The markets are manipulated. All markets are manipulated. What's the 'take away' ? You have several choices:
- A Get a job at one of the manipulators, break off and start your own manipulation firm
- B Find out how they are doing it and do it yourself (if you have a really rich Uncle, otherwise this option won't work for you)
- C Find a crack in the market manipulation engine and exploit it
- D Day Trading (but this is really, really, really tough and even if you can manage it, your years are limited.)
Ways to not win, or barely beat inflation:
- X Buy and hold
- Y Stock picking
- Z Buy and hope
Both methods, statistically, will lead to ruin. You would have been right buying and holding the Amazons (AMZN) and the Googles (GOOG) but how about the Worldcoms, the Enrons, the Kodak's.. The Refcos.. (we did HODL to Refco and we got a check for .30 cents on the dollar via bankruptcy court). Stock Picking and Market Timing (when will the market bottom or top) is also dangerous because even if you're a well funded Genius, you can't be right all the time. This blast from the past is inspired by a first screening of the original "Fight Club" with the family all together, the inspiration of the theme of this site. We tried to cover this topic on a high level in our work Splitting Pennies - but although this video is still on youtube, the meme remains well hidden from the masses. Even Zero Hedge, if you ask most people, think that we're some political site. Is it left? Is it libertarian? No man, it's just free. They don't know what free is, being overwhelmed with thousands of 'media missiles' every day. Democrats, Republicans, and all in between are brainwashed by their own propaganda, their own Dogmas. This interview is just fascinating.. in many ways, most notably how Cramer easily switches from the 'hedgie predator' to 'party line' as if he's 2 different people. Cramer is a smart guy, one wonders what a smart guy is doing as a TV personality, but then again, a TV icon recently became president.
In March 2007, a December 2006 interview from TheStreet, Inc's "Wall Street Confidential" webcast stirred controversy after it appeared on YouTube.com. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices—some of debatable legality and others illegal. He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, "A lot of times when I was short at my hedge fund...When I was positioned short—meaning I needed it down—I would create a level of activity beforehand that could drive the futures." He also encouraged hedge funds to engage in this type of activity because it is "a very quick way to make money." Cramer stated that everything he did was legal, but that illegal activity is common in the hedge fund industry as well. He also stated that some hedge fund managers spread false rumors to drive a stock down: "What's important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it's important to create a new truth, to develop a fiction." Cramer described a variety of tactics that hedge fund managers use to affect a stock's price. Cramer said that one strategy to keep a stock price down is to spread false rumors to reporters he described as "the Pisanis of the world." The comment was a reference to CNBC correspondent Bob Pisani, who reports from the trading floor of the New York Stock Exchange. "You have to use these guys," said Cramer. He also discussed giving information to "the bozo reporter from The Wall Street Journal" to get an article published. Cramer said this practice, although illegal, is easy to do "because the SEC doesn't understand it." During the interview Cramer referred to himself as a "banking-class hero."
Think about that next time you pickup your mouse and want to go long. And one other thought - if 'Big Money' or as Cramer calls it "Smart Money" is able to manipulate the stock market, then how much does it take to manipulate Bitcoin, or any other Crypto? We all know about the not so secret Goldman Holdem Crypto desk, we can only imagine how deep their paws are into Crypto pies, as makers and takers. Markets are manipulated. Accept it, learn it, in case you forgot - repeat it. Markets are Manipulated. So consider this next time you're watching a YouTube video by a 20 year old with multi colored hair talking about Bitcoin going to 1 Million. Remember that more than 60% of the Bitcoin 'float' is controlled by 1,000 people who are all 'White Libertarian Bros' who are all friends. Thanks DB for the reminder about the 'Washing Machine' so interesting! The game evolves but it doesn't change. Crypto isn't any different, it's just window dressing, but without the regulation. To learn more about Market Manipulation checkout Splitting Pennies and then Graduate to Splitting Bits.