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Back in March I predicted a 20% correction in the stock market sometime in 2013. I based the prediction on my hypothesis that the financial markets are manipulated by a loose network of big players. I have no hard evidence for that hypothesis. All I know for sure are the following facts:

1.      Markets act in a way that is consistent with manipulation.

2.      The big players have the means and the motive to manipulate markets.

3.      Collusion is nearly impossible to detect if done right.

4.      Some of the most respected firms in the finance world have recently been caught doing unethical and illegal things.

That's the backdrop.

This week, our so-called government announced it has secret evidence that a dictator in the Middle East used chemical weapons on his own citizens.

Pattern Recognition: ON

Here's some more background to keep in mind: The President of the United States recently supported the closing of medical marijuana dispensaries in California and never offered a reason for his change of policy from hands-off to go-to-jail. The new policy wasn't even popular with voters. An observer has to assume money was behind the flip-flop. Maybe it was the private jail industry that wants to keep weed illegal. Maybe it was the booze lobbyists. All we know for sure is that President Obama changed his views on the topic and didn't offer a reason. So he has a credibility problem where money is involved.

Now we citizens of the United States are being told that we might need to lob some bombs at Syria because someone over there allegedly used chemical weapons. Everyone agrees that the limited military action being contemplated won't fix anything. But it certainly will drive down the financial markets.

One entirely plausible explanation for the administration's position on Syria is that it has information we citizens don't have, and shouldn't have, and the government is acting in our best interest. Or maybe they really want to send the world a message that chemical warfare is a red line that can't be crossed. Maybe the whole thing is an excuse to poke Putin in the eye and make his people scurry for cover because we're still tweaked about the Snowden thing.

Any of that is possible.

The problem with believing any of those scenarios is that an equally good explanation for what we observe is that the defense industry, the news industry, and the market manipulators are, once again, moving in lock-step to gin up a war, generate weapons sales, improve news industry profits, and create huge profits for market manipulators.

As a citizen, I am forced to form an opinion using nothing but the questionable "facts" emerging in the news, plus my own guesses and suspicions. How does one form an opinion in that environment?

In a situation with so much at stake and so little reliable information, I default to the following rule: If you don't know which choice is right, pick the one that costs the least to implement. So I don't support bombing Syria; it sounds expensive.

I want to be clear that I'm not recommending a course of action for the United States. I don't have access to the information that the decision-makers have. All I'm saying is that the government has a credibility problem where money is involved, and lots of money is riding on the Syria decision. The whole thing smells like bullshit to me.

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Sep 5, 2013
Now it looks like the rebels are the ones using the chemical weapons:


So who are we going to bomb? A week ago Obama was going to bomb the regime. This totally reminds me of that one scene in 1984 when Big Brother suddenly switched wars from eurasia to east asia or whatever.
Sep 2, 2013
The question I've yet to see answered about the whole "Obama changed his mind on marijuana" meme is this: does the President actually have the authority to order federal prosecutors not to prosecute someone? If so, why didn't anyone tell Nixon?
+1 Rank Up Rank Down
Aug 30, 2013
Government in general - and this government in particular - have credibility problems in far more areas than money. Stacking the NLRB with union advocates? Wouldn't that be like consulting with the Muslim Brotherhood or CAIR about peaceful Islam? Which several administrations have done in a gratuitous and repetitive display of non-partisan stupidity. Ramming Obamacare down everybody's throats ... then having the unions complain it will be too expensive along with employers necessarily making part-timers out of every position possible? Cut so much money out of the military that the Navy largely doesn't go anywhere allowing most ship-board skills to rust? Send US weapons to Mexican drug lords in hopes of generating a teachable anti-gun moment and stonewall the fallout? Fail to secure the semi-embassy in Benghazi in spite of multiple requests and stonewall the fallout? Have the IRS suppress opposition political groups and stonewall the fallout? Encourage racial quotas in self-defense situations and force an unwinnable prosecution? Abandon stable sponsored foreign leaders in favor of the Muslim Brotherhood and then wring their hands over the fallout?

"They" do seem to have a plan to marginalize their opposition. "They" do seem to have a plan to nationalize health insurance. "They" do seem to have a plan to reduce most of us to serfs (without guns), ruled by a supposedly benevolent political class. Tea Parties, Republicans and conservatives need not apply.

But I seriously doubt they have a grand plan linking war and markets. Any "they". And market players do have a plan for the standard war scare: a) stop buying, b) sell this or that, c) plan to buy big when the uncertainty is relieved by actual bombs actually dropping. In short, sell the rumor, buy the news. The volume that traders move dwarfs the market influence of anybody still going with that buy and hold concept. This is not particular to war news. Good traders trade the news effectively. Investors seem to forget that markets are not one-way guarantees and start sniffing about conspiracy. They should probably read more of the fine print in their brokerage agreements. Or look at a ten-year graph of the price of ... anything.

