*****The Flagrantly Visible Hand*****

Zero Hedge reports about the flagrantly visible hand (of Uncle Sam).

(emphasis mine) [my comment]

Tuesday, May 19, 2009
The Flagrantly Visible Hand
Tyler Durden

Now with a
hearty helping of futures manipulation (courtesy of the SLP?). None of this should be news to Zero Hedge readers. The video below from Fox Business News discusses all you need to know about how to prop a market about to crash. Fast forward to 2 minutes and 30 seconds.



Transcript courtesy of myprops.

"Something strange happened during the last 7 or 8 weeks. Doreen you probably can concur on this -- there was a power underneath the market that kept holding it up and trading the futures. I watch the futures every day and every tick, and a tremendous amount of volume came in a several points during the last few weeks, when the market was just about ready to break and shot right up again. Usually toward the end of the day — it happened a week ago Friday, at 7 minutes to 4 o'clock, almost 100,000 S&P; futures contracts were traded, and then in the last 5 minutes, up to 4 o'clock, another 100,000 contracts were traded, and lifted the Dow from being down 18 to up over 44 or 50 points in 7 minutes. That is 10 to 20 billion dollars to be able to move the market in such a way. Who has that kind of money to move this market?

On top of that, the market has rallied up during the stress test uncertainty and moved the bank stocks up, and the bank stocks issues secondary — they issues stock — they raised capital into this rally. It was perfect text book setup of controlling the markets — now that the stock has been issued..."

****

Now, when Bernie was caught running a ponzi, all hell broke loose... What is the proper etiquette in this case? Should investors give the utter failure of regulators to safeguard proper market efficiency the ass or the crotch.

Chuck at Rebel Traders reports about painting the tape.

Painting The Tape
By Chuck · 1:15 a.m. today
Saturday, May 30, 2009

Interesting how the media never mentions that the only reason the market ended in the green today was activity that took place in the span of only several minutes.

Was this 'program trading' or intentional painting of the tape?

Painting The Tape—

The illegal practice in which traders buy and sell a specific security among themselves, creating the illusion of high trading volume and significant investor interest, which can attract unsuspecting investors who might then buy the stock and enable the traders to profit.

Well whatever this was that occurred at exactly 3:55pm EST it was the event that prevented the market from going into the red.

See the horizontal red line on the chart below that marks the top... that red line is the resistance level going back to the previous high on May 8th, resistance held.

I will have much more on Saturday and on Sunday...

The chart below is a 5 minute chart of the S&P; 500 E-Mini futures for today.

(click image for larger view)


S&P; 500 E-Mini Futures

My reaction: Wow, Fox News is openly talking about stock market manipulation. That is very different from the last time I saw the Plunge Protection Team discussed on national television (See CNBC Video Clip Denying Existence of Plunge Protection Team).

Also interesting, these blatant manipulations of S&P; futures are occurring at the same time as
clear manipulation can be seen in COMEX gold open interest.


Notice a pattern here?

For years, there have been accusations of manipulations in the gold and stock market. Now that interference is becoming so obvious it can't be dismissed anymore.

The lunatics aren't the people who believe in government interference/manipulation of markets, they are the ones who don't.


Background information on government interference in US financial markets:

The Visible Hand of Uncle Sam examines information indicating that the U.S. government has surreptitiously intervened in the American stock market.

Over-the-Counter Derivatives Markets and the Commodity Exchange Act is a 1999 report where The President's Working Group on Financial Markets recommends changes to the Commodity Exchange Act. (this report is proof that The President's Working Group has been actively involved in the deregulation of US financial/derivative markets.)

The Quiet Coup - The Atlantic explains how the finance industry has effectively captured the US government—a state of affairs that more typically describes emerging ma rkets, and is at the center of many emerging-market crises.

The Story of Deep Capture is a tale of prominent journalists who help cover up a massive financial crime while toadying to some of Wall Street's slimiest operators.

OCC's Quarterly Report on Bank Trading and Derivatives Activities for Q4 2008 shows how derivatives activity in the US banking system is dominated by a small group of large financial institutions. (look at table 1-12)

Gold and Silver "Leasing" Examined explains gold leasing and how Wall Street ended up horribly short gold.

