What If The "Crash" Is As Rigged As Everything Else?

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Take your pick--here's three good reasons to engineer a "crash" that benefits the few at the expense of the many.

There is an almost touching faith that markets are rigged when they loft higher, but unrigged when they crash. Who's to say this crash isn't rigged? A few things about this "crash" (11% decline from all time highs now qualifies as a "crash") don't pass the sniff test.

Exhibit 1: VIX volatility Index soars to "the world is ending" levels when the S&P 500 drops a relatively modest 11%. The VIX above 50 is historically associated with declines of 20% or more--double the current drop.

When the VIX spiked above 50 in 2008, the market ended up down 57%. Now that's a crash.


Exhibit 2: The VIX soared and the market cratered at the end of options expiration week (OEX), maximizing pain for the majority of punters. Generally speaking, OEX weeks are up. The exceptions are out of the blue lightning bolts such as the collapse of a major investment bank.

Was a modest devaluation in China's yuan really that unexpected, given the yuan's peg to the U.S. dollar which has risen 20% in the past year? Sorry, that doesn't pass the sniff test.


Exhibit 3: When the VIX spiked above 30 in October 2014, signaling panic, the Federal Reserve unleashed the Bullard Put, i.e. the Fed's willingness to unleash stimulus in the form of QE 4. Markets reversed sharply and the VIX collapsed.

Now the VIX tops 50 and the Federal Reserve issues an absurd statement that it doesn't respond to equity markets. Well then what was the Bullard Put in October, 2014? Mere coincidence? Sorry, that doesn't pass the sniff test.

Why would "somebody" engineer a mini-crash and send volatility to "the world is ending" levels? There are a couple of possibilities.

1. The Shock Doctrine. Naomi Klein's landmark study of how manufactured crises are used to justify further consolidation of power, The Shock Doctrine: The Rise of Disaster Capitalism, provides a blueprint for how financial crises set the stage for policies that extend the power of central and private banks and various state-private sector players.

A soaring VIX and sudden crash certainly softens up the system for the next policy squeeze.

2. A "crash" engineered to set up a buying opportunity for insiders. When easy gains get scarce, what better way to skim a quick 10% than engineer a "crash," scoop up shares dumped by panicked punters and momo-following HFT bots spooked by "the world is ending" VIX spike, and then reverse the "crash" with another round of happy talk?

3. Settling conflicts within the Deep State. I have covered the Deep State for years, in a variety of contexts--for example:

Is the Deep State Fracturing into Disunity? (March 14, 2014)

The Dollar and the Deep State (February 24, 2014)

Surplus Repression and the Self-Defeating Deep State (May 26, 2015)

Without going into details that deserve a separate essay, we can speculate that key power centers with the Deep State have profoundly different views about Imperial priorities.

One nexus of power engineers a trumped-up financial crisis (i.e. a convenient "crash") to force the hand of opposing power centers. As I have speculated here before, the rising U.S. dollar is anathema to Wall Street and its apparatchiks, while a rising USD is the cat's meow to those with a longer and more strategic view of dollar hegemony.

Take your pick--here's three good reasons to engineer a "crash" that benefits the few at the expense of the many.

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clooney_art's picture

 You got that right. Everything is rigged. Stage managed on a central scale. They are even preparing what nonsense to say after a sizable decline in the market and it won't make any sense.

Stackers's picture

Yes it is rigged ..... and it is a very very old game plan

“The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. ”

SimplePrinciple's picture

The plan?  After a much larger stock drop, .gov rides to the rescue of retirees by confiscating their accounts and replacing them with Treasuries that cannot otherwise be easily marketed.  Of course, this replacement will be done in a manner that promotes Social Justice, aka Robin Hood.

Winston Churchill's picture

How else did you think the RedRes was going to get rid of them ?

No way were they going to be the bagholders.

