I don’t buy into the many conspiracy theories that continually seem to get resurrected, but I expect that this particular thesis, from Max Keiser, may very well have legs:

“May 6th was an unequivocal act of domestic financial terrorism in America. A day that will live in infamy.

To scare the lawmakers, themselves large owners of the very banks and stocks that they are supposed to be regulating, a financial Weapon of Mass Destruction was put to their head and they acquiesced.

As the inventor of the continuous double-auction, market-making technology (VST tech. US pat. no. 5950176) that is referenced 132 times by program trading and HFT patents since 1996, I can tell you that Goldman, JP Morgan and the gang simply pulled the ‘buys’ from their computer trading programs and manufactured a crash. And when the coast was clear, and it was clear the politicians were not going to vote for anything that would break up the ‘too big to fail’ banks; all the ’sells’ were pulled from the computers and the market roared back.

This is a Manchurian Candidate market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go – and then hundreds of thousands of day-traders watching Cramer on CNBC jump on the momentum bandwagon and commit the crime for the Wall St. financial terrorists, who then say, ‘It wasn’t us, it was ‘the market!’”

Amped Content goes on to note that coincidentally the day after the crash, the “break up the too big to fail banks” amendment was soundly defeated by a 61 to 33 margin in Senate. And, a deal was struck to eliminate key provisions from the audit of the Federal Reserve bill. And, Goldman was meeting with the SEC to work out a settlement in their case against them.

I am always reluctant to put much stock into these nefarious “coincidences” — but I have to admit that Max’ theory here is quite intriguing . . .

>

click for larger table

table courtesy of ZeroHedge

>

Source:
High Frequency Terrorism: How the Big Banks and Federal Reserve Maintained Their Death Grip Over the United States
Amped Status, May 10th, 2010 at 1:11 am
http://ampedstatus.com/high-frequency-terrorism-how-the-big-banks-and-federal-reserve-maintained-their-death-grip-over-the-united-states

Category: Derivatives, Politics, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

34 Responses to “Manchurian Candidate Market”

  1. Patrick Neid says:

    What’s a day without Mad Max.

    That amendment had no chance of passing no matter what the market did.

  2. polizeros says:

    Sounds a bit like the 9/11 Truthers.

    But how could so many have colluded so instantaneously with no one breaking cover or a leak happening? That’s just not credible.

  3. curbyourrisk says:

    [Monday morning rant on] And I remind you that Germany……then agreed to the bailout of Greece. I am sick and tired of all the games. Now this bailout is my last straw. I am done. We bailed out our banking system along with most of the BIG Euro banks back in 2008 and NOTHING has changed. They are still playing the games and now they are lying daily about their balance sheets (with .gov) approval. NOW we have to bail out an entire Continent. Screw this. Over the weekend, I was at 2 communion, 2 of my kids soccer games and went to dinner with the family at a local Applebee’s. I talked to a lot of people, some of the very people I told Barry about in NASSAU conty that were no longer paying their mortgages. EVERYONE SAYS THE SAME THING. SCREW THIS. 8 more families have stopped paying their mortgages. 2 of those families have taken up to spending as much on their credit cards as possible. Another one, whohasn;t paid their mortgage in 4 months, just got a car loan…a freaking car loan. Thiss ponzi county is pathetic. And our government is psuhing this more and more to sustain the lies. Barry you can go on tell me one small part of Nassau county does not show a trend and technically you are right, but I have family and friends all over the country, and they are all telling me the same thing. You live on the North Shore of long island. I venture to be you don;t have too many EVERYDAY people there as neighbors. How many electricians and plumbers live in your neighborhood? How many cops (well….thats probably a bad example as we pay our cops here extremely well.)? My point is Barry, that as long as you continue to use statistics provided by government entities or the banks, wait…they are government entities until they repay all the FDIC debt they sold to recapitalize, you are living outside the real world. It is about time the people of the United States realize……WE are the government. AND we make the decisions. I hope every bank in Euro-land defaults on every loan and our government, covertly bailing out the EU, gets the shaft. [monday morning rant off]

  4. b_thunder says:

    Regardless whether or not the 600-point 15-min drop was a conspiracy or not, the statement that “…This is…. a market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go” is 100% correct. Since August of 2009 the market has been on a near straight line up, on ever thinner volume, 70% of which ware HFTs shoveling shares from one to another.
    The only thing I’d add is that the “trading bots start the ball rolling” with the money straight from the Federal Reserve and the TARPed taxpayers.

