reality of the situation. We are held hostage by financial terrorists who will stop at nothing to increase their wealth and ultimately destroy this nation. They have issued an ultimatum, that ultimatum is bow to our demands or perish in financial ruin. How we will deal with this issue, if we deal with this issue, is something to yet be seen.
Posted by Evan Arnold
on June 3, 2010. Filed under Business,News.
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