The Day Everything Changed 

Friday, September 29, 2008

Executive Summary

• Official market intervention has been openly confirmed.
• US markets can no longer inspire world confidence.
• The rules have changed.

"After today, nothing will ever be quite the same in the US financial markets.  A turning point has been reached.  Many people will not be aware of this for another 6 to 8 months, but we will someday refer to our financial markets as “before 9/19” and “after 9/19.”

Prior to this week, mine was one of a few voices that warned of the degree to which official intervention had been creeping into our markets.  I first noticed this behavior some years back, with very strangely-timed, massive futures-buying operations that would hit the market at the most improbably fortuitous times.

If this had happened once or twice, I could have written it off as a strange trading strategy, worked out by some clever hedge fund. But one of the rules of trading is that if you try the same thing over and over again, eventually the other players will see what you are doing and steal your lunch.

Yet whoever was doing this did it brazenly and seemingly without regard for their entry prices…a surefire way to shovel money into the market and lose it.   Who could be doing this, and why?  I formed  suspicions, talked to people, gathered evidence, weighed the odds, and concluded that this had to be official intervention.