  5. wally says:

    Like Travis McGee’s busted flush, that trade action tips the hand: 1. the other algos are set to shut down in a panic, not to collect the bargains and 2. you can get by with a trade that is 55% off the last one but not 60%.

  6. Sircornflakes says:

    Who will play Jim Cramer in the movie version?

  7. quiddity says:

    Jim Cramer will play himself.

  8. tenaciousd says:

    As someone who has been active in politics for two decades now, I can appreciate how vital stories such as these can be to affecting change. Voters will never bother to read any of the dozen recent books that chronical Wall Street’s role in the economic collapse, but they know the ibanks are nefarious. This story provides a convenient shorthand as to just how nefarious they are. It might not be true specifically, but it’s plenty true generally. So, BR, I think you are very astute in believing this will have legs. We just took the story of ibank nefariousness down from the top of Mt. Olympus and brought down into the realm of mortals. If that gives additional momentum to TBTF down the road, we will all owe Mad Max a great deal of gratitude.

  9. Lariat1 says:

    @curbyourrisk: You are right about the attitude of the “small guy”. people I know haven’t paid their 3k mortgage for over two years, yes two years. Their lawyer just informed them that they will have to vacate the house finally due to back taxes. So if they had paid their taxes, I don’t know how long this would go on. They made a lot of money in the building boom and the guy got disabled, so I guess he will get SS disability and they will move back with family for awhile. Pick up the pieces that are left. Nothing but a roller coaster ride. People around here feel that between the oil spill and the greed on Wall St. and no accountability in our govt. then why should they care.

  10. curbyourrisk says:

    ^^^^^^^ Why should anyone care at this point??? Our leaders will do what ever it takes to bail each other out and the banks. If they don;t care about us, why should we really care about them???

  11. Robespierre says:

    “Goldman Sachs Has First Perfect Quarter With Zero Trading Loss ”

    Barry believe what you want this is IMPOSSIBLE in a free market.

  12. ZackAttack says:

    I would really, really like it if someone could possibly, just once, have a trade bite them in the ass without having to invent a vast shadowy conspiracy out of whole cloth.

    Yes, we can believe (some precious metals market) is collusively held down, or that the Fed is directly involved in pumping stock futures. The hard, courtroom evidence for that, however, is about as good as that for the existence of Odin.

    By the same token, Euro zone leaders have to threaten a vast international cabal of “speculators” with their jackbooted intelligence services. Show me. Just once, prove to me what you allege. Or STFU.

  13. mk says:

    The problem with executing something of this scale is that someone gets greedy and takes the other side. The very flaws of man that permit vast collusion tend to hamper the outcome.

  14. contrabandista13 says:

    THE ONLY QUESTION THAT I HAVE IS……

    WHO PUT THE EXLAX IN THE PUNCH……?

    It was lake a drunken swingers orgy on crystal meth gone wrong….

    Best regards,

    Econolisious

  15. Robespierre says:

    ZackAttack Says:
    Show me. Just once, prove to me what you allege. Or STFU.

    Sure and Madoff was actually making money for 30 years it was only 2 years ago that he committed fraud. So unless you see prof you don’t believe so to you saying that Madoff was a criminal 5 years ago would have encounter the same response.