But mostly Occam has it nailed. And the stupidity that explains nearly all of it is Obama trying to polish the turd he regards as his legacy. With His own loquaciousness He hath talked Himself into a corner. And now He will probably do something risk adverse like firing a bunch of $5m missiles at a tent and hitting a camel in the ass. Either that or deploy troops with such a royally hosed up mission and absurdly restrictive rules of engagement that He gets our people killed for no discernable gain. For Syria, the world, or His legacy.

Right now, people are dying regularly and horribly. Washington and Turtle bay are ... talking. Increasingly urgently, but still just hot air. Effective leadership and/or action seem highly unlikely. Conspiracy, even less likely. Particularly since Obama and Putin aren't swapping coded reassurances behind the podium anymore.
Aug 30, 2013
cpbrown i think you are overestimating the complexity.

imagine you have to rob someone, you hit them with a stick, reach into their pockets and take stuff. crime is disorder. it requries less complexity/coordination/direction/order than building. you can suck at it and you still win. you kill witnesses. you can just bumble thru it. i think the main point you are missing is that crime does not harvest a very significant amount of what is lost. you go to a farm, murder everyone there, eat their dinner, and go on your merry way. what you gained is far less than what was taken.

say you steal a bag of apples, but 90% of them fall on the ground as you run away. this is what crime does. it destroys things, and while breaking it, a few usable morsels are created.

the concept is not hard, but i do agree with you about collusion but only from willingness standpoint, complexity isnt a limiting factor. when your work is crime and everyone has self interest at play then trust must be nonexistent. would make collusion very difficult.

as far as manipulating the markets, all you have to do is control bubbles and crashes. if you can control scary things like war you can cause crashes. if you own politicians you can prop up industries like freddie and fannie. then you just buy low and sell high. you control the rhythms and you pluck the fruit when its ripe. is that too complex for warren buffet to do?
+17 Rank Up Rank Down
Aug 29, 2013
I really don't understand why it's not a big deal to kill people with guns and explosives but it's when people use chemicals. Why it's ok to ignore the former and it's mandatory to do something about the later?
Aug 29, 2013
delius, as far as I'm concerned the only that's gotten better since Obama was elected is his golf game. Take his Obumacare... the local Bob Evans restaurant I eat at during the weekend just made all but 5 employees part time (20 hours) to keep from having to pay the insurance. These are poor waitresses and our Dumb-mander in chief is "helping" by making sure they can only work 20 hours at one job. Then they have to find another part time job or two, waste gas driving to up to 3 different jobs, and try to balance their schedules around that mess.

All this is from a democrat who says he wants to help the poor.

So if we've got a guy who's main legacy, the thing he wanted the most, is going to be a train wreck, how are we supposed to trust him on some foreign policy in a region he doesn't know anything about relatively speaking? Plus wasn't he elected in part because he was anti-war and is now flipfloping by getting us dragged into another war in the region?

I'm sorry, I don't care that he's the president, I think we are at the point where he doesn't deserve our respect. Hence Obuma instead of Obama. ;)

Since we are on the topic, didn't Scott used to own a restaurant? What would he have done assuming he was big enough that he had to pay for his entire staff's insurance?
+3 Rank Up Rank Down
Aug 29, 2013
"The President of the United States recently supported the closing of medical marijuana dispensaries in California and never offered a reason for his change of policy from hands-off to go-to-jail."

Not true. They did give a reason. "We're not concerned in prosecuting patients or people who are legitimate caregivers for ill people, who are in good faith complying with state law," said Benjamin B. Wagner, the United States attorney for the Eastern District of California. "But we are concerned about large commercial operations that are generating huge amounts of money by selling marijuana in this essentially unregulated free-for-all that exists in California."


Cities and Counties in California have been asking the feds to step in because of the chaos created by a poorly written law. The Feds can't just ignore such requests. They are obligated to take some action. You may disagree about what that action should be, but the bottom line is that if California were to follow the example of Wa and CO - they'd be fine. Instead they passed a law with so few controls that the impact caused by the bad actors is riling up local voters (city and county-level) against the law. Those folks, in turn, are begging for federal intervention.

I'm not saying politicians don't cave to special interests. I am saying this is not a clear case of self-dealing on the part of the Obama administration.

In Syria - I get that plenty of folks make a lot of money when we go to war - however, there are also plenty of rich anti-taxers who are currently very active on the hill. You'd think those folks would be balking at the prospect of paying for another war. Obama doesn't have a Cheney in his cabinet. He does have some human rights activists in his inner circle. I have no idea what is going to happen - but I don't think there are many people close to the president who are advocating for war.

