As if it hasn’t been enough that we had to be lied to about Ireland, Portugal, Iceland, etc. causing a pull back in the US equity markets in the past, today the news media blamed Egypt for a sell of in the Dow and Nasdaq. Reuters reports:
“Wall Street retreated from its 29-month high on Friday as escalating anti-government protests in Egypt prompted investors to move away from equities and into safer assets. Disappointing results from Amazon and Ford further triggered the sell off. The S&P 500 was on track to close below its 14-day moving average for the first time in two months.”
WTF Finance anticipated this pull back in the stock market as the Dow crossed the 12,000 mark but struggled to remain above. Decreased demand for several stocks whose companies just recently announced their earnings was another variable that lead us to believe that the markets are topped out for now. But the most important variable that made us come to that conclusion that the markets will correct had nothing to do with earnings, price action, or volume. Politics made us anticipate the beginning of this sell off.
In the fall of 2008 when the bailouts were first introduced to legislators Americans were against such an intervention. Stock market manipulation has been used for hundreds of years in order to drive agenda as the resulting Government policies are used to the benefit of certain industries who benefit from the imposed regulations. Imposed regulations are often lobbied for and it is not uncommon that industries voice opposition against regulatory changes while simultaneously funding them. Without the stock market drop of 777 points in a single day the American mass psychology wouldn’t have been ready for the $700 billion bailout plan. Needless to say economic fear has been used for centuries to implement regulation and laws in general.
WTF Finance mentioned in the past how Ireland, Spain, and the financial troubles of other European Nations can be used to distract from the economic and monetary realities of the United States. With Congress urged to increase the debt ceiling of the U.S. this sell off in the market comes at a convenient time to convince Congress and prepare the American public to further allow for a debasing of the currency, more bailouts and market interventions while continuing with the same living above your means deficit spending.