Fester's picture

Crash --> War --> New .Gov --> Moar Power

remain calm's picture

Everything is managed for control. They think they have control and can manage everything. They can't and then they lose control. They will lose control again. But the loss of control is not staged. Again, they think they can manage eveything. Their models fail. We are about to see a big failure. Some of you need to add another layer of tin foil added to your head. They will manage after the failure, again, because they think they know what they are doing.

Headbanger's picture

Oh yeah... EVERYTHING is rigged now

So we can't blame ourselves for any of it.


It's the fucking greed of all the Muppets to blame as well.

Captain Debtcrash's picture
Captain Debtcrash (not verified) Headbanger Aug 26, 2015 8:52 AM

I wrote on the "planned crash" scenario several months ago.  Why would the fed raise rates into poor macro economic conditions, officially no inflation, with bubbles popping throughout the world, if not to cause or exacerbate a crash, all to allow them to try some new policy tools.  After all the st Louis fed did come out and say QE is ineffective. I think they really want to ban cash and push rates significantly negative.  Not possible under current statute, but that's easy enough to change with the politicians shitting themselves. 

BKbroiler's picture


WordSmith2013's picture

Yes, the crash will be totally engineered just like 2008.



"Debt Default and Dollar Meltdown,
Derivative Explosion and Deflation Implosion
are Timed According to a Controlling Calendar"

Herd Redirection Committee's picture

So many people were expecting 'something' to happen in September, that not only did they push the date up (of the initial crash, if not the main crash), they (intelligence agencies) released a SLEW of rumors...

Comets striking the Earth in September!  Extended black outs/power outages (is black out racist?).  Hoover Dam getting blown up.

All just so people would be confused and not know what the F*** will happen.  Counterintelligence.  Disinformation.  Got to love it!

whotookmyalias's picture

If everything is rigged, crashes are rigged too. It's not complicated or mysterious.

g speed's picture

and the biggest rig of all ---gravity--its forcing things to go in its direction and cannot be controlled and its a big secret how it works and we are all at its mercy and are DOOOOOMED---LOL    deal with it

BLOTTO's picture

I wish it was just the markets.


Our WHOLE LIFE is rigged.


'Life' - one giant cosmic lie.


Now what?

libertrue's picture

QE is ineffective at boosting stimulus, but it is still quite effective at buying back treasury bonds that China is dumping like a bad prom date. They should add a reason 4, if the VIX going to 30 in Oct 2014, kept the Fed from hiking rates and prompted them to suggest QE4, which still hasn't come about, why not just attempt the same thing again, just days before the Fed was planning on raising rates? If you had an army of high-frequency traders, why not force a crash to scare the Fed into making policy decisions that help your bottom line?...queue Norm MacDonald...Or so the Chinese would have us believe...

Captain Debtcrash's picture
Captain Debtcrash (not verified) libertrue Aug 26, 2015 1:41 PM

They certainly may try QE again, but I think the fed wants some new toys to play with.  

caconhma's picture

Very soon FED will own a half of the entire stock market with a socialist dream coming true.

libertrue's picture

QE is ineffective at boosting stimulus, but it is still quite effective at buying back treasury bonds that China is dumping like a bad prom date. They should add a reason 4, if the VIX going to 30 in Oct 2014, kept the Fed from hiking rates and prompted them to suggest QE4, which still hasn't come about, why not just attempt the same thing again, just days before the Fed was planning on raising rates? If you had an army of high-frequency traders, why not force a crash to scare the Fed into making policy decisions that help your bottom line?...queue Norm MacDonald...Or so the Chinese would have us believe...

kliguy38's picture

and thats my point Remain calm..........WHAT IF IT ISN'T CONtrolled.

