Anything is possible in a banana republic

From the Wall St. Journal's Fund-flows firm suggests government manipulated stocks:

The unusual circumstances that led the U.S. market to rally powerfully in 2009 might be explained by secret government moves to buy stocks, according to Charles Biderman, the founder and chief executive of TrimTabs, a research firm that tracks liquidity flows in the market.

"We cannot identify the source of the new money that pushed stock prices up so far so fast," Biderman said in a statement Tuesday.

The source of approximately $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn't come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds [my emphasis].

So that rules out... well, practically everybody. Who the heck is buying this crap?

According to Biderman, the Fed would have done this by purchasing stock futures, which are traded after hours. This caught my eye because Zero Hedge has recently argued that the past 3 months' worth of stock market gains have been entirely due to after-hours futures trading:

Furthermore, if anyone was merely looking at the trading action in regular hours, one would think there was absolutely no profit made since early September. The reason for that: all the upside since September 14th has come exclusively from after hours action. The chart below demonstrates the relative performance of regular hour trading in the SPY as well as that in the extended session. The notable observations: gaps, gaps, gaps. Every single day, minimal volume pushes the futures index higher. Good news, bad news, it don't matter to the Goldman S&P and Russell 1000 futures desk: they just lift every micro offer, giving the impression that the market is unstoppable, often leapfrogging each other as the latest viagra'ed GDP or unemployment rumor is spread. Come morning, it is time for the HFT brigade to come in and scalp their trillions of pennies while leaving the market unchanged, then at 4pm handing it off again to leveraged futures manipulation and dark pools. In a nutshell, this is the secret of the past quarter's phenomenal market performance.

The red line is how stocks have performed during normal trading hours. The green line represents the rise in stock markets that came from futures trading during the off hours. And as Zero Hedge says, it's all coming from the futures.

There seems to be some argument about whether it's the Fed direct, or the Plunge Protection Team, or Golden Sacks who's behind the futures buying. As if there is any daylight between these guys! The pseudo-government plutocracy is the pseudo-government plutocracy, regardless of the official titles.

What's evil about this is that the prolonged rally will have sucked investors back into stocks in their 401k and other retirement accounts. And the rich, in case you weren't aware, can make just as much money as the market falls as they can while the market is rising. We may become poorer, but the rich always get richer.