No longer a conspiracy theory: Wall Street investors now openly admit the “markets are all rigged”
08/21/2015 / By collapsenews
“The stock market is rigged.”
That’s the first line in a recent column by New York Post financial writer John Crudele. And while the tendency for many — especially anyone who is struggling to get by — is to instinctively believe him (using the because ALL rich people are greedy liars mentality), making such a bold claim really should require some evidence. Some proof.
Well, Crudele has provided it. And actually, the claim is nothing new; he’s been making it off and on for a couple years now, and with evidence.
Still, he notes, people “scoffed.” Some, he said, dismissed his claims as just another “conspiracy theory,” complete with “tinfoil hats” and the like. Most, however, just ignored him and continued with the belief that a stock market in a broke country, with a broke, underemployed population, can still gain in value, based on these stark economic realities, without any monkey business.
No more, Crudele says. “The dirty secret is out.”
He notes further:
With stock prices rushing far ahead of economic reality over the last six or so years, more experts in the financial markets are coming to the same conclusion — even if they don’t fully understand how it’s being rigged or the consequences.
Crudele also points out that he’s not the only financial markets analyst and observer who sees what’s really going on. Ed Yardeni, a longtime Wall Street sage “who isn’t one of the clowns of the bunch,” recently said straight up that the market was being propped up.
“These markets are all rigged, and I don’t say that critically. I just say that factually,” he asserted on CNBC, Crudele wrote.
Government and companies themselves are likely in on it together
He added that Yardeni based his assertion thusly: The U.S. Federal Reserve will not implement any policies or plans that would upset investors on Wall Street, and the Fed is really doing everything it can to keep it humming (and growing, albeit artificially, perhaps).
Others who may not even realize it have also made similar claims, Crudele writes. A mid-March article noted that the Bank of Japan (a nation with debt amounting to about 250 percent of annual GDP) is “aggressively purchasing stock funds.”
“By directly underpinning the market, [Bank of Japan] officials have tried to encourage private investors to follow suit and put more money in stocks in the hope of stimulating the economy and increasing inflation,” read the report from Tokyo.
Crudele says that is called “rigging the market for a higher purpose” — hoping that investors who can afford stocks will essentially make a lot of money, then spend it. The economic benefits of such spending, the Japanese central bank hopes, will then “trickle down to the rest of the economy,” the Post columnist writes.
“The Journal provided lots of details that I won’t get into here,” he continued. “But the paper also presumed that all these central bank stock purchases were being done on the Tokyo market and that only the shares of Japanese companies were being rigged.”
But that may not be true, Crudele says. The BoJ, as well as central bankers around the world, could just as easily be buying shares of American companies to help out the U.S. stock market, by far the richest in the world.
It’s no longer a “fair” market
Tokyo could even be doing so at the behest of policymakers in Washington who are fearful that any direct intervention in equities on the part of the latter “would be discovered by nosy people like me.”
“Last fall, we learned that one American exchange has made intervention in — rigging — foreign governments easier and cheaper to accomplish,” he wrote. “In October, it emerged that CME Group, the Chicago exchange that trades options and commodities, had an incentive program under which foreign central banks could buy stock market derivatives like the Standard & Poor’s futures contracts at a discount.
“As I’ve reported many times, S&P futures contracts are the vehicle of choice for rigging the market. They are a cheap and very powerful way to cause an artificial buying frenzy,” Crudele wrote.
Bottom line: Washington, and companies themselves, are likely involved in rigging to keep up the appearance that Wall Street is both solvent and stable. And today’s markets are simply “not fair.”
You can (and should) read the full column here.
Then, read more of Crudele’s insights on U.S. government market manipulation we reported on in October here.
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