Fahque Imuhnutjahb's picture



Regardless of whether every gyration is choreographed by TPTB, the take away should be that those closest to the fount of knowledge (riding in the engine) get their thirst

slaked first, and those furthest away (riding in the caboose) get parched, shrivel up, and mummify.  Those in the know feed on those in the dark, period.  The ability to be

nimble, get access to insider info., and adjust accordingly is  the next best thing to controlling individual events.  It's all about the long term trajectory of NWO goal seeking

and having a tinfoil yarmulke.

g speed's picture

proving again the POWER of knowledge and the privalige of the secret sign and how knowing the secret determines your self worth----such foolishness is not for grownups --really 

greyghost's picture

so the two minds finally write a good article.  been having these exact thoughts since monday's crash and miracle levitation act. how many stop losses were triggered on that rollercoaster?

see the next article about the bet on the vix on friday

Carpenter1's picture

If they can make it go up, they can sure as shit make it go down. Time to wake up

Crash N. Burn's picture

"They will manage after the failure, again, because they think they know what they are doing."

Could be because "they" have done it before. People should be taught who "they" are

 "The Rothschilds were universally acknowledged as the wealthiest clan on the planet in the 19th century. They never lost that wealth. We simply lost all knowledge of it. The House of Rothschild has effectively erased itself from our (so-called) history books. That takes power.

Are children taught in our classrooms that most of the (endless) wars between European powers during the 19th century were examples of House Rothschild already “playing” the governments of Europe against each other, like puppets? Are the children taught that a basically unknown cabal of bankers created the Bank for International Settlements in the early part of the 20th century, so that these Western bankers could do the money-laundering necessary to allow Western industrialists to supply armaments to the Third Reich?

They certainly aren’t taught that one of those “industrialists” – Prescott Bush – was convicted of “trading with the Enemy”. Because if they had been, clearly it would not have been possible for both his son and grandson to be elected as presidents of the United States, where they could serve the bankers.

Postulating a group of ringleaders for this banking crime syndicate other than House Rothschild is problematic. It involves manufacturing an entire mythology around such hypothetical ringleaders, whereas with this clan of megalomaniacs, the historical, financial, and political context is already in place.

Their wealth is undeniable. Their intentions are unequivocal. The amoral malice they hold toward the rest of humanity is documented, historical fact."


How Western Governments Will Steal Your Land, Part III


"They" are Rothschild!

"People without homes will not quarrel with their leaders."

-          The Bankers Manifesto of 1892


"Simply put, there was/is no other clan on the planet that already possessed the wealth and power to make the pledges contained in The Bankers Manifesto of 1892, in 1892 – and then to (finally) pursue that crime-against-humanity to (near) fruition, in 2015."


Fahque Imuhnutjahb's picture

OK sir, that'll be enough candor out of you.  You're Home Depot Nail Gun seminar commences tomorrow at noon,

if you are unable to attend then a house call will be arranged.  Your new code name is "Plywood"

Herd Redirection Committee's picture

This cabal already had $1 billion dollars (or Francs) back in 1850!  1850!  Do so preliminary calculations of how much that wealth would grow to, by 2015, at even 2$ or 3% interest.

Uchtdorf's picture

I'll take up your challenge using the tried-and-tested Rule of 72.


1850 $1B

1886 $2B

1922 $4B

1958 $8B

1994 $16B

2030 $32B



1850 $1B

1874 $2B

1898 $4B

1922 $8B

1946 $16B

1970 $32B

1994 $64B

2018 $128B

So unless you're going to tell me that the $1B in 1850 existed in the form of very rare gold coins, I don't think you need to be too concerned. The US alone spends $128B in a very short time. It seems a billion bucks ain't what it used to be. 

HowdyDoody's picture

For real chutzpah, they have put their supprt behind a Romanov to claim the throne of Russia.




SMG's picture

You're exactly right, and I hope when there are angry mobs in the streets, people who know what the heck is going on, get out there and help them point their rage in the right place.

jcdenton's picture

This is your Red Shield. They do nothing. They can do nothing without permission ..

To those who insist that Jews run the world, I say okay, but only by the permission and appointment of Rome.


In 1814, however, the Jesuits turned anti-semitic. I believe this was in order to mask their collusion with the money power operated by the House of Rothschild, “guardian of the Vatican Treasury.”




