Why Stock Market Manipulation Matters

I have become convinced that individuals who harangue against discussions about market manipulation are losers who have a narrow view of how trading should be done. There is a certain mindset that says, “Practice good technical analysis and it doesn’t matter if the market is being manipulated or not.” These people are court holders, judgers of ideas and lifetime losers in the market. The truth is that practitioners of pure technical analysis lose money close to 100% of the time. It is a good bet that the ones who object to discussions of ideas that irritate them are somewhere close to the bottom with respect to trading results.
The awareness of the presence of market manipulation is relevant to trading securities for the same reason knowing that a set of dice is loaded is meaningful when playing craps. In either game, if one can determine that some kind of affirmative action is causing a certain outcome, it makes sense to use that knowledge in the decision making process.
There are certain parties for whom the knowledge of market manipulation really doesn’t matter. Those who practice mechanical systems really don’t need to worry with it. To others with a broader perspective it makes a world of difference.
1.) People with retirement accounts that are equity based.
2.) Equity mutual fund investors
3.) Any trader who works broad market moves.
4.) Anyone who trades long term
5.) People who want to game the manipulation
6.) People who want to try and profit from the eventual damage the manipulation will cause.
One of the things I learned early in my trading career is that anything that makes a difference can’t be proven. In 2005, when I first conjectured that there was an unofficial government sanctioned asset enhancement initiative in operation I was labeled a tin horned conspiracy theorist and dismissed. Doubt at that point was understandable. More recently the chairman of the Federal Reserve makes statements clearly implying that everything possible is being done to increase asset prices. So, am I sure stock prices are being controlled? I am sure enough to be short a portfolio of stocks, waiting for the destruction of the world’s financial markets to occur.
The relevance of all of this is that controlled markets face destruction. It is often argued that if markets are being enhanced higher, it makes sense to stay long and be happy with it. The problem with that is that the system such as it is, is prone to sudden collapse. Some argue that there has always been corruption in the market and always will be, so why worry about it? Frankly I wouldn’t worry about it if all it was, was organized crime skimming off a little illegal profit. This is the first time in history when stock prices have been managed with the cooperation of government agencies. I would agrgue that corruption, like radioactivity is in fact harmless until it reaches a critical level.
Sometimes I come across as a moral crusader but nothing could be further from the truth. When something is wrong I might point it out, but my motivations here are highly mercenary. This is an opportunity to profit from a coming disaster and I plan on doing just that.

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About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
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