Discussion in 'Trading' started by flipside21, May 3, 2012.
What does everyone think? Is there direct manipulation in the stock market?
Uh...Is this a trick question?
Direct manipulation would be direct purchases of stocks or futures by the Fed or related entities.
Indirect manipulation would be something like QE policies where bonds are bought from primary dealers and the primary dealers may (but not necessarily) use this money to buy stocks. Operation twist is also an indirect manipulation by lowering long-term interest rates and drive liquid asset prices higher. So, indirect manipulation is more policies aimed at encouraging lifting of stock prices, whereas direct manipulation would be for the Fed to buy stocks directly and stuff it onto its balance sheet. The present Fed balance sheet consists of mortgage and US Treasury bonds rather than stocks.
Absolutely, the big guys scaring the little guys, happens all the time.
there is no manipulation. Big Boys don't even have to manipulate anything. Average Hedge Fund loses money. Customer's money, but each time they are in plus for the year they would chop off profits. Plus the management fee.
The way big institutions are structured, they don't even have to make money to make money.
SEC stamped out that sort of thing years ago. Happened in the '20's they say (before the SEC).
Of course conspiracists claim it still goes on every time someone buys index options before a Fed rate cut or a briefing for GS clients by Hank Paulson - that's the tin foil hat brigade for you.
prior to lehman I'm convinced the fed could (and have in the past) facilitate the buying of stock index futures to lift the market via banks etc, but not direct buying.
Currently, I don't have an opinion on "direct" manipulation because I trust no one in the Fed or what they might do.
Yep, of course. FED is the ultimate player.
If what you said is true, why does FED keep printing money?
Is it the only way to depreciate the value of dollar?
You mentioned that "Because FED right now is de facto entire economy. Economy no longer exists, it has been killed by debt."
Why we are in high debt? Why America has the highest debt in the world? Why we have to borrow so much money so that now FED has to keep printing money to pay its own debt loans? I don't think FED is the reason for the collapse of the America but the high debt.