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Thread: weekend commentary - Pre-Election Market Manipulation

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    Banned Melonie's Avatar
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    Default weekend commentary - Pre-Election Market Manipulation

    I try to avoid politicizing economic issues any more than is absolutely necessary, but it's hard to ignore US Fed / Treasury actions over the past month that approach the trillion dollar ballpark in total ...








    The 'creator' of this graph is obviously of the opinion that the political 'powers that be' have 'instructed' the US Fed / Treasury to print billions in new greenbacks over the past month and to 'distribute' that newly created money to member banks such that most of it would wind up being used to purchase US stocks - thus causing US stock indexes to rise just prior to the election. The future implication is of course that if the political 'powers that be' don't wind up doing well in the election, that they will still be in a position to 'instruct' the US Fed / Treasury to reverse policy i.e. suck money out of the US stock markets in november and december.

    In fact, some of the 'talking heads' on the cable financial channels (Bloomberg, Fox) are beginning to discuss the possibility this weekend that if Democrats win majorities in the upcoming Nov 7 election, the implied tax increases that go along with Democratic majorities will result in a major sell-off of US stock markets.

    Whether implied tax increases by a new majority of Democrats are in fact the cause, or whether a reversal in US Fed / Treasury policy in november and december under 'lame duck' conditions in the US congress are the cause, either way tends to indicate that US stock markets will be headed downward from here if Democrats do well in the upcoming election !!!

    My only objective in posting this is to raise awareness on the part of anybody who is heavily invested in US stocks right now that they may want to re-evaluate their position in light of this very significant new risk factor.

    ~
    Last edited by Melonie; 10-29-2006 at 01:31 AM.

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    Veteran Member StuartL's Avatar
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    Default Re: weekend commentary - Pre-Election Market Manipulation

    Jim Willie seems to be convinced of something similar to influence oil prices:

    http://www.financialsense.com/fsu/ed...2006/1025.html

    Whether he is correct, who can say, but you can see his point. Presuming that this is all true, it must takes the lengths to which politicians will go to new depths. Although that said, the Iranian hostage crisis was pretty low too. Watergate was hardly a high spot either... Hard to tell which was worse really...!

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    Banned Melonie's Avatar
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    Default Re: weekend commentary - Pre-Election Market Manipulation

    yes I had seen this article, as well as many others that point to the existance of 'officially sanctioned, well organized, well financed clandestine organizations' whose primary purpose is to manipulate worldwide markets. I myself have been reluctant to speak of this subject too openly, because it smacks of 'tin foil hat' conspiracy theories, 'new world order', 'Illuminati' and other such buzzwords which are virtually guaranteed to destroy the credibility of anyone who publicly speaks about such things.

    The 'safe' buzzword being used on most investment boards to describe this extremely curious phenomenon is 'RoboTrader' !!! ... as in the 3PM appearance of RoboTrader who starts buying Dow stocks with a vengeance in order to assure a 'green' market close !!!

    The reason that I posted the graph and commented about Treasury injections over the last month was that this is now officially released gov't data, where the relationship between Treasury 'lending' to Wall St. member banks and the subsequent closing price of Dow stocks have moved in virtual 'lockstep'.

    However, you gotta love Jim Willie's intestinal fortitude re calling 'em like he sees 'em' ...

    (snip)"RECENT MARKET SKEW

    Since late summer, the energy market has been the subject of vast and powerful forces. Four birds were hit with a handful of stones, in what can best be described as a brilliant stroke. Vital signs on the national level has been fortified. The body economic must therefore be healthy. We mere mortals need not be fully informed of true nature of the handful of stones. Suspicions can certainly turn the cranial gears, motivate brain blood flow, to such an extent as to discern, detect, and distill some highly likely actions taken behind the curtain. Whatever happened, it was for the greater good.

