bobbyw24
Banned
- Joined
- Sep 10, 2007
- Messages
- 14,097
By Jon D. Markman
When references are made to the world's "oldest profession," I sometimes wonder if we're not exactly referring to market manipulation. In this country alone, market operators have been employing all sorts of market manipulations for more than 100 years.
What may surprise you is that most of it isn't illegal or even improper; in institutional circles, it's actually viewed as shrewd business.
One such manipulation was put on display this week - a news development that had me howling in disbelief and left me in awe of the evil genius of Goldman Sachs Group Inc. (NYSE: GS).
But if we step back, there's a lesson here - a lesson that points to real potential profits if we stop to understand what's about to happen before our very eyes. It's a lesson that I preach to investors - that the institutions that operate the market and maintain its very framework, also "influence" that market's movements. In fact, this real-market "case study" confirms the profit strategy that I've set out in this special report.
These machinations are completely legal. But they do happen and those who understand that also have the opportunity to profit from that knowledge. And you don't even have to be part of the institutional elite to do so if you know what to look for.
Surely you have heard by now that the Goldman partners have decided to pay their top brass in stock instead of cash bonuses this year. So do you think it is any coincidence that Goldman shares have mysteriously declined recently? After one of the most profitable years of all time due to the company's involvement in dozens of sovereign and corporate debt and equity deals, and its successful prop-desk trading of the recent volatility?
If you had the ability to drive down the shares of stock that you were about to receive, wouldn't you do it? Goldman doesn't actually have to sell its stock to drive its value down; all its treasury department needs to do is stop supporting it during the day with buybacks.
As noted, it's not improper, it's just smart business. You can see how much Goldman's stock has fallen - compared to an industrial company like 3M Co. (NYSE: MMM) in the chart above. Since mid-October, Goldman shares are down 12% while 3M is up 9%. I seriously doubt that the pounding of Goldman's stock relative to the shares of 3M is occurring on the basis of fundamentals; it's most likely all structural.
You can be sure that some of Goldman's financial-industry cronies will be announcing the same sort of stock-based compensation too, and it will turn out to be no coincidence that their shares have fallen dramatically while most other sectors of the market have been buoyant.
Once those bonuses have been paid and the prices recorded, expect the prices of these shares to levitate, as if by magic. My guess is that this will happen at the start of the New Year, if not late in December.
Be ready to swoop in and take advantage.
The past week amounted to a series of messy, choppy sessions that reflect normal, structural change that goes on at this time of year: Some fund managers engage in end-of-year tax-loss selling; other managers tidy up their accounts so that they look all nice and pretty for customers' last account statements of the year; and still others prey opportunistically on the prior two groups.
The choppiness occurs because of the meeting of these two opposite forces: Stocks that have been super-strong, like Apple Inc. (Nasdaq: AAPL), come under some pressure as investors rebalance their winners into other stocks. And of course others take advantage of those dips to add those winning names if they don't own them already. In short, there is just a ton of gamesmanship in the first two weeks of December that makes for uneven, seesaw action.
Continued...
http://www.commodityonline.com/news/Is-Goldman-Sachs-manipulating-stock-market-23862-3-1.html
When references are made to the world's "oldest profession," I sometimes wonder if we're not exactly referring to market manipulation. In this country alone, market operators have been employing all sorts of market manipulations for more than 100 years.
What may surprise you is that most of it isn't illegal or even improper; in institutional circles, it's actually viewed as shrewd business.
One such manipulation was put on display this week - a news development that had me howling in disbelief and left me in awe of the evil genius of Goldman Sachs Group Inc. (NYSE: GS).
But if we step back, there's a lesson here - a lesson that points to real potential profits if we stop to understand what's about to happen before our very eyes. It's a lesson that I preach to investors - that the institutions that operate the market and maintain its very framework, also "influence" that market's movements. In fact, this real-market "case study" confirms the profit strategy that I've set out in this special report.
These machinations are completely legal. But they do happen and those who understand that also have the opportunity to profit from that knowledge. And you don't even have to be part of the institutional elite to do so if you know what to look for.
Surely you have heard by now that the Goldman partners have decided to pay their top brass in stock instead of cash bonuses this year. So do you think it is any coincidence that Goldman shares have mysteriously declined recently? After one of the most profitable years of all time due to the company's involvement in dozens of sovereign and corporate debt and equity deals, and its successful prop-desk trading of the recent volatility?
If you had the ability to drive down the shares of stock that you were about to receive, wouldn't you do it? Goldman doesn't actually have to sell its stock to drive its value down; all its treasury department needs to do is stop supporting it during the day with buybacks.
As noted, it's not improper, it's just smart business. You can see how much Goldman's stock has fallen - compared to an industrial company like 3M Co. (NYSE: MMM) in the chart above. Since mid-October, Goldman shares are down 12% while 3M is up 9%. I seriously doubt that the pounding of Goldman's stock relative to the shares of 3M is occurring on the basis of fundamentals; it's most likely all structural.
You can be sure that some of Goldman's financial-industry cronies will be announcing the same sort of stock-based compensation too, and it will turn out to be no coincidence that their shares have fallen dramatically while most other sectors of the market have been buoyant.
Once those bonuses have been paid and the prices recorded, expect the prices of these shares to levitate, as if by magic. My guess is that this will happen at the start of the New Year, if not late in December.
Be ready to swoop in and take advantage.
The past week amounted to a series of messy, choppy sessions that reflect normal, structural change that goes on at this time of year: Some fund managers engage in end-of-year tax-loss selling; other managers tidy up their accounts so that they look all nice and pretty for customers' last account statements of the year; and still others prey opportunistically on the prior two groups.
The choppiness occurs because of the meeting of these two opposite forces: Stocks that have been super-strong, like Apple Inc. (Nasdaq: AAPL), come under some pressure as investors rebalance their winners into other stocks. And of course others take advantage of those dips to add those winning names if they don't own them already. In short, there is just a ton of gamesmanship in the first two weeks of December that makes for uneven, seesaw action.
Continued...
http://www.commodityonline.com/news/Is-Goldman-Sachs-manipulating-stock-market-23862-3-1.html
