Crash weighs in on the bizarre NY Post article by Crudele last week calling for direct government intervention in the equity markets:
prudentbear.com
Lastly, John Crudele had another article in this morning’s New York
Post. That I have linked below. As I suspected, his article last week
calling for Uncle Al to "save" the market was not a spoof. He was
serious. There’s two big fallacies in this article. The first being that
the market can be "saved." When the market is ready to go down, it
will go down. It cannot be stopped. I don’t care how many
manipulations are tried. Ask Japan, their government bought stock all
the way down from the Nikkei peak in 1990. Ask an oil trader if
Clinton’s numerous pronouncements that oil had topped and should
go down ever worked? Ask if the SPR release pushed oil lower?
Manipulations are short term band-aids, not a fix. Now, I actually
doubt there was any manipulation by the Fed or Federal government
on Wed, but I have no doubt that some Wall Street firms were in there
trying to jam this piggy higher. It’s in their vested interest to keep this
sham going as long as possible. After all, these were the same guys
telling you to buy CMGI at $160 (now $17), YHOO at $250 (now $59),
and AMZN at $113 (now $31). It's no coincidence that the more and
more stocks are far far beneath their highs, yet the indexes magically
never take a big fall. You see that would clue in the public to what the
Street already knows, that this game is winding down.. slowly to be
sure, but it IS ending. At some point it will accelerate as the herd
catches on, but for now they continue to blissfully buy bounces as
stocks slowly grind lower. The second great fallacy in the article is
that we "need" this manipulation to prevent all the innocents from
being hurt. Now, nobody likes bad things in financial markets to
happen just like they don’t like hurricanes hitting coastal towns. But,
to have everyone make an agreement to pretend like a hurricane is
not coming so that when it arrives it won’t do damage because
damage is bad is just plain nuts. Nobody wants the hurricane to come,
but you can’t just ignore it. Mother nature will do what she is going to
do. The only way to avoid the problem is to leave town and move
inland because whether you are there or not, the storm is going to
come ashore. Unfortunately, Crudele is right about one thing.
Everybody is going to pay as this bubble deflates. That’s why
financial bubbles have such disastrous consequences and why a
responsible central banker would act to prevent them from ever
occurring in the first place. |
