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You Think You're An Investor? I Think Not

Tyler Durden's picture




 

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Let’s start with defining what an ‘investor’ really is. A reasonable definition of an investor seems to be ‘someone who puts money into risk bearing assets that promise to produce financial gains through – increased – productivity’.

If we can agree on that, then furthermore I think we can all agree that investors need markets. And not only that, but they need functioning markets. What defines ‘functioning’ here is that ‘investors’ need to be able to discern what the value is of the assets they have already purchased and/or are thinking of purchasing in the future.

But we haven’t had any functioning markets since at least 2008. There is no price discovery left, nobody knows the actual value of anything anymore, and ‘traders’ pour money into all sorts of ‘assets’ without having one single clue as to what they are really worth. They don’t even care about the real value of the ‘assets’ they purchase. They don’t have to, because the game’s so obviously rigged and distorted.

There is no risk left in the assets, productivity – i.e. the added value – has long since ceased to be an issue, and that leaves financial gains as the only point of our definition above. But that must of necessity also mean that whoever trades in these non-functioning markets – preferably with ‘money’ borrowed on the cheap -, is not an investor.

So what are the people who do trade, while still calling themselves investors? Are they then mere ‘traders’? That doesn’t quite seem to fit.

What are they then? It may sound a bit harsh to claim they are all just plain grifters, but maybe that’s not too far off the truth after all.

One might conclude, when looking at the excessive attention ‘everyone’ paid yet again today to Janet Yellen and the Fed, waiting breathlessly to see if she utters the word ‘patience’, that those people who call themselves ‘investors’ are not even grifters, they’re nothing but yet another group of lazy bums waiting for government – and/or central bank – hand-outs.

Just much bigger hand-outs than people receive who are on foodstamps (and now you know where that much maligned inequality comes from). But they’re still hand-outs.

Nobody puts money into worthy (for lack of a better term), innovative, productive projects anymore, everyone just waits for what the Fed says and plays it safe (hand-outs). The Fed has thus eroded the investment world, and indeed the entire investment market model.

And that will come back to bite everyone. There is no more money flowing into any ‘worthy’ initiatives, it’s all going into whatever makes most money fastest, screw – increased – productivity. And since price discovery no longer exists, worthy initiatives will receive funding only through some freak accident (like a billionaire with Alzheimer’s), not by design, not through the inherent benefits of the investment model. Which is all but dead.

This cannot but have far reaching consequences, because we no longer have a model in which the best and brightest and hardest working amongst us can and will get funding to build their dreams. All money goes into either ‘Tech Boom The Sequel’, or is spent betting against whatever trend looks fit to fall first. Or a combination of the two.

The smarter amongst you, and I have to doubt that there are too many, will understand that the Fed ‘protection racket’ that has existed for years, is about to come to an end. It’s you against Wall Street now, and most of you don’t stand a chance in that arena.

A rate hike, any rate hike, or two, is the (re-)start of price discovery, at a time when everyone is ‘invested’ in ‘assets’ for which price discovery was never even considered at the time of purchasing. How fast can you unload? Who’s going to be the buyer? Are there enough fools greater than you left?

Maybe I should feel better knowing how much y’all stand to lose soon, but I don’t, because I also know how much everyone else stands to lose who already don’t have anything but debt. Emerging markets are going to get obliterated, all sorts of funds and levels of government, domestic and abroad, are going to get crushed – resulting in more services getting cut for the poor -, and so, whether you like it or not, are most Americans and Europeans who fancy calling themselves ‘investors’.

They’re not. They’re just a bunch of grifters and bums. They couldn’t (have) survive(d) in a marketplace that has actual price discovery. They couldn’t have borne the losses and recuperated. Not the way real investors do.

I found this a good and somewhat amusing summary of the feeling before Yellen’s speech today, as expressed yesterday via MarketWatch:

‘Hell Will Break Loose’ If Fed Loses Patience

It could go either way, according to the Fly from the iBankCoin blog, who spoke of extremes. “If we find out this Wednesday that [Janet Yellen] is not, in fact, patient, hell will break loose and 66 seals of hell will be broken — paving way for actual centaurs to roam, wall-kicking people in the faces with their hooves,” he wrote. “On the other hand, if Janet is patient and says so, we’re all going to make an absurd amount of money.”

Having a rigged, distorted system that fakes being a market and makes a bunch of grifters a lot of money, is not how you build a functioning society.

