Fixed Stock Market by Congress

Ok, the link I am providing below has a lot of ambigious truth to it. I have traded the stock market since I was 18(Almost two years now), and this obvious in OTCBB and Pinksheets especially.
It just seems to clarify some suspicions I've had about the stock market, but I don't agree with the person writing this or some of the things he/she says. I'm neutral when it comes to the writing at this site, but I have been a little suspicious of how MM's work.

Tell me what you guys/gals think.


Click here to read it because the link was too long

[edit on 11-2-2005 by The Division Bell]

I don't know why you think Congress is behind it, anyone with more then a million bucks can manipulate the markets(specially the OTC) fairly easily. If ya get caught though hehehe. I mostly avoid OTC Pink sheets and the Grey markets but am always willing to put a small speculative bet on the BB exchange, its been very friendly to me in my 4 and half years of trading. I mostly confine myself to the Nasdaq as its an area I understand the best(ie Science and Technology).

There is an Economics theory called Creative Destruction

Creative destruction is an expression used in economics, coined by Joseph Schumpeter. It refers to a dynamic process of competition and monopoly in markets under capitalism. For Schumpeter, the main principle of capitalism was innovation and the introduction of new technology and not perfect competition (the invisible hand and static markets).

Schumpeter distinguished between innovation and invention. While an invention may be purely theoretical in nature (or shows up only as a prototype), an innovation is put into practice. In a market-oriented economy, an innovation stands or falls in a "market test."

The main idea of this principle is that innovation ("creation") encourages economic growth and is thus central to capitalism's functioning. But innovation by one company also leads to destruction of complacent firms' monopoly market share. Companies that once dominated markets (such as Xerox, Polaroid, and Kodak) lose their dominance and shrink in profitability and importance. Creative destruction may also go the other way, toward monopoly, as a corporation such as Wal-Mart exerts its domination of retail markets at the expense of older or smaller companies using new inventory-management, marketing, and personnel-management techniques.

More generally, creative destruction refers to the fact that new ways of organizing production or distribution while being "creative" (having benefits) also are destructive (having costs). Many assume that the benefits automatically exceed the costs, but there is no reason why this should always be so. Independent farmers being driven out of business by agribusiness corporations may be forgiven if they think in terms of "destructive creation."

How this fits in with the markets will become clear as I explain. When an especially disprutive technology(think IT, Plastic, Biotech etc) becomes an innovation it tends to create an irrationally exuberant psychological element to the market-place which results in vastly overvalued Market Caps and Share Price. Due to this really attractive market(attractive to Stocks that is), it encourages "pretenders" to pop up by the hundreds. For instance in the US in the 90s when the WWW and IT was all the rage just over a thousand companies existed at its hieght(in the US do not know actual numbers right now still trying to locate) it created an extremely overbought environment on the Nasdaq, so when the Consolidation phase hit and 80 % of Public companies were not delivering promised results it turned the Exuberance into Anxiety slowly turning into Panic for a while then stabling off. If it weren't for 9/11 we would already be finished with the recovery, but unfortunetly for us 9/11 DID happen so there is another "random" element there. Basically what I am trying to say is that NO ONE CONTROLLS THE MARKETS. It controls us to an extent, we can take advantage and maybe even swing things to our advantage from time to time, but in order to do those things you gotta have the cash. Thats what Capitolism is all about.....

FYI, The really big money isn't even in stocks its in bonds or Gov't and Corp dept. The US Bond market is something like 10 times bigger then the stock markets. If you want to look for Congressional influence try there, you will probably find some, but no one person or collection of persons can control the entire markets its just too big and complex. Maybe a superintelligent AI could do it, i doubt anyone on earth today could accomplish such a feat.

Originally posted by sardion2000
I don't know why you think Congress is behind it

Well, I put that in the title because its what the article says, I never stated I believed it.

Great explanation though. Good work. It reminds of a "pretend" company on the pink sheets I lost some money in. GMZP, it was a diamond company then somehow became a nanotech company overnight............I'm still sobing over selling ALTI last month, it was up 129% a couple days ago. I love the nano stocks. ALTI is a solid company, I highly recommend it.

Bonds....I don't understand bonds yet, I need to buy a book on them.
I think I'd be great at selling short because I usually pick some real losers, not just in the OTC or Pinks.