Wall Street Corruption and Lies

You can feel the pressure building...

The house of cards constructed by elitist global bankers is starting to crumble, piece by manipulated piece.

The shiny new plugs placed on the holes poked in the system in 2007 and 2008 have lost their luster. The wall they've built up is starting to crack.

We've already learned that LIBOR, which affects pretty much every interest rate on earth, has been a forgery for years. Emails show Barclays and others had been colluding to fix the rate since 2005.

The Fed knew about it since at least 2008. And did nothing.

We discussed this cover-up last week.

But that only tugs at the corner of the camouflaged tarp that's been concealing how those in the highest offices of global banks and governments have been bleeding wealth from average citizens at any cost...

Smoke, Mirrors, and Lies

This week we learned the New York Stock Exchange had to cancel trades for six companies after an algorithm “went haywire.”

This is more of that jargon we talked about last week. Algorithms don't go haywire. They are controlled by humans.

I also heard it described as a “glitch,” “error,” “snag,” and “snafu.”

Let's call it what it really is: bankers getting so greedy that they've designed algorithms to outsmart any human who might try to make a trading profit on his own.

Like what happened with derivatives and credit default swaps, the complex web of lies, greed, software, and manipulation has grown too complex for even its creator to control and understand.

That's one hell of a “glitch.”

In this case, the “glitch” (otherwise known as the overly-greedy human-controlled algorithm) was owned by Knight Capital Group (NYSE: KCG).

Instead of buying low and selling high — which is the goal of any mere mortal — the greedy bankers who controlled this algorithm had tweaked it so much that they lost control of it.

The trading program started buying high and selling low.

Take the case of just one stock affected by these corrupt practices, utility company Exelon (NYSE: EXC). Trading software firm Nanex did a forensic analysis of the trades and noted:

"In the case of EXC, that means losing about 15 cents on every pair of trades. Do that 40 times a second, 2,400 times a minute, and you now have a system that's very efficient at burning money."

“Efficient” isn't quite strong enough. Knight Capital lost $440 million in minutes.

One can only assume, in addition to the six stocks for which the NYSE canceled trades, that the other 130-something stocks on the exchange were also affected.

That's one hell of a “glitch.”

But don't worry, Knight Capital is “actively pursuing strategic and financing alternatives to strengthen its capital base.”

My jargon meter is going off the charts.

Know you're playing a rigged game.

What Can You Do?

First and foremost, educate yourself.

Read as much alternative media as you can about Wall Street and government manipulation and fraud. They certainly aren't exposing it on Fox or CNBC.

Not enough people are paying attention to this stuff. And that's why the collective “they” continue to do it — and get away with it.

I know hundreds of people who can discuss NFL trades or celebrity gossip. I only know a few who can intelligently discuss why algorithms are bad for individual traders.

Second, manage your own money.

You just saw how well a management firm like Knight Capital can do for it. You can do better.

And I can prove it with a real-life example...

I personally manage an IRA and a separate brokerage account. It's up several hundred percent since 2007 (when I started it at the wise old age of 24) using only stocks, ETFs, and my personal market knowledge.

And I opened that account three weeks before the crash we still haven't recovered from, in September 2007.

Now take my not personally-managed IRA from American Funds, which I keep because of the employer match and tax advantages...

I started that in September of 2009, close to the bottom of the market.

The market is up 40% since then. A monkey should've been able to make money between then and now.

I repeat: The market is up 40% since I opened an IRA with a Wall Street company that uses Wall Street mutual funds as part of the typical we-get-rich-while-you-lose Wall Street system.

So while I started investing in that account at the precise time the market started a years'-long 40% rise... my Wall-Street-run account is DOWN 1.7%.

I've put in $29,085.85. It's worth $28,576.38. The market went up 40% in that time.

And that's the entire point here.

All the lies...

All the manipulations...

All the deceptions...

All the cover-ups...

All the Wall Street/government collusion...

None of it is realized or understood by the average citizen except through diminishing bottom lines.

Banks make money, politicians make money, Wall Street fund managers and executives make money... everyone else gets hosed.

I — and millions of others in the U.S. and across the world — will be bled dry unless we wake up, call out the criminals, and take our futures (financial and otherwise) into our own hands.

But watch out. Tyranny will not go gentle into that good night...

A Department of Homeland Security study out this month labels Americans who are “suspicious of centralized federal authority” and “reverent of individual liberty” as “extreme right-wing” terrorists.

Yes, folks, it's a twisted world when John Corzine and Jamie Dimon (Or is it Madoff and Mozilla? No, that was 2008.) are millionaires, the government protects them, and the deterioration of quality of life for people like you and me is treated as collateral damage.

Wake up, you terrorist.

Call it like you see it,

Nick Hodge

@nickchodge on Twitter

Nick is the Founder and President of the Outsider Club, and the Investment Director of the thousands-strong stock advisory, Early Advantage. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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