Who are the Friends of the Fed? Friends of the Fed are dealers who insure the Fed that newly created money will be channeled into appropriate financial markets. More important Friends of the Fed are the high frequency trading firms who orchestrated short squeezes and manage uptrends in a positive manor. Friends of the Fed are loyal to the Fed as long as the Fed can and does guarantee risk free profits for them.
How do I know, there are Friends of the Fed and that the market is manipulated? It actually is more than a guess. How did astronomers decide that Pluto existed before it was visible? They could see the effect it was causing. For two decades, the stock market has moved with consistency that is not possible in a natural market setting. In a natural market setting, things don’t always turn out right. When one company reports bad earnings in a rigged market, that is always offset by supper good news of another nature. Situations don’t turn out that way over and over again by coincidence. Affirmative stock market action is real and ongoing. It is completely self serving for most to pretend that it ordinary investors are driving the market up. The market is being managed and it will be until one or more of the tools of manipulation wears out. There is never solid information in the present moment. We have to figure out what is going on.
You would think stock buybacks would be discontinued because they work to the eventual determent of the corporations. Stock buybacks are not for the benefit of business. They are a payday for corporate insiders. Buybacks will not be the first tool to disappear.
The Fed is having trouble guaranteeing profits to the Friends of the Fed. Dealer activity is naturally reduced when QE is discontinued. The high frequency trading companies flourish in an atmosphere when virtually all trades take place in less than a minute down to a fraction of a second. Volume must also be kept low. The time will come when complete short term trading is no longer in vogue. That will kill the high frequency trading firms and they will be the first of the tools of manipulation to fail.
What constitutes volume? If we subtract the volume from money that does not stay committed over night form over all volume, it is easy to see that very little in the way of long term holdings, is changing hands. When long term holdings start hitting the market, there will be no stops to run. There will be no buyers either. So, will the market drop? Of course it will but that doesn’t mean the game is over. There will be ingenious initiatives that will serve to pass as many losses as possible to the general population.
