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The Stock Market Can Be Manipulated

Almost daily, as stocks go up and stocks go down in our market, the stories of the reason why try to relate the vicissitudes on Wall Street to some current happening that is taking place in the United States or almost any other country in the world. But, without fail, the media relate what is happening to something outside the market.

But there is good reason to believe that the stock market can be manipulated by insiders who know how to juggle the market in schemes to enrich themselves at the expense of the innocents who waste their time looking for the events behind the ups and downs. For example:

A powerful brokerage house advises its customers that the future of the XYZ Corporation is dim. It suggests that its customers sell. Almost overnight, the value of that stock goes down. Holders of the stock begin to sell. The stock falls further. The bears are in control.

When the stock or a collection of stocks is hit in this way, the media begin to talk about the bears whose paws are tearing down the prices on stocks. When the prices get real low, all of a sudden, the bears become bulls.

I had some firsthand experience with this phenomenon. I served for some years as a member of the advisory board of an organization with offices in London, Paris and Antwerp in addition to in the U.S. Once a week, we met for a luncheon followed by discussion. On one occasion I was asked to lead off the discussion in response to a question from the head of the organization. I pointed to indicators of a coming recession.

A fellow discussant said that what I called bad news was really good news. In a recession or depression, he said, we can buy up companies and countries at bargain prices. He spoke for an outfit with deep pockets that made a fortune during the Great Depression.

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