Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Corruption Becomes Business as Usual

Stock-Markets / Market Manipulation May 31, 2015 - 04:36 PM GMT

By: ...

Stock-Markets

MoneyMorning.com Michael E. Lewitt writes: Week after week, the news is filled with reports of law-breaking by institutions and individuals that hold positions of trust in society. Last week, FIFA, the body that rules the multi-billion dollar business of soccer, was hit by indictments of many of its senior officials who were charged with running a multi-year corruption scheme.

The week ended with former Speaker of the House of Representatives, Dennis Hastert – who for 8 years was the second in line to the presidency – being indicted for violating banking laws in connection with a scheme to pay hush money to a man with whom he had an illicit sexual relationship thirty years ago.


A week ago, several of the largest banks in the world agreed to pay $5.6 billion to settle charges that they manipulated foreign exchange rates. All of these institutions were serial offenders who had previously admitted to committing other serious financial crimes.

On top of it all, the U.S. presidential campaign is being conducted under the cloud of allegations that the presumptive Democratic nominee, Hillary Clinton, used her family's charitable foundation to solicit huge donations from foreign businesses and countries. And there are serious questions emerging about her tenure as Secretary of State and her independence from foreign influence were she to enter the White House.

There is something profoundly wrong with a world where those entrusted with power are consistently found to be corrupt. But it is even more disturbing that this corruption is treated as "business as usual" in the media and the markets.

Apathy Creates Stagnation

In a world now home to more than $200 trillion of debt, which has no hope of ever being repaid, there is a desperate need for leaders with character, intelligence and courage to forge solutions to intractable economic challenges. This need is compounded by a seriously deteriorating geopolitical situation abroad and rising violence on the streets of America.

Yet Americans are exhibiting a high degree of complacency about the world around them. This mass delusion comes at precisely the time when they should be crying out for radical change in their leaders and the policies that are bringing the world to its knees.

Financial markets continue to inhabit a universe dictated by the reckless and misguided policies of central banks who continue to print money like drunken sailors. Here in the U.S., the Federal Reserve continues to dither over raising interest rates after keeping them at zero for eight years and refuses to recognize that these low rates are themselves suppressing growth.

In Europe, Japan and China, central banks are printing trillions of dollars' worth of money to stimulate economies that already have too much debt. Meanwhile, what doesn't happen are much needed, pro-growth tax, labor and regulatory reforms.

Rather than acknowledge the fundamental reality, stock market investors only see free money.  Stock prices are driven higher, and there is no thought given to the fact that these high share prices are being levitated by nothing more than funny money.

When You Can't Grow, You Merge and Acquire

One of the key indicators of an overvalued market is a boom in M&A. Last week was typical of what we have seen thus far in 2015, as a number of large and expensive mergers were announced. Charter Communications (Nasdaq: CHTR) agreed to buy Time-Warner Cable (NYSE: TWC) in a $79 billion deal – a much higher price than it offered to pay a couple of years ago -while Avago Technologies (Nasdaq: AVGO) agreed to buy Broadcom (Nasdaq: BRCM) in a $37 billion deal that valued BRCM at 19x cash flow. Late in the week, healthcare giant Humana (NYSE: HUM) was reported to have put itself up for sale.

Some believe that M&A is an indication of optimism on the part of corporate executives, but it usually signals that companies are running out of organic growth and are looking outside for new sources of growth. These deals inevitably lead to large layoffs and other cost cuts that are negative for economic growth.

Most deals fail to generate the synergies they promise; instead they line the pockets of corporate executives and shareholders. I would not be surprised to see the stock prices of the surviving companies much lower a year or two from now.

Signs of Fear are Starting to Show

Last week stocks took a breather after first quarter GDP was revised lower to a -0.7%.  The Dow Jones Industrial Average lost 221 points or 1.2% to close at 18,010.68 while the S&P 500 fell 19 points or 0.9% to end the week at 2107.39. The Nasdaq Composite Index fell by 19 points or 0.4% to 5070.03.

The Dow Transportation Average fell 2.2%, which is considered a bad omen by those who adhere to Dow Theory, which holds that the Transports hold the key to the direction of the market. A faltering economy, which the GDP numbers point to, indicates that America's economic engine is sputtering. While there is an active debate about whether first quarter GDP was as weak as the -0.7% number indicates, it appears indisputable that first half growth is going to be disappointing.

The Atlanta Fed's real-time tracking of second quarter GDP is still showing growth at under 1%, so something is clearly dragging on the U.S. economy – most likely the ever-rising mountain of debt at every level of the economy, rising healthcare costs, and the inexorable weight of regulation burying businesses in needless paperwork.

But there is something else holding back the economy… The world has become a dangerous and uncertain place. Headlines matter and the headlines are ugly. Markets are driven by psychology. Complacency is still running high but it can shift on a dime. Nobody knows when it will reach a tipping point but there is enough bad news out there to cause such a shift. Investors should pay attention to potential sell-off triggers and, as always, proceed with caution.

Source :http://moneymorning.com/2015/05/31/market-corruption-becomes-business-as-usual/

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules