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    Irises

    Mockingbird

    current issue

    More Fraud

    On Monday Oct. 28, 1997 Wallstreet plummeted more than 554 points. This was the worst decline ever, it exceeded the black Monday crash of Oct. 19, 1987, when the market fell 508 points. Foreign investment patterns established a set of dynamics which lent itself to a stock market crash. The sequence of events and explanations given raise once again the ugly specter of illegal stock market manipulation on Wallstreet.

    Consider how the crash started. It is said that the currency of Hong Kong was trying to peg itself to the U.S. dollar and failed. This in turn caused a supposed ripple effect against "over valued" companies throughout S.E. Asia. Does this make any sense?

    An analysis of the mutual funds for S.E. Asia, Pacific Rim and International Funds revealed two curious facts. First, it was common knowledge as far back as half a year ago that corporations in Asia were overvalued. Thus, currency events in Hong Kong would be "very" unlikely to trigger the series of events that resulted in a World wide stock market crash, when mutual funds and investors had already adjusted for them in their investment strategies.

    Next, to better understand how the failure of Hong Kong's currency could catalyze a stock market crash all the way around the World, an evaluation of other similar currency failures in the resent past and their effects is in order. Recently, England tried to keep the pound tethered to a silver standard- it failed miserably and fortunes were made and lost. But, no major impact on World stock prices was felt. The United States under Nixon's administration tried and failed to maintain the gold standard, and once again no major stock market crashes resulted. Now someone explain to me, in a way that makes any sense, how, when two major currencies fail to keep pegged to some external source of value, and one of them is the leading currency in the World and nothing happens as a result in the World's stock markets: how can Hong Kong's currency, when it isn't even a country, it's a city, cause such a cataclysmic result?!? Remember, we're expected to believe this, when we've seen how the mutual funds have already adjusted for the circumstances in S.E. Asia.

    There is another interesting facet to this crash that defies reasonable explanation, and that is the time line. In this era of instantaneous electronic transactions around the World, the crash occurred in slow motion. An economic scenario known for over six months, and already adjusted for was then supposed to have rocked the World's markets, when caused by a city's currency failure, and this supposedly took two full market days to transpire. Anybody who follows the stock market from moment to moment must have thought that they had entered the "Twilight Zone", and had been transported back to the horse and buggy era. Compare this to all the other World market activity since the crash i.e. all the World's markets turned on a dime when Wallstreet started to recover. And yet we're expected to believe that it took two days for the mouse that roared, to be heard around the globe and topple World markets-RIGHT!

    Then, there is the problem of major stock market crash patterns. Prior to stock market crashes certain sequences of events transpire. This was not the case here. There were no signs of the Bull Market running out of steam, and that is because it had not. President Clinton's administration continues to follow the same fundamentally sound economic policies that is producing our unprecedented period of prosperity. His administration's handling of the market crash, unprecedented as it was, was exemplary.

    It is an incontestable fact that a stock market crash occurred. Further, it is a fact that the explanations provided are ridiculous. What then is a reasonable hypothesis that can explain the events that transpired on Oct. 28. First, consider that it is a proven fact that the radical right (see issue #2) has recently manipulated the stock market for two reasons; to obtain money and to effect political events. Second, if any set of individuals have antecedent knowledge of an upcoming crash then in the ensuing recovery periods there are tremendous opportunities to realize gains, while the rest of market participants are trying to make up their loses. Third, this would result in tremendous funding advantages for any upcoming political events like elections, or purchasing shares of corporations to increase influence in corporate America. We should expect to see an expansion of the recent trends of the radical right dominated Republicans to adequately fund their agenda and candidates i.e. in Oregon alone, Gordon Smith, while paying back his own considerable campaign debts, somehow was able to come up with enough additional funds to establish a one man PAC with a stated objective to financially aid all Republican candidates in the state acceptable to the existing radical right dominated Republican party, not bad for a freshman Senator, and the Republican candidate "90% declared" Seizmore has had enough money to finance two initiative measures and still have sufficient funds to 90% consider running for Governor. Fourth, any further funding from individuals who would back Democrats or initiatives unacceptable to the radical right would be seriously hampered from doing so. The hypothesis that seems quite probable then, is that the stock market crash was deliberately initiated for both economic and political objectives, which would then be cashed in on economic and political gains that would further the factional interests of the radical right.

