Do you believe the stock market is rigged?

[raccoon]

I do.

[alittlelark]

1. yup. n/t

[GodlessBiker]

2. How?

[raccoon]

7. By people/institutions that have megabucks, and can eat the little guys for a snack. nt

[Common Sense Party]

26. The megabuck institutions get taken, too. Remember Enron?

Do you know how much money big institutions like CalPERS and other pension plans lost on Enron?

About the only thing big players have over small guys is lower commissions on trades.

Big does not equal smart, and small does not have to equal stupid.

[Caliman73]

35. CalPERS is a pension organization

It isn't a big fish, it is an agency that has organized a diverse group of employees who pool their money together for the collective good of the pensioners. While CalPERS does present a large amount of capital, that capital is encumbered to obligations. While the investment strategy is to grow the fund, profit is not the primary motivation, preservation is.

Megabuck institutions are those like Goldman Sachs with their "uncanny ability" to come out with profit despite precipitating devastating losses for the market.

I don't believe that the market is completely rigged, but the largest players ala Sachs, Citigroup, BofA, and others who actually make big moves that can dictate where the market goes have a very unfair advantage against the smaller players and the individual investor.

[Common Sense Party]

36. large amount of capital = megabucks

This isn't hard to understand. The biggest movers in the market are institutional investors like CalPERS and other pensions, endowments, and insurance companies.

[girl gone mad]

42. Sorry. but the big boys see CalPers as a sheep waiting to be shorn.

I recently read a report that said over half of all pension fund managers are unqualified. That's just the way Wall Street likes it.

[Common Sense Party]

43. So what? Half of all mutual fund managers are unqualified.

CalPERS has squads of accountants, portfolio managers and trustees who are very good at what they do.

[CanonRay]

3. I'm beginning to believe it.

And I've pulled all money out of stocks. I think the bond/mutual fund ratings are also rigged.

[raccoon]

20. ITA. nt

[Hutzpa]

4. Yup. n/t

[slackmaster]

5. Not rigged exactly, but big players have huge advantages over small ones

As in many games.

[Ganja Ninja]

21. Yup its like a casino.

The big boys/the house has built in advantages over the small investor.

[Tuesday Afternoon]

6. yes...not the market per say but, it is manipulated and the intent is to

deceive.

[Iggo]

8. I believe it's gamed to a great extent.

But if it was rigged, billionaires wouldn't commit suicide when it tanks.

[raccoon]

9. "Gamed" and "manipulated" as Tuesday says are better words for it, I think. nt

[Terry in Austin]

10. "I am shocked,

shocked to find that gambling is going on in here!"

;-)

[Swede]

11. You can invest in the same stocks the big guys do.

Not sure what you mean.

[unblock]

24. in roulette, you can bet on the same number that the cheaters bet on.

but not knowing who the cheaters are or which number they're betting on puts you at a disadvantage.

[Bonhomme Richard]

12. Legalized gambling and Wall Street is the house........

With all the advantages of the house.

[catzies]

17. Yes. Wall Street is a casino and the house always wins. n/t

[kjackson227]

13. yep, rigged/manipulated.

[CountAllVotes]

14. beyond "rigged"

it is sheer fraud and a huge ponzi scheme IMO.

:kick:

[DJ13]

15. Stock Manipulation by Goldman Sachs: Control of the Stock Market, Control of Government?

Tue Jul 14, 2009

In 2008, Goldman Sachs lost $53 billion, then changed its status to be eligible for a government bailout, took $10 billion of our money, and proceeded to award $5.6 billion in bonuses to its employees. (That is, its home office employees -- Goldman has been cited 173 times for failure to pay even minimum wage to its Burger King Workers.) The New York Times overview on Sachs that in 2007, it "paid its chief, Lloyd C. Blankfein, $68.7 million - the most ever for a Wall Street C.E.O." ...I want to make one one hundreth of that in my whole life and I'll be happy!

However, in a dramatic reversal of fortune, in the first quarter of 2009, Goldman posted a huge profit of $1.66 billion. The bank investment giant is projected to post a profit of about $2 billion for the second quarter.

More here-
http://www.dailykos.com/story/2009/7/14/753229/-Stock-Manipulation-by-Goldman-Sachs:-Control-of-the-Stock-Market,-Control-of-Government
Daily Kos: Stock Manipulation by Goldman Sachs: Control of the Stock Market, Control of Government?

[Warpy]

16. To the extent that 99% of us are denied all the facts

you bet I do. We're left blundering around in the dark with only the glossy prospectus to guide us, hoping that there aren't too many lies about the health of the company as we sink in a few bucks in the hope of earning income from their stock.

Trusting everything to dumb luck, we're trying to swim through a shark pool with bloody chops tied around our waists, hoping the sharks either aren't hungry or will dine on each other in the confusion.

