It is really amazing how true and factual information can be presented in such a way as to be misleading. People who have a vested interest in public perception, (especially when public perception will dictate the extent to which a person can make money), are more than willing to mislead the public for their own selfish gain.
Take for instance the current financial troubles on Wall Street. From all “known” indicators, the country is in a terrible situation. Of course, it looks that way because that is how it is presented to the public. But the whys and wherefores are not so easy to determine. Perhaps we should just take the “expert’s” word for what’s happening.
Although I sometimes have trouble with memory, I do remember, not so long ago, what was happening with the New York Stock Exchange. In the 1980’s it was believed the Dow would never grow beyond 4000. In 1994, CNN reported that it was believed the Dow would hit an all time high of 4000 that year. You can read that article at http://money.cnn.com/magazines/moneymag/moneymag_archive/1994/03/01/88664/index.htm. Now the whole world is upset because stocks have “dropped” to 8000? Why is that? At 8000, the Stock Exchange is worth twice as much as it was 15 years ago. Could it be because certain people want the public to be upset and fearful? Fear, as George Bush has taught us, is a great motivator ~ a motivator so great as to prod people to do things they wouldn’t normally do, to prod people to believe things they wouldn’t normally believe.
Here are two charts showing the history of the stock market. The top one is from yahoo.finance.com and it shows the stock market from 1935 to the present day. The one below shows the stock market from 1972 to the present day. Regardless of the difference in the time spans shown, why do the two charts of the same information look so different? The first one indicates a jagged yet predicable upward trend throughout the history of the stock market. The second shows that stock market growth was nearly flat until about 15 years ago when the coarse of the market took a sudden turn, growing at a much faster pace than it had all the years previous. A closer look shows that the first chart, the Yahoo Finance chart distorts the truth about the growth tread of the market. The row indicating growth from Zero to 5000 as much higher than the row indicating growth from 5000 to 15000. Doing this was the only way to make stock market growth look predicable and fairly consistent. Why would they make the chart this way?
In Poker, “Ram and Jam” is a term to describe the effect of raising and re-raising bets so to make the game as expensive as possible to play. And that seems to be what has recently happened on Wall Street. As long as everyone played the gamed and could keep up the pace, stock brokers and others caused stock prices to rise higher and faster than believed possible. Of course such play cannot be sustained forever. When you look at the charts, you see that stock prices climbed at a near true vertical rate just before the crash. Once that happened, the bottom fell out. Or more precisely, everyone stopped buying and began selling off their stocks.
Yes, I know about the mortgage crisis. What you should realize is that the mortgage market was mirroring the stock market at every turn, rise, and inevitable fall.
Now, people with lots and lots of money know what they are doing, and they don’t play games for the fun of it. Everything they do is calculated and geared towards making money.
Without going into much more detail, I just want you to see that even though the value of the market has dropped in comparison to recent days, and many “johnny come lately” people to the stock market have lost every thing, the real movers and shakers of Wall Street have made incredible profits. And I’m not just talking about their Golden Parachute retirements. And, where do you think they made their profits? Off of the small investors, is where.
Lets say you are a real mover and shaker back in 1993 with a fair amount of money. And then you began to “ram and jam” the market with other investment people until it seemed it could get no higher. What do you do then? Why sell, of course.
You entered the stock market when it was at 4000, when it reached 14000 you started selling, that’s a pretty good profit. You tripled your money. Even now, with the market at 8000, if you decided to sell more stock, you’d still be doubling your money. Not bad for 15 years investment.
But really, you still have all this money, profits made from the sell off, and you are wondering what to do with it. Well, the stock you sold at 14000 is now available at 8000. Might as well start buying again.
Sure, during the Clinton administration, stocks rose. And that was attributed to the bustling computer era. But, isn’t it funny that that “bubble” burst at the same time the Clinton presidency ended? But the same thing happened again during the Bush Junior presidency. This time, though, there was no “industry” on which this stock market climb could be attributed. Actually, with the country being at war, our economy should have weakened. But instead it only strengthened. Odd, don’t you think?
Instead we had a president who was a puppet to big business interests. From Haliburton to the Stock Market, big business saw the Bush Junior administration as a golden opportunity to make as much money as possible. Certainly the Bush administration would not get in the way. What resulted was the fleecing of America. And nothing was off limits, regardless of who might get hurt in the process.
It is amazing how difficult it is to find information on the full history of the stock market in charts. Nearly all charts go back only as far as 2004. Recently I found a chart that showed the entire progress of the stock market from it’s very beginning. And within a couple days of finding it, and studying it, it disappeared from the internet. And I actually expect that this chart below, which goes back only to 1975 will disappear soon, as well.
By studying the chart it really doesn’t take much to see that the markets have been manipulated, recently, beyond their natural tendencies.
If you follow the growth trend of the stock market from 1985 to 1995, and continue that diagonal line to the year 2009, (regardless of the markets actual deviation from this trend) you’d see that the stock market naturally would have reached 8000 this year anyway. The market has hovered at around 8000 for the past month. I predict we will see it begin a slow and steady upward trend from here on out.
Trust me. Despite the doomsday talk, and the number of financial “casualties” in the past year or so, America is doing just fine.
Click on the pic below for a more detailed view.