[I think today's announced re-flip-flop back to a hands-off federal policy on dispensaries tells us there was never a serious reason to be involved in the first place. Your quote says feds were "concerned" about the big operators. Does "concerned" sound like a reason for jailing a dispensary operator? -- Scott]
Aug 29, 2013
And one of today's biggest CNN headlines... The fed will officially not-prosecute recreational drug use in Colorado and Washington, unless it's dopey driving, gang-related, or marketed to minors.
Aug 29, 2013
Kingdinosaur: [ Didn't the last new middle-eastern government president Obuma backed (Egypt) just get overthrown by its own military for abuses? So he doesn't have a good track record of picking sides over there. If he's going to ally with the friends of the government that just got kicked out, it'd be pretty clear that he doesn't know a bloody thing about mid-east politics. ]

You know, your points would resonate a lot more if you didn't sink to grade-school level insults like "Obuma". And that's coming from someone who happens to agree with you.

Scott: [ In a situation with so much at stake and so little reliable information, I default to the following rule: If you don't know which choice is right, pick the one that costs the least to implement. ]

Not a bad rule, but in the case of this entire post, you are neglecting an even better one: "Never attribute to malice what can be adequately explained by stupidity." Pareidolia, the friend of conspiracy theories everywhere.
-1 Rank Up Rank Down
Aug 29, 2013
Assad is just testing the boundary of the quantity of civilians he can kill with chemical weapons before someone starts punishing his regime. So he starts with smaller attacks with lower death tolls, then a larger attack like the last one with 350-1000 dead. As long as the rest of the world does nothing I predict the next chemical attack will be 2000-4000 dead which will be followed by increasingly larger attacks (such as killing everyone in an entire city).

Before larger chemical attacks happen I predict the west will launch strikes to take out Syria's air defenses, jets/helicopters, and command control centers. The strikes will go well enough that Assad will refrain from doing larger chemical weapon attacks until Russia can improve Syria's air defenses based on what they learned from the first air strikes, the west will hold off on further strikes unless large chemical attacks occur again. I have to believe Syria is a money pit for Russia and Iran since I can't imaging how this Shia regime can keep things running economically when Shias make up only 13% of the country, so the west may not complain too much if the civil war drags out longer.
+13 Rank Up Rank Down
Aug 29, 2013
Scott, once again you give the "manipulators" way too much credit for intelligence and capability. I don't doubt that "they" would want to be able to control events in their favor, but the complexities are just too insurmountable in figuring out exactly what to do, & when, to have it all work out just right for them. And then to assume some sort of exceptional cooperation across many large and disparate organizational !$%*!$%* is just incompatible with the insights of the world of Dilbert.

What I think you are seeing is the typical groupthink of the establishment. But it is more the inadvertent group actions of a mob, rather than the rational machinations of an evil cabal.
+6 Rank Up Rank Down
Aug 29, 2013
It was observed a long time ago that 'war is the health of the State' [Randolph Bourne]. Looks like America is heading for the gym for a workout, again.
+4 Rank Up Rank Down
Aug 29, 2013
Mr. Adams;

I smell the stink of the words "weapons of mass destruction" again. Oil and profits in the "Nam poisoned me (1965-66) and my generation's confidence in the government. But the war drums keep beating every few years or so. Iraq and Iraq again and now Syria. Bombing Syria solves nothing. And who is the leader of the Syrian rebels ? We don't even know that. RIght on Scott !

+6 Rank Up Rank Down
Aug 29, 2013
As Deep Throat said in "All The President's Men": "Follow the money."

And also Verbal Kint in "Usual Suspects": "The greatest trick the devil ever pulled was convincing the world he doesn't exist." (actually, it's from Charles Baudlaire, but who cares?)

I'm still torn apart between "people are greedy manipulative bastards" and "people are stupid and short-sighted bastards" hypothesis...
Aug 29, 2013
In this case I think there are too many dots between your hypothesis and conclusion and you are ascribing motive where the real explanation can be found with Occam's Razor.

My own opinion is they're inept - they want to "do something" - and they're ideologically incapable of doing nothing.

Taking action in Syria isn't popular. 91% of Americans are opposed to it according to a recent poll. My own understanding of Syria is the rebels aren't especially good people - they smell a lot like Al Qaeda for starters but they've committed their own atrocities - and on top of that the complexity of the geopolitics leads to a high probability that taking action in Syria will have unintended consequences that are against our interests. So 91% of the people are probably right: the smartest course of action is to do nothing.

