First, they conspired to rig the municipal bond market, then the mortgage securitization market, then LIBOR, then the stock market, and now the 12 largest banks have been sued by Public Retirement Funds for “Conspiring To Rig Global FX Markets (currencies)”. It would appear that we are running out of conspiracy theories that haven’t become Conspiracy Fact. No worries, we still have the gold and silver markets to go, which should come to a head within the next few years. It’s not a conspiracy, anymore than healthcare companies buying favors and laws to squash competition – it’s simply the way business gets done in our corporatist system, that is hardly a glimmer of its former self, formerly known as free-market capitalism.
The connected power that profits without oversight benefits from creating the aura of conspiracy. Like the propaganda strategy that tells a giant lie over and over, the conspiracy tactic is simple deception designed to keep the public looking at one hand while the other one robs them blind. Unfortunately, there are consequences to fraud in the stock market, and more importantly on society and the world.
Sociopathic banksters can manipulate markets for profit within a trend, but they cannot alter the trend (no matter how much they wish to play God). If they could, then the 2008 collapse and bankruptcy of Lehman Brothers would never have happened. The fraudsters on Wall Street and govt conveniently overestimate their power at the expense of driving down confidence that causes money to hoard, and the economy to contract.
In the short-term, the upward trend in stocks will not change, and neither will the fraud. The money to be made from unscrupulous actions that are never prosecuted is simply too large, and the public is too apathetic to do anything about it. In contrast, Thailand needed the military to step in to stop the outrage, because the govt was overpaying rice farmers. Maybe when gas prices hit another all-time high and retirement accounts and pensions get confiscated (bailed-in), Americans might get outraged enough to do something? Although, this is also doubtful, as Democrats will argue that anyone with a retirement account is rich and should donate for the greater good of Socialism. Who knows, the President might even sign an Executive Order mandating a govt-run retirement account that forces you to buy treasuries. Oh, that’s right he’s already got it on deck. However, he may have difficulty convincing his younger constituents, who are being FORCED to pay for Obamacare, while overburdened with student loan debt.
Both of these problems are the result of corrupt politicians that have been bought by the banking and healthcare lobbies – the former that pushed for the financialization of college education, and the latter that received special dispensation from laws that are supposed to prevent you from being abused. Our govt is making the same mistake as foreign govt’s, antagonizing the group that is most likely to revolt.
If you want to know why markets can continue to climb in the face of a dismal economy and consistently poor jobs data (as measured by the percentage of the population that’s employed), it’s because the stock market now has very little to do with jobs and the economy. It has to do with capital flows from the Fed and distressed foreign economies looking for a safer haven.
Corporations can improve profits and their stocks by cutting jobs and buying back stock with cheap money (for a while). Artificially suppressed interest rates are also reducing disposable income for seniors living on fixed income, and making it more affordable to replace people with job killing robots and software. How does that help the economy? Once again, the problems can be traced back to meddling brain-dead bureaucrats that do not understand that everything is connected and CANNOT be centrally controlled.
The Fed’s Ivory Tower belief in the “wealth effect” only works if people have money to spend or can be manipulated into taking on more debt (which has limited impact because the demand that is pulled forward eventually has to be paid for with a wishful higher income). How strong can the wealth effect be, when you’re only talking about the 0.1% that truly benefit from asset inflation?
Another example of how our “brilliant” political leaders continue to destroy the economy with their “good intentions” was just put on display in Chicago, where Obama buddy and Chicago Mayor, Rahm Emanuel, announced he will raise taxes and cut retirement benefits to keep the sinking pension boat afloat. As we will see in other well fortified socialist bastions throughout the country, when you raise taxes and lower living standards, people and/or capital leave – making budget problems that much worse. This will feed the social discontent that is building until it overflows when the economy turns down in 2016.
For the socialist that believe it is the wealthy that are destroying the country, please ask yourselves these questions:
– Where does the capital come from and who takes the risk to create businesses that provide jobs? Capital has always concentrated because it is required to innovate and grow the businesses of those willing to take on the risk.
– Who imposes the taxes that kill jobs and invites the lobbyist to bribe politicians so the taxes can be avoided?
– How does confiscating money from wealthy people, that is only wasted to support the lifestyle of bureaucrats, help you in the slightest?
– Why do you ignore history and human nature? Name one instance in human history where taking money from the productive class to grow the role of government has not eventually destroyed the society.
Market cycles, driven by the passions of man and controlled by the “Invisible Hand“, will overwhelm the manipulators in the public and private sector every time. Even the greediest capitalists only want to make money so the world is their oyster, not to run the world – that is left to the “leaders” in govt. Just as the govt propagandist use the “mean world syndrome” to make you believe that govt can protect you, conspiracy theories are also pushed by govt to justify taking away more Rights to protect you from the evil capitalist that want to take over the world.