Oh, and you know what the worst thing of all is – if it can get any worse -? If the Fed and other central banks, post-2008, would have simply let the markets sort things out, most of the ‘money’ that has now been so horribly dislocated and mis-invested and debt-riddled, would never have existed in the first place.

The S&P would have been at 500 or so, bonds would have ‘normal’ prices and yields, actual investors would have taken their losses, and we would have had at least some sparks of brightness to look forward to. As things are, there’s only the headlights of that highspeed train coming at us from the other side of the tunnel.

 

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Thu, 03/19/2015 - 09:48 | 5905736 Falconsixone
Falconsixone's picture

pretty sure its not capitalism

Thu, 03/19/2015 - 09:58 | 5905774 negative rates
negative rates's picture

An investors long term is 5 years, a traders long term is 5 days, that's your difference.

Thu, 03/19/2015 - 10:04 | 5905784 Greenskeeper_Carl
Greenskeeper_Carl's picture

if you want to be a 'value' or long term investor, you need to be sitting on the sidelines until these insane valuations drop by at least 60-70%, maybe even more. buy and hold may have worked in the past, but it doesn't anymore.

Thu, 03/19/2015 - 13:21 | 5906603 malek
malek's picture

But, but... resulting in more services getting cut for the poor!   <facepalm towards Raul>

Thu, 03/19/2015 - 10:07 | 5905790 wallstreetapost...
wallstreetaposteriori's picture

New traders time horizion is in milli-seconds now.  Speed of light.

Thu, 03/19/2015 - 10:30 | 5905883 negative rates
negative rates's picture

Gees that's way past the stage of insanity, do these guys ever rest or do the light go out all at once?

Thu, 03/19/2015 - 10:10 | 5905797 venturen
venturen's picture

in the 1960 the average holding period of stock was 8 years...now about 5 days. HFT Baby...Going to be great watching the rats when this baby goes and all the exits are blocked!

Thu, 03/19/2015 - 10:32 | 5905889 negative rates
negative rates's picture

In a building lined with fire exits, I don't think they are worried.

Thu, 03/19/2015 - 10:05 | 5905785 Jean Valjean
Jean Valjean's picture

It's capitalism with broken money.

Thu, 03/19/2015 - 10:11 | 5905801 venturen
venturen's picture

CRONYISM!!! Capitalism would still not pick and winners and losers....Lehman out and Goldman in!

Thu, 03/19/2015 - 11:14 | 5906084 OldPhart
OldPhart's picture

It's facism.

Thu, 03/19/2015 - 09:53 | 5905751 FireBrander
FireBrander's picture

"pretty sure its not capitalism"

Uh, yes it is; it's the end game of Capitalism.

Read Marx...he nailed it...wrong about Communism...but nailed Capitalism...

Thu, 03/19/2015 - 10:01 | 5905780 Carpenter1
Carpenter1's picture

Yep, lots of ZH'ers are Pavlovian dogs trained to do one trick, and they think they're pro. That would be why they're terrified of the end of this bull, they wouldn't have a hope in hell of making money in even a semi-functioning market.

Thu, 03/19/2015 - 10:09 | 5905792 Dr. Richard Head
Dr. Richard Head's picture

BS.  If earnings season didn't allow for Fed Window Dressing and actual profits and earnings were reflected, many of us would be able to spot good investing opportunities.  As of now, all earning are bullshit.  Additionally, many of us would be swimming in Benny bucks if gold and silver weren't manipulated to shit.  

Thu, 03/19/2015 - 11:50 | 5906224 detached.amusement
detached.amusement's picture

go look up what capitalism is, asshat - what we have aint it and you have to have some blinders on that cover virtually your entire field of vision to think so.

Thu, 03/19/2015 - 14:11 | 5906852 Blankenstein
Blankenstein's picture

The banks were bailed out by the government when their bets went bad in 2008 - no downside, no risk for the Squid, AIG and the others which also included foreign banks. That is NOT capiltalism.  Privatizing the gains and socializing the loses is NOT capitalism.

Thu, 03/19/2015 - 09:52 | 5905752 kowalli
kowalli's picture

it's a casino, forget about markets

Thu, 03/19/2015 - 11:44 | 5906195 marathonman
marathonman's picture

You're playing the World Series of Financial Poker versus the squid.  Play tight and fold the crap hands.  This year I think a bunch of players are getting knocked to the rail on the way to the final table.

Thu, 03/19/2015 - 12:35 | 5906412 KnuckleDragger-X
KnuckleDragger-X's picture

The real investors don't go anywhere near the markets nowadays. I take the ocassional risk but I assume I could lose it, which leads to me being careful not to do something stupid.....

