The Stock Market - Machines versus Man and Womankind - the People have no chance!

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It sure is great to know that President Obama solved our economic woes and saved the American public from the greed mongers on Wall Street.  He brought solid growth to our economy and stability to our markets.  Drove the unemployment rate down and kept the interest rate low.

Well, at least that is the political spin.

The truth is quite the opposite if truth were exposed to the people but that will never happen with the corporate, political, news media merger of special interests assuring no one is in a position to tell the truth.

Take our financial crisis now underway in which the American stock markets have lost over Four trillion dollars in eight days, most likely the greatest loss of value in history.  Not a single word from our President, Treasury Secretary, nor Chairwoman of the Federal Reserve Bank.

The world is in a financial meltdown and NOTHING from our president!  Makes one wonder who he is trying to protect?

High Frequency Trading (HFT) has taken over our stock markets and taken down the world financial system and our leaders have not even blinked.

Do you know what HFT means to us?  It means no more brains, with a heart and soul, can control the market trends.  It means our banks have insulated themselves so well they have no responsibility for what happens to the market.

It means market volatility is imbedded in a market that was supposed to maintain stability.

In short, our government and our banks have sold their souls to the Devil and the Devil is in the shape of an algorithm.

An algorithm (pronounced AL-go-rith-um) is a procedure or formula for solving a problem. The word derives from the name of the mathematician, Mohammed ibn-Musa al-Khwarizmi, who was part of the royal court in Baghdad and who lived from about 780 to 850.

Contribution of Al-Khwarizmi to Mathematics and Geography

By: N. Akmal Ayyubi

Muhammad ibn Musa Al-Khwarizmi is one of the greatest scientific minds of the medieval period and a most important Muslim mathematician who was justly called the 'father of algebra'. Besides his founding the science of jabr, he made major contributions in astronomy and mathematical geography. In this article, focus is laid on his mathematical work in the field of algebra and his contribution in setting the foundation of the Islamic tradition of mathematical geography and cartography.

Introduction

Islam gave birth to a new civilization that spread from China in the east, India in the south east, Russia in the north, and Anatolia in the west of Asia, to East and North Africa up to the Mediterranean regions of Southern Europe. This civilisation was marked by a deep interest in science. In the heart of the Islamic scientific tradition lays the queen of sciences, mathematics, where the scholars of bilad al-Islam (lands of Islam) excelled in all its branches practiced in pre-modern times.

One of the greatest minds of the early mathematical production in Arabic was Abu Abdullah Muhammad ibn Musa al-Khwarizmi (b. before 800, d. after 847 in Baghdad) who was a mathematician and astronomer as well as a geographer and a historian. It is said that he is the author in Arabic of one of the oldest astronomical tables, of one the oldest works on arithmetic and the oldest work on algebra; some of his scientific contributions were translated into Latin and were used until the 16th century as the principal mathematical textbooks in European universities. Originally he belonged to Khwârazm (modern Khiwa) situated in Turkistan but he carried on his scientific career in Baghdad and all his works are in Arabic.

He was summoned to Baghdad by Abbasid Caliph Al-Ma'mun (213-833), who was a patron of knowledge and learning. Al-Ma'mun established the famous Bayt al-Hikma (House of Wisdom) which worked on the model of a library and a research academy. It had a large and rich library (Khizânat Kutub al-Hikma) and distinguished scholars of various faiths were assembled to produce scientific masterpieces as well as to translate faithfully nearly all the great and important ancient works of Greek, Sanskrit, Pahlavi and of other languages into Arabic. Muhammad al-Khwarizmi, according to Ibn al-Nadîm and Ibn al-Qiftî  (and as it is quoted by the late Aydin Sayili), was attached to (or devoted himself entirely to) Khizânat al-Hikma.

It is also said that he was appointed court astronomer of Caliph Al-Ma'mun who also commissioned him to prepare abstracts from one of the Indian books entitled Surya Siddhanta which was called al-Sindhind in Arabic. Al-Khwarizmi's name is linked to the translation into Arabic of certain Greek works and he also produced his own scholarly works not only on astronomy and mathematics but also in geography and history. It was for Caliph al-Ma'mun that Al-Khwarizmi composed his astronomical treatise and dedicated his book on Algebra.

