Monday, April 14, 2014

Stock Market Manipulation

Does it ever seem odd to you that the stock market rises and falls so dramatically? If the Dow is actually used for long term investments, then why the big swings?

When there is money involved there is manipulation. Big players won't place a bet til the odds are in their favor.

The Dow is easily manipulated and no one cares. There are only 30 stocks in the 'Dow Jones Industrial Averages' which now sits at 16,026.

How hard is it to imagine certain key players all opting to buy or sell in concert to send that 'average' either up or down? How great is the temptation to do such a thing? How much wealth can be amassed by doing this?

The normal investor assumes that the Dow measures fairly the average of all stocks. They assume when the Dow is rising that all stocks are rising, and they buy in.

This is not so, there are but 30 stocks measured and anyone can plainly see how easy it is to drive markets up or down with only a handful of large investors. If half or even less of the 30 stocks were manipulated the outcome can be made predictable. To make it even easier, these manipulators don't have to pay up front for stock purchases, they only pay after cashing in on the sales they make after their stock prices have risen.

This explains the erratic movements, known as 'corrections', usually attributed to anonymous 'day traders'. Brokers like to tell small clients that 'corrections' are the reason you are losing money on your supposedly safe mutual funds. Brokers make no promises or guarantees other than to bill you regularly.

Put succinctly, the stock market is controlled by a form of Mafia. And just as in Las Vegas, the house always wins.

Because this is a real thing you will see the Dow post an increase today, 4/14/14.

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