[mopinko]

25. what she said.

other than that, i don't think so. i wouldn't bet on the worth of any particular stock. it can always be the next enron. but i have family in the industry, and i do not think that the market itself is rigged.
i do think the big guys have way, way, way more info than the average investor. and i wouldn't trust jim cramer to babysit my dog.

[formercia]

18. Absolutely.

It's a sucker's game.

[PretzelWarrior]

19. yes.

[Common Sense Party]

22. No.

I just think many people don't know what the hell they're doing, and it's easier to claim "it's rigged" than to try to understand it.

[KittyWampus]

45. common argument in defense of Wall Street is that the rest of us unwashed masses aren't smart enough

to understand what's going on.

Some big parts of what that argument fails to address are:

*Economists and Financial experts who do understand point out the malfeasance/inequity/manipulation
*Wall Street groups write the freaking rules that govern themselves and thus give have advantages from the start
*From what Wall Street apologists say, even the EXPERTS don't fully understand the implications of all the rules they wrote for themselves

[Common Sense Party]

47. Nice try.

Didn't say "not smart enough." I said "don't want to get educated."

I've been in the "Wall Street" industry for 15 years (as a very small, bit player). There are shenanigans and cheats galore, enough to make my stomach turn. There are some short-term quant trading programs that only an MIT rocket scientist could understand, and perhaps not even then.

But, for the individual investor, the basics are still the same. Buy low, hold for a long time, sell high. Diversify. Try to lower expenses as much as is reasonable. Buy quality. Know that there are up markets AND down markets. Don't get scared out of a down market. Buy more shares when prices are low. No one can successfully time the market. Slow down before your exit--get more conservative well before you retire.

Much of the market manipulation and shenanigans will not affect the long-term, sensible INVESTOR. It will, however, cause headaches for the short-term SPECULATOR, and it can do real damage to those toe dippers who don't have a long-term perspective and plan.

And as far as Wall Street writing their own rules, nonsense. We have regulation upon regulation already, many of which make no sense. Crafty and crooked people are always going to find a way around regulations.

[redqueen]

23. Of course.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6057091

[unblock]

27. there is some element of improper advantage

but probably the vast majority of it is honest, or rather legal, with major players taking advantage of legitimate, public information that smaller players don't have the means to take advantage of (e.g., real-time data feeds and supercomputers).

the real question is, should companies like goldman sachs be allowed to profit simply for having faster computers and being able to get their trades in faster than others.

[redqueen]

29. Did you look at that link? The code is for cheating.

It's not just doing legal things faster, it's cheating.

[unblock]

32. if they did something illegal, that would fall into the "unfair advantage" category

if they didn't cheat but took advantage of superfast computers and market power that few if any have access to, that would be legal, but is questionable, in the category of things that aren't but probably should be illegal.

outside of that, most hedge funds and the like simply have computers that recognize patterns that in theory could be recognized by anyone, but the rest of us don't have the time to develop and implement such things.

[Orsino]

28. Not entirely...

...but a lot of players, big and small, are doing their best to rig it. Luckily, they are not all working together.

[taught_me_patience]

30. Threre's been a lot of tape painting recently

It's probably the government trying to prop it up.

[SOS]

31. The internet IPO's of the 1990s were pure fraud

and the rest of it is gamed by Wall Street to shaft the average American investor.

Goldman is paying billions in bonuses this year.
How's your 401K doing?

[paulsby]

33. absolutely not. it's the greatest price discovery and wealth creation mechanism ever

i trade futures and stocks. my grandfather came to this country as a poor immigrant and did very well by long term conservative investments. depression be damned. it has been a boon to my family and me as well. there has NEVER been a 20 yr period in its history where dollar cost averaging into the base index has not given a positive return. in most cases, a very good return as opposed to the average asset class.

[Greybnk48]

34. Sadly, yes.

[Odin2005]

37. Yes, has been since Reagan.

if laws against insider trading were fully inforced and/or had teeth at least half the people working on Wall Street would be in jail. It's no longer serving it's proper function, raising capital, it has become a giant bubble-blowing rigged casino for corporate profits.

[midnight]

38. Yes.

[LanternWaste]

39. No...

No... gamed by a lot of insiders and abused by a lot of cheats, but not rigged-- too many divergent interests for that to happen without any noise (over and above the ambient noise always in place).

[Cessna Invesco Palin]

40. No. Stop being insane. n/t

[tritsofme]

41. Only when I'm losing money.

[Common Sense Party]

44. That's about right for most people on DU.

[KittyWampus]

46. Because Ponzi schemes don't work for anyone at any time. Not saying that anology is perfect

but illustrates how stupid your comment is as any kind of rebuttal.

Better analogy- like no one ever wins in casinos... or no one every wins the lottery.

[Common Sense Party]

48. I think you need to study more about what a Ponzi scheme is.

Then, study how the stock market works.

You will learn a lot.