Muhammad ibn Musa Al-Khwarizmi is one of the greatest scientific minds of the medieval period and the most important Muslim mathematician, justly called the 'father of algebra'. He wrote the Kitâb al-Jem wa'l Tafrîq bi Hisâb al-Hind also called Kitâb Hisâb al-adad al-Hindî on arithmetic in which he used Indian numerals including zero in place of depicting numbers by the letters of the alphabet and the decimal notations or numeration by position for the first time. It deals with the four basic operations of addition, subtraction, multiplication and division as well as with both common and sexagesimal fractions and the extraction of the square root. The original Arabic text of the book is lost and only its Latin translation is available.

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Now you know, our financial trading system consists of High Frequency Trading formulas based on the work of a Persian Islamist developed over 1,500 years ago.

These algorithms enable a select number of super computers to buy and sell stock at a speed far beyond the human capacity to direct, let alone manage. On a normal trading day High Frequency Trading is responsible for about 50% of the trades and seven billion shares are about the number traded daily.

Black Monday of this week saw 13.9 billion shares traded, almost double the normal volume, as the market began a wild three-day spiral that ended a week of high tension investing and left traders staggering at what happened.  The vast majority of those trades were by HFTs. 

Most of the increased volume was HFT, which is formula not human driven.  Events took place showing humans have clearly lost control of our markets.  Stocks dropped over 1,000 points in less than an hour, far more than the greatest single day loss in history of 777 points.

In just two days, the S&P 500 lost $900 billion in value, and total losses across the world for just the last week were over FOUR TRILLION DOLLARS.  That is more than the entire United States budget ($3.8 trillion) for 2015.  In the US alone over $2.1 trillion was lost in six days.

Imagine that, the market lost 1,000 points before anyone could react.  All the new gimmicks the Obama administration ordered to protect stock manipulation failed because the algorithms knew exactly when to stop driving the market up or down to avoid detection by the SEC.  On Tuesday the market lost almost 700 points the last 30 minutes.

   

So what about the circuit-breakers that are supposed to suspend trading and calm the market, well on Monday there were 1,200 market stops and they had no control over events that took place.  It was still the largest market loss in history.

Installed after the May 2010 flash crash, the so-called circuit breakers are designed to slow down dramatic selling or buying. They are typically triggered when stocks dive or spike by a certain amount in a matter of minutes. Think of it as a time out. Trading is halted for five minutes, giving investors a chance to calm down and allowing cooler heads to step into the market.

China is blamed for our troubles but in truth, greed is feeding the market and the High Frequency Trading is stealing billions for a very limited number of beneficiaries.  Our loss of control is so severe Congressional and Justice Department investigations should be launched, but are not even being discussed by our elected officials.

Where is the outcry?  Where are the protectors of the people?  Have we finally lost control to the machines?

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Banks and Brokers bank big bucks as Little People get Played - Again!

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Once again it was the individual investor excluded from the buy and sell and buy action that sent shock waves through the financial markets today, because once again the computers took over the stock markets with programmed selling forcing the market into an unexpected correction and creating a mountain of opportunities for the computers to profit in any recovery.

By now, most informed people know the American stock markets serve no public interest, fail to do what they were intended to do, and act to feed their wealthy owners even more wealth.  It is a vicious cycle begun in earnest with the last major stock market crash in 2009, and it operates at a level of legal, but immoral corruption that the Obama administration has never fixed.

It was back in 2008 I warned that Goldman Sachs owned candidate Obama much like they owned President Clinton when he needed millions of dollars to pay his legal fees during his impeachment.

Once he got elected Goldman people were placed throughout Obama's administration and controlled all fiscal policy of the government.  As it became clear billions of dollars were going to be lost only the two major banks who supported Obama in 2008 received virtually all the money they had at risk, an amount totaling billions of dollars, Goldman Sachs and J.P. Morgan.

Here we are, seven years since the economic crash that cost consumers trillions of dollars in wealth and not a single banker behind the economic manipulation was prosecuted, or wound up in prison.. This is the same pattern they perfected with the Clintons by providing millions for Bill's legal defense fund to save him from impeachment, then arranging for hundreds of thousands of dollars in speaking fees, and helping his rather mysterious Clinton Foundation.

