The government manipulates a myriad of markets. Obviously FX and Treasuries for starters, gold and oil via management of their own inventories and possibly from time to time index futures. One only need witness the Fed's shameless manipulation of auctions including the one last August when they purchased 7 billion in securities. The effects of said interest rate manipulation have an ipso facto effect on share prices. By effectively setting a ceiling on long bond yields, stocks are allowed room to grow in an artificially low rate environment.
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What markets are manipulated and what will cause it to stop?
- Thread starter DrPepper
- Start date
Quote from MKTrader:
U.S.? Constitution? You're in Barackistan now, buddy. You'll take your 1.25 S&P points and be happy...or else!
lololol... lately I take smaller profit swings out of trades than my initial stops used to be. if the markets get any tighter, we'll all be needing free mental healthcare benefits
The Fed has not intervened in UST auctions. We discussed this at length in another thread. Stop believing conspiracy theories and think for yourself, pls.Quote from HelloDollar:
One only need witness the Fed's shameless manipulation of auctions including the one last August when they purchased 7 billion in securities.
Indeed, but that's the way the cookie has always crumbled...Quote from austinp:
the game has always been rigged, will always be rigged by someone(s) in control. Just never before so blatantly and openly stepped on by our U.S. government: democracy, republic... whatever the hell it is constitutionally supposed to be in theory.
I've had this discussion on a couple of other threads, so, as I said, there's no use in endlessly reiterating the same point.Quote from spinn:
OK, so where does the money come from that allows these machines to purchase shares/contracts?
Do you really believe the market should be at these levels with 10% unemployment and companies like AT&t TAKING BILLION DOLLAR HITS DUE TO HEALTHCARE???
Pretty convincing evidence.
http://seekingalpha.com/article/156904-the-fed-already-buys-back-last-week-s-treasury-notes
And then there's this admission by then Chairman Greenspan on Nov. 13, 2003:
"There is an implication in the notion (of fighting deflation risks) that we are restricted solely to overnight funds. But our history as an institution indicates that there have been innumerable occasions when we have moved out from short-term assets and invested in long-term Treasuries. We do have the capability, if required to do so, to go well beyond activities related to short-term rates.â
http://seekingalpha.com/article/156904-the-fed-already-buys-back-last-week-s-treasury-notes
And then there's this admission by then Chairman Greenspan on Nov. 13, 2003:
"There is an implication in the notion (of fighting deflation risks) that we are restricted solely to overnight funds. But our history as an institution indicates that there have been innumerable occasions when we have moved out from short-term assets and invested in long-term Treasuries. We do have the capability, if required to do so, to go well beyond activities related to short-term rates.â
Quote from Martinghoul:
The Fed has not intervened in UST auctions. We discussed this at length in another thread. Stop believing conspiracy theories and think for yourself, pls.
Indeed, but that's the way the cookie has always crumbled...
I've had this discussion on a couple of other threads, so, as I said, there's no use in endlessly reiterating the same point.
The Chris Martenson article is not convincing evidence to anyone who knows how the treasury mkt functions. In fact, Martenson is exactly the type of storyteller that I referred to in my original post. I have gone through the numerous errors/fallacies/inconsistensies in his article in detail in another thread. Let me know if you can't find it.Quote from HelloDollar:
Pretty convincing evidence.
http://seekingalpha.com/article/156904-the-fed-already-buys-back-last-week-s-treasury-notes
And then there's this admission by then Chairman Greenspan on Nov. 13, 2003:
"There is an implication in the notion (of fighting deflation risks) that we are restricted solely to overnight funds. But our history as an institution indicates that there have been innumerable occasions when we have moved out from short-term assets and invested in long-term Treasuries. We do have the capability, if required to do so, to go well beyond activities related to short-term rates.â
As to Greenspan's comments, all I can say is "DUH!". Firstly, the SOMA account at the NY Fed moves in and out of all sorts of assets, including longer maturity treasuries. This is done through periodic coupon/TIPS passes, as well as the everyday mkt activities of the NY Fed's trading desk. Furthermore, pretty much every central bank across the globe engages in these types of trading as part of normal operations. This is hardly a secret and is documented in painstaking detail. Moreover, as I keep saying, mkt participants routinely scrutinize the Fed's treasury holdings, 'cause, if you trade treasuries on an RV basis, it makes a difference to whether you make or lose money. Secondly, what Greenspan was referring to did, in fact, happen when the FOMC authorized the outright treasury/agency/agency MBS purchase programs. There was nothing secret about the activities of the NY Fed in that regard either, so I am not sure how you've managed to imply something clandestine and sinister from Greenspan's statement.
Quote from Ivanovich:
By providing the banks with near-free money, with no end in sight, what do you think the banks will do with that? Invest it in asset classes. They're certainly not going to lend it out to non-credit worthy Americans. The money has to go somewhere. Therefore, this isn't a natural market wherein the tide is determined by fundamentals, economic strength or anything of the sort.
It is driven by cheap, no interest loans and free money. It is fixed. Manipulated to go only up. When the money dries up (and it always does eventually) the house of cards comes crashing down. But the big boys in the "know" will "know" when that is to happen, and they won't get burned. Everyone else will. Again, fixed. Manipulated.
Pretty much spot on.
Quote from austinp:
I would personally define "manipulation" as any government backed attempts to influence free-market direction up or down.
If any market is pressed either direction by government force(s), that pretty much bastardizes the "free" part imo
We have not had a free market in the past 30 years, when we left the gold standard.
I'm not saying any of this activity is clandestine. But I am saying it's manipulative. And I will look up the thread you're speaking of. Don't misconstrue; I think you're a brilliant guy and one of only a dozen or so participants here worth listening to.
Quote from Martinghoul:
The Chris Martenson article is not convincing evidence to anyone who knows how the treasury mkt functions. In fact, Martenson is exactly the type of storyteller that I referred to in my original post. I have gone through the numerous errors/fallacies/inconsistensies in his article in detail in another thread. Let me know if you can't find it.
As to Greenspan's comments, all I can say is "DUH!". Firstly, the SOMA account at the NY Fed moves in and out of all sorts of assets, including longer maturity treasuries. This is done through periodic coupon/TIPS passes, as well as the everyday mkt activities of the NY Fed's trading desk. Furthermore, pretty much every central bank across the globe engages in these types of trading as part of normal operations. This is hardly a secret and is documented in painstaking detail. Moreover, as I keep saying, mkt participants routinely scrutinize the Fed's treasury holdings, 'cause, if you trade treasuries on an RV basis, it makes a difference to whether you make or lose money. Secondly, what Greenspan was referring to did, in fact, happen when the FOMC authorized the outright treasury/agency/agency MBS purchase programs. There was nothing secret about the activities of the NY Fed in that regard either, so I am not sure how you've managed to imply something clandestine and sinister from Greenspan's statement.