Trusting Wall Street

DOW suckerThere’s an old saying, “If you are sitting at a Poker table, you look around, and you can’t determine who the Sucker is…’s you!”

I have reached the point where I trust almost nothing coming from the Wall Street Gang.

The most touted financial number the TV News talks about is the “Dow”, the Dow Jones Industrial Average. This number has been manipulated since it’s beginning in 1896. The chart below pictures over a decade of the DOW.

The DOW is the average of the stock prices of 30 major corporations. Initially they added up the stock price of each company and divided the total by 30. It seems very simple, doesn’t it? Not quite. When one of the DOW companies starts a decline it is replaced by one on the rise. Here are the replacements over the last 10 years….


AT&T Corporation, Eastman Kodak Company, and International Paper Company were replaced by American International Group Inc., Pfizer Incorporated, and Verizon Communications Inc..


SBC Communications Inc. was renamed AT&T Inc. after it acquired the original AT&T.


Altria Group Incorporated and Honeywell International Inc. were replaced by Bank of America Corporation and Chevron Corporation.

American International Group Inc. was replaced by Kraft Foods Inc.


Citigroup Inc. and General Motors Corporation were replaced by Cisco Systems, Inc. and The Travelers Companies, Inc.


Kraft Foods Inc. was replaced by UnitedHealth Group.

2013 September 20, 2013

Alcoa Incorporated, Bank of America Corporation, and Hewlett Packard Company were replaced by Goldman Sachs, Nike, and Visa.

Meanwhile a gimmick called the DOW Divisor, shown below, is manipulated to magically cause an increase in the DOW average. The DOW average started as a basket of thirty stocks, the stock prices were totaled together and then divided by the number of stocks, 30, to result in a DOW average. Over time the divisor was supposedly adjusted for stock splits (where anyone holding a share of stock would receive two new shares after a 2 for 1 split) and other manipulations . This European table uses comma’s rather than periods. It shows changes in the “divisor” over time.

DJIA Divisor Trends
DOW Fat Banker

Initially the total of the thirty stocks were divided by 30. Now the divisor has been manipulated so the total of the prices of the 30 stocks are multiplied by 7.6. If we used the initial divisor of 30, yesterday’s DOW average would be 514 rather the reported value of 15413.33. So much for information from the Wall Street Snake Oil Salesmen. DOW DJIA Snake Oil

It appears that it is more efficient to flush money down the toilet rather than waste it away with Wall Street bankers.

The important issue is “What can I do with the  savings I have managed to accumulate over the years?” $100,000 “invested” in the DOW in 2007 it would be worth $46,000 in 2009, that is a whopping 64% loss, not what I consider a “good investment”. Financial sources report that the DOW has recovered and has reached record highs recently, but as we can see above, the number is rigged.

So what to do?

Some Americans are buying Gold Coins and hiding them under the mattress. Gold is very popular with people in China and India, both have suffered hardship and deprivation numbers of times over the thousands of years of their existence. They feel secure owning some amount of precious metals….

During the U.S. Civil War Union troops would confiscate southern livestock and crops. One thing the raided southerners could do was to bury “the family silver”.

Does history have a message for us about Wall Street so-called investments?DOW 10 Yr Gold Prices

Also see…..




One thought on “Trusting Wall Street

  1. There is much talk about “This Bubble”, and “That Bubble” for various financial instruments. The sad fact is that prices are manipulated through front running and high frequency trading and later allowed to tank. If you don’t know who the sucker is….it’s you.

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