Thu, 03/19/2015 - 09:52 | 5905756 silverer
silverer's picture

Lately, I like to watch Shake Shack.  Stock is all over the map.  But really, either people are going in and buying the food or not.  Earnings are either real or not.  But the stock is all over the place, creating either profits or losses all on its own, having nothing to do directly with the food sales.  In fact, the whole market is just a see-saw rigged gimmick to take profits in one direction or the other, except the big players are too anxious and impatient to wait for the real connected results, so they play with it all to make it happen.  Disconnect?  You bet!

Thu, 03/19/2015 - 09:54 | 5905763 rccalhoun
rccalhoun's picture

i have not used the term 'investor' in over a decade.  investing implies knowledge and effort in choosing said investment.  but the stock buyer cannot be called stupid, either.   he/she has either directly or indirectly purchased on the side of the fed.  many think they will get a clear signal when to jump off.  many are following the herd.  but the ones that irritate me are those that think that 8-10% returns are their right.  but those same people cannot explain why a bond yields 2%

those are the people that should be wiped out

Thu, 03/19/2015 - 09:56 | 5905768 buzzsaw99
buzzsaw99's picture

we cannot agree on that

Thu, 03/19/2015 - 10:00 | 5905778 B2u
B2u's picture

I am brilliant.  I know how to make money.  I just BTFD and I cannot lose...ever.

Thu, 03/19/2015 - 10:16 | 5905828 Callz d Ballz
Thu, 03/19/2015 - 10:04 | 5905783 yogibear
yogibear's picture

Broken markets, broken society. 

Everyone wants something for nothing.

Including Wall Street stealing trillions.

For the rest Social Security Disability, food stamps, illegals aliens get tax refunds with which they never paid into.

Thu, 03/19/2015 - 10:12 | 5905811 Dr. Richard Head
Dr. Richard Head's picture

I disagree that everyone wants something for nothing.  I would be perfectly fine if I could just keep my earnings without paying for the bullshit promises government turds keep giving out.  I would be fine to see real estate prices normalize, even if that means I end up underwater on my mortgage.  It would be great if we didn't have suppressed interest rates and I could actual invest my extra capital.  It would be great to see PNL statements reflect reality in order to assertain a company's worth.  

Thu, 03/19/2015 - 10:18 | 5905834 Callz d Ballz
Callz d Ballz's picture

Unfortunately our club is getting smaller.

Thu, 03/19/2015 - 10:12 | 5905805 spinone
spinone's picture

For those in the general public who are even aware of the massive amount of bailouts given to banks (at least $6T so far, plust $10T of swaps with foreign banks), I think they believe that if the Fed did it it must be for a good reason, like the greater good.  As it becomes more an more apparent that here was not a good reason, just cronyism, people will lose faith in the Fed, and perhaps the Gov't itself.

Clearly the Fed should have nationalized the investment and depository banks, wiped out the shareholders and bondholders, fired management, put their bad assets into a "bad bank", and re-IPO'ed the new clean banks, much like with GM.  The the clean banks would be able to lend money to grow the economy.  If that had been done in 2008, we would be out of the "Long Depression" by now and not looking at a second recession within it.

Thu, 03/19/2015 - 11:12 | 5906075 SirBarksAlot
SirBarksAlot's picture

Alas, the Pennsylvania Senator Toomey has now introduced HB-37 into the Senate as SB 576, which takes the banks off the hook for their derivative debt as provided in the Dodd-Frank Act.

Since the banks don't have to pay their debts and the debts will be collected, care to take a guess at where that money will come from?

https://www.congress.gov/bill/114th-congress/senate-bill/576?q={%22search%22%3A[%22S+576%22]}

Thu, 03/19/2015 - 11:53 | 5906234 detached.amusement
detached.amusement's picture

I love how it says give feedback, but it only allows a one-click to give feedback about the site layout.  As if calling your congressm an is going to produce a different reaction from them than "sorry but this is what's best for you, we know, trust us"

Thu, 03/19/2015 - 10:12 | 5905806 p00k1e
p00k1e's picture

“Investing” ended with the introduction of self-directed schemes like ‘401K’ plans. 

Thu, 03/19/2015 - 12:23 | 5906360 Thisson
Thisson's picture

There's nothing wrong self-directed investment.  

Thu, 03/19/2015 - 10:13 | 5905809 Chuck Knoblauch
Chuck Knoblauch's picture

150 years ago, Wall Street traders were in the streets of NY pimping stocks next to horse shit.