The problem is I don't think the people in Washington right now are capable of doing nothing and I don't ascribe much intelligence to the saber rattling. To draw a connection to market manipulation is to give them credit for far more intelligence than they have.
Aug 29, 2013
My own belief is that several competing conspiracies are in play at any given time. Yes, the biggest ones tend to win out. But that doesn't mean they won't stumble over each other with results their creators neither anticipated or wanted. And even on the highest level, you can't count out magical thinking, self-delusion and sheer stupidity.

Political history is full of rulers or would-be rulers who take on too-powerful or too-unpredictable allies for momentary advantage. I remember old school politicos and pundits insisting the Arab world "only respects strength"; consequently they threw resources behind dictators who ruled brutally but, perhaps inevitably, survived only on donated muscle from us or the Soviets -- and eventually fell anyway, leaving us with no allies (unless we want to cozy up to whatever creatures co-opt the revolution) while a new generation of idiots tells us to bet the farm on the next "strong man," or be the strong man ourselves.

And we're not alone. The Soviet Union's failure may have been hastened by its dependent, useless puppet regimes. China has to protect North Korea or face invasion by an entire population of abused, starving refugees. Saudi Arabia essentially encouraged radical Islam as a way to direct discontent away from the government; now that discontent is coming home, more powerful than ever.

On a smaller scale you CEOs who invite the wrong people to help repel a takeover, or make short-term decisions with dire consequences. Wall Street didn't WANT the economy to tank. Each sleaze was banking on the other sleazes playing nice so the system would continue to generate something for them to drain. A bit like giant fleas gorging themselves on a dog, knowing full well that collectively they'll kill the dog and ruin a good thing, but each assuming the others will do the right thing, and be less greedy and more sensible. Or the dog will make himself bigger and produce more blood for them by pulling himself up by his bootstraps.

The Tea Party was, very simply, an astroturf project of the conventional GOP leadership; a movement that could do all the dirty campaigning while the beltway team merely smiled. What happened was they empowered fringe movements and wannabes, and instead of a faithful, unquestioning voting block they got a restless "base" that seems to oppose any attempt to expand its numbers and effectively strips the party of any remaining power by demanding bumper-sticker positions be non-negotiable. My metaphor for this one is a restaurant that bends over backwards to build loyalty among a small group of regulars who can be persuaded to pay too much for bad food. In time these become abusive to strangers who walk into "their" restaurant and demand to see the manager when any change -- even an obvious improvement -- is made to attract more business. The restaurant goes into a death spiral, trying to survive on the limited patronage of the regulars who may hate all other restaurants, but now feel the management should feed them for free because they're loyal.
Aug 28, 2013
Don't watch/read/listen to the news... no ones going to do anything about it... still don't care...
Aug 28, 2013
Didn't the last new middle-eastern government president Obuma backed (Egypt) just get overthrown by its own military for abuses? So he doesn't have a good track record of picking sides over there. If he's going to ally with the friends of the government that just got kicked out, it'd be pretty clear that he doesn't know a bloody thing about mid-east politics.

Also objectively speaking, what if the people who got poison gassed were al-quida terrorists? Is getting blown up, crushed to death in rubble, or having shrapnel tear up your body so you can bleed to death over a few hours really that much better than poison gas? I mean how many US prisons still use the gas chamber as an option for carrying out a death sentence?
+15 Rank Up Rank Down
Aug 28, 2013
The thing that bothers me about the accusations of Assad using chemical weapons is that it makes no sense.
- He knows if proven he used the chemical weapons it will likely bring an attack from the US.
- If you were going to risk an attack from the US and allies, wouldn't you go "all in" and use them in a way that brought you a decisive advantage? The people who were killed didn't seem to be likely targets in terms of the war.
- If you're going to use chemical weapons, why do it at the very time there are UN inspectors in country?

On the other hand I can see a very strong motivation for Assad's enemies to use the chemical weapons and blame Assad; provoke the US and it's allies to attack Assad. Unify opposition and generate world wide condemnation.

Obviously Assad's a bad guy, but I'm very leery of getting the US involved under what appear to be questionable !$%*!$%*!$%*!$ Fortunately this government has been nothing if not transparent and honest, so I have total confidence that they will do the right thing.
Aug 28, 2013
The biggest Syrian news is not the World War I gas attack, it's the World War III cyber attack by the "Syrian Electronic Army". Washington has been ratcheting up the fear mongering on cyber attacks for a while now (notably the Chinese threat), but now we're led to believe that even Syrian rebels can wreak havoc with our internet.

Extrapolate forward and it's just a matter of time before the cyber equivalent of The Twin Towers occurs. Whether it be a true or false flag attack won't matter much. All that'll matter is the HUGE money to be made by the quickly emerging cyber defense industry and cyber insurance industry.

(Cringely posted on this subject 2 weeks ago)

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