  16. jjay says:

    Very interesting. No one pays their mortgage on a perfectly good house and gets away with it because the banks are afraid to admit they are all insolvent. Now with this oil gusher in the Gulf, there is a potential for all of coastal Florida to be ruined. Just as real estate was getting up off the canvas in Florida, oil fouled water ruins tourism and fishing in the Gulf. Everyone with a mortgage there stops paying, the banks, residential and commercial real estate evaporate. Tax payments stop. Next month starts the hurrican season down there. Should help Hawaii and California as frozen Canadians and European snow birds look for somewhere new to roost as they walk away from Florida and the Gulf. I wonder if the oil slick will reach Cuba, that should help our relationship with them. The dynamics of this unfolding should be awesome!

  17. Lugnut says:

    Perhaps the crash was the banks ‘Hank Paulson moment’ with his one page wish list.

    So, in any event what we get is told that the big banks are too big to fail, and the Fed will never let itself be seriously audited. Shut up and keep paying your taxes, cause pretty soon we’ll be next in line to keep the Eurozone afloat when they blow through their bailout money.

    S.S.D.D.

  18. Fredex says:

    The longstanding shorthand dimissal of Angry Max is that he is an IT guy, not a financial guy. Well, this is an IT issue where he is an expert. Maybe you should listen this time.

  19. R. Cain says:

    HFT
    think of the possibilities when Goldman & JPM own their own stock exchange

    Direct Edge ECN set to become 4th U.S. stock exchange

    ‘Direct Edge, which is owned by Goldman Sachs Group Inc, JPMorgan Chase & Co, Knight Capital Group Inc, hedge fund Citadel and the International Securities Exchange, an options market owned by Deutsche Boerse’s Eurex.

    ‘Gaining exchange status will also add to the speed of trading on its systems because Direct Edge will no longer have to go through a stock exchange to quote the bid and ask prices on a trade.’

    http://www.reuters.com/article/idUSTRE62B4LE20100312

  20. Marcus Aurelius says:

    mk Says:

    The problem with executing something of this scale is that someone gets greedy and takes the other side. The very flaws of man that permit vast collusion tend to hamper the outcome.
    _________

    You don’t get it: We — the non-banking/non-corporatist public — takes the losing side of most, if not all, of these schemes. Why would the bankers turn on one of their own co-conspirators if there is more to be gained by playing along with them?

    I’ve never seen this question asked here or elsewhere, but is the linked organizational chart accurate, or not (other than the names, such as Lehman, who have been divvied up among the survivors)?

    http://www.save-a-patriot.org/files/view/whofed.html

    If it is accurate, it would be interesting to know exactly who owns the other Central Banks.

    Then, there’s this (which should erase any doubt as to conspiracy/control/manipulation):

    “Give me control of a nation’s money and I care not who makes the laws.”

    — Mayer Amschel Rothschild

  21. Lugnut says:

    ^^^aptly named

  22. perra says:

    The weak link in this argument are the “hundreds of thousands of day traders watching Cramer on CNBC”. The argument assumes that these people have any dry powder left to invest after listening to Cramer.

  23. perra says:

    What would be really cool is if we have another market “crash” this afternoon.

  24. DeDude says:

    “think of the possibilities when Goldman & JPM own their own stock exchange”

    Then not only will they be able to manipulate the market and rob regular peoples pension funds, they will be able to cover their tracks.

  25. curbyourrisk says:

    perra…..I am so rooting for one….. No one screaming about the markets melting up this morning, but if we finish in the RED…you know the investigations will begin RIGHT AFTER THE FREAKIN CLOSE.

    How I would love to see a down day today! Some pull the plug on the machines. Let’s see what happens.

  26. phb says:

    May 6th: The Day the Music Died

    Hat tip Don McLean

  27. clawback says:

    ZackAttack,

    Did you see this?
    http://www.nypost.com/p/news/business/feds_probing_jpmorgan_trades_in_gZzMvWBqOJpB55M7Rh9vwM

    BTW, did you hear that “conspiracy theory” that John Paulson colluded with Goldman in constructing the CDO’s he shorted/bought CDS on? It’s crazy some of the stuff people will make up just to make excuses for their own poor trades.

