About 2.40pm on Thursday, the S&P 500 index, the US equity market’s benchmark, fell from 1,120. Within six minutes, it bottomed out at 1,065.79, a Kamikaze-like dive of nearly 5 per cent. By 3.00pm, the index was moving above 1,120, although still down 4 per cent on the day before, settling 3.2 per cent lower by the close.

The immediate explanation circulating through the Main Street Media was that an incorrectly typed sell order – one that confused “billions” for “millions”, for example – was the likely culprit.

However, despite the tedious pushing by the Main Stream Media of this story, officials still could not identify a specific cause.

We still don’t know what was the initiating signal for the trading activity we saw on Thursday, said Jeff Wecker, chief executive officer at Lime Brokerage. The verdict is still out.

Since other people are volunteering theories about this almost-disastrous stock market dive, I would like to throw one out there, too.  At the risk of being accused of wearing a tin foil hat, here it is.  It involves a close friend and benefactor of the President of the United States of America:

George Soros set up the now famous Quantum Fund as one of the world’s first Hedge Funds. It took money from the wealthy and invested in risky but potentially highly profitable international deals.

It did very well out of the collapse of fixed exchange rates in the 1970s and the deregulation of global capital markets. By 1980, George Soros was worth more than £16.5 million and his fund £67 million. The stage was set for his intervention in the Exchange Rate Mechanism, a system established in 1979 for controlling exchange rates within the European Monetary System of the European Union (EU) that was intended to prepare the way for a single currency.

Around spring 1992, Soros had decided that the pound would have to be devalued because it had been pushed into the Exchange Rate Mechanism at too high a rate.

He knew that the Bundesbank was in favor of a devaluation of both sterling and the Italian lira and believed it would have to happen because of the disastrous impact that high British interest rates were having on asset prices.

Soros spent the next few months in preparation to profit from that devaluation. He borrowed sterling heavily, reportedly to the tune of £6.5 billion, and converted that into a mixture of Deutschmarks and French francs.

On Black Wednesday, September 16, 1992, Soros won his bet.  The UK Conservative government was forced to withdraw the Pound from the European Exchange Rate Mechanism (ERM) due to pressure by currency speculators, most notably Soros himself. 

In the following days, he took care of business, paying back what he borrowed and ending with a profit of around £1 billion.  At the same time, Soros bought as much as £350 million of British shares, gambling that equities often rise after a currency devalues.

He later admitted that his actions had benefited no one but himself.

There are several culprits in the American Stock Market Crash of 2008 that helped cost John McCain the Presidency, but one key source of the problem escaped almost everyone’s attention:  an economic index that can be easily manipulated by Hedge Funds and whose erratic movements have shaken the foundation of Wall Street: the ABX index, launched in 2007 by the Markit Group, a London-based company that specializes in credit derivative pricing and that administers the index.

The heart of the mortgage mess we are still recovering from was uncertainty regarding the value of subprime securities. The ABX Index is used to determine the value of these securities: it is a benchmark of the market for all the home loans issued to borrowers with weak credit . A collapse of this index led to home loans being marked down in value.

Looking back, it’s pretty clear that the ABX was manipulated by Hedge Funds. As the ABX subprime mortgage index crashed, so did much of our economy.

Some investors made out like bandits. George Soros for one. Soros had become a political powerbroker of unrivaled influence within the Democratic Party (see The Shadow Party: How George Soros, Hillary Clinton and Sixties Radicals Seized Control of the Democratic Party) and, even now, has an empire of politically active 527 groups, of which he is the number one donor, by far, in America. 

There is a now infamous lunch whispered about between Soros and John Paulson, a Hedge Fund Manager who made millions during the collapse.  Soros invited Paulson for lunch, “asking for details of how he laid his bets, with instruments that didn’t exist a few years ago”.

George Soros was a very early and influential backer of Barack Obama and remains so to this day.

Speaking of the present…

White House press secretary Robert (Baghdad Bob) Gibbs yesterday said Obama’s economic team was jolted by Thursday’s near disaster and met with Obama shortly after the market plunged.

Gibbs said Obama thinks:

the circumstances around this is something that should be watched or should be reviewed and looked at.

No kiddin’, Scooter.  May I suggest someone you should talk to first?

Sources:  ft.com, telegraph.uk.co, farlex.com, american thinker.com, the hill.com