Posted on 05/09/2010 10:54:59 AM PDT by blam
Goldman Sachs Rigged Stock Market Crash
Stock-Markets / Market Manipulation
May 09, 2010 - 12:46 PM
By: Ellen Brown
Last week, Goldman Sachs was on the congressional hot seat, grilled for fraud in its sale of complicated financial products called “synthetic CDOs.” This week the heat was off, as all eyes turned to the attack of the shorts on Greek sovereign debt and the dire threat of a sovereign Greek default. By Thursday, Goldman’s fraud had slipped from the headlines and Congress had been cowed into throwing in the towel on its campaign to break up the too-big-to-fail banks. On Friday, Goldman was in settlement talks with the SEC.
Goldman and Wall Street reign. Congress appears helpless to discipline the big banks, just as the European Central Bank appears helpless to prevent the collapse of the European Union. . . . Or are they?
Suspicious Market Maneuverings
The shorts circled like sharks in the Greek bond market, following a highly suspicious downgrade of Greek debt by Moody’s on Monday. Ratings by private ratings agencies, long suspected of being in the pocket of Wall Street, often seem to be timed to cause stocks or bonds to jump or tumble, causing extreme reactions in the market. The Greek downgrade was suspicious and unexpected because the European Central Bank and International Monetary Fund had just pledged 120 billion Euros to avoid a debt default in Greece.
Markets were roiled further on Thursday, when the U.S. stock market suddenly lost 999 points, and just as suddenly recovered two-thirds of that loss. It appeared to be such a clear case of tampering that Maria Bartiromo blurted out on CNBC, “That is ridiculous. This really sounds like market manipulation to me.”
Manipulation by whom? Markets can be rigged with computers using high-frequency trading programs (HFT), which now compose 70% of market trading; and Goldman Sachs is the undisputed leader in this new gaming technique. Matt Taibbi maintains that Goldman Sachs has been “engineering every market manipulation since the Great Depression.” When Goldman does not get its way, it is in a position to throw a tantrum and crash the market. It can do this with automated market making technologies like the one invented by Max Keiser, which he claims is now being used to turbocharge market manipulation.
Goldman was an investment firm until September 2008, when it became a “bank holding company” overnight in order to capitalize on the bank bailout, including borrowing virtually interest-free from the Federal Reserve and other banks. In January, when President Obama backed Paul Volcker in his plan to reinstate a form of the Glass-Steagall Act that would separate investment banking from commercial banking, the market collapsed on cue, and the Volcker Rule faded from the headlines.
When Goldman got dragged before Congress and the SEC in April, the Greek crisis arose as a “counterpoint,” diverting attention to that growing conflagration. Greece appears to be the sacrificial play in the EU just as Lehman Brothers was in the U.S., “the hostage the kidnappers shoot to prove they mean business.”
The Nuclear Option
It is still possible, however, for the European Central Bank to snatch Greece from the fire and rout the shorts. It can do this with what has been called the nuclear option -- “monetizing” the debt of Greece and other debt-laden EU countries by effectively “printing money” (quantitative easing) and buying the debt itself at very low interest rates. This is called the “nuclear option” because it would blow up the hedge funds and electronic sharks operated by Goldman and other Wall Street heavies, which specialize in bringing down corporations and whole countries for strategic and exploitative ends.
Will the ECB proceed with this plan? Perhaps, say some experts. It could just be waiting for the German election on Sunday, which the ECB does not want to appear to be influencing.
Agree that after German election the German legislators will do what the people are against..
But this article is too much about conspiracies with little proof.
Soros is int heir somewhere.
Absent the makeup and with a morning look, and you would think differently.
Good article and on point. GS is a huge market maker and is often the market maker. No doubt they can compute to a very precise range the amount they will net from short attacks on their own positions.
The exact circumstances of the trading action are still unclear. The unusual trading action in P&G stock believed to be at the center of Thursday's most volatile moments, thought to have originated from Terra Nova Financial, a Chicago-based provider of prime brokerage and clearing services, a person familiar with the situation said.
