How to manipulate markets in 10 minutes......

Excerpts from Michael Lewis's Liar's Poker:

Trading money was none the less trading. It required at least one iron testicle and the same logic as bond trading. One day Dall was in the market to buy (borrow) $ 50 million. He checked around and found the money market was 4 to 4.25 percent, which meant he could buy (borrow) at 4.25% or sell (lend) at 4%. When he actually tried to buy $50 million at 4.25%, however, the market moved to 4.25 to 4.5. The sellers were scared off by a large buyer. Dall bid 4.5. The market moved to 4.5 to 4.75 He raised his bid several more times with the same result, then went to Bill Simon's office to tell him he couldn't buy money. All the sellers were running like chickens.

"Then you become the seller", said Simon.

So Dall became the seller, although he actually needed to buy. He sold $50 million at 5.5%. He sold another $50 million at 5.5%. Then as Simon had guessed, the market collapsed. Everyone wanted to sell. There were no buyers. "Buy them back now", said Simon when the market reached at 4%. So Dall not only got his $50 million at 4% but took profit on the money he had sold at higher rates. That was how a Salomon bond trader thought. He forgot whatever it was he wanted to do for a minute and put his finger on the pulse of the market. If the market felt fidgety, if the people were scared or desperate, he herded them like sheep into a corner, then made them pay for their uncertainty. He sat on the market until it puked gold coins. Then he worried about doing what he wanted.