Hillary is the most recent recipient of the Goldman purse strings as Bill and Hillary have now received over $23 million in speaking fees.

Well Goldman and Morgan will no doubt benefit from the stock market crash, what the pros call a correction, since some of those massive computers are theirs.  In the meantime, the average person in America will lose 10% more of their wealth while the bank boys make 10% more on their manipulations.

Once upon a time such practices landed executives in jail but no more under the Obama administration.  Perhaps one day, people will realize that it really does not matter whether a politician is a conservative or liberal, Democrat or Republican, they are all owned by the rich and only the rich and their political stooges are getting richer.

After the collapse this week the market is down 10% and the professional economists blame it on China, North Korea, excess oil inventories, the wavering of the Fed on cutting interest rates, and the instability in Europe because of Greece.  None is true.

The market will rise when the rich can make money and will fall when they stop making money.  They sell when the market peaks and buy after the collapse, all with the help of their monster computers.

If they still do not make money, they bring new companies into the market through public offerings, known as IPOs.  Of course they really do not want them to succeed so they buy up all the stock before the first public offering, then sell it to the stupid public the first day it is available to buy when the price is being driven up.  Once the stock rises, they lose interest and so far this year 38 IPOs have gone bankrupt, which cost the little people untold millions or billions of dollars.

I guess there is a reason our founding fathers did not trust big banks, international banks, or even capitalism.  Maybe our current leaders should pay attention to history, not just their campaign fund raising efforts.

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China and the World Financial Manipulators - It takes a Communist Country to stop the Financial Corruption

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Just a week ago, here is what world financial analysts said about the economic collapse in China.

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Daily Mail, London

China's tumbling stock markets plunged even further today, intensifying fears the country was tail-spinning towards the biggest financial disaster since the 1929 Wall Street crash.

Almost $3trillion (£2trn) – more than the entire economic output of Brazil – has been wiped out since markets went into reverse just a few weeks ago, posing a bigger headache for many global investors than even the Greek debt crisis.

China's government, regulators and financial institutions are now waging a concerted campaign to prop up the nation's stock markets – a move that failed spectacularly in the 1929 crash that triggered the Great Depression.

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Here is what the experts said just three days later.

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The Toronto Star

China’s battered stocks rebound as officials tighten market controls

Government takes desperate measures to shore up market, while feared internal security police announce they have begun investigating investors accused of ‘maliciously’ shorting blue-chip shares, as bubble bursts.

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The Washington Post

BEIJING—China’s stock market recovered sharply in volatile trading Thursday after the government announced further measures to restore investor confidence, including forbidding major shareholders from selling.

Shanghai’s benchmark share index rose 5.8 per cent on Thursday, reversing direction after sliding 3.8 per cent earlier in the day. But it has still lost around a quarter of its value since a peak in mid-June.

In the latest in a series of desperate measures to shore up the market, regulators banned major shareholders, corporate executives and directors from selling stakes in listed companies for the next six months.

Officials also announced that banks could roll over loans backed by shares.

But, for some investors, it was the entry of the feared Public Security Bureau (PSB) that really changed sentiment.

The powerful internal security police announced they had begun an investigation into a dozen individuals and institutions accused of “maliciously” shorting blue-chip shares.

The state news agency Xinhua said the move showed regulators would “punch” anyone who violates regulations and the law “with a strong fist.”

But if those moves calmed some of the panic in the markets, it was far too early to declare victory, analysts said.

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In the course of a couple of days the stock market experts had declared the worst financial depression since the Great depression of 1929 would befall China.  A couple of days later the strong and immediate reaction of the Chinese government to the market manipulation had driven out the devils and restored the market completely, recovering the $3.2 trillion within days.

The instantaneous action by the Chinese stock regulators and Chinese government left financial experts bewildered, prognosticators stunned, and crooked financial manipulators running for the border.  It seems odd that none of these tactics were employed by our government during the 2009 American financial collapse.

For comparison purposes, the loss of wealth to American households in the 2009 recession totaled an astounding $14 trillion, and the worldwide loss was $34.4 trillion.  Clearly the screams of "depression" by the economic experts about China's $3.2 trillion in lost value, which was erased in a matter of hours, were either efforts to further drive down the Chinese market value, were the result of algorithms gone mad, or were deliberate lies to undermine the Chinese market.