Terra Nova has broker-dealer status with both the SEC and the Financial Industry Regulatory Authority (FINRA). One service Terra offers is sponsored direct market access, which it says allows clients to "establish a direct connection between their proprietary platforms and the Nasdaq or NYSE Arca execution systems."
Terra Nova's customers appear to be mostly hedge funds but it also provides clearing services for other broker-dealers and registered investment advisers. Something regulators and the exchanges need to be looking at.
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REFERENCE The Financial Industry Regulatory Authority is the largest non-governmental regulator of US securities firms. Does FINRA have firms registered as "acting as intermediaries" between Terra and institutional investors to facilitate investments?
One of the services Terra offers is sponsored direct market access, which it says allows clients to "establish a direct connection between their proprietary platforms and the Nasdaq or NYSE Arca execution systems." Ergo, the errant trade -- characterized as a large sell order in P&G --could have come from one of the firm's clients with that type of access.
If licensed financiers facilitated this scam---and ARE NOT registered, that could mean loss of license....or worse.
LET'S ASK FINRA and the SEC:
Financial Industry Regulatory Authority (nongovernment regulator of US securities firms)
CALL (866) 776-0800
SECURITIES/EXCHANGE COMMISSION
EMAIL enforcement@SEC.gov
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REFERENCE We need to know whether Chicago politicians (COS Rahm Emanuel comes to mind), and financial firms are registered as "intermediaries to facilitate investments." And whether registered firms might share a similar US address.
These financial operatives might also be listed with offshore addresses at infamous money laundering havens including: Lebanon, Liechtenstein, Russia, India, Israel, Panama, the Bahamas, the Cayman Islands, the Cook Islands, Dominica, the Marshall Islands, Nauru, Niue, Panama, the Philippines, St. Kitts and the Grenadines, Cyprus, Gibraltar, Monaco, Antigua, Tortola, BVI.
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REFERENCE
Goldman Sachs Will Be Sitting Pretty With Emanuel in the Obama White House
Timothy P. Carney, Examiner Columnist, November 21, 2008 Goldman Sachs always has clout in Washington, as evidenced by the firm’s alumni serving as Treasury secretaries under both Presidents Bush and Clinton. Today, in these tumultuous times of bailouts and meltdowns when the investment banking leviathan needs Washington more than ever before, Goldman can leverage its most valuable asset yet—incoming White House chief of staff Rahm Emanuel. Goldman Sachs is the giant of Wall Street, and more than any other investment bank, Goldman is surviving the current financial storm.
Traditionally a Democratic booster, and one of Barack Obama’s top sources of funds in this past election, Goldman has always had some particularly strong allies within government.
Emanuel is one such ally. An interesting early chapter in the Goldman-Emanuel relationship took place in the setting of Bill Clinton’s campaign for the White House in 1992. Clinton hired Emanuel as his chief fundraiser. At the same time, however, Emanuel was on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to “introduce us to people,” in the words of one Goldman partner at the time. This is certainly a noteworthy relationship, but it’s one that has almost entirely escaped scrutiny. (snip)
In his four terms in Congress, Emanuel has raised $74,750 from Goldman, making the firm his number four source of funds.
Goldman has helped Emanuel. How has Emanuel helped Goldman? The most obvious answer, as mentioned in this column two weeks ago, is in Emanuel’s lead role in shepherding the “$700 billion” bailout—first proposed by former a Goldman CEO, Bush Treasury Secretary Henry Paulson—through the skeptical House.
Of course, back in the Clinton days, Goldman benefited from NAFTA and the bailout of the Mexican currency, with Emanuel pushing NAFTA through Congress, and Rubin hammering out the peso bailout.
Did Goldman improperly funnel money to the Clinton campaign by subsidizing Emanuel’s salary in 1992? Did Goldman’s help to Clinton spur the Democratic president to push NAFTA and the Mexican bailout?
