Uh-oh. Fake liquidity in illegal "wash trades"?

I am quite sure that by the time this Ponzi collapses we are going to see all manner of slime ooze out of the organized crime syndicate which is running it.  This is the kind of thing that can bring a rapid collapse to any Ponzi scheme.   Check out the article for yourself.

This comes as no surprise to me.  In fact I alluded to it in this post where I wrote, "What banks are finding is that on the way up there is lots of liquidity but if this thing rolls over like Dent thinks is going to happen then everyone is going to find out very quickly what a phony market the stock market actually is.  There will be very little liquidity for the next crash and that means that sellers will have to lower prices big time in order to move their inventories of essentially worthless company shares.  In other words, not everyone can get out of a Ponzi scheme whole.  Duh."


I also wrote in this post, "In addition, after all these years, the government is starting to go after high frequency trading companies saying they have too much advantage.  These guys provide all of the liquidity to the markets.  Who will buy and sell in 1 cent increments when they are gone?  Will it go back to the 1/8th or even 1/4 of a point spread between bid and ask?  That will kill the day traders, another sector that provides liquidity and price determination."

Well, today's article is not the government leading the way on this but let's face it, if government does not want a case to be heard, that case is simply not heard.  It is denied or dismissed or other pressures are put in to place.  If the government does want a certain outcome, doors are opened, the path is swept free of obstacles, etc.  It's an old game and it's human nature: crony capitalism.  Before you call me a conspiracy theorist or mention "not in the USA", think again.  This is EXACTLY what Lois "the political attack dog Lerner and her corrupt IRS are under the microscope for.  They picked winners and losers simply by selective enforcement of the rules and in fact making up new rules if it would be useful to wear out those conservatives looking for special tax status.  The government is dirty, filthy, corrupt and it is business as usual.  It doesn't matter how many good people work there because, like any cesspool, all the really big chunks have floated to the top.  And from the top they rain down policy and rules and executive orders and laws on the rest of us in order to satisfy their sick little agendas.

But I digress yet again (which is a good thing because letting off a little steam in these pages keeps my blood pressure down). 

Bottom line: expect a lot of fraud to be uncovered in the markets.  Expect them to be a lot thinner that most people believe.  Expect there to be double sets of books, massive insider trading, and probably 20 other things of that ilk that you have to be an insider to even dream up.  And each time some piece of structural dirt gets found, the markets will lose more and more confidence.  At some point the whole thing will just be one big rolling lawsuit which common people avoid as being more trouble than its worth.  To say these things today sounds like insanity.  These words are not for today's reader.  They are for readers 10 years from now looking back.