The 'Phantom Shares' Menace explains how naked short selling distorts shareholder control.
Securities Lending - Executive Summary explains how the basics of securities lending is a collateralized loan, where the company borrows money from a brokerage firm at a very low rate collateralized by one or more securities held in the company's portfolio. (see *****401(k)s Hit by Withdrawal Freezes***** for why securities lending is a problem)

Treasury Market Practices Group endorses several measures to address the widespread and persistent settlement fails in US Treasury securities. It correctly deduces that the reason Wall Street is naked short selling treasuries is the complete lack of any penalties for doing so. This lack of any negative consequence is why failures to deliver hit 2.5 trillion last October. (See *****Wall Street Selling Imaginary Treasuries***** more on why these failures to deliver are a problem)

The Long and Short of It is filled with a ton of information about (naked) short selling. It explains how legitimate/illegal short selling works, compares regulations and disclosure requirements between Hong Kong, United States, United Kingdom, Australia, and Singapore, etc...

PIRATES OF THE COMEX examines how traders and investors in precious metals are being robbed in US futures markets.

WHAT IS NAKED SHORT SELLING? explains how broker-dealers are selling billions, if not trillions, of imaginary assets and how investors are completely oblivious to the counterparty risk created by these "Share entitlements" (stock IOUs)

Wall Street Addicted To Selling Non-existent Shares explains how delinking of the clearance and settlement of transactions has resulted in hundreds of millions of undelivered equity securities being outstanding on any given day in the US equities markets.

This entry was posted in Background_Info, Bailouts, Federal_Reserve, Market_Skepticism, Videos, Wall_Street_Meltdown. Bookmark the permalink.

16 Responses to *****The Flagrantly Visible Hand*****

  1. Dave Narby says:

    Question is...

    How long can they keep painting it?

    Sooner or later the music will stop and they'll be all out of chairs...

  2. Numonic says:

    Well Dave all i can say is the fact that it is becoming more evident means that it is close to ending. It's like I said before, people don't recognize price fixing until it's on their block corner, when in fact price fixing was there before they noticed it and the only reason they noticed it was because it was reduced to their field of vision. The same can be said for what's going on in the gold/silver spot market. It's becoming harder and harder for them to keep/bring the price down. Credit is price fixing and it's coming to an end. The more blatant and evident these price fixing manipulations look, the closer they are to ending. So expect the stock market to take a big dive in the near future heading towards total collapse. The fallacy is that we had free markets and are now loosing it with these attempts/manipulations and the truth is we haven't had free markets since we started banking and using paper as currency and that this is coming to an end and as it comes to an end it becomes more visible.

  3. Numonic says:

    Actually i should replace "free markets" with the word "capitalism" in my previous reply. The Free market is free and capitalism and communism etc. all exist within it. The consequences of using communism is an effect of the free market so the Free Market always exists.

  4. vahadad says:

    Yes, we know whats going on.We know who is doing it and we also know why they are doing it. But I dont see anybody lifting a finger becasue all are in on it (except for the coomon man).

    I assure you that they also have planned their strategy well in advance. There has to be a war to distract and reallocate exisiting natural resources for its survival of the fittest and its a dirty game.

    So do we praise our gladiators or heap scorn on them because they dont play according to rules. Ultimately everybody loves a winner. In the next few years , one might even be applauding Mr. Bernanke for his guiding hand through troubled waters.

    What can be that paradigm shift event that wil make it happen so is the million dollar question ..

  5. Anonymous says:

    Please help!!! Can anyone tell me where have the Trillions gone? People, funds and banks are losing money. Who won the money? What will they do with that big money? That is the question I always wonder.

  6. Numonic says:

    Bernanke will fail at keeping this price fixing/credit/banking economy afloat for another year as no one can save it and every further attempt to save it requires larger and larger infusions of base money and ultimately larger weimer/zimbabwe size denominated bills which will shrink the area between too much debt and too much base money where at that point there will be no more that can be done to keep the prices of things down and prices of things in relation to that currency will be rising with no way to stop it. The banking/credit/price fixing system will collapse and the world will be better for it after the dust settles and the world will look back at what Bernanke and the central banks and govt's were trying to keep alive and see how it was halting humanity from progressing as this new economy will be booming more than it ever did under the credit/banking/price fixing system.

