Market Manipulation: Exhibit 1 Stock Action on Feb 25, 2010

Stop being naive in believing that the stock market is ‘efficient’ and all those nonsensical theories developed by some crackpot economists.  In a LESS manipulated market, you may have a chance at making money in ‘investing’ or ‘trading’ securities. You might ask, “what about making money in the current market environment?” To that I say, “fat chance!”

Do you want to know how they spread rumors and manipulate stock market? This comes to you via Zero-Hedge.

Rumor vs. Fact: An Insider’s Report on a Manipulated Market

As an example, the March S&P futures gapped open much lower due to the poor economic data (coming later) and quickly put in a low at 1084.70.  From there the high frequency traders (HFT) took over and churned the markets back and forth slowly for the entire morning and early afternoon session, thus keeping fear at bay.  Additionally, when the market did swoon a bit, Golden Slacks supported the market by buying large size in the big S&P pit.

In the early afternoon it hit like a mad PPT trader masquerading as a legitimate agent of the NY Federal Reserve: MASSIVE BUYING!  Within minutes the S&P500 along with the other major markets took flight and quickly rallied 1%. Had a rate cut followed the recent rate hike?  Was the recent horrific economic data revised by the BS artists at the BLS?  Nope – the market took off because it was rumored that AAPL would split its stock 4:1.  Yep.  A rumor.  A *^%$#!G rumor!  About 30-minutes after the short covering carnage started AAPL denied the story…and the market proceeded to ADD to its gains.

When the S&P500 came upon the 3:15pm close, the market had settled negative, but hardly.  The rally was good for 17.50 points from the low equating to a 1.6% reversal.  And in case you didn’t know, a 1% market move equates to well over $100 billion in market capitalization.  Therefore, this amazing move tacked on ~ $180,000,000,000.00 to the US (non-rigged) market cap.  How nice.

Oh, did I mention this was based on a RUMOR…an UNFOUNDED RUMOR?  Not to worry though folks – you can bet your bottom dollar that the fellas on Fraud Street weren’t about to let a massive rally fade away to nothing. After the initial period when AAPL denied the rumor and the market churned around 1097.00, then the market went even higher.

Said another way, Fraud Street kept the gains based on a known FALSE rumor…and then…wait for it….wait for it…I G N O R E D the real news of the morning.  It was a well timed replay of the Greek bailout rumor of Feb. 9th.   How healthy is this market if its best moves are 100% fabricated bull$#it? [This last line say it all. Click here for full story.]

“Fraud Street” and “Lame Street Media!” I love it! I might use this later. BTW, PPT stands for Plunge Protection Team, a derogatory name given to the Presidents Working Group on Financial Markets. PPT was formed in the aftermath of October 1987 crash to prevent market crashes. Oh yes, the Crackpot Greenspud – the ‘champion’ of free-market economics has signed off on it. If  the markets are really free, there is no room for PPT in a free market society.

Here is another related note on inefficient (manipulated) markets.