    Finally, one last consideration is in order. The illegal manipulation of a Bull Market is difficult to do without it soon becoming blatantly obvious. The illegal manipulation of a supposed Bear Market that rests on a solid Bull Market foundation is much more difficult to detect. And, all of the manipulated dives would represent opportunities to literally make money in the ensuing recovery periods. Manipulated, Bear Markets then, would present greater opportunities to make money for a select few than in honest Bull Markets, where all people fairly make money the old fashioned way - they earn it!

    Under such conditions as just outlined above defensive strategies are imperative. Any serious market participant should keep at least a 20% cash reserve to avail themselves of the radical right money making scams. Buy low and sell when you reach the approximate pre-dive price is an obvious bit of conventional wisdom, even if grossly over simplified; but, it constitutes a necessary strategy, to maintain competitiveness, under current fraudulent market conditions. It will of course incur a certain element of risk to the unwary investor, but it can with sufficient acumen keep current market players competitive. To recommend like ambushing strategies would be illegal, unethical and immoral, all one can do with the realities present today is develop the above defensive strategies and caveat emptor.FAREWELL.

    It's Tuesday, and "things are getting curioser and curioser". We are saved, the stock market rallied. And who was the unlikely hero of the hour? We are told, Main Street America, the small investor. Translated that means purchase orders less than 10,000 shares.

    This staggers reason! What percentage of all shares are owned by the small investor? And of those shares the vast majority are owned through mutual funds, which explains the proliferation of mutual funds in recent years. Yet we were told that the mutual funds largely staid out of the rally on Tuesday. Now, of the small number of stocks owned by the small investor that remain unaccounted for by their mutual fund investments, is that going to be enough to cause not just a rally, but a rally of 300 points?

    Consider your small investor, he or she works so they will not be able to follow closely events on the market all day. But, with their faith in Wallstreet intact, they, before going off to work, place a modest order to buy. It isn't one good citizen we are told, but the aggregate impact of them all - all of those small investors who, we are expected to believe, have dipped into their remaining savings. And, do they invest conservatively in mutual funds, as their past investing patterns clearly show they're inclined to do and the current stock market crash would indicate as prudent? No, they're to wise for that; supposedly, they don't buy the Blue Chip mutual funds who, we are told, were sitting pat. They all of a sudden start to buy individual Blue Chip stocks. But wait, this fable gets even better. What is the impact of "Main Street" ? The stock market falls approximately another 100 points during the first hour of trading. So much for Sir Lancelot the small investor on main street!

    Another group with far greater economic clout had to have been moving quietly, in smaller than 10,000 share lots probably handled through several different brokers to make it difficult to trace, placed enough buy orders to stage the rally. None of these purchases are tracked under current market practices, in the daily computation of data, so their identities are safely anonymous. Isn't that a convenient arrangement.

    Euro-Greed

    Europe is embarking down the path to a new common currency called the euro. It is a blatant attempt to roll back a century of social- political progress culminating in Keynesian economics, and substituting in its stead and inferior set of greed motivated programs highly profitable to certain factional interests. That this is so can readily be demonstrated by an objective analysis of the facts involved.