    So in the next few years there will be no applause for Mr. Bernanke only disdain and the same will be recieved by anyone who supported a credit/banking system.

  7. Numonic says:

    Anonymous the so called "money" evaporated because of the $1 quadrillion credit contraction.

    Check out Runtogold.com Trace Mayer has some good stuff about it.

  8. stibot says:

    Anonymous, i asked myself the same. I think most of the money were spent on US consumption, they were just "eaten". So they no longer exist while no hard assets were made.

    Second part are virtual money. Those are money like stocks/derivatives. If i promise you i will pay you 1000 USD for an information, you feel you have 1000 USD but then i decide otherwise, information has no longer value for me and your 1000 disappears very quickly. There are many promises around the Wall Street which can not be met.

    The last part was stolen by bankers and their friends.

  9. Anonymous says:

    Where have the trillions gone?

    The simple answer to this question is: Nowhere. These trillions did not exist in the beginning. They were an illusion as they were largely representing credit for work to be done in the future. The illusion started to disintegrate as people realized that the future work will never materialize. Case in point: GM is going bankrupt because the market does not believe anymore that GM will ever make sufficient profits in order to pay all the billions in debt. GM can not increase prices because its customers can not pay higher prices which is the result of the fact that the US economy is not productive enough.

    Numonic: Please explain how prices of things can rise due to base money printing when consumers do not have access to that money? Unemployment is rising, credit is not available, bankruptcies are increasing, house prices are falling. How can under such circumstances prices of things increase?

    A rising price of precious metals does not mean that the price of "things" must increase as well. If prices get out of hand, the Fed will rise interest rates and crash the economy by forcing loan recalls (inducing a margin call so to speak).

  10. Anonymous says:

    Numonic and Stibot, thank you very much for your quick responses. Good answers. I just think that once the money was printed/created by debts, there is no way to evaporate except the debts are paid. To me it seems that that big money is stolen by the controllers behind our President. I dont know I am right or wrong. I will keep studying and thinking from your comments and Eric's blog. Thanksssss!

  11. Numonic says:

    "Anonymous said...

    Numonic: Please explain how prices of things can rise due to base money printing when consumers do not have access to that money? Unemployment is rising, credit is not available, bankruptcies are increasing, house prices are falling. How can under such circumstances prices of things increase?

    A rising price of precious metals does not mean that the price of "things" must increase as well. If prices get out of hand, the Fed will rise interest rates and crash the economy by forcing loan recalls (inducing a margin call so to speak)."

    I don't feel like repeating myself so here's a quote from one of my past replys answering your question.

    This is from Eric's article:
    Key Points About Hyperinflation

    http://www.marketskeptics.com/2009/04/key-points-about-hyperinflation.html

    "Numonic said...
    You people need to start reading my replys instead of being so confused why all these bailouts aren't causing prices to rise. And the deflationists needs to take in to consideration risk premium/borrowing/production costs.

    First of all hyperinflation has begun. It began when the credit contraction began because that is what hyperinflation is. Hyperinflation is a great credit contraction.

    The only reason prices aren't high right now is because instead of these companies coming to the customers for the money they need, they are going to the govt. through these bailouts. And the govt. is more than willing to help because higher prices of things(not debt) is bad for the currency. But very soon the credit markets will take a hit soo hard that the govt. will not be able to keep up with the credit contraction and these companies will have to tap all resources and the rich, those who can afford non-neccessities are still a market to tap in to.

    So deflationists you are right about the enormous credit contraction keeping the bailout money from entering the economy BUT prices will rise not because the credit markets will thaw and ease. Prices will rise because the credit markets will get TIGHTER, so tight the govt.s printing presses will not be able to keep the credit markets open and extra help will have to come from you and me(the customers) through rising prices which is something the govt. does NOT want and has be stalling from happening with the printing press and these bailouts. Yes, the printing press and the bailouts are keeping prices from rising high.

