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Read the Friday Afternoon Wrap-Up for 6/8/2012, Weekend Thoughts and Monday Morning Commentary for 6/11/2012

Fresh off this morning’s angry RANT, I’d like to speak of a topic near and dear to my heart – the STOCK MARKET.  At least it used to be, but in recent years became a MANIPULATED nightmare – so much so, I have sworn off it forever, realizing it poses not just a grave risk to my finances, but my sanity and personal relationships.

Born in New York in 1970, I had money “in my blood.”  I studied finance in college, read the Wall Street Journal cover to cover from age 18 (until I became disgusted with it ten years later), had internships at Paine Webber, Shearson Lehman Brothers, Merrill Lynch, AG Edwards, and Prudential-Bache before I graduated, and received my CFA designation in 1998 – long before the world realized its value.

From the second I started watching it – in 1989 – the market dominated my life.  I watched every tick, every day, aware of ALL major developments affecting it.  In 1996 – after three years as a bond broker at Cantor Fitzgerald – I finally got my opportunity to work with the stock market, as a trader/analyst/administrator of a NYC hedge fund.  In fact, I started at Keim-Wilson in February 1996, just ten months before Alan Greenspan’s famous “irrational exuberance” comment – which, contrarily, ushered in the final, parabolic stages of the internet bull.

I invested my small amount of savings in internet and telecom stocks in 1998-99 – my first investments – as well as my beloved oilfield service stocks.  In April 1996, my hedge fund made its first oil service investment – in offshore contractors Ensco International, Marine Drilling (now part of Ensco), and Global Marine (now part of Transocean, whose rig blowout polluted the Gulf of Mexico in 2010).  In 1998, I became a sell-side oil service analyst at Southcoast Capital in New Orleans, moving back to New York a year later to join Salomon Smith Barney in the same capacity – where I stated until February 2005, when I left Wall Street forever.

When the “tech wreck” arrived in 2000, I not only sold every stock I owned, but attempted to short the market.  On paper, it sounds like I probably made a killing, but in reality I barely broke even.  Which is better than most achieved, but shows how difficult it can be to fight stocks the public desperately wants to believe in, such as Fannie Mae (yes, I was short it that long ago), Amazon.com, and Yahoo!.  Until I moved my entire net worth into PM mining stocks in May 2002, I was not long a single stock – one of my best decisions ever – and since that time, have NEVER been long a non-PM stock.

When I first started working in the stock market, it was quite obviously freely traded.  Sure, the “President’s Working Group on Financial Markets” (i.e., the “PPT”) existed –created after the 1987 crash – but back then, it was ONLY utilized as an “emergency measure” – such as in response to another 1987-type event.  Stock market volatility was much higher back then, and if you can believe it – the Dow actually FELL when bad news occurred.  If such news arrived in the evening, rest assured it would be reflected the next morning – as opposed to today, when PPT algorithms goose stock futures throughout the night.

I can quite confidently pinpoint the time when I first became aware of pervasive market intervention – i.e., when the PPT first exceeded its mandate to “enhance the integrity, efficiency, orderliness, and competitiveness of U.S. financial markets, and maintain investor confidence.”  That date was September 11th, 2001.  More accurately, September 17th, the day the NYSE re-opened.  The Dow initially plunged – as one would expect – but a strange, “invisible hand” supported it late in the day, unlike anything I had observed in more than ten years.  But that was “child’s play” compared to the blatant PPT maneuvers following the Enron and Worldcom collapses in December 2001 and July 2002, respectively.

By late 2001, the “tech wreck” – plus 9/11 – had created a horrific economic environment, with “gloom and doom” dominating the market landscape.  Yet – enigmatically, the Dow had recovered its pre-9/11 losses.  At the time, Enron was the most loved stock in the market – a symbol of “American ingenuity,” owned by essentially ALL hedge and mutual funds.  Thus, its collapse SHOCKED the world, so when the Dow opened down 200 points – or EXACTLY 2.0% – lower, no one was surprised.  However, when it recovered three-quarters of those losses in a spirited “HAIL MARY” rally in the day’s final hour – the first I can remember – and the rest in early trading the following day, I was dumbfounded.

Seven months later – with the U.S. deep in the throes of recession – the far larger Worldcom was an equally beloved company, TEARING APART the economic fabric when it was found to be a fraud.  Surely, this catastrophic disaster would resonate in stock prices – or so I thought.  The “day after,” the Dow opened down 4.3%, but recovered one-third of those losses in another “HAIL MARY” rally, which had me really scratching my head.  Two days later, the Dow surged more than 6% for no reason I could imagine – and at that point, I KNEW something had forever changed.

I also remember the 2003-2007 period, when PM mining stocks were truly in a “raging bull market.”  Yes, the Cartel incessantly attacked PAPER gold and silver at the same KEY ATTACK TIMES, but far less frequently.  Additionally, they were comfortable allowing the stocks to occasionally breathe – as back then, the dollar had only recently topped, and inflation was significantly lower.  Central banks were still selling gold, and the public-at- large had not even heard of it – most still haven’t – so mining stocks drew very little media attention.  Moreover, the HOUSING BUBBLE – care of Greenspan MONEY PRINTING – was in its final stages, so the public felt “rich,” and not the slightest bit worried of the future.

I remember countless HUI explosions, “key upside reversals,” and other events that have now been BANNED by the Cartel.  Those were – by far – the best investing years of my life, but were nearly offset by the CARNAGE of 2007-2011, when government algorithms commenced their now five-year ATTACK on PM miners, starting with the juniors in April 2007 – when the TSX-Venture (i.e., Vancouver) Exchange peaked, and the seniors in November 2011 – after what I call “D-DAY.”  If I hadn’t cashed out some of those stocks to buy my house in – by pure fortune – May 2007, I undoubtedly would have experienced a net loss in holding PM miners from 2002-2010, during which the prices of gold and silver rose to roughly $1,400/oz and $30/oz, respectively, from $325/oz and $4.50/ounce.

Mining stocks have been unable to escape the VORTEX of limitless naked shorting since then, and it is debatable how they will react – short- and long-term – when the Cartel is finally broken.  However, broad markets such as the “DOW JONES PROPAGANDA AVERAGE” have experienced the polar opposite effect – particularly since Global Meltdown I in 2008-09 – in that essentially limitless futures buying has propelled it dramatically higher than it would be in “freely-traded” conditions.

I have thoroughly documented these “anomalies” each and every day, and will continue to do so for as long as it takes.  My goal is to PROTECT readers from the evil clutches of manipulated PAPER markets of all kinds – stocks, bonds, and PMs – and letting you know what it “once was” will hopefully help you understand that what they have become is nothing more than “smoke and mirrors,” propelled partially by PROPAGANDA, but mostly MONEY PRINTING and MANIPULATION.

Markets are no longer freely-traded, but malignant, capital-killing, government-controlled entities, bent on destroying your wealth and yielding submission to their whims.  Oh well, people once thought cigarettes were good for us, too…

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