I see a return to those days soon.

Instead of horse shit, it will be dead bankers rotting in the street.

Thu, 03/19/2015 - 10:14 | 5905818 vegas
vegas's picture

Raul, Sorry you lost money being short; maybe some day you'll figure out markets could care less what you think. "Investors"? An "investor" is somebody who speculated on price appreciation, has lost money, and is now holding on to "paper losses" hoping he/she can get back to even. The world has always been and always will be a pile of shifting sand dunes of risk/reward; try and keep the sand out of your eyes.

 

www.traderzoo.mobi

Thu, 03/19/2015 - 10:19 | 5905840 ricky663
ricky663's picture

Yeah, those were the days when we could "invest" or trade based on fundamentals.

You would think technicals would work, but then you hear/read about how manipulated the markets are. This renders both fundamentals and technicals irrelavent.

You know things are F'd up when both your long and short positions are losing at the same time.

There are days when I think I am the most brilliant trader (like yesterday), and other days when I think I have no clue (like today). Whipsaw anyone?

Hard to make sense of the markets these days. Time to take a break?

 

Thu, 03/19/2015 - 10:28 | 5905868 will ling
will ling's picture

guillotines, gallows, firing squads (re)build functioning societies as the lessons taught/learned span generation upon generation. let's get goin!

Thu, 03/19/2015 - 10:34 | 5905896 toady
toady's picture

This is my favorite meme here on ZH. Back in the day it was all about plunge protection, tanks in the streets, and trillions to the big banks. Oh, the hue and frey! Someone, please, think of the children! Oh, the humanity!

Now it's all about participation rates, welfare, and disability. Not even close to as sexy as the end of the world as we know it!

Thu, 03/19/2015 - 11:02 | 5906037 juggalo1
juggalo1's picture

But that hasn't killed their air of "we're the only ones who know" and "everyone else is completely delusional".  What's going to happen?  System collapse.  When's it going to happen?  Soon.  The underlying message hasn't changed for 7 years.  I notice we haven't heard from the silver bears or the preppers as much recently.

Thu, 03/19/2015 - 10:40 | 5905924 Fun Facts
Fun Facts's picture

Protocol #20

Replace sound investment with speculation.

Done.

Thu, 03/19/2015 - 10:43 | 5905938 juggalo1
juggalo1's picture

I don't agree with the premise of this article.  First I don't agree that the banks should have been allowed to fail with stock and bond-holders wiped out.  Lehman was allowed to fail with bail-ins.  Equity holders in AIG also took heavy losses.  I don't agree that the benefit would outweigh the costs if further failures had been allowed to proceed.  As you said the S&P might well have been at 500 and stayed there.  There is an enormous cost to that, and recovering from it would not be as simple as you seem to believe.  Also I don't agree with your definition of investor.  Knowing the value of an underlying asset is not necessary to being an investor.  No one knows the true value of an investment.  Markets discover price, not value.  In addition there is still considerable risk in the capital markets.  We have seen small declines since 2008.  Admittedly the Federal Reserve has intervened which has reduced risks on the downside, but risk assets and productive assets are still changing hands.  Real return is still being made.  I don't agree that the market is non-functional at this time.

Thu, 03/19/2015 - 10:47 | 5905952 Temporalist
Temporalist's picture

You probably like to steal lollipops from children too.

 

The markets "function" like a heroin junky...fix to fix, score to score, robbery to robbery.

Thu, 03/19/2015 - 11:57 | 5906251 detached.amusement
detached.amusement's picture

  let us know when you open your eyes back up and rediscover those pesky little things called fundamentals

Thu, 03/19/2015 - 13:45 | 5906699 RaceToTheBottom
RaceToTheBottom's picture

You are either a Muppet or a Muppeteer.

Either way is not a good thing.

 

Thu, 03/19/2015 - 10:46 | 5905948 SirBarksAlot
SirBarksAlot's picture

I prefer to think of the Fed as Fagin and me as Oliver in the Oliver Twist saga. 

"You've got to pick a pocket or two."

A reluctant victim of the system, doing my best to survive.  Sob.

 

 

Thu, 03/19/2015 - 11:02 | 5906036 q99x2
q99x2's picture

I gave up being an investor when Obama got elected and have since taken on a more formal reality within and without the Q99X2 multi-verse. Safety is everywhere and nowhere. What goes down goes up. One Q99X2s loss is the same Q99X2s gain. Good is Bad and Bad is Good. I now have the ability to relate to the things economists say.