    Get gold and silver now! The price of everything right now, not just gold and silver is being artificially depressed with these bailouts, but the credit contraction will win and cause companies to tap the customers for the increased borrowing costs govt. bailouts will not be able to stop.

    We are in hyperinflation. A credit contraction is in fact hyperinflation. The effects are rising prices through rising borrowing costs and the only reason we see larger bills is because the govt.'s attempt to stop the credit contraction(hyperinflation) by supplying the needed currency. Those rising prices would still appear even if the govt. stopped printing the currency. The bailouts are stalling those rising prices. This is your chance, your opening. Get whatever you can while it's cheap. The govt. can only slow the credit contraction for so long. Soon(before this year ends I believe) the credit contraction will get too much for the govt.'s printing presses to handle and those rising prices will be exposed. Get gold and silver now while it's cheap.

  12. Numonic says:

    I'm against the immorality of the bailouts and I understand how the bailouts will lead to "mal-investment" as lenders lend with ease and no regard as they are given assurance that they will be bailed out but allot of people think that bankruptcy would have a different effect. Bankruptcy would not have a different effect. Bankruptcy would lead to higher borrowing costs and thus higher prices. All this money through these bailouts if not coming from the govt. would be coming from you and me(the customers) as companies raise prices to pay the increasing borrowing costs. We should be thanking the govt. for these bailouts as they are a window in a burning house that we are trapped in. That window can only stay unblocked by the fire for so long as the credit contraction moves faster than the govt. can print $100 bills. So thank the govt. for suppressing the price of silver and gold and thank the govt. for these bailouts that are suppressing the price of everything else and take advantage of these suppressed prices before the fire blocks the window, that's before the next shoe drops in this credit contraction(which looks to be the commercial real estate market). It's not the credit contraction that is making things cheaper, it's the govt. bailouts in combination with the credit contraction causing prices to drop or not rise high. Removing either 1 of these 2 things(bailouts & credit contraction) would cause prices of things(not debt) to sky rocket. The thing is there is a limit to the bailouts as the govt. can only print $100 so fast while the credit contraction can take $100 allot faster. The govt.(with these bailouts) is doing everything in their power to be the only one these companies take their money from. They don't want these companies to start charging customers higher prices because that would be bad for the currency, so these companies are taking those higher prices to the govt. and the govt. through these bailouts are paying those higher prices so we don't have to(for now). But there is going to come a point where the credit contraction intensifies and the govt. will not be able to bear the load by itself and the companies will have to raise prices to make the difference the govt. could not handle, either that or the govt. will print larger bills to combat this increase in the credit contraction. But this won't really help as the bailouts at the current stage are drawing distrust in our debt. If we increase the bailouts by creating larger bills, the credit contraction will be intensified by holders of our debt dumping our debt as larger bills are a sign the govt. has lost control of the credit contraction and that there is high risk of the debt defaulting. And thus the govt. will be forced to print even larger bills to combat the increased credit contraction. At this point prices of things(not debt) will be going through the roof. And eventually it won't matter if we print or let the credit contraction run because the area between too much debt and too much base money will be miniscule and whether we stop printing or continue printing prices will continue rising. I expect us to go through all of this before this year ends. So take advantage now and get whatever you can and need before you can't afford it. I expect the prices of everything regardless of how unnecessary/easy to produce to rise although the price of things more necessary and hard to produce to rise more.

  13. Numonic says:

    P.S. Things that are difficult to produce(gold/silver) do not go with banking as banking requires bailouts to survive. If you can not bailout your debt, trust in the debt and the banking system is lost and the banking system fails and you have hoarding which is the opposite of banking. Banking requires letting someone else hold your money, hoarding requires no one else but you knowing where your money is. Gold/Silver and things that are difficult to produce are for hoarders and paper currency and things that are easy to make are for bankers. Bankers eventually become hoarders as the debt grows so large that even the seemingly easy thing to produce(i.e. paper currency) becomes difficult to produce and through rising borrowing costs due to this credit contraction, companies are forced to raise prices to make the money to pay the loan to stay in business and the currency of the bankers is devalued and the things that are difficult to produce become more valuable.
    April 21, 2009 6:26 PM
    "

  14. Numonic says:

    Also Anonymous you are wrong when you say:

    "The illusion started to disintegrate as people realized that the future work will never materialize."

