Why does this come as some kinda news to anybody? I think the real story here is probably that somebody decided that somebody needed to take a fall and Cramer's the lucky winner.
From The Daily Beast.
Jim Cramer single-handedly created the concept of Dykstra-as-financial genius. Known mostly for his willingness to crash his body into walls or his cars into trees (nickname: "Nails"), the former New York Met and Philadelphia Phillie became an investment columnist for TheStreet.com in 2005, after sending Cramer an unsolicited email. For the next four years, Dykstra made stock picks, focusing on "deep-in-the-money calls"—a way to buy leveraged options—for tens of thousands of followers on Cramer's website.
Here's the basics of how "The Stock Market" works.
1) Some Wall Street guys get together and buy a bunch of shares in some company they really don't give a damn about - and sometimes one that nobody's ever really heard of - and they pay a nice low price.
2) Their networks of Brokers and Dealers spend the next several days on the phones pimping "this hot new issue" to the rubes, saying (essentially) the price of the stock is going to make real progress.
3) Meanwhile, they tip off their buddies in "The Financial Press" that something pretty big might be about to happen - and guess what? The Money Bunnies on CNBC and Bloomburg et al go on TV and feed the rubes a load of crap about how they've uncovered this possibly fantastic opportunity that the rubes then take as confirmation that the broker guy was right.
4) If it works this time the way it's worked every other time for the last century or so, the rubes rush in; they buy lots of shares; and surprise surprise - the price of the stock goes up. Wow. Whooda thunk dem guys was so smart?
This is obviously a very crude sketch, and with the rise of Day Trading and the preponderance of Institutional Investors and Mutual Funds and Hedge Funds, etc, there are now many more layers of complexity, as well as a lot more complicity. It becomes not just a corrupt system, but a system of legalized corruption. So when everybody's in on the scam, how do you tell who the bad guys are?
And BTW: It's not possible to practice Free Market Capitalism when the markets are all captive to a few very powerful controlling interests. What we have here now is called Oligarchy.
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