    The proponents of the euro contend that it is necessary for a variety of reasons. First, it will make "easier corporate planning, pricing and billing". However, currently the ECC already has intact agreements that promote free trade in industrial production, agricultural production and the free movement of labor, capitol and enterprise, which is backed by a successful financial system based on a currency unit the ECU (European Currency Unit). Anyone who has travelled abroad knows currency conversions are as simple as entering amounts and pushing a button on a calculator, even for those who have no facility for simple arithmetic conversions this is easy. In the business world, currency conversions, resulting from contractual obligations, are an accounting function covered in first year accounting. How the euro will help an already simple system facilitate " easier corporate planning" is left unspecified. The current system has only made it possible for Europe to become the World's largest trader controlling 20.9% of all trade compared to the United States of America's 19.6%.

    Second, it is said that the euro will open Europe's financial markets to new foreign competition. How can increased competition occur over and beyond what currently exists? Are Martians going to start competing with the Japanese, Arab oil money, American and Pacific Rim countries? How can this supposed increase in competition help European corporate interests?

    Third, it is stated that "inefficient policies" will be less sustainable. The intent of this is blatantly obvious, it is an attempt to force the redesigning of highly successful existing Welfare States. The European countries' version of entitlement programs (i.e. Welfare, Social Security, and Medicaid) are to be sacrificed to the golden calf of the radical right's factional interests- privatization. The effect will be poorer health care, poorer care for the elderly, a reduced standard of living for the poor, and poorer social services. It will force the implementation of private and profitable HMO health care models (insurance rates on these programs are currently rising in the U.S.). And, it will force people to invest, for their retirement, in guess whose mutual funds? The same thing was attempted in the U.S. under the pretence of a `balanced budget' by the radical right wing Republicans, when they shut down the American gov't. while trying to extort their programs on the American citizens.

    Fourth, the euro is supposed to make European economies attractive to business. But, as already stated Europe controls the largest share of World trade. A brief survey conducted in mid-October indicated that international mutual funds were already heavily invested in Europe and intended to expand that investment base further.

    Fifth, the final claim supporting the conversion of the highly successful existing ECU system to the dubious euro was that somehow in spite of commanding the largest share of World trade Europe was standing stagnate while the U.S. and Asia were forging ahead. An analysis of information obtained from mutual fund ratings as of the second quarter of 1997 showed the following results. Out of the 27 equity mutual funds that were studied, Asia had 25% exceeding a 20% rate of return for last year. Further, Asia had 47% of its mutual funds exceeding a 10% rate of return for the previous year, 33% of the Asian funds posted negative rates of return. Meanwhile, Europe had 71% of its equity mutual funds humming along with over 20% rate of return for the year. And, if that weren't enough good news, 95% of the equity mutual funds posted rates of return for the preceding year exceeding 10%! Not one European equity mutual fund registered a negative rate of return. Obviously, Europe is not only not stagnating, it is doing better than its Asian, Japanese and U.S. counterparts. And, now some idiots, in the name of greed, want to come along and kill the goose that is laying the golden eggs. the fact is there is no legitimate reason to change the existing ECC. system!

    There are several compelling reasons not to change the existing financial system. First, as previously noted it plays into the hands of special right wing factional interests. Second, it provides inferior health care, care for the elderly and welfare. Third, it forces countries to have less flexibility, and thus be less efficient, in developing economic policies to meet their regional needs in times of economic travail. Fourth, unlike the United States of America the euro proposal doesn't provide for the regional transfer of resources to help ailing economic areas. Fifth, while the ECC does allow free labor movement, lateral social mobility patterns have never established themselves in Europe.

    The existing system has proven itself extremely successful. The pretenses for changing the system are as transparently invalid and absurd as the emperor's new clothes. That certain individuals will sacrifice the public good for personal advantage, and fool themselves by warping their beliefs to match that of power and their own perceived self-interests has been repetitively shown throughout history from Shakespeare, to Goethe, to Voltaire. And, that tragically is what is transpiring in Europe today with the euro: greed and avarice are being substituted for sound economic policy.

    If you are interested in any other poems by the author or would like to constructively comment on any of the poems presented here please contact me at my e-mail address:chuang_tzu@hotmail.com in the meantime. This page hosted by
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