Understand what a fiduciary is. Do look that up in your best legal dictionary ..


The house of Rothschild is bound by fiduciary duty to facilitate the Jesuit General's needs. According to Encyclopedia Judaica, the Rothschilds are “Guardians of the Vatican Treasury.”


Congress complied on April 6, the Guardians of the Vatican Treasury cranked out the credit (through the Rothschilds' brand new Federal Reserve), and over the next year and a half, more than 364,000 American lives were sacrificed (out of 4,355,000 mobilized) to Ledochowski's objective of destroying the Reich and replacing its Protestant Kaiser with a charismatic dictator.




Okay, who wrote the seminal Secrets of the Federal Reserve, before Griffin's tome? That would be right. Eustace Mullins ..


"It is difficult to restrain the enthusiasm which RULERS OF EVIL engenders in the reader. Saussy gives us the essential knowledge for which we have been waiting these last six thousand years."

~ Eustace Mullins




Luc X. Ifer's picture

Who the fuck in his mind doubts it, retards?! 

Antifaschistische's picture

yah....like 16k now on the DOW is NOT being goal-seeked by the PPT.   lol

Motasaurus's picture

The Banksters That Be only have a month left to make money off each other before they have to forgive each other their debts. This "crash" is just profit taking and positioning - the banksters are unloading their debt onto non-banksters: people whose debts they don't have to forgive.  

GeezerGeek's picture

I thought that Robin Hood was anti-oligarch, not a redistributionist progressive slimeball. His opposition was the government (Sheriff of Nottingham) and its cronies, not some overly successful capitalist. The money given to "the poor" was remuneration for excessive taxation. Get the story right.

frankly scarlet's picture

S.P. Yes...there is an estimated 4 trillion locked away in the various pension plans that the Fed would like to get their hands on and this "swap" would bring the Fed's balance sheet down to previous levels.

KnuckleDragger-X's picture

It really doesn't matter if it's rigged or not, it'll suck for the vast majority of people. You can blame it on anybody you would like, but doing something about it is the hard part. History is replete with people who tried to break the system in order to take control and sometimes it works, but a lot of the time it doesn't, at least in the in the long run. Just ask Robespierre on his way to his own guillotine.....

pods's picture

They aren't that powerful. Why give them the benefit of the doubt?  They (if there really is a they that has control) would like nothing more than for you to sit home whimpering, worried about how much control "they" have.

Macro has been in the shitter for years.  China was bubblicious and bound to crack.

The reason why I know this was no engineered event is the damage control I have seen due to it. Even the lowliest podunk local talk show host was able to have on some talking head who was talking about why this was just an over reaction and macro is golden and our economy is the cat's meow.

Don't buy into it.

And fuck numerology too.  The only way where they can set the closing price is if we are all stuck in a damn powerplant with tubes coming out of our body.

If that is the case, where the fuck are you Morpheus?


Beam Me Up Scotty's picture

I'm not so sure.  This article might be spot on.  Consider this:

Federal Reserve can print and create INFINITE digital and physical dollars.  With infinite dollars, they can control EVERYTHING.  Both UP and DOWN.  We can't audit the Fed, how do you know their balance sheet is really 4 trillion?  Because they say so?  They could literally decide the prices of every single thing in dollar terms with unlimited dollars at their disposal. 

Sir SpeaksALot's picture

exactly, they could buyout all stocks 10 times, and how would we know who is buying? they could just put it from "one pocket to the other". their balance sheet could easily be 40 trillion or 400 trillion, or t s all staged.

Not My Real Name's picture

At some point, printing an endless sea of dollars (physical or digital) destroys the only thing that gives those dollars value: confidence in the currency. When that happens, the game is over.

