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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Federal Reserve Colludes With Banks To Drive Up Stock Prices

Stock-Markets / Stock Markets 2019 Feb 26, 2019 - 01:51 PM GMT

By: Barry_M_Ferguson

Stock-Markets

Insider trading occurs when someone makes money investing in a public market with knowledge unavailable to the public. Martha Stewart was jailed for such activity or more specifically, lying about insider trading.

Insider trading is a charge reserved for little people. The swamp protects its own.

Insider trading was even perfectly legal for our members of Congress until just a few years ago. Speaker of the House Pelosi is known to have made a tidy fortune with such privilege. For instance, when Visa announced an IPO, Ms. Pelosi bought in. Is she a great investor? Hardly. There was legislation in the House that would have added regulations to credit card companies like Visa but Ms. Pelosi made sure that legislation never made it to the voting floor. Imagine, a proposed government regulation that Pelosi did NOT agree with. I wonder why? Visa IPO’d and burst higher enriching Ms. Pelosi. Today, the same speaker calls for a ‘moral economy’. Really?


Incidentally, legislation barring congressional member inside trading used to be considered unnecessary because surely our elected leaders would have the decency to refrain from such unfair practices. What kind of low-life scum goes to congress only to enrich themselves with immoral practices? Uh, well, given the afore mentioned Pelosi parasite and the rest of our recent members of government, Congress passed a bill to prohibit this practice in 2012.  

I had an investment advisory practice during this time. Had I done what Ms. Pelosi did, I would likely still be in prison. Which brings me to the story at hand.

As of 2/22/19, we suddenly witness the best start to the Dow in 55 years! The Dow is up 9 weeks in a row. That’s the best streak in 25 years! The Dow is up 8 weeks in a row to start the year. That hasn’t happened since 1964! This streak is marked on the chart with the green ‘Fed Wave’ arrow as shown on the chart below.

Before the recent ‘Fed Wave’, 2018 saw an ugly ‘Blue Wave’ down as democrats took solid control of the US House of Representatives. Communism is not conducive to strong economics. This decline is the blue line on the chart below.

And before that, stocks had rallied nicely due to the belief at the time that the democrats might not gain such a House majority. Sure, the democrats rigged the elections but that’s another story. But, that election rigging was another fear of a people who understand that liberty leads to prosperity. Restricted liberty leads to poverty. Democrats peddle poverty. Or, as communist democrat Bernie ‘the talking coconut’ espouses, communism is great because once it destroys the economy the new communist government can feed people with bread lines. Only a total idiot would follow a fellow idiot into proven failure. Sadly, America has a sizable population of idiots.

Back to the recent ‘Fed Wave’. It should be clear to anyone with a functioning brain cell that the Federal Reserve Bank, as I have written for the past 20 years, is a bank cabal designed to destroy the US by redistribution wealth to the upper elite class by inflation, money printing, and debt slavery. All the while, they keep the stupid people fooled by rigging stock prices higher and higher. Corporate earnings are as meaningless as a referee in a WWE wrestling match. They are part of the scenery that gives the illusion of credibility. Forget Elliot waves. Forget technical charts. All as meaningless as an economics degree from Boston University. Even Ocasio-Cortez has one of those.

Stocks rise when the Fed says they should rise. Again, as I have been writing the Federal Reserve establishes what I call the Dikembe Mutombo Line. Readers can review my past postings on the subject but I predicted months ago that the Dow 24k line was a DML Sure the democrat take over of the House exacerbated a stock selloff but not to fear. The Dow dipped below 24k and dropped to the 22k level by Christmas Eve, 2018. Did panic set in? The Nasdaq actually fell 20% to where pundits mentioned the word ‘bear’. Interestingly, the Fed let the S&P 500 fall 19% before they put Dikembe to work.

Here is the scene. The Dow suffered its biggest Christmas Eve loss in history.

Then, according to Treasury Secretary Mnuchin himself, the PPT (Plunge Protection Team) convened. What did they do? Well, Mr. Mnuchin himself says he called leaders of the six largest US banks - JP Morgan, Citigroup, Goldman Sachs, Morgan Stanley, Bank of America, and Wells Fraudulent (Has Wells Fargo officially changed their name yet to denote their actually banking practices?).