Thu, 03/19/2015 - 11:20 | 5906108 I Write Code
I Write Code's picture

Some of us keep trying to "invest" right through the noise.

Thu, 03/19/2015 - 11:25 | 5906123 Hubbs
Hubbs's picture

Going back to Socrates. I am smarter than everyone else who thinks they know something, because I know that I know nothing. Therefore I know one more thing than everyone else.

Fast forward to today's investment world: Despite all my readings, and seeming understanding of basic economics and investing priciple like index averaging, buy low , sell high, etc, everything I have invested in has either lost money or been a deadpan zero gain. Got out of the stockmarket October 2007 and looked like a friggin genius, but never got back in because the whole system was rigged...except that I missed out on a huge rally, and so I am right back where I started again.

 

 

https://www.youtube.com/watch?v=Ay7B0YmdpIc

Thu, 03/19/2015 - 11:30 | 5906139 armageddon addahere
armageddon addahere's picture

I want to learn to be a bum and a grifter. I want to sit on my duff in front of a computer and make money by some  speculation that requires no effort and contributes nothing to society. I'm tired of working at something useful and getting the low pay and contempt dumped on people who keep society functioning.

But all I get are these articles talking about the scams but never giving any specific instructions. You either know about these things or you don't. If you know, give us the low down if you are just shooting your mouth off stop wasting my time.

Thu, 03/19/2015 - 12:59 | 5906517 pndr4495
pndr4495's picture

A capital market is a market creating/selling/trading capital , i.e. manufacturing plants ,  equipment , end products etc. , so - since we need a REAL venue in which to trade - create an exchange where trade matching through an exchange server is NOT POSSIBLE , no colocation , no pricey hardware , a clear limit on the TRICKNOLOGY , as Curtis Sliwa referred to technology recently.  See if it gets traction.  After all , the exchanges are cesspools now , and they are broken.  There is a lot of poison in the mud with respect to how things developed after they all went public.  How well would the geeks do if they had to execute their own order in a commodity pit or act as the specialist on a stock floor ?  We'll probably never know.  Anyone who wants casino style trading , well then . let them use the existing set up.  Common sense isn't , as Voltaire said and what we have now is NOT progress , it is NOT innovation either.  

Thu, 03/19/2015 - 13:30 | 5906641 RaceToTheBottom
RaceToTheBottom's picture

I believe the term is Muppet

Thu, 03/19/2015 - 16:39 | 5907456 Professorlocknload
Professorlocknload's picture

Well, now, ain't Socialism just ducky?

Thu, 03/19/2015 - 16:49 | 5907494 No More Bubbles
No More Bubbles's picture

Yep, we're toast.

Thu, 03/19/2015 - 18:36 | 5907722 Arthur Schopenhauer
Arthur Schopenhauer's picture

Excerpted from: U.S. MONEY VS. CORPORATION CURRENCY "ALDRICH PLAN" WALL STREET CONFESSIONS! GREAT BANK COMBINE By ALFRED OWEN CROZIER Author of the financial novel, "The Magnet" (Written in the year 1912).

“A banking or currency reform plan that does not take into account the constantly daily monetary, financial and banking practices of Wall Street will be ineffective and useless. There conditions constantly prevail that decisively influence the supply and flow of currency and credit, the rates of interest on both time and call loans, the making and calling of bank loans in vast volume, the international ebb and flow of the tides of debt that now measure all values, and the quotation prices of trillions of dollars of listed securities, a total thirty times the value of all annual crops of the soil and eighty times all the money of the United States.

If these forces were moved only by natural causes — "natural supply and demand" — values would be relatively accurate and stable, fluctuations and changes comparatively moderate and harmless, monetary conditions would be sound and financial institutions safe; and Wall Street as a barometer of the nation's prosperity and a "governor" on the financial engine moving the wheels of all American activities would be an accurate and useful indicator and regulator of steady and inestimable value to the entire country and all of its inhabitants. There would be no dangerous extremes and consequently no possibility of panics.

On Wall Street, everything is artificial. Nothing is natural or logical; therefore the unexpected always is happening. Every effect is the result of a planned and purposeful cause. Whatever is done usually was intended, procured. If prices soar to the swallows' nests, they were put up there. If they slump to the coal cellar, they were dumped there. And only the few big inside operators know which will be done on any particular day. Consequently everybody else who either speculates or invests in "listed" securities is merely gambling blindly, recklessly, without the slightest knowledge or chance of knowledge. A mere guess as to whether that day the masters of the machine will decide to lift the lever up or push it down. And he will not and cannot know, or have the slightest idea or inkling until after, figuratively, he has dropped his money in the slot, made his bet, heard the whirl of the unseen wheel behind the impenetrable curtain, and the attendant, "the broker” opens the little peek-hole and, as usual, calls out:
A. "You lose! Try your luck again?"
B. "You win! Try your luck again?”