Our little recession of 2009 cost Americans more than four times as much money as the temporary Chinese drop.  We are still trying to recover from 2009 six years later.  China did it in about 48 hours.  Six years later no one is in jail for causing the 2009 crash while the Chinese are preparing to prosecute brokers within a few hours and in China they take corruption and stealing from the public seriously.

It seems as if our financial experts are worthless when it comes to knowing the Chinese market as the latest flurry of lies and scare tactics demonstrate.  This swift and decisive action in China should tell us we continue to depend on a corrupt financial system here in America that is immune from government threats and prosecution.

There are a few things the Chinese can teach us about managing the parasites on Wall Street and their protectors in Congress.

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The Facebook IPO - A Billionaires Delight and Forbearer of the Next Internet Stock Collapse

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The culmination of greed in America

Tomorrow the boys of Facebook become billionaires as they cash out just before millions of new stockholders are left holding another Internet stock that lost half it's value.

Make no mistake, the billions to be made over a 48 hour period will be the last profits from the Internet for years to come because there is no business model for pure and simple greed.  This IPO and every other Internet company surviving on revenue from Internet advertising will crash because the truth slipped out of the bag too early.

Yes, the speculators who control the IPO and have purchased all the offering before the public even had access to it, will simply let the value increase since the IPO was over subscribed and that means fewer shares are available for purchase.  In a day or two they will sell into the market, take their billions of cash and walk away.

GM created a huge potential problem for the IPO when it announced just a couple of days before the IPO release that it was stopping all Internet advertising on Facebook and everyone else because after spending billions of dollars on Internet ads over the past few years because the ads have no impact on consumers.

For years the Coltons Point Times has warned of the foundation of quicksand when it comes to valuing Internet stocks and advertising revenues.  In fact a year before the last Dot.com bust in 2000 we published a column outlining why the market was about to collapse.

For those who don't remember, it has now been twelve years since the dot com bubble began to seriously deflate.  The financial climax had its high water mark on March 10, 2000 when the NASDAQ peaked at 5132.52.

The subsequent stock market crash caused the loss of $5 trillion in the market value of companies from March 2000 to October 2002, and those parts of the world which were the epicenters of the dot com boom, such as the San Francisco Bay Area, were plunged into a financial nuclear winter.

More than a decade later we still haven't learned.  Facebook is going public with over 97% of their revenue from Internet ads, ads General Motors, the largest car company in the world, says are worthless.  American's and foreigners driven by greed will purchase the stock, not from Facebook but from the financial institutions who already bought  stock before the people had a chance.

Now that's fair President Obama, our first president to embrace the Internet speculators as economic wonders not to mention huge financial contributors to the President's reelection campaign.  You don't suppose Obama has some of that Facebook stock do you?

There is no financial basis to say Facebook is bigger than Exxon, Proctor & Gamble or GM when the sole basis for revenue is advertising which recent polls indicate 83% of Facebook users never click on.  The other 17% say they occasionally click on one if it is of interest.

Don't be surprised if another five trillion dollars is lost and that most of it comes from Internet stocks, or should I say stockholders.  Of course the Internet executives will cash out starting tomorrow leaving you holding the bag.

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Save the Economy - Vote Republican!

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If you want to know what the stock market is going to do in reaction to the midterm elections, here is a bit of inside information. The greater the victory by the Republicans the greater the economy and stock market will improve. So if you want to speed up the economic recovery, vote Republican.

In most off year elections the minority party wins the most seats and the stock market always gains more on average after a midterm election than after a presidential election. Obama should know, he got elected and the stock market promptly crashed.

The market has been slowly trending up this year as the Republican victory got nearer. The larger the GOP victory tomorrow, the stronger the market will react for the better.

Part is a result of the anti-business attitude of our young president, part is a result of the social leaning agenda of Obama and the Democrats, part is because of the record setting deficit spending and record increase in the national debt under Obama, and part is the historical pattern of minority success in midterm elections.

Make no mistake, the Republicans are going to win and win big.

According to Brian Gendreau, market strategist for Financial Network, in the period from 1922 to 2006, the average gain of the Dow Jones Industrial Average over the 90 trading days following midterm elections (roughly November until mid-March) was 8.5%, according to a new study he authored.