  28. SOP says:

    Robespierre Says:
    ["Goldman Sachs Has First Perfect Quarter With Zero Trading Loss ”

    Barry believe what you want this is IMPOSSIBLE in a free market. ]

    Golden Sachs response:
    ““If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie.”

    Goldman Sachs

  29. Event_horizon says:

    Seemed suspicious to me that wacko Cramer was so unusually calm during Thursday’s crash. I’m sure the boyz must’ve tipped him off about the day’s plans to pull the bids, and even let him in on some of the action.
    Question is, were the voting congresscritters let in on some of the action, too?

  30. ToNYC says:

    When Goldman co-located and re-wired the NYSE through their SLK pipes and Asian moonlighters, joined Archipelago and sent Thain over to run/ruin the NYSE and Arca became the electronic NYSE while Goldman ran REDI book as a platform so they could read your hand…this was in 2003-20044 mind you….you could see it coming. The fact that the “survivors” are still wandering around scratching their heads, reads like the last hours of a salvaged journal of a First Cabin passenger on the Titanic.
    A High Speed few players, GS and JPM, DB as well trying, give lightning speed haircuts to the pension funds and other embedded investors like 401-Kers, who, but when the real investors pull their bid, the convictions of the two players vaporize. Without real regulation, we have an electronic shell game, where no one can find the salami to hide.

  31. b_thunder Says: May 10th, 2010 at 8:52 am

    Regardless whether or not the 600-point 15-min drop was a conspiracy or not, the statement that “…This is…. a market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go” is 100% correct. Since August of 2009 the market has been on a near straight line up, on ever thinner volume, 70% of which ware HFTs shoveling shares from one to another.
    The only thing I’d add is that the “trading bots start the ball rolling” with the money straight from the Federal Reserve and the TARPed taxpayers.
    ~~
    Fredex Says: May 10th, 2010 at 9:41 am

    The longstanding shorthand dimissal of Angry Max is that he is an IT guy, not a financial guy. Well, this is an IT issue where he is an expert. Maybe you should listen this time.
    ~~
    SOP Says:

    ““If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie.”
    ~~
    some things should be re-read..some, read for the first time..
    http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Propaganda+Goebbels+Bernays
    ~~
    “But how could so many have colluded so instantaneously with no one breaking cover or a leak happening? That’s just not credible.”

    “Political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” – George Orwell

  32. R. Cain says:

    HFT
    Thursday’s meltdown could be – emphasize could be – related to Direct Edge’s current software testing.
    A lot of volume was routed to Direct Edge and BATS, after NYSE circuit breakers tripped.
    Would have been a good real-time system test.

    Reuters 4.28.10
    ‘Direct Edge, a private U.S. trading venue operator, said on Wednesday it delayed the launch of its two formal exchanges until July to give members a longer connecting and testing period.’
    http://www.reuters.com/article/idUSTRE63R64E20100428

  33. TakBak04 says:

    Robespierre Says:
    May 10th, 2010 at 9:15 am

    “Goldman Sachs Has First Perfect Quarter With Zero Trading Loss ”

    Barry believe what you want this is IMPOSSIBLE in a free market.

    ——–

    I think the “Fast Money” folks on CNBC called it tonight. Said that Goldman releasing that First Perfect Quater with Zero Trading Lost” was an example of Goldman’s…. “bad PR Campaign.”

    With all their Money ….I wonder how Goldman can be doing such a bad PR Campaign. This report makes them as questionable as Bernie Madoff…in some respects, doesn’t it?

  34. ToNYC says:

    Of course Goldman makes money every day, I could too: shooting fish in a barrel reading everyone’s cards and getting my bet down before them. This current market environment system is failure by design, a lobotomy in progress..get better drugs.