A Method In Their Madness


In Hamlet, when Polonius is trying to explain to the King, that the son of the man (his brother, that he murdered), is exhibiting such erratic behavior for a specific reason, he says, “Though this be madness, yet there be method in’t.” This statement in the play is often misquoted as, “There’s a method in his madness.” When it comes to wall street insiders, there is most definitely a “method” in their “madness”, and the perception of madness and randomness that the public has of the stock market.

When one learns and realizes that the stock markets are at their core, nothing more than massive retail merchandising operations, where goods (stocks), are bought and sold, then one can begin to understand the mechanisms of this vast enterprise and its implications for the trader, the investor, and the economy at large.

This merchandising operation is abetted and protected by the very forces and regulatory bodies that are supposed to be in place to protect the public. The main regulatory body for the exchange is the SEC, the Securities and Exchange Commission. The SEC was created in 1934, and is part of the Securities Exchange Act of 1934. And the SEC then was utilized to enforce the Securities Act of 1933. These acts were created in response to the 1929 stock market crash, to ‘protect’ the public from events like that ever happening again. In its infinite wisdom, the Roosevelt administration, with great urging from the heads of wall street, appointed Joseph Kennedy as the first head of the SEC, a known stock pooling operator and swindler, therefore ensuring that all “regulations” and “reforms” would favor the exchange and certainly not the investing public that they were designed for. These practices continue to this day.

One can gain some insight into the methods of the exchange insiders and how they achieve their results, by examining the written results, which are available in library’s, of the SEC’s investigations of the exchange after their actions drew public outrage in how they handled certain crisis events in the stock markets. One of these investigations, was after the assassination of President Kennedy, wherein the markets where closed, with stocks way down, and then reopened the next day at incredibly higher prices. The results of these investigations are called Special Study reports. We then learn in theses studies, that specialists,( market makers etc) can “unilaterally set and control the prices of stock”, and by the use of certain devices, including the short sale, they can destabilize the markets, in which they are “competing” with the general public by, not only trading in their functioned account, designed to maintain an orderly market, but also in their “own” investment accounts and other insider accounts they manage. This would seem to me like a very large conflict of interest. A virtual win-win situation. Combined with the financial media, which the exchange and its gang own and control, they can manipulate this merchandising operation and induce the public, for the most part, to buy high and sell low. It is of some interest that the stock market is perhaps the only retail establishment where the merchant can always get the customer to buy high and sell low.

Unlike Hamlet, whose seeming madness leads to chaos and death for almost everyone in the play, the exchange continues on with the chaos; to their great benefit.