    This is the fallacy most people make. Most people think that credit is contracting because of some mass awakening by the lenders. This is not true. The reason lenders are not lending is because of insolvency, not because they are choosing not to lend. Not because of some mass realization that there will not be enough production to pay off the debt. They CAN'T lend. They don't have the base money. It was stretched too thin by the enormouse creation of debt that the creation of base money could not keep up with as the creation and destruction of debt(which is mostly done by computer) moves faster than the creation and destruction of paper(which is done by the printing press). Credit is contracting because the lenders are insolvent not because they've become more aware of their reckless lending and choose to be more careful with their lending.

  15. Anonymous says:

    Numonic: You said "We are in hyperinflation. A credit contraction is in fact hyperinflation."

    Do you mean that credit contraction leads to higher housing prices? And credit expansion produces lower housing prices? Is that what you mean? If that is true, then we should be all for continuing credit expansion as it leads to lower housing prices, lower car prices and cheaper food. It's a weird logic which is difficult to understand.

    You say we are in hyperinflation. Yet, according to conventional definition, hyperinflation means prices double every two months. But we have falling prices: Homes are cheaper, gas is cheaper, computers are cheaper, even my haircut got cheaper ($10 now instead of $14 in the past). Mortgages are getting cheaper although more difficult to qualify for. I am afraid your arguments do not make any sense at all.

  16. Numonic says:

    Anonymous, it's not that difficult to understand.

    "Do you mean that credit contraction leads to higher housing prices?"

    In the sense that it has gotten harder to get credit/mortgage, yes a credit contraction makes it more costly to get a house.

    "If that is true, then we should be all for continuing credit expansion as it leads to lower housing prices, lower car prices and cheaper food."

    We already went through that but like Ludwig Von Mises said:

    "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

    We have chosen the latter because this credit contraction isn't voluntary, the lenders are insolvent.

    I already explained why prices aren't rising so high right now(even though they are creeping higher). If you equate the bailouts with the prices we would be paying had it not been for the bailouts paying those prices for us through the printing press, you would see that prices are doubling every two months as the bailouts are getting extremely larger and larger. The worse the credit contraction gets, the more we would be paying had the printing press not been paying for us. But the printing press has a limit. Soon the credit contraction will become too severe for the printing press to handle and this increased credit contraction(which is an increased demand for Fed Notes [base money] needed to stop defaults) will have to come from somewhere else. The only other place is through rising consumer prices. It's not that difficult to understand if you see that this great credit contraction is leaving little room for lenders to lend and those that do lend will start charging higher rates as they need the base money to prevent defaults on already existing debt coming due. The govt's actions of increasing the base money with the printing press is halting that from happening. But as I said before the printing press has a limit and credit removes money from the money supply faster than the printing press can add it(at least with the largest bills being $100). The reason larger bills are created is because the govt. wants to continue to halt what I just mentioned from happening(rising consumer prices). The larger bills are created when the destruction of money starts moving much faster than the printing press can print the current largest denominated bill. I also explain how this attempt fails to stop the credit contraction as it is a sign of lost control of the credit contraction and high risk of defaulting on the debt and causes holders of the debt to sell the debt so as to not be the one to be defaulted on(otherwise known as a run on the currency). This selling of the debt exacerbates the credit contraction as selling the debt is an increase in the demand for the base money which is already rare in comparison to the debt and in high demand because of the great credit contraction. So prices will rise because the money will be needed to stop defaults. But the price rise will be in the price of things(not debt). Massive defaults would lead to rising prices of things because companies that rely on borrowing to survive(which is practically all companies) will have to pay higher borrowing costs as the risk for default is increased and will have to raise prices to pay those higher borrowing costs. The more defaults, the higher the risk of default, the higher the cost to borrow, the higher prices will have to rise to meet those rising borrowing costs. It's simple. If you agree that we face massive defaults and a great credit contraction and also agree that companies rely mostly on borrowing to survive, do the math and you will see rising prices in the near future.

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