[Like your editor, Rick’s Picks  forum regular Wayne Razzi (aka “Red Will”) is a veteran floor-trader who grew up in South Jersey.  When I asked him if he would like to contribute a guest commentary, I was not expecting the provocative tour de force that unfolds, step by step, below. In the essay, Will asserts nothing less that that the impending collapse of our economic system was meticulously engineered by financial and political sociopaths. Let me attest that his is not some whack-o conspiracy theory; rather, it is the closely-reasoned argument of a highly intelligent person who values truth sufficiently to have searched for it, in the form of an answer to a profoundly disturbing question, for many years. Judge for yourself whether his conclusions tally with your own thoughts as to why the American Dream is about to go bust. RA]

Incompetent, But Curious

After being hazed all day and into most evenings by my firm’s Options Specialists for about six months, I was given a seat on the trading floor.  It is from that point on that I began the conversion from business school idealist to incompetent cynic.  In fact, well before I officially became a trader, I witnessed “broad daylight” collusion every day.  The myths of the “fair and orderly market” and the “competitive open outcry system” were dispelled almost immediately as soon as I had learned enough as a trainee to be able to slow down the frenetic action to a pace that was comprehensible.  What do I mean?  Why is this important?  Well, in theory, the traders of options on a given stock are supposed to be competitors that do not cooperate with other members to set market prices on which the public will execute trades.  The reality is that the main trader, typically the specialist, makes the bid-ask spread market and the majority of the time the entire trading crowd simply states their level of commitment to the market that he has made.  Here is the problem, OUR watch-dog, the SEC, rarely if ever has done anything about this clear violation of the law. Many techniques and devices are employed to encourage market makers to play ball.  Any time spent on some of the options floors over the years would have revealed this to the SEC.  This means… they know it and they just do not care.  They have always known it.  This may not be a revelation here in 2010 with Rick’s “crowd” being a rather enlightened one, but 20 years ago this matter-of-fact flouting of the law initially stunned this “Econ/Finance” dual-major as these business practices were conspicuously absent from the textbooks.  What does this prove?  It proves what many of you — but until recently not nearly enough people — believed:  The government is entirely about strategic, selective prosecution.  Shocked, right?  The government and the markets are corrupt!  I am sure that many of you are floored!   Hold on though, I am “going somewhere” with this as it is stated.

As you have probably already guessed, this “welcome to the real world of our markets” experience put me on a path that would shatter nearly all of my idealistic beliefs about a country with systems that I was raised to revere.  Just in case you weren’t sure how corrupt things actually are within our markets, it’s my hope that any faith that you may have reserved is fully gone by now because if it can happen in plain view amongst competitors then much more can clearly occur behind closed doors.  Let’s get back to that “assume that others know what you know” concept and in doing so, we’ll leap ahead in time by about five years.

………

(Ed Note: I have advanced to Wayne’s list of “US Rapidly Deteriorating“

Sticking with the step-back-perspective theme with an eye towards wrapping things up, let’s consider how dire things are at present.  I hate to add even more length to this piece but it is clear from just a few headlines that the USA is in rapid deterioration mode, and not just fiscally/economically:

• A nearly perfectly divided electorate that’s addicted to the right/left paradigm
• Police are ignoring calls for certain serious crimes yet indoctrinated citizens are more fearful of firearms than of having to defend their families and homes against illegally armed thugs with no support from law enforcement
• Education here is largely a qualitative and fiscal farce
• In what could be described as an unimaginable achievement, popular culture now makes anything prior to the 70’s appear to have been a modern Renaissance period
• Our government is dedicated to Homeland Security at airports but our borders are porous.  The MSM will never highlight this contradiction.  Is it possible that “the war on drugs” only applies to those that aren’t with the company?
• Perpetual wars are by and large accepted when they are even thought of at all
• And of those plans to bring back those jobs that are never coming back and about revitalizing and retooling those manufacturing centers that will never hum again?
• Can we really Smartphone and service business our way out of the destructive vortex that we’ve allowed them to conjure at will with an end goal of debt enslavement?
• What I refer to as the “Manipulation Cartels” have amassed and consolidated power like never before
• The “button pushers” seem to want to implode the system but on their timeline and with some fragments of realism included to maintain “believability

…..read the whole commentary HERE (begin with the Heading “Beneath the Surface”)