    The cease fire between Israel and HezBollah began the virtuous sequence. The crude oil price began to fall. Rumors from the energy trading pits cannot be confirmed or substantiated. However, they beat hard on the walls and dripped steadily along the grape vine, to the effect that the US Military has been selling both crude oil and diesel fuel. They are the largest single entity on the planet in energy consumption. The exaggerated natural gas inventory report in late August helped. Apparently, heretofore never used components were added to the NG inventory. Toss in some lower global energy demand forecasts from OPEC mouthpieces and EIA tools, and perceptions come down. Pressure from the regulatory bodies on energy traders has taken the luster off their enthusiasm for all things energy related. An official USGovt report divulged that nasty energy speculators might have added $15 per barrel in the oil price, having inflicted harm on the USEconomy and consumers alike. The most brilliant deft stroke came early, from Goldman Sachs. Their managers of the GS Commodity Index saw fit to reduce from 8.45% to 2.3% the weight for gasoline in the index. Since $100 billion is invested according to this index, fully $6 billion in forced gasoline contract sales resulted directly, as though by USGovt order. Countless interconnected trade schemes are employed within the energy complex, such as tying crude oil to gasoline, crude oil to heating oil, and crude oil to natural gas. The entire multi-faceted movement was given a wind at its back by the weather, which has delivered warmer weather to the northern states and provinces of North America.

    The end result has been crude oil falling from $77 to $58 in price, natural gas falling from near $10 to as low as $4.60 in price, and gasoline falling by 80 cents or so (depending upon fuel grade). The primary beneficiaries were 1) consumers who pay less for fuel, 2) voters who are encouraged to see red ballots as preferable, 3) Goldman Sachs, who undoubtedly (unless brain dead) profited from short gasoline and energy trades in the futures market, and 4) JPMorgan, who was bailed out of deeply underwater energy positions, according to press reports. One should in no way suspect that Goldman Sachs was motivated to help the incumbent hold majority power in Washington DC. Such thought is cynical, distrustful, and perhaps undermines the perception of fair markets, let alone the democratic process, upon which this nation was founded. One should in no way suspect that Goldman Sachs was motivated to offer a giant assist to its rival JPMorgan. Reducing the prices of many of JPM’s energy trades helped out this giant bank, but that is likely more a coincidence. After all, GSax and JPM are bitter rivals, set on winning dominance over the other, surely not cooperation. Except for a century-long close relationship with the US Federal Reserve, the private firm of JPMorgan is a private firm.

    More than meets the eye can be detected on the JPMorgan vulnerable energy positions, shared with partner Citadel Investments. The story deepens. Apparently, JPM threatened to pull the credit plug on Amaranth, one of its hedge fund clients. This hastened the Amaranth decision to liquidate much of its wrong-footed energy trades. Ouch, $6.5 billion in fund losses. It was purely to assure stability to the energy market itself that JPM bought at very heavy discount the Amaranth energy positions, thus bailing out their own JPM wrong-footed trades. One might suspect that written into the Amaranth investment prospectus is a hidden (clearly visible in font 4 size) clause to offer every possible assistance to their credit and equity parent partner JPMorgan.

    You gotta give CNBC some leeway. Surely, they wish to properly report the financial news, the news, the whole news, nothing but the news, with no bias toward their bevy of financial firm advertisers. They have gone out of their way in the last couple weeks to deny manipulation by the USGovt, its allies at OPEC, its major partners on Wall Street, and elsewhere, of the historic decline in prices for the entire energy complex. Of course, the oil market is bigger than any one person, or even the 11 million barrels of oil borrowed (not replaced to the US Strategic Petro Reserve). Of course, a slower global economy has taken the gusto out of speculative energy trades. Of course, a warm winter kept inventories high. However, CNBC managed to avoid any and all mention of the Goldman Sachs reduced weighting for gasoline in the GS Commodity Index. What a great story it would have made. Then again, maybe experts exaggerate the impact. Talk about asymmetric impact from a single numeric weight in late August by the largest and most successful hedge fund in the United States!!!"(snip)

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