Today's Stock Pools

"To be normal, to drink Coca-Cola and eat Kentucky Fried Chicken, is to be in a conspiracy against yourself."
--Jerry Fletcher (Conspiracy Theory)

Back in the 1920s groups of speculators joined together in 'stock pools' to manipulate stock prices. These syndicated operators sought to push prices around in order to attract uniformed investors--particularly trend followers. Ultimately, the goal was to 'fade' naivety, meaning selling when the uninformed were buying or vice versa.

I wonder whether stock pools might not be with us again. Rather than being groups of private investors, however, might today's stock pools be government-led syndicates?

The government-network would seek to operationalize non-economic agendas. For example, the goal could be to levitate security prices under the assumption that people view higher stock prices as indicators that economies (and government policies aimed at improving them) are ok. Stated differently, the goal would be to prop up public confidence using methods that could be viewed as unconventional propaganda.

Government officials could operate stock pools directly, or work via networks of carefully selected agents.

The key question, of course, is how such pools would work. A number of key parameters would have to be met. For example, presumably, these operations must be covert lest the public would see the naked emperor.

Hopefully, we'll entertain this question in future posts.

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