When I was in Los Angeles, California, I worked for six months as a broker's assistant. They sent me to all kinds of classes and clinic's run by the big houses and taught me a lot about the industry. I only stayed in the industry six months because it only took me that long before I couldn't go to work without wanting to puke. This essay is written so you, the average person, can understand some of the scam's they run on you in the racket they call the Stock Market.
I was working in the industry about 2.5 years before the big October melt down in 1988, Black October. They regularly told me that, in either October or November of 1988, the big boys (upper class natural elites) who run the stock market were going to stage a crash on the stock market to shake a bunch of you other people out of the money tree and decrease your wealth.
You need to understand that there are about 300 families which run this world. They are the upper class natural elites, the owners of the mega businesses, the liberal politicians, and others upper class rats. They have their game set up illegally but they also hire and fire the guy who is supposed to keep things legal so they don't have to worry about being caught.
The way they work this racket is that they have large families with each member of each family having a large account with certain major brokers. Illegally, they have it set up so that one or more key members of the family control the accounts for all of their distended family members within each of the 300 families. They use this system to coordinate the buying and selling on the stock market with such financial force that they literally control the market.
You see, a single investor cannot own 15% of any stock and just sell it any time he/she wants to because, if you own 15% or more of a stock, you must get permission to sell some of that stock, inform the general public you are going to make the sale, and can only sell off significant amounts in stages permitting the other investors to have time to also sell their stock to prevent losing money. This is because owning 15% or more of a stock normally gives you controlling interest of that company.
This is how the big boys get around that rule. Let's say I am a leader of one of the 300 families and I have 6 kids who each have six kids who got married and they each have six kids. Including the spouses (including my wife), I will have a total of 302 family members who all have very large accounts in various participating brokerage firms. I will have complete control over all of these accounts with the family members understanding they can't touch these accounts, only I can through the different participating brokerage firms. To keep them from rebelling, I set up a very large trust fund for each of them to live well off of the interest with the understanding that, if they buck the system, I pull their trust fund and they have to go to work like the rest of you. You also need to know that they can't run off to the various media and tell them about this racket because various members of the 300 families control those media, so who are you going to tell?
With 302 family accounts under my control, I can choose any 15 to 20 members' accounts to each purchase 1% of any stock and have controlling interest in that stock and can buy and sell all that stock I want without getting permission, informing you the share holder, or anything else because no one account will own anywhere near the mandatory 15%.
Then you add to this that all 300 families work together with a core of family representatives who make the finally decisions for all of the families. So you now have 300 families with hundreds of thousands of large accounts in a variety of participating brokerage firms under the control of a small central management team coordinating major buys and sells to control the stock market.
Now how do they use this to cause a market crash or boom? Simple, they use what is called a ceiling and a floor. When they want to drive the market down, they put out a ceiling by selling enough stock from each of a variety of strategic businesses so that you, the average person, can't buy it all. That causes a panic sell off with these families selling high until the panic sets in and then withdrawing from the market until the market reaches the low they decided they want it to reach. At that point, they put out the floor by buying all the stock that is for sale at a low price until they turn the market around and it starts growing again. They use the system to control the market so they can be guaranteed to sell high and buy low making profits while creating buying and selling panics in the general market at your expense.
In House Game
I was trained for another little racket the large brokerage firms play which is similar but within their firms. They break their brokers down into three levels of brokers based on the seniority the brokers have within the firm. Within these three levels of brokers, they break the broker's accounts down into three more levels based on the size of the accounts their customers have. They use this set up for introducing stocks for business that are just going public.
First, the house (brokerage firm) will get a given amount of stock for just setting up the company and doing the offering with the broker in charge of the operation getting a share of those stocks. Second, they make first offering to the first level of clients for the first level brokers at the initial offering price. This creates sales and gets the stock moving upwards while providing the riches cats for the upper level brokers a low price on the stock.
Now that the stock has produced sales and is moving upwards, to continue this upward movement, they sell the stock to the second level clients for the first level brokers and the first level clients for the second level brokers providing them with a slightly higher price on the stock. The third step is to sell the stock to the third level clients for the first level brokers, second level clients for the second level brokers, and the first level clients for the third level brokers.
You should realize that, by this time, the price is moving well because the sales have been increasing rapidly and this will cause you average players on the market to take notice so you will buy into the stock driving it even higher. Now it gets a little complex so follow closely.
The fourth step is to sell the stocks previously purchased by the first and second level clients for the first level brokers and first level clients for the second level brokers to the third level clients for the second level brokers and the second level clients for the third level brokers. These sales continue the stock moving upward while guaranteeing the upper level brokers and clients a nice fat profit. The last step will be to sell the stocks purchased by the third level clients for the first level brokers, second level clients for the second level brokers, and first level clients for the third level brokers to the remaining clients and general public getting all of their top clients out of the market before it "adjusts" down causing people to begin losing money.
It needs to be stated that all of the clients for the top level brokers and most of the clients for the second level brokers know about this game with the understanding that they have to lose money on one out of every so many stocks to make it look legitimate. Yep, the crooks own the game.
The Media Game
Then we have the con game that is run by these TV and newspaper experts you depend on for investment advice. They very simply go out and purchase a given stock and then tell you to buy it. Enough of you will buy that stock to drive the price up and then they sell their shares to you when they feel the buying frenzy they have created with their advice is close to the top getting them out of the game. On the other end, they will sell their shares in something at a high price, then tell you why you should not buy that something at that time causing a selling panic, and then buy back in when it gets low. They make it easy for them to buy low and sell high at your expense.
After I posted this essay, I thought about it for a while and realized that I should add this following note. All of the things I just described are illegal but this is the how I was taught things really work in the Stock Market by every broker I met regardless of which brokerage firm for which they worked. Therefore, I had to assume these things were correct. In one class given by one of the largest firms in the nation and taught by their top broker in Los Angeles, the class was informed that this is how things really worked in the financial industry and, if we didn't like it, we should get a job in another industry, so I did. I felt better about myself after I left the industry. I think I got a more respectable job sweeping floors and cleaning toilets until I could find something better.
In fairness, I would like to add that I did know some good brokers and firms who did not commit the above crimes. They also told me about the upper class natural elites committing these crimes but refused to do so because of morals and/or a knowledge that they would have gone to prison because they didn't have the immunity the upper class natural elites enjoy. They also all knew that the crash of 1988 was going to be in either October or November of 1988 and how it would work. They knew these things were designed to keep the richest the richest.
I just thought you might want to know about a few of the cons in the racket they call the Stock Market. Personally, I won't put a dime into it unless I did my home work on a business and wanted to invest in that business for the long term. If you are buying and selling at the advice of others, take plenty of KY with you.