Down Market more news of manipulation

Evidently the media can no longer deny the reality of our economy.  They have milked the so called recovery for as long as possible.  Now that the market is not being manipulated to the upside by large corporations any longer, the media has to get on the band wagon that is rolling out the economy sucks banner.  The reporting on the economic crisis has been nothing less than despicable the past few years.  A few have taken up the truth flag such as Dylan Radigan, but the reporting of the msm has been completely bought and paid for by corporate America and the  White House.

The middle class America has been wiped out and the burden on small businesses has been so onerous that they can not grow and hire.  The thought of running a small business is not longer the thought of growing and expanding.  Owning your own business in this day and age is just a way to trick people into thinking they have something more than a job.  Even worse, owning your small business has become just a way to have a job without any vacation or benefits.
 
The balance in our economy, if there ever was one, has been tilted completely in favor of the elites and those running the government.  Now we hear the media ringing the bell that the stock market is headed south but it has little to do with the economy. 

The stock market will go down because the institutional traders want it to go down so they can screw any one holding stock now that it has gone upward far enough for people regain some hope that they may be able to take a breath and relax. 
How could it be any clearer?  The Stock market went up with no growth in the economy.  It was a total manipulation by corporate American and the government.  The hope was that it would improve the attitude of the country and they would all start spending money, Even the ones that are still  unemployed.  The complete incompetence of the government has screwed the economy for years ahead.  People still talk crap that housing is not a large part of the economy.  Evidently they don't teach much in econ class at the ivy league institutions.  This is likely because economics is bull shit and it has been and always will be used to manipulate the American people.  Economics is not difficult to understand the government doesn't want people to question the Oligarchs running the country.  We have been divided into a two class society with the separation of rich and poor getting larger and larger. 

The truth of a down economy has never been told, other that Matt taibbi in his recent rolling stone piece, (this is a must read by everyone)   makes it clear we were raped by the likes of Goldman Sachs and their friends in the government. 







Investors may have to get used to down market - Business - Stocks & economy - msnbc.com
from MSNBC

After closing at its highest level in nearly three years on April 29, the S&P 500 has tumbled nearly 7 percent on the back of a barrage of soft economic data, sparking the debate over whether the economy is headed for a double-dip, or has merely hit a soft patch in its recovery.


The benchmark S&P 500 recorded its sixth straight weekly decline Friday and volume has picked up, as it typically does, on down days. Another week of selling will mark the longest stretch of weekly losses for the index since 2001.



Red flags, including ugliness in the junk bond market, options activity and the ease with which support levels have been broken, suggest more selling ahead.



"You have to be realistic. You've got to have some sort of correction to go into this marketplace just for the healthiness of the market," said Cliff Draughn, president and chief investment officer at Excelsia Investment Advisors in Savannah, Georgia.



As stocks have declined, both investment-grade and high-yield risk premiums in the bond market have slumped as investors sought safe-haven assets.



That's troublesome since the stock market often moves in sympathy with the junk bond market because rising borrowing costs crimp corporate profits.

Read more on the lack of a recovery here at Naked Capitalism (Dude where is my recovery)

Wells Fargo Hammered By District Court Judge in MN

How did Wells Fargo take undue financial risk with investment customers? 

The Star Tribune reported Banks like Wells Fargo lend clients' securities, mostly stocks, to Wall Street brokers who need them temporarily to conduct short sales and other transactions. In exchange, the borrowing brokers hand over cash collateral, which the bank invests, earning small gains for the clients lending out their securities.


But Wells Fargo's investments in asset-backed securities carried risks that led to losses in the credit crisis beginning in 2007. As losses mounted, Wells Fargo made it difficult for some investors to extract themselves from the program, so they sued.

The Judge said he found the testimony of former Wells Fargo Chairman Richard Kovacevich and CEO John Stumpf "to be almost childlike" and that he accepts "that one of the primary functions of subordinates in today's corporate America is to shield their ultimate superiors from accumulating embarrassing information."


It is ridiculous for the Chairman and former chairman to say they new nothing of the increased risk to the securities lending program. The judge also said it was clear that Wells knew of the heightened risk and put securities owned by customers at grave risk. He continued by saying that they bank breached its duty of full disclosure once its line managers were taking greater risks with the customers securities. 

It is clear now that the banks have never had the best interest of anyone in mind except their own.  They were happy to put everyone else's money at risk in asset backed securities knowing they would not be taking the loss, still be collected management fees and probably were buying CDS or Credit Default Swaps that would pay the bank in the event of failure to any of the  ABS products. 

If Wells was buying CDS against their own clients it would be a major scandal.  It would not surprise me though because we have seen similar practices done by Goldman Sachs.  It also wouldn't surprise me if the banks all played both sides of the ABS trade.  This could have added to the increased demand for Sub Prime assest backed securities because the banks could make money on the failure of  these securities through their CDS, which would pay them if the Assest Backed Security failed. 

The industry was set up to allow the banks to profit whether their clients had gains or losses.  They perfect market had been created for Wall Street and the Banks by Wall Street and the Banks.  Unfortunately, this is also what led to collapse of  the housing industry. 

The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.(Book review): An article from: Journal of Economic Issues

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