Guest Post: You Can't Fool Mother Nature For Long: Financial Markets

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

You Can't Fool Mother Nature For Long: Financial Markets

Constant State and Central Bank intervention and manipulation is not the foundation of a free, transparent market--it is perception management in service of Elite control and looting.

You can fool Mother Nature for awhile, but not over the long-term. That's the theme of the week. Every day I will take a look at a segment of American life that is currently based on the supposition that we can dodge reality essentially forever.

Correspondent Chad D. recently summarized the profound lack of authenticity in the American experience:

Have you noticed that Americans often don't experience REAL things: REAL food, Real water, REAL relationships, REAL money, REAL freedom, REAL peace of mind, REAL living, REAL leaders, etc. I know you've gotten flack for your extensive use of "simulacrum," but it's so true. Most Americans have no idea what REAL is.

Thank you, Chad. Let's ask just how real our financial markets really are. We can start our inquiry with this thought experiment: where would the stock, bond and commodity markets be if all Central State and Central Bank intervention and manipulation were prohibited?

Where would the stock market be if the Plunge Protection Team (PPT) didn't manipulate the stock market via massive purchases of ES S&P 500 futures contracts? These massive purchases are always executed in sparsely traded pre-markets, maximizing the ramp-up effect, which then triggers momentum chasing buys from high-frequency trading machines.

Voila, ramp-and-camp Mondays, which studies have found account for the majority of the market's gains last year.

Remove ramp-and-camp Mondays triggered by massive PPT futures purchases, and where would the unmanipulated market be?

What if unemployment statistics were unmanipulated, i.e. the number of people in the workforce didn't magically decline by millions every year? What if the bogus "Birth-Death Model" was banned as mere fantasy job creation? Where would the unmanipulated market be then?

Where would bond market yields be if the Federal Reserve were unable to print money to buy hundreds of billions of dollars of mortgage and Treasury bonds?

We can also shed light on the difference between a real free market and a simulacrum of a "free market" by asking: does anyone seriously believe the stock market would be higher if all market intervention and manipulation by the Central State and Central Bank (and their proxies) ceased?

We can extend this by asking: what if public companies were banned from issuing "beat by a penny" pro forma earnings and other accounting tricks?

What if the "shadow banking system" was outlawed, and all assets and liabilities were transparent? Does anyone seriously believe the fragile financial system that depends on shadow banking for its dodges and profits would survive transparency and marked-to-market accounting?

Americans have no real experience of free, transparent financial markets or of rigorously transparent accounting by their Central State, the Federal Reserve, public corporations or the financial sector. They have been presented facsimiles of accurate statistics and accounting, and simulacra of transparent markets.

Average Americans are responding to this systemic destruction of truth and fact by exiting the stock market--and that is just the start. As I described in When Belief in the System Fades (March 12, 2008), the Elites benefitting from the Status Quo depend on the active participation and complicity of millions of citizens.

When those participants' faith in the Status Quo's fairness and transparency declines below a critical threshold, then they withdraw or limit their participation, and the system enters a self-reinforcing death spiral.

To go back to the key question: does anyone seriously believe the stock market would be this high if the Central State and Bank and their proxies weren't constantly intervening in the market and manipulating data?

Intervening in supposedly "free markets" for the purposes of perception management and political spin ("everything's great because the market is up!") is ultimately an attempt to fool Mother Nature. The Powers That Be have succeeded in manipulating markets since 2007, but reality (Mother Nature) eventually shreds the phony facade of perception management.

As the European attempts to fool Mother Nature (i.e. unmanipulated markets that are free to discover price and price risk) disintegrate, does anyone seriously think the PPT can prop up the U.S. stock market with its usual pre-market manipulations?

When Mother Nature reasserts reality, the frauds, scams and facades will shred like tissue in a hurricane. Maybe that process of reverting to reality is finally about to begin.

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LawsofPhysics's picture

Eh er, maybe, banks have been doing this in earnest for several thousand years now.  Just the same, I will hedge accordingly.


"When Mother Nature reasserts reality, the frauds, scams and facades will shred like tissue in a hurricane. Maybe that process of reverting to reality is finally about to begin."

Only if someone with power and a leadership role stands up and fraud at ALL levels is actually prosecuted.  Otherwise, the FEMA camps and re-education camps (the modern "prison") await.  Any bets on that happening?

chumbawamba's picture

What the fuck happened to the Chase credit card robosigning article that was posted right before this one?  I was in the middle of posting a new comment and the article just fucking disappeared!

I am Chumbawamba!

