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Stock Market Manipulation Print
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Sunday, 05 May 2019 08:36

Stock market manipulation

The second story is how the stock market is about to collapse. The story is getting a little stale now as each mini sell off leads to another rally. Is it because the US Fed has put on hold any more rate rises or is it because of the impending wonderful US-China trade deal, etc?

Back in 1982 stock market manipulation was made legal. Not all manipulation of course but just share buy backs by companies. US congress is now getting hot and bothered. They have only just realised that Trumps tax cuts, and offshore repatriation of overseas company profits, were spent buying back their own shares, not paid out as special dividends. And so they want to ban buybacks again.

Buybacks have reduced the float of shares available and now represent a substantial lump of the S&P's market capitalisation. Without buybacks and Sovereign nation buying such as the Swiss National Bank, would the market be as High as it is? Unlikely.

Who benefits from buybacks? Just the insiders from share options and only those who decide to sell their shares. You can read more here.

Goldman Sachs have pointed out that should buybacks be banned, the stock market will collapse. Since 2007/8 over $5trillion has helped fuel the market with $900 billion last year and much the same expected in 2019.

This could be the biggest risk to the Trump rally, but by looking at the S&P pushing towards it's 2016 high the market this week suggests there is no chance of congress reversing that 1982 directive.

 

From the blog

You load 16 tons and whaddyget?

You load 16 tons and whaddyget?

What Kondratieff is telling us..

Way back in the days of wind up gramophones, my first 78 was that great number by Merle Travis. Reading an article this morning it resonated as China is said to have added just under 16 tons of Goldto it's reserves.

Maybe it's just the Gold bugs dropping bullish articles around the internet in an attempt to pump up prices. Perhaps they are the same people who tell us the Fed keep dumping massive numbers of Gold sell contracts whenever the price rallies.

Read more...

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