Does it really matter why stocks are up?
When it comes to the market, it's not really important whether something is true, only that people believe it is. And if you can make a profit off that, all the better.
That's the conventional wisdom, especially these days where the path is set in cement: stocks must go down and rates go up because all that mattered the whole way up were the actions of the biggest manipulator of all, the Federal Reserve.
Take Thursday, for instance. I hate up openings -- those big up openings on nothing but good foreign news. But down openings where everyone sees the gloom and the gloom only, those are made for reversals and that's just what we got.
Once the market reversed, Ben Bernanke picked that moment to have a conversation with his go-to guy, John Hilsenrath, in what was a master stroke moment where the bears were busy betting against the big, phony rally because the truth about rates, and therefore stocks, is now out of the bag.
So, Bernanke manipulated the market, right?
When I suggested that Bernanke picked a terrific time to spread the gospel that you can't presume the tapering is soon upon us, initially people were suspect. Did I believe the Fed did anything substantive? Was I that naïve?
Darn it all, I am anything, if not naïve. What I was saying was Bernanke has learned to play the game. He knew his words were going to have an impact because he wasn't trying to stem a decline. He was saying basically, "look, intelligentsia, I know your game, you think I am done, think again."
Those who believe that he is too unsophisticated or doesn't know the impact of his words; he knows all too well the impact and he needed to undo his testimony of a few weeks ago.
So, the rally gained steam and people realized that rates can go both ways and Bernanke's not happy with the velocity of the move.
Now, on to the charge of manipulation. My take's pretty clear. The truth is an abstraction. When it comes to the market it really doesn't matter if something is true, what matters is that people believe it is true. Does Bernanke really have the power to contain rates? Maybe, maybe not. But with rates down Thursday and Bernanke squawking, how can you believe that he is impotent. More important, how do you know that the trader next to you doesn't believe he's for real and says we gotta cover and we gotta cover now?
Which all comes back to the first point about whether one market is true and the other market is phony. I have lived with this ridiculous dogma for 14,000 phony Dow ($INDU) points. I have lived with this fanciful judgment during the fabulous runs for so many stocks. All I can say is that nothing's phony if a bid can be drilled for a stock that moved up big on the phoniness. Nothing. If you are able to sell a big piece of merchandise at a good price, what's phony about it?
Of course, my view is viewed as having no rigor vs. the views of those who know it is all a big, rigged market. But the joke's on them. You see, I don't care who rigs it. I don't care what's real. What's wrong? What's different? What's fresh? What's stale? What's known? What's not known?
All I care about is what's working. That's because I am not a bull or a bear. I am a practical person who accepts manipulation on both sides, who understands that people lie and cheat and do whatever's necessary to make money. I have said that before and gotten in big trouble for it by speaking about how I have seen it done, not how I do it or did. I just want it to be known that it happens and I want people to be able to see it and game it for what it is worth, a wave to ride to profits, and nothing more.
But also, nothing less.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.
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That cavalier disregard for fairness, ethics and, yes, even morality, is prevalent on Wall Street today, and is at the root of the public's abject distrust of it and of the gov't entrusted to oversee it.
you picked Alcoa at 18 as the stock of the year 3 years ago and it is still at 8.....
recently you picked gold at 1900 and aapl at 700..........the evidence shows you are a hack
I like Cramer, but he is totally wrong on this subject. There is more to America than fast money that benefits not the companies being traded but the traders only. Cramer's, "Do your homework" means nothing if the game is fixed. Hell, even Meyer Lansky forced Los Vegas to keep the games clean.
I hate the CNBC rants against any form of government regulations, regulations being considered because of abuses by financial institutions. They complain about delays, but the delays are caused by the actions of thousands of lobbyists fighting every regulation or attempting to word it in such a way that keep them from being accountable. Now we hear the great, honorable financial institutions ahve been fixing exchange rates. "Honorable" is a word that should not be applied to crooks. I am disgusted that the crooks are never put behind bars. If they are guilty, the shareholders pay the price.
The biggest laugh is their constant complaint about a "lack of clarity." When has there ever been clarity? There is always risk, but the risks should be knowable to all. If the only way the financial players can make money is by cheating, fraud, etc, banks and other financial institutions are no more than Mafia bust out joints. "Our Crowd" of crooks is to be treated as honorable men. I think not. They will ruin America and CNBC will still gush all over them.
The stock market has been rigged for a long time...The relevance ot the market to the majority of consumers is just about non-existent. The game is manipulated by the big players and the small fry investors get fleeced.
The Wall Street "Masters of the Universe" are nothing but crooks with expensive suits.
Sometimes I wonder 'what willl the game look like when no one wants to play"....Let the 1%'s play with themselves...this is about the way the game is shapping up...
It doesn't matter as long as it builds value, that is true..
Hopefully we won't have too many Depressions or Deep Recessions in our Lifetimes..
Seems just about every 2-3 Generations,eh.
I was a baby at the end of last Depression or born just after...
It effected my G-parents and parents some....But they came from the farms or rural America..
Late 50s were a little tight in some places.
1987 was somewhat of a scare, but recovery was somewhat quick..imo
My Parents and them before were never investors in Stocks...
Our parents were also very quizical about us and our siblings as investors..Attempting to teach or warn us of always be alert to a 20s-30s type disaster...But never telling us not to save or dabbling in investing..
2007-early 2009 was a Wake-up call or scream...We learned and better yet, our kids learned..
I assured them not to panic, (like we were quietly)....My job was to give them confidence.
But we have recovered very nicely....And they are back to normal, except maybe with some loss in the value of their homes yet..
As a bonus at Christmas time, besides Gifts...We pass out a few thousand dollars...
It always generates a lot of smiles, hugs and kisses...Before dinner.
And gives the kids confidence that Mom & Dad (and grampa&grandma) didn't lose it all in the downturns...
What difference does it make if the market is rigged? It makes a great deal of difference to those of us who are logical. 'It makes a great deal of difference in how we analyze the market, use history as a guide and generally THINK not "feel." It makes a great deal of difference in predictability, intelligent investing and not pounding our money down a rat hole.
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