Larry Doyle, a Long-Time Wall Street Veteran Speaks On Market Manipulation

Is the stock market being manipulated?


I can not count the number of times I have been asked that question over the last 9 months. Rather than my offering personal opinions which market pundits may view as sour grapes or worse, I want to revisit a ten-minute segment of my interview last evening with Phil Davis.


The segment runs from 29:45 until 40:00 (audio player provided below). If you do nothing else today, please listen to this dialogue between Phil and myself. Neither of us goes into this conversation with agendas or preconceived notions in an attempt to score points. I will offer an edited version here. I think you will find the information, thoughts, and opinions offered to be enlightening.


PD: It’s getting more and more likely that there’s going to be an event that takes the market down and that’s because of the nature of the market rally. The rally has been a very thinly traded, low participation rally.


LD: I want to pursue that….the idea that there could be or will be some sort of an event. Obviously, all of the governmental support that has come into the market, all of the quantitative easing, the easy money, the 0-.25% Fed Funds rate…all sorts of other backstops. Now they’re trying to figure out how to ease some of those supports out of the market while China and India have increased their rates. Are we overextended? Have we created a little bit of an asset bubble?


PD: I think we have created a ‘helluva’ asset bubble…..Let’s be honest. We were delusional in 2007. Those valuations were completely wrong….the earnings were fake and I want to emphasize again fake because they were fake. They were not only not real earnings but what were reported as earnings turned out to be tremendous losses. The financials were putting out fake numbers…it was all fake…..How did we get the market back to where it is then? How is this even possible?


LD: How much are we overvalued?


PD: Don’t forget the Dow is fake also. They took out GM and Citibank from the Dow. Those are two zeros and they put in Travelers and Cisco…that’s 640 Dow points that were added because they swapped GM and Citi for Travelers and Cisco. Now is that real?
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