NihilistZero's picture

Had to down arrow you Beam. There are just totally moving parts in world politics and the world economy to exact such a precise level of control. The idea that all the bankers are on the same page is specious. In so much as their interests may converge I'm sure Deutsche Bank and the Bank of England will exert monetary power for the same specific goals. Once their interests diverge I doubt they pay each other even the slightest consideration. This is the one saving grace the masses have. The greed of the various oligarchies will always prevent a perfect union among the ruling class.

Chupacabra-322's picture

The vast majority of ZH's especially the veterans here understand fully that there are no more "Bear or Bullish" markets. There's only Fascism & Ponzi.

"If central banks purchase stocks in order to support equity prices, what is the point of having a stock market? The central bank’s ability to create money to support stock prices negates the price discovery function of the stock market."
-Dr. Paul Criag Roberts

"These questions came to mind when we learned that the central bank of Switzerland, the Swiss National Bank, purchased 3,300,000 shares of Apple stock in the first quarter of this year, adding 500,000 shares in the second quarter. Smart money would have been selling, not buying.

It turns out that the Swiss central bank, in addition to its Apple stock, holds very large equity positions, ranging from $250,000,000 to $637,000,000, in numerous US corporations — Exxon Mobil, Microsoft, Google, Johnson & Johnson, General Electric, Procter & Gamble, Verizon, AT&T, Pfizer, Chevron, Merck, Facebook, Pepsico, Coca Cola, Disney, Valeant, IBM, Gilead, Amazon."

-Dr. Paul Craig Roberts


Beam Me Up Scotty's picture

No worries NZ.  I am just throwing out a theory.  Maybe its fact, maybe its not.  All I am saying is, I can conjur up a scenario where they can control the price of everything, in both directions.  And unless someone can actually prove how many dollars have been created, they can't prove me wrong either.  They can continue to do such a thing, until there are dollars everywhere, even when they try and claim otherwise.  If people believe there are only 4 trillion dollars in circulation, but there are really 40 trillion, then they can get away with exactly what I have described.

NihilistZero's picture

I get what you're saying.  I'd counter argue it's more like a butterfly effect.  They don't know exactly where the hurricane will land but since the released the butterfly and know exactly when it flapped it's wings, they will always be in the most advantageous position to profit from the destruction.  I think you'd be hard pressed to show a reasonable scenario where they can control world markets prices to the dollar.  It's actually much easier to let the human elements work and then react.

It's the "Brave New World VS 1984" Dystopia argument.  The system which can bend the most has the far greater chance of maintaining power.  We can observe this in the political systems that have lasted the longest.

Implied Violins's picture

Had to down arrow you, Nihilist. There is just too much evidence that this whole shitshow is contrived. Don't forget the saying, 'create order out of chaos.' That's exactly what is going on here; at the highest level this is all planned, even the 'chaos.' It's meant to keep us from focusing on what is really going on. The Hegelian Dialectic at work.


Herd Redirection Committee's picture

What they specialize in is controlling both sides in a conflict.  BOTH SIDES.  Get it?

So yes, there are groups at odds with each other.  Sure.  But both are having their strings pulled by a single, co-ordinated group of 'puppeteers'.

Divide and conquer...  And what better way to control the outcome of any given conflict?

NihilistZero's picture

Your theory is not compatible with the dystopia conspiracy Beam put forward.  I tend to agree with your position.  Mainly because the natural outcome of that thesis, chaos at varying levels for all but the elite of the elite, is what we have been witnessing forever.

actionjacksonbrownie's picture

So you are saying all the major Central Banks are ultimately independant of one another? I personally would like some confirmation of just who controls the major Central Banks. China remains a big question mark to me, but I can't see Japan or Germany being very independant as both were under u.s. domination after wwII and I have seen no signs of that domination slipping. And I have to think that the London Bankers and the fed are joined at the hip. That leaves only minor Central Banks which may or may not be independant, but are largely irrelevant, as they are completely at the mercy of the Major Central Banks.

bsdetector's picture

If the velocity is increased does that provide more opportunity to skim? I'm recalling Cougar's post about shaving nickels.