I've found it quite interesting to read the increasing number of stories lately in regard to the current economic situation with a focus on when we can call it a bottom in this sector or that, or when we can call it a bubble and when it will burst, but more recently how none of the traditional indicators seem to make any sense anymore. The reason of course is that the financial world as we know it is changing due to years of manipulation, unethical and in some cases downright or at least borderline illegal activities.

So why now and not way back when it started? There are many reasons, but the most important one is the entrance of the common man into investing and the markets. What was once a domain for only the 'rich folks' has now grown to include just about every walk of life. Self-direction of retirement fund types, casual investors, all the way up to full-time stay-at-home daytraders and everything inbetween. This influx of new money is what sparked the growth of the Dow, Nasdaq, S&P and other various markets to new highs and where companies saw opportunities through IPO's to generate cash flow where they would have been laughed off before.

All this growth came with good and bad consequences. Lots of advantages for existing publicly traded companies to offer up more shares and generate monies, but also opportunities for fraudulent activities to take place while these new investors learned the ropes. With all the new, more emotional, investors now in the market, vehicles had to be re-created that could be controlled and made available only to the 'money talks' crowd. The 'protect your own' mentality of the good ole boys club was no longer working and so new ways to make money out of nothing were desperately needed or god forbid they would have to play within the same rules as everyone else. Left to their own devices we ended up with sensational failures like Enron, Worldcom, and more recently Bear Sterns, Countrywide and all the others along the way.

So what happened? Well the start of the 'problems' began with better consumer awareness as lower income earners began to get involved in the market. Thus was born the whistleblower, although I'm sure they existed before then. What didn't exist before then was this wonderful thing called the Internet whereby information is just a mouse click away and anyone with an eighth grade education and some free time can put it all together and leak it to the appropriate news source. This didn't happen overnight and the more recent expansion of readily available higher speed Internet connections has increased the size of this public watch group tremendously.

Companies that could hide behind built in delays in the reporting system before, can now see their stock drop or rise on even the slightest inclination of good or bad news, although it is more likely to follow the bad news down. The introduction of the blogger as a valid news source has also helped to tighten up the loopholes that companies would have jumped through in the past before anyone was the wiser. This has resulted in more effective public policing of the market which is now arguably a global environment.

The point here being that this is not your mother's market. Everyone knows what everyone else is doing. Whether they can always do something about it is another story, but everyone knows. There is no more hiding for corporate america or government or the world for that matter. The last bastion of hope for the previously free manipulators is the rules of trading entrenched in the old days of the self-preserving 'only the rich play the market' mentality. However the ways of yesterday just won't cut it anymore and the unexplainable ineffectiveness of past market indicators is a testament to that fact. Sooner or later the laws of change demand the rules change too.

No we are not in Kansas anymore Toto and for those relying on the old ways, this is your warning lest you be sucked up into the Tornado of change that is upon us.

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Corbin, I'm afraid I have to respectfully disagree with the thesis that "improved access to information delivery for Average Joe Shmoe cardinally changed the ways and companies cannot hide no more..and so on"

Here is the problem

Who do you ( you, other investors, traders, John Q. Public, FED, you name it) TRUST?

You know the answer - TRUST NONE.

How is it possible to know WHAT blogosphere "news" IS credible? Or complain is holding water? Or may be it is just a hoax, like with ELX back in the days when it was EMLX at $100 and lost 50% of its value right in the middle of the day ( I was stupid enough to buy some at that drop), then it was halted for 2 hours ( scare memories)  and when opened - it opened at $89 and recovered to $100 next day? Someone posted SOMETHING on the internet - you are not calling THAT manipulation?

Can you trust auditors?

Can you trust rating agencies?

So, why anyone would trust someone on the internet? As a matter of fact - why anyone would trust anyone at all? Just to be taken advantage of at a later time?

 I'd say markets now even MORE manipulated than ever before and news just like always are OLD news - someone always knows beforehand ( never mind "fair di.closure" )

CHARTS DON'T LIE - people DO.

"Wall Street never changes, the pocket change, the suckers change, but Wall Street never changes, because human nature never changes" Jesse Livermore

I would then have to disagree with your "charts don't lie" statement or at least say that they can be made to lie. My medical study example above proves that. Charts like percentages can be made to say anything you want them to.  I did not say that the manipulation stopped, in fact it has increased from what I see. It is just that it is far easier to catch them at it with more information available to the general public.

I did not say you should trust everything you read either. However, when you put all the information together that is available, you can get a clearer picture of what is going on and when more people are doing this collectively (i.e. the Internet), it is much harder to get away with for very long. It used to take long periods of time for 'scams' like the sub-prime mortgage mess to be brought into the public light if they ever were at all. Now they can be out and on your computer screen before it even hits the printing press or the TV screen.

Yes these things still happen, but under much closer scrutiny and public oversight.

You are making vaid points indeed. If you know what sources can be trusted and capable to handle "information overload" - it is easier to get information - how helpful that info is and, most importantly, how stock will react - is a different stroy, companies and stocks and not the same anymals.

And I have to agree with you "that charts can be made to lie", but it is very difficult to make "the chart to lie" for avg daily volume of above 2-3M and on a weekly scale ( short term...I really stopped looking at daily charts long time ago, I watch weekly and, as funny as it might sound since I am a short term trader - I look at monthly charts. Daily I might use only to confirm and to time better )

There is no Holy Grail of trading...