Wall Street – Market manipulation and financial speculation July 11

“Speculation is only a word covering the making of money out of the manipulation of prices, instead of supplying goods and services.” Henry Ford(1863-1947) American industrialist. 

“Henry Ford’s misapprehension is that speculation equates with market manipulation. That’s not right: speculation can be completely consistent with fair and competitive markets. We do care, however, to eliminate market manipulation… In Henry Ford’s heyday, before the era of market regulation, groups of individuals would band together to try to move stock prices up or down so as to harvest a profit from the rest of the investing public.”

“Speculators are important to the business person because they bring liquidity to the market. We don’t want less liquidity. To see the consequences of falling liquidity, see the subprime loan market and the repercussions on financial institutions, investors, and home owners. In addition, speculators make all kinds of insurance possible—they are the willing counterparties to a host of risks. Think of speculators as shock absorbers in the markets.”

“Speculation is often condemned as an immoral activity, like gambling, and often in contrast with investing, which seems to take the high ground. Yet the boundaries between speculation, gambling, and investing are fuzzy…. “the role of futures markets in providing both insurance against fluctuating prices and liquidity for the participants in these markets has not been recognized by some vocal fraction of the population—just as the role of derivatives and many other financial innovations is not recognized today.

“In Henry Ford’s heyday, before the era of market regulation, groups of individuals would band together to try to move stock prices up or down so as to harvest a profit from the rest of the investing public… Today, it is quite difficult to manipulate a commodity market that is as vast and competitive as is the oil market. Markets that are easily manipulated send the wrong signals about resource allocation and the cost of capital to people in the real economy (such as producers and consumers of oil products.) Quash market manipulation, but let the speculators do their work.” Taken from: https://blogs.darden.virginia.edu/brunerblog/2008/07/speculation-and-manipulation/

“Wall Street’s mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government’s visible hand and insiders control markets and manipulate them up or down for profit – all of them, including stocks, bonds, commodities and currencies.”

“It’s financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls “pump and dump,” defined as “artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price,” then profit more on the downside by short-selling. “This practice is illegal under securities law, yet it is particularly common,” and in today’s volatile markets likely ongoing daily.”

“Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it “pump(ing) and dump(ing) of the entire American economy,” duping the public, fleecing trillions from them, and it’s more than just “a process designed to wipe out the middle class. This is genocide (by other means) – a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts.”

“Fitts explains that much more than market manipulation goes on. She describes a “financial coup d’etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank” along with insiders. It’s a government-business partnership for enormous profits through “legislation, contracts, regulation (or lack of it), financing, (and) subsidies.” More still overall by rigging the game for the powerful, while at the same time harming the public so cleverly that few understand what’s happening.” Taken from:  http://www.thirdworldtraveler.com/Banks/ManipulationHowMarketsWork.html

In the good old days, Banks actually lent money to help homeowners and small businesses, and the stock market was a way to invest in your favorite stocks. But now banks find that it is more profitable to gamble, and the stock market is rigged, so for the big money boys it is not really  gambling. Like Los Vegas the power brokers generally make big profits and the little guys pay for that profit.

Up from Wall Street makes the case that there are strategic
and socially responsible investment paths that have the capacity to rebuild our economy
and infrastructure, reinvigorate our cities, and create the green jobs of the future.
http://www.workandeconomy.org/images/UP_FROM_WALL_STREET_Talking_Points.pdf

Elizabeth Warren: We need Glass-Steagall 1:21 min https://www.youtube.com/watch?v=TyRR-PsmPFM

Speculation and Criminal Manipulation of Food and Commodities Prices https://www.youtube.com/watch?v=ydxWmWB_lzI

Papantonio: Wall Street’s New Commodities Market Scam  12 min. https://www.youtube.com/watch?v=3JTmpq2MrFU

Sen Elizabeth Warren – Wall Street Manipulation of Commodities Market 10:55 min. https://www.youtube.com/watch?v=jXpLIqDksDA

Secrets of a former high speed trader  https://www.youtube.com/watch?v=itxbyXO67XY

In-Depth Look – High-Speed Trading Unfair? – Bloomberg https://www.youtube.com/watch?v=HxVeopN1bBU

Documentary: The Wall Street Code (VPRO Backlight)  Long but good 50.29 min. https://www.youtube.com/watch?v=kFQJNeQDDHA

Ins and Outs of Derivatives Trading – Part 1 https://www.youtube.com/watch?v=YP4zwoqewHI

What are derivatives? – MoneyWeek Investment Tutorials 9:50 min. https://www.youtube.com/watch?v=Wjlw7ZpZVK44

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About altruist1

I am a raging progressive and a writer. I received Bachelors degrees in Mechanical Engineering and Industrial Arts with a Secondary teaching certificate and a minor in Physics. I taught for about ten years, then did various jobs including welding,fabrication and traffic engineering, and am now retired. I am interested in science, energy, the environment, and architecture.
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