The answers to these questions are opaque, and with Emanuel burrowed deep within the Obama White House, the continued relationship between Goldman Sachs and Obama’s right hand man won’t be easy to follow.
Watch which regulations of Wall Street Obama fights for. Watch where the bailout money goes. And don’t be surprised to see Goldman soon sitting pretty once again.
SOURCE http://www.washingtonexaminer.com/opinion/columns/TimothyCarney/
If so, they've had practice. The crash in 2008 looked suspicious — because of the timing. Anyone pointing that out then, would have been labeled either a paranoid conspiracy theorist; or a racist shill for the Republican Party (or both).
Want some real fun? Wait for next week
I smell Soros and gang -
they spin the GS scenario because they've already got everyone convinced they're the biggest baddest guys on the block - LOOK AT THEM - not over here. And they're mad they couldn't pin GS...that all went fizzle.
Of course, the attack on GS may all have been a classic misdirection anyway. This is a gang who, when doing something with one hand - you'd best be watching the other hand.
Later, the Fourth Reich, hidden safely in their base inside the hole to the center of the Earth in the Artic, issued orders to Janet Reno to send that little traitorous Gonzales kid back to the secret gravity experiment site in Cuba, where unknown to Bill Clinton, the REAL clone of his wife lay in state after she was taken down by the deadly assassin who was the stolen Linburgh baby, all growed up.
At least until Robot Dillinger made it out of the hidden Soviet Gulag in Russia, where the brain of Nicholi Tesla, hidden safely away in a mayonnaise jar full of radiation rich neutriants, began the plans for the secret device that would build the machine that would deign the palm pilot that ultimately programmed the positronic brain of Barack Obamma, who is a cleverly designed android from the future, here to prepare us for the alien harvest.
The financial apocalypse; brought to you by those big-head alien guys here "To Serve Man."
OK. I am going to mention something here that I have been wondering about: That Thursday, I had , as usual, one window open to MSN’s money page. I update it throughout the day to see how the DOW’s doing. Between 8.30-8.45 AM CST, the DOW quote was acting...Odd. I’d refresh, and it was down over 300 points...a few seconds later, it was down less than 80...Refresh again (like, 10-15 seconds later) and it was down over 300 again. It was like that for some minutes, me refreshing the page every few seconds because I just couldn’t believe what I was seeing, and the DOW level was jumping back and forth like that for some time. But finally I had to leave to do other things, and when I came back home that afternoon, I read that the DOW had been down nearly 1000 but had “quickly” regained much of that 1000 point dive. And that reminded me of how weird the MSN money’s DOW info had been that AM, to the point I’d sent them a nastygram telling them what the page was doing and suggesting they have their techs look at the obvious page malfunction. I’ve seen it go up and down throughout the day of course, but I’ve never seen it go down 300, then only down 80, then down 300 , then only down 80 (apply, lather, rinse, repeat) within the space of mere seconds before. Did anyone else notice that, early in the AM last Thursday? Ideas on what (if anything) it might mean?
Hello MSM, HELLO! I know, it's hopeless with those guys.
Why is it that every former Chairman of GS is a no good scumbag - Rubin, Corzine, Paulson, et.al.? They’re all Democrats too!
The psychology of a first wave (the initial movement in a new direction of trend) is disbelief, dismissal, denial. Market participants discount the move, find some reason to explain it away as a fluke, to see it as due to special circumstances, an unexpected news event or the nefarious activities of manipulators, fraudsters or rogue traders with more money than sense.
In contrast, the final movement of a trend is accepted as a matter of course, without comment. Observers see no need to explain the price action, but instead accept it as fully deserved (apathetically resigned to their fate if price is falling, giddily counting their future profits if price is rising.)
Which psychology best matches the upmove from Feb to April 2010, and which best matches the downmove of the past few days?
Hmm, there seems to be a pattern here. What could it be?
I agree, the market is being manipulated. The problem for the manipulators this week is that there were no suckers waiting to play their game. No buyers, the market crashed.
I thought that Paulson was a Republican?
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