During the past week I heard allegations on talk radio on Tuesday that the government was propping up the market by funneling funds to banks to buy stock in advance of the election. Interestingly, that day the market had started down fairly sharply and appeared to be pushing farther down when it reversed to move up fairly abruptly. I have no idea of the truth of the assertion, but it certainly would not surprise me if it were true. On one hand, markets do turn during the day without manipulation. On the other hand, elections are almost upon us and a healthy looking stock market would certainly be an asset to those in power. A market moving up at least gives the illusion that the economy is improving. Nevertheless, I have to come down on the side of Warren Buffet who was recently quoted as saying that this recession isn't over yet. A manipulated market could well give a very false impression.
What troubles me is that I could even consider the possibility of elements of the government underhandedly manipulating the market for the personal gain of those elected to represent the people. Perhaps I am overly naive to say that the markets can only work if there is integrity, but that is what I believe. It is a crime for private citizens to secretly attempt market manipulation so why should our government that is supposed to represent the people undertake any covert market manipulation. Let me be clear that I am not making any accusation because I simply do not know. My problem is that for quite some time I have watched as at least some politicians lie, cheat, steal, and manipulate their way into power at the expense of their electorate. If we are to have a market in which the participants can trust, it absolutely must be as free as possible of covert manipulation by anyone, particularly our government.
For quite some time in these articles I have studiously avoided political comment. Now, however, I believe it is a necessity to comment if there is even the appearance of impropriety with the possibility of governmental manipulation of the markets. Such manipulation would undermine the trust of the participants and without trust in the integrity, we can have no viable markets. Such a manipulation would serve only the interests of the manipulators and not the honest interests of those whom they were elected to serve. If our markets and our country are to survive, we the people must not allow such manipulation. Government of the people, by the people, and for the people appears near death and market manipulation would be a serious symptom of the illness leading to the ultimate demise.
Anyway, that's my opinion. I'm sure you'll share yours.
by Bill Kraft, Editor
Copyright 2010, Makin' Hay, Inc.
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