Black Monday
On the last Monday in October, the Dow
dropped 550 points and, to everyone's relief, the
exchanges stopped the trading thirty minutes early. If
the new rules had not required the halt, it might have
been much worse. Is this the beginning of the great
crash?
If it is, it won't be from a lack of
planning on the part of President Clinton, Robert Ruben
and the Federal Reserve. According to credible sources,
it has become government policy to "protect" the
investment community from the laws of gravity.
The government has even admitted as
much. Alan Greenspan gave a speech in Lueven, Belgium on
the 14th of January, this year, in which he touted the
Fed's obligation to bail out banks and private financial
institutions not just by printing unlimited amounts of
money but also through "direct intervention in market
events."
S&P 500 Contracts
For a while now, there have been
rumours among traders that the US government was
stepping into the market from time to time to purchase
S&P contracts. The obvious reason was to thwart short
sellers and stem possible panics.
The rumours held that the government
was buying S&P futures contracts through the good
offices of Goldman Sachs, the firm once headed by
Treasury Secretary Robert Ruben.
If true, many people must have known
about it. Everyone who did would be in a position to
profit dramatically by purchasing the S&P futures in the
full knowledge that the federal government was poised to
intervene in the market to guarantee the profitability
of their trades. Under those conditions, anyone could
trade S&Ps as profitably as Hillary Clinton did cattle
futures.
But I was sceptical. After all, such
activity would (or should) require congressional
approval. Also, if short selling is a legally sanctioned
activity, wouldn't it be highly illegal to secretly
intervene with public funds on behalf of the longs and
ignore the rights of the shorts? But seeing is
believing, and now I'm convinced its true.
Tawdry Tuesday
The next morning after Monday's big
550 point break, I, and everyone else trading S&Ps
witnessed a most remarkable event. It must have been the
most blatant display of market manipulation in the
history of Wall Street. Or at least the biggest and most
public. In spite of this, to my knowledge, not a peep
was made by the establishment press.
The tip-off was the "timing" of a
dramatic rise in the premium (number of points in
which the S&P contracts were trading in excess of the
value of the underling stocks).
I have traded the S&P for years and
I've never seen anything like it. The average "fair
value" of the premium that day was 600 points.
Exactly six minutes before Bill
Clinton was to address the market crisis on television,
the premium rose almost instantly to 3,500. This was
undoubtedly caused by the concerted purchase of what had
to have been at least a billion dollars worth of S&P
contracts.
The Computers Blinked
The strange thing is that it almost
failed to work.
Normally, anytime the premium rises
just a little bit above the fair value, computers which
are programed by the arbitrage investment groups
automatically enter orders to sell the overvalued
contracts and simultaneously enter orders to buy the
undervalued stocks generating an automatic riskless
profit. But this time it didn't work. At least not like
it should have.
The premium rise was so fast and so
big that, evidently, the fail-safe systems kicked in
whereby the computer didn't believe what it saw. Under
these conditions, it stops trading and calls a human to
see what is wrong.
When I saw the 3,500 premium, I
thought the same thing. Some kind of computer error. I
immediately looked to see if the stock prices were
rising, and they weren't. Dead in the water!
I looked up at the TV, saw Bill, and
it dawned on me.
It was Slick Willie doing what he does
best. Blatant manipulation of the highest order.
I jumped in and made a very good
profit. A lot of other traders did too. Of course
Hilliary and Craig Livingstone were way ahead of me. But
the computers were slower than all of us.
It took about a half hour for their
operators to override the systems and order the mass
purchases of stock that the feds had been counting on.
Ultimately, though belatedly, it still worked.
A New Bull Market?
All things considered, the con was
perfect.
The back of the would-be crash was
broken and the bull was reborn. At least for now. The
real mystery is why and how the media keeps mum.
A concerted investigation by the Wall
Street Journal, New York Times or Washington Post would
surely reveal enough evidence to blow this outrage sky
high. This is nothing less than the illegal clandestine
tampering with the free market.
But like the murder of Vincent Foster,
the rigging of Wall Street is a dirty little secret the
media establishment would rather not reveal.
The "Big Lie" & Waiting for the
"Second Shoe"
The American people suffer less from
ignorance and more from an illusion of knowledge. The
percieved knowledge that the proveribal "freedom of the
press" will protect their society from the "Big Lie."
I, for one, want to congratulate the
Laissez Faire City Times on its first issue today
on the internet.
Just as the VCR helped to strip the
scales of socialist government duplicity from the eyes
of the Russian people, it is the internet and efforts
like this newspaper which will ultimately do the same
for the Americans.
Hopefully with the same result. I
can't wait to see the other shoe drop.
Let freedom ring!
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