Cramer: Manipulation Makes Prices Seem Phony

Highly leveraged funds are moving the market and eroding investors' trust.
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The Rev is so right when he says that "trust levels are low." You saw it yesterday in that fated half hour where nothing happened, nothing to justify the ramp up, and people just shrugged and said, "That's the market."

For me it is truly jarring. My office at

CNBC

is about 150 yards from where I do my show, and in that period between when I leave my office and walk on to the floor of the "Mad Money" studio, the market jumped almost 150 points, causing me to rewrite the top of the show.

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What bugs me is the artificiality of the whole thing. I figured that there would be something after the close, an emergency rate cut, an upside preannouncement, a merger of some sort, anything to justify the advance. Nope. Nothing.

So it was, in a word,

phony

. If it can be

phony

, on the way up, we know it can be phony on the way down, and that means it isn't worth playing at all. That's the conclusion I reach.

We have a real problem in this market. The problem isn't the insolvency of the banks -- although that's no picnic -- nor is it the worldwide slowdown, which is ugly but, hopefully, manageable.

No, I think what is keeping people out besides the hideous losses is the recognition that the market is being manipulated up and down pretty much every day. You can see it in the ETFs that push the sectors, whether they be

oil or finance

, and you can see it in the last 15 minutes, when double- and triple-powered ETFs rule.

It makes the market into a joke where the prices at which you buy things are rendered meaningless almost immediately. Given that the ultimate direction has been

down

, you can sympathize. More than that, you can agree that it isn't worth investing until the manipulation is cleared up.

Given that the manipulative instruments were just approved, however, this change does not seem likely.

Too bad; as we lose players, we lose capital. As we lose new capital, we go lower or mark time until the selling finally exhausts itself.

If it ever does.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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