Mr Lennon Hendrix's picture

Rehypothecated to Market Ticker?  I heard that site is getting desperate for views.  Crazy Karl might shut it down because he is so upset with everyone for not believing in pixie dust and unicorn piss :(



Ruffcut's picture

Oh, poor douche banger. He doesn't understand the real world, yet. Still thinks the political system has a chance and is relevant.

I took my mother-outlaw out to dinner (because I had too, wife's orders), and she couldn't understand the markets and why I trade. She never listened to me when I called the GM, Wamu, Lehman busts, years ago. "That doom and gloomer ruffcut", she thought. I said; "I had my security licenses in the late 80's and it was bullshit then and it is just bigger bullshit now."

How much bullshit can the system handle? We shall see, my pretty, we shall see.

Mr Lennon Hendrix's picture

Are you petting your cat or something?

Ruffcut's picture

No, my new puppy. Other great dog died in November of lymphoma. She was only three.

"If dogs don't go to heaven, then when I die, I want to go where they go." Will Rogers

Desert Irish's picture

Another quote and one of his many that could have been written yesterday


"If a bank fails in China, they behead the men at the top of it that was responsible...If we beheaded all of ours that were responsible for bank failures, we wouldn't have enough people left to bury the heads." Feb. 6, 1927



Bob's picture

Same here.  Based upon family information, I was attempting to reply that the banks are sure as hell robosigning court suits for credit card debt.  Sorry to hear that you got hammered, Chumba.  I hear from an attorney who handles these cases that they've been taking debts below $1,000 to court in droves, btw.

Muddy1's picture

I'll post this a couple of places

Maybe the banksters threatened Tyler with a lawsuit.  That's OK, here a three links to similar information, some is recent and some is dated.  Save the information before my comment is censored as well.

dick cheneys ghost's picture

Tony Blair and Jamie Dimon recenty vacationed in Nigeria.........I wonder if there is any correlation to what is now happening to that country?....


"In the space of two days he visited Nigeria’s president Goodluck Jonathan in his capacity as paid adviser to JP Morgan, the US investment bank, and followed that with a faith foundation visit to nearby Sierra Leone. On the Nigerian leg of the journey, Mr Blair was accompanied by the bank’s chief executive, Jamie Dimon, who announced plans for a new office in Lagos."

RiverRoad's picture

Blair's employed by the Carlyle Group.  Interesting; the plot thickens.

jaffa's picture

Interest and other charges are presented in a variety of different ways, but under many legislative regimes lenders are required to quote all mandatory charges in the form of an annual percentage rate. The goal of the APR calculation is to promote truth in lending, to give potential borrowers a clear measure of the true cost of borrowing and to allow a comparison to be made between competing products. Thanks.
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Spacemoose's picture

i had a chase card with a five digit balance.  i had been making less than the required payment to chase (and was paying my employees instead, inter alia).  late last year i got a collection call and they offered a 36 month payoff at 0 % interest.  i declined because it would have shown on my credit report as a workout and instead i paid the debt off with an in service 401K distribution as soon as the new tax year began. 

my plausible theory:

someone with a calculator has figured out that aggressively pursuing these debts drives enough debtors into bankruptcy that the additional recovery from said pursuit is outweighed by additional attorney fees in bankruptcy and loss of partial payments that they would have otherwise received by letting things ride.    

i've learned my lesson (at 25% per annum). never again.  never again.  

blunderdog's picture

Quite plausible.  Here's another possible factor, too:

Many customers are literally too broke to pay, and their credit is already trashed, so when collectors call them, they say, "Forget it, I ain't payin, see ya in court."

Many collections amounts are far too small to be worth pursuing in court, so they've wasted $X dollars trying to collect already and don't want to throw good money after bad.  It wouldn't surprise me if a lot of the commission-style collections agencies are going out of business themselves.

Desert Irish's picture

I suspect by now Jamie knows what colour underwear the Tyler's are wearing on a daily basis and his lawyers have them on speed dial.

Muddy1's picture

Maybe the banksters threatened Tyler with a lawsuit.  That's OK, here a three links to similar information, some is recent and some is dated.  Save the information before my comment is censored as well.

TheFourthStooge-ing's picture

chumbawamba asked:

What the fuck happened to the Chase credit card robosigning article that was posted right before this one?  I was in the middle of posting a new comment and the article just fucking disappeared!

Good question.

I still have the article open in another browser tab from this morning, so I was able to retrieve the URL for the original article, which is, at least for the moment, still available.


pods's picture

I was wondering that one too.  Never seen an entire article disappear.


Cynthia11640's picture

Ya I wanted to know what an administrative discharge was - never heard of it and it was a comment to the article. Can anyone help?

Oh regional Indian's picture

America is the Truman Show. And Hollywood/MSM are tryign to make sure it's the Truman show everywhere.

