Data Shows How Wall Street Manipulates Markets

Data Shows How Wall Street Manipulates Markets by  for Casey Research

Fake news… It’s everywhere. But it’s not a new story…

As a young stockbroker, I read how the great speculators of the early 1900s would float negative stories. They’d crash shares so they could cash in on short positions.

Others would whisper bullish stories into the ears of clueless newsmen so they could dump overpriced shares onto the public.

From Jay Gould to Jesse Livermore, Wall Street’s history is littered with moneymen playing the media for personal profit. Given there were no rules governing stock trading back then, it was easy for them to move stock prices.

I wish I could say that has changed… It hasn’t.

For instance, in January, House Speaker Nancy Pelosi slammed Facebook for schmoozing with the Trump administration.

Here’s what she said at a news conference on January 16:

They intend to be accomplices for misleading the American people with money from God knows where.

It was the same day her husband exercised his call options on Facebook early. He bought more than $500,000 in shares on the cheap.

That’s not the only instance of Wall Street and D.C. working together to confuse investors.

Following the 2008 financial crisis, lawmakers cashed in on information before the American people knew about it.

During that year, then-Senator John Kerry dumped $550,000 of Citigroup’s stock. That was right after a private meeting with then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke.

In the meeting, Paulson and Bernanke warned of deep economic trouble ahead.

But in public, Bernanke was saying something quite different. On July 16, 2008, he told Congress that Fannie Mae and Freddie Mac were in “no danger of failing.”

Both went into government receivership on September 6, 2008. Investors lost a fortune. It’s likely entire retirement accounts were wiped out.

We’d later find out more than a half-dozen politicians privy to this information dumped their stocks. Some went as far as betting against the U.S. economy.

Peter Schweizer, the president of the Government Accountability Institute, exposed how Washington profits from insider knowledge in his 2011 book, Throw Them All Out.

Here’s what he said about politicians tipping the scales in their favor:

These same legislators are crafting these massive bailout bill[s] that are going to benefit certain industries and they are free to trade stocks in companies that they are writing legislation for to bail out.

But it’s not just politicians pumping the news cycle for their benefit. Hedge fund managers, corporate CEOs, and large, individual traders are all taking their turn in front of the cameras to spread their own brand of “fake news.”

How can you and I compete against that?

That question has been driving me crazy for the past few months. I’ve been working my team to the bone to figure out one thing: How we can level the playing field.

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