The fact is the putting up or down of the price of a given stock or bond is simple and easy. The shares of the company are limited. It is not like speculating in wheat or corn against every bushel in the world. A large portion of a corporation's shares of stock never change hands, however much the price may fluctuate. The proportion of shares "on the market" usually is relatively small. It is only necessary to organize a syndicate or "pool" with sufficient available means or borrowing power to put up as a margin a sum equal to 10 per cent of the quotation price of whatever shares of that particular stock may be offered. Usually but 10 per cent to 25 per cent of the stock of the smallest or largest corporations or trusts will appear on the market, even if prices are forced far above conceded value. Most holders want steady investments, dividends, not to gamble on stimulated changes in prices. And the manipulators must furnish only 10 per cent of the value of the relatively small amount offered. Another 10 per cent is furnished by the brokers and the balance 80 per cent by the banks, loaned on the securities as collateral. Thus the banks are the chief factor in every stock-market manipulation.

While the great Wall Street insurance companies, controlling in their reserves hundreds of millions of the accumulated savings held for "the widows and orphans," are prohibited by law from investing in stocks, the law does not say that they cannot, to help out their stock-market masters, deposit a hundred million of money in the banks and thus enable such banks during a great market manipulating campaign to loan to inside operators billions of dollars of additional credit to aid them in running the gamble against the public, the living fathers, husbands and brothers of such future "widows and orphans." Whatever the amount, they certainly deposit many billions in the big banks.

Such a dark pool always is formed and operates in absolute secrecy. Often its members do not know the plays to be made from day to day with the common funds for mutual benefit. That is a "blind pool” only the manager, usually one of the pool members, knows the moves made or to be made. A pool of that character has the price of that stock, the welfare of the corporation, its stockholders, officers, employees, and the public absolutely at its mercy, and yet no one outside of the pool itself even can know of that fact. Sometimes it is a long, exhausting, wearing, heartbreaking, strangling struggle. Often it is just a quick, deep stab in the dark, always from behind, and all is over. The guilty never are caught or detected or even suspected, for the stock exchange is created and operates to hide the identity and completely screen the actions of the bandits of high finance.

Very often the different pools manipulating the various stock and bond issues of the many trusts and other corporations quietly put their heads together and cooperate, or conspire. The whole list of price quotations goes up, a "bull" movement, or down, a "bear" movement, according as has been predetermined. The public that owns most of the securities but does not know until too late which way prices are to be put is, of course, always fleeced, the profits going to the insiders. In fact, it is the regular practice of the manipulators to put out hints and "tips" through the daily press and otherwise to cleverly induce the uninformed public always to take the wrong side of the market, and lose. Sometimes dividends are increased and decreased for the purpose of manipulating quotations for the speculative profit of "insiders."

An honest, legitimate trading market for securities would be a useful national blessing. But the Wall Street Monte Carlo, in its practice and results, is the most colossal, crooked and financially dangerous den of gamblers and robbers the world ever has seen or dreamed of.

Quotation prices sometimes are pushed up or down 10 to 50 per cent. The overwhelming consequences of these fluctuations can be realized from the fact that an average fall of but 10 per cent means a total loss to holders of the securities amounting to a sum exceeding all the money in actual circulation in the United States. A few such "swings" each year and the losses will equal eight or nine trillion, the yearly value of all the crops.

In this and other ways "high finance" silently and constantly and irresistibly harvests an ever increasing portion of the fruits of all human toil and effort. Yet the methods and means employed are so secret and mysterious, the victims may not even realize they have been intentionally victimized, and never would suspect the right parties in any event. Indirectly most of the losses fall on the people who never buy stocks at all.

It is "high finance" against people, with the cards always "stacked," the game always "fixed." It is hard for the people to figure out just how it is worked, but a large portion of the prevailing high prices is due to the machinations in one way or another of "high finance." The inflation of the volume of securities out of all proportion to assets, increase in interest rates on billions upon billions of dollars of municipal and corporation bonds and upon the loans of bank credit, are some of the agencies used, the extra burden falling always and only upon the people.”

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