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Specialist Manipulation of Individual Stocks And MarketsA Question Of Fact Or Fiction?
In my opinion the market place as a hole andindividual stocks in general are under heavyaccumulation by the specialist system andmore importantly by individual specialists.The problem I have with this is the fact thatindividual investors continue to sit on their hands and watch as specialists continuallyand consistently rob their hard earned moneyfrom their financial accounts. Investors are stillunder the belief that the stock market is an“Auction Market”, driven by their buying andselling of individual stocks and mutual fundsthat they invest in. Nothing could be further from the truth.For the entire 20
th
and start of the 21
st
centuries specialists have exerted their controlover the market place creating the booms andbusts of market cycles. If you don’t believe thisask yourself the following questions,
during theGreat Depression of the 1920’s and early 1930’s asindividual investors and corporations were wipedout how is it that specialists made massive profitsfor themselves and their corporations?
Also,
why is it that during every major recessionthat this stock market has weathered in the last 100plus years those same specialists have madeexorbitant profits
? And most importantly
why is itduring the market crashes of 1963, 1987, and 1998specialists made record profits for themselves andtheir companies at the expense of investors?
The answer is simple; investors don’tunderstand how the market place works.When they
 
invest in a stock and they make arare profit they are overjoyed with their success. When they lose money on a stocktheir broker simply tells them they made apoor investment choice and moves on.Specialists are able to continually cheatinvestors of their profits by hitting them with athree-pronged attack. These three levels of attack are as follows, the use of the “
media
” tocontrol investor’s insights and knowledge of the market place and individual stocks. The
Federal Reserve
and its control interest ratesand money supply for both corporations andindividual investors. And finally the specialists’use of his “
short sale
” to control market andstock tops and his “short covering” toaccumulate stock and stop market declines attheir cumulative lows.Now you ask yourself how is this all possible,well the answers are simple, when one hasbeen indoctrinated from the time he or she haslearned how to handle money in the wrongmanner, it is virtually impossible to make theproper decisions when buying and sellingstock.All of the information that the individualinvestor receives, whether via the internet, hismorning stock pages, or via the electronicnews media, (IE) TV and cable networks isgenerated on the 14
th
floor of the New YorkStock Exchange. The Exchange fabricates allof the information about stocks prices, splits,mergers, scandals and potential failures. It istherefore impossible to get the proper information from them to make the educatedinvestment decisions necessary to besuccessful in the market place.They are also used to continually inundate theinvestor with shaded information when itcomes time for them to either enter of leavethe market place. As stocks are reaching their collective all time highs and investors shouldbe selling out to prepare for the imminentdecline, but instead they are coerced intostaying into the market place and buying morestock at these inflated highs as specialists andmarket and Exchange insiders are themselvesleaving the market place.The same can be said as the marketsapproach their collective bottoms. As investorsshould be considering buying more stock astheir issues move down they are again
 
coerced into leaving the market place as themedia paints a picture of major catastrophicdisaster for the investing public. They paintsuch a bleak picture that investors throw uptheir arms in disgust and sell everything atmassive losses just to try to save face.The “
Federal Reserve
” is another tool thatspecialists use to force investors to make thewrong decisions. Recent history has againproved this point to be true. Just last monththe Federal Reserve dropped interest rates
1-¼
points in order to keep investors in themarket place. As they dropped rates themarket rallied for several day’s giving theappearance of strength while specialistsunloaded stock back to the market place thatthey had picked up as they cleared their collective books of sell orders.After that unloading process was concludedspecialists again moved the market lower.Now we are again in the throngs of a major decline and the Federal Reserve will morethan likely step in at next weeks meeting andcut rates by another 1 percent. This will have atwo-fold effect on the market place. First it willgive specialists the opportunity to againunload stock picked up during the declineback to the public before moving lower.It will also force investors to stay in the marketat the very time that they all know that theyshould be selling out. They can’t leave themarket for the safety of cash instrumentsbecause in their minds the 2% plus rate of return won’t justify their needs.The third and last dagger in the hearts of investors is the specialist and his use of the
short sale, and short covering
.” As statedearlier specialists rallied the markets sharplyhigher last fall creating their highs in August2007. At those highs they sold out their tradingaccounts and more importantly
their personallong-term investment accounts
. They thencontinued to rally stocks while they sold 100’sof millions of shares of stock short.After completing those short sales they beganthe decline that we are in now. When theyapproach their lows which I believe will be inthe range of the
9,200
level they will use their short covering abilities to again refill their trading account, and more importantly their personal long term investment accounts.For those individuals who don’t believe thatthis type of manipulation is possible in today’ssociety look at the following examples of stocks. The issues listed below are all issuesthat will come under heavy accumulation attheir lows by specialists and market makers.Notice how each is now dropping sharply fromits previous highs last year:STOCK:HIGH CURRENT PRICEAAPL:$204.00$126.50GS:$240.00$157.00NYX:$112.00$59.50WB:$60.00$26.50LEH:$172.00$39.25BSC:$173.00$30.00The next several weeks will be very volatile for the average investor. He will be beset withmajor declines in his stocks prices and morethan likely will be forced to sell them at losses.One final point on the specialists’ manipulationof individual stocks and the help it gets formthe Fed and the Media in its quest toaccumulate said stocks. Yesterday it came tolight that two of Bear Stearns funds werebecoming insolvent and that they were goingto have major capital withdrawals from thecompany.The media announced this news after themarket close the previous day. This allowedthe specialist to manipulate the stocks price atthe open in order for him to maximize hisprofits for the following day’s open. He openedthe stock down
$4.00
on a trade of 
500
sharesand then dropped it another 
$28.00
on thenext trade of 
1500
shares. How can you justifytaking
$32.00
from a stocks price on
2000
shares traded?
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