And because they have the biggest illusion to lose, Americans are most fearful of REALITY aka Truth.

Truth is a rare commodity now-adays. Easier by far to be an ostrich.

So of course the markets are a lie too. Just Google Ming the Mechanic and DTCC. It's been a lie from the start. So sorry.

Enough Said.



Mr Lennon Hendrix's picture

The light!  It burns my eyes!!  My eyes!!!

GeneMarchbanks's picture

The biggest cult in history by far. Freedom is everywhere in America but no one bothers to look for it. Oversimplicity of journalistic scribbling, pointlessly complex scientific half truths and prepackaged entertainment are all in abundance. Americans have everything and anything. Except themselves.

SheepDog-One's picture

I hear that will make you go blind.

Oh regional Indian's picture

:-) But seriously, check it out. Cartoon. Really well done.


Jason_1sandal's picture


I feel we are being assaulted on both fronts.... fear and amusement.

Oh regional Indian's picture

Isn't that right JAson? our candle is being burnt by a blowtorch at both ends FOR us.


Jason_1sandal's picture


Yes, Escaping this reality, this Matrix, isn't so easy as taking the "red pill." I've done my best to disconnect from this system, but you cannot escape it completely. It has permeated everything, even our not yet concieved children. We are born into it as were our parents, and their parents before them and so on and so on. I feel all we can look forward to now is it's self destruction and maybe, just maybe we will survive.

DCFusor's picture

You win my personal link of the day contest, ORI.

What's funny is that both could be true at once...

Dapper Dan's picture

Thanks bob,

The following reader comment sums it up,

  • Flag

  • The Times long ago lost its trust by showing its bias towards Israel in the geo political sphere. Few expect the Times to sort out truth from fiction but that provides opportunities for the blogging phenomenon. It gives us the joy of speaking truth to power, even if, few Americans are interested any longer. I'm sure historians will mark this era by the failure of media and the demise of print media in general. Though it is astonishing that the media has fallen so far, so fast. I don't know any intelligent individuals any more who credit the media institutions of yesterday with what we used to call journalism. The Powers That Be, are no longer.


    SheepDog-One's picture

    A few see the truth of it already, and have taken the proper actions....most will never see it or accept the truth until its far too late for them.

    Mr Lennon Hendrix's picture

    And we buy silver, for silver is monie....

    And it's fucking cheap too!

    Amish Hacker's picture

    Still, you have to believe that truth will have the last word. And if that is true, then it makes sense to invest in something honest. Honest money, say.

    LooseLee's picture

    "Truth is a pathless land"...Jiddu Krishnamurti

    The Big Ching-aso's picture



    Here's the difference.    When you go to a casino you absolutely know when you've lost or won a gamble by looking at the numbers.   Today in the markets you sorta know if you've won or lost depending on what they tell you the numbers are.     Then they suddenly change the numbers after you thought you won while you stand there at the payout-window with your pants down around your ankles.   It's a wonderful gambling experience.

    It's like the Casino from Hell and Satan is the dealer.

    Things that go bump's picture

    Casinos are paying winning beats in blow jobs and head these days? 

    francis_sawyer's picture

    No that's just to get your chicken mcnuggets...

    MrBoompi's picture

    In order to achieve the "power and leadership role" you mention, you have to sell out to the very people you would have to prosecute.  You become a part of the "organization" at that point.  You are a made man.

    And god only knows what would happen to you if you cross them.


    Ewe235's picture

    He forgot another... REAL tits.

    The Deleuzian's picture

    Clearly...CHS is a big fan of Baudrillard

    Oh regional Indian's picture

    if this is who I think this is, please post a link to your post on Baudrilliard. Brilliant stuff, I can't find it. Deep in my bookmarks.


    The Deleuzian's picture

    ORI...Best advice to you sir is to read Simulacra and Simulation...

    prains's picture

    here's the link


    you'll have to roll up your sleeves to read




    also reading Fatal Strategies and Hyperreal America can enlarge ones proboscis for sniffing out great american cultural (value-engineered) morsels 

    must have a multi dimensional mind to attempt

    JOYFUL's picture

    yup, it be me alright. I put it up on Scribd, but the font really sucks and I haven't figured out how to fix it. Here's the original.

    funny day, I'm posting on Eddie Shack and Jean Baudrillard...only on ZH you say!>?!?!

    Hey ORI, still looking to be booking my class 3 Kashmirian houseboat, but sounds like the weather's a tad cold there now...more evidence of global warming?

    Oh regional Indian's picture

    Aha! Aha.

    Everyone should read this. It is superbly written, incisive and divisive ;-), right Joyful?

    And aha again. Yes, all well here and Kashmir is a no no. Perhaps Kerala, check that out.


    jaffa's picture

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