That's almost 5% higher than the Dow's gains in presidential election years.

During the midterm elections the only time the ruling party gained seats in both the House of Representatives and Senate was in the 2002 elections, and the market fell afterward - making it the only time since 1942 that the Dow has fallen after a midterm election.

In the days before midterms, the market generally tends to perform well, just as it has this year.

"The market starts to go up beforehand and it just doesn't stop," said Gendreau.

While past performance is no indication of future success, consider this: The Standard & Poor's 500 Index has posted gains for every 200-trading day period following mid-term congressional elections since 1942. Stocks surge, on average, by a whopping 18.3% in those 200 days, according to the Leuthold Group, a Minneapolis-based investment-research firm.

The S&P index chalked up its biggest 200-day gain, 30.5%, in 1942, as the tide began to turn in World War II. The smallest gain, 3.9%, came in 1946, as investors worried that the economy would sink into another depression.

Like I said, save the economy, vote Republican!
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Goldman Sachs Gets Multi-Billion Dollar Payback for Backing Obama

Obama Buddies Get Richer as Congress Seems Dumbfounded

So what is the best investment in America? Buy a president. Just ask Goldman Sachs who secretly decided long before last year's election that the one candidate who could keep them from bankruptcy, who would allow them to cover up billions of dollars in bad mortgage loans and ignore oil price manipulation was the promising junior senator from Illinois.

As reported over and over the past three years in this paper, Goldman met secretly with Obama long before the election and decided Obama was the one. They helped raise millions of dollars for Obama and guided him throughout the campaign planting former Goldman executives throughout the Obama campaign and new Administration to help assure they got what they wanted.



They helped insure that federal government money would be used to pay them back all the bad loans made to AIG. One of Obama's top financial advisors was able to invest $5 billion in Goldman less than a year ago and has already made over $1 billion profit, Warren Buffett no less. A revolving door was set up to help usher former Goldman executives into the Obama White House and Treasury and throughout the many financial agencies of government.

As Goldman got government money to help them survive they were forcing competitors out of business to take over the world investment banking market. They used federal TARP funds and bailouts of Fannie Mae, Freddie Mac and AIG to replenish their coffers and eliminate competition.



They are the only financial institution to triple their value since Obama got elected. There has been no meaningful investigation of their role in the sub prime mortgage disaster and oil price manipulation of last year and this year to expose how they have made billions of dollars at the expense of hapless and greedy institutional investors and private investment funds.

They were instrumental in modifying federal rules and regulations to keep the sub prime mortgages and oil futures derivatives outside government regulatory control while the world economy was brought to the brink of disaster. They even bought the very oil futures market that set the world prices while their own energy experts were predicting unjustified oil price cost hikes.

While Goldman was busy dumping billions of dollars in toxic mortgages into the world market they were also forcing AIG to repaying them billions in potential losses, a move that forced the federal government to come in with over $180 billion in federal bailout dollars for AIG under the new AIG CEO, a former Goldman executive, who helped Goldman receive 100% of all debt owed by AIG.



Last week Goldman joined fellow bankers JP Morgan, Credit Suisse Bank and Deutsche Bank in paying back the federal TARP funds, $88 billion between them, thus freeing themselves from federal scrutiny. Then secretly this past weekend they informed employees that the biggest bonuses in 140 years would be paid out this spring, though what they meant was the over $500 million in bonuses would be the most in history. It was also based on just the 1st quarter results, since Obama took office, in 2009. What a slap in the face to the president who complained about executive bonuses. Yet Obama has never uttered a word about the Goldman manipulation of the government, regulations, markets or bonuses.



Since 2006 Congress has stood idly by, perhaps because Goldman pumped millions of dollars into our presidential, house and senate campaigns, and Congress did nothing to investigate the Goldman role in the economic collapse. Obama is silent about Goldman, Congress is acting as if they got caught with their fingers in the cookie jar, and Goldman continues to use the federal economic system as their own private account.

If nothing comes out of this the citizens of America should know once and for all that our government leaders are really bought and paid for and demand impeachment. It is time to throw out all the scoundrels and the opportunity begins in 2010 before there is nothing left of America. Obama ran on a platform against Wall Street while being the patron saint of Wall Street. The media refuses to tell us the truth. The government can't. It is up to the citizens to take back America.