Guess what happened the next trading day? Yep, the Dow logged its best ‘day after Christmas’ in history! The Dow was up a thousand points. Small caps were up. Mids were up. Everything. Antarctica? Yeah, it was up. Saturn, Neptune, the Andromeda Galaxy? Yes, didn’t I say ‘everything’? Up, up, up! On Doner and Blitzen and Dasher and…uh. Wait a minute. That’s the other Santa Claus. I get the Fed and Santa of the North Pole mixed up.

Investors may have felt smug and smart but not so fast. Really smart investors had their money where it really gained. Yes, I’m talking about Venezuela! Their stock index was up over 6% in a single bound. Wait a minute, that’s Superman. I get him mixed up with the Fed too.

Sure the stock market is rigged. Sure, it’s a complete con game. Of course, this makes the anti-capitalists like antifa look like absolute morons. To be clear, to anyone with a functioning brain cell, the US is not a capitalist nation. Why then do some people complain about economic unfairness due to capitalism? A system in which the Federal Reserve Bank rigs the stock markets in favor of the rich and famous is in no way capitalist. Why do I think so? Empirical evidence. As Yogi Berri once said, “You can observe a lot just by watching.”

On Christmas Eve, the Nasdaq had fallen into an official bear market. The Dow and S&P were close behind. The PPT met. The next day stocks began to rally and have not stopped since. Coincidence? What else could so immediately arrest a bear market and turn it into a bull market in eight weeks? Before Christmas Eve, President Trump floated the idea of firing Fed Chief Powell because the President was unhappy about the Fed’s course of interest rate hikes. Mr. Powell got the message. The PPT convened. Ergo, stock prices are fixed by the Fed. Nothing else matters. 

So, here is what we should all wonder.

Does this chart below look like normal investing?

Does this chart reflect a ‘market’ as it simply goes up every single day every single week?

Is it even possible for the stock indices to suffer a daily loss? Weekly?

The Fed met with the leaders of the six largest US banks to discuss the fall of the stock market. Do you think they talked about auto manufacturing? Utility output? The unemployment rate? Ha! Of course not. This is all about the stock market and how to manipulate it higher. We have to keep the stupid people fooled!

So, I ask again, what did the Fed tell the big banks that the Fed did not tell the rest of us?

I’m guessing it went like this. The Fed said to the cabal bankers, “Guess what I’m going to do tomorrow?” At this point they are winking rapidly at the listener.

I’m guessing the banksters immediately phoned their trading desks with the good news. Go all in, Baby! The Harlem Globetrotters are playing tomorrow and I know whom to bet on. Away, Prancer and Dasher…

Sorry, I keep getting the Fed confused. But to the point. Is this not insider trading? What if Mr. Powell had called any of the rest of us and told us what was going to happen the day after Christmas?

Why doesn’t the Fed start a lottery where they randomly choose six people to dial up before their next big intervention?

Why doesn’t the US government move all of my social security money to JP Morgan for the win, Alex! 

All I’m asking is why can’t Mr. Powell give me a quick ring before his next big move? Insider trading can be very profitable. It’s the ‘american way’. Just ask Nancy Pelosi and the big banks.

1-year Dow

Chart courtesy stockcharts.com

Barry M. Ferguson, RFC
President, BMF Investments, Inc.
Primary Tel: 704.563.2960
Other Tel: 866.264.4980
Industry: Investment Advisory
barry@bmfinvest.com
www.bmfinvest.com
www.bmfinvest.blogspot.com

Barry M. Ferguson, RFC is President and founder of BMF Investments, Inc. - a fee-based Investment Advisor in Charlotte, NC. He manages several different portfolios that are designed to be market driven and actively managed. Barry shares his unique perspective through his irreverent and very popular newsletter, Barry’s Bulls, authored the book, Navigating the Mind Fields of Investing Money, lectures on investing, and contributes investment articles to various professional publications. He is a member of the International Association of Registered Financial Consultants, the International Speakers Network, and was presented with the prestigious Cato Award for Distinguished Journalism in the Field of Financial Services in 2009.

© 2019 Copyright BMF Investments, Inc. - All Rights Reserved

Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. 


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