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The Oil Markets Are Rigged – Here’s How
The Oil Markets Are Rigged – Here’s How
We have remarked numerous times, thanks in many cases to the detailed analysis of Nanex LLC, that oil markets (among others) are manipulated or rigged. But, just as Michael Lewis was what equity market participants needed to comprehend what was occurring stocks, so WSJ reports today on ‘spoofing’ in the oil markets. Spoofing is rapid-fire feinting, which as Tabb group’s Matt Simon notes, “raises a question now about whether someone is engaging in legitimate market activity or clear market manipulation.” Here’s how they do it…
Ironically, the last time we commented on this was the day after The SEC charged another trader (and his machines) with spoofing.
But, as The Wall Street Journal reports, it continues…
The 2010 Dodd-Frank financial-overhaul law outlawed spoofing, but the tactic is still being used to manipulate markets, traders say. “Spoofing is extremely toxic for the markets,” says Benjamin Blander, a managing member of Radix Trading LLC in Chicago. “Anything that distorts the accuracy of prices is stealing money away from the correct allocation of resources.”CME, the world’s largest futures exchange, put out rule clarifications in August 2014 intended to end spoofing.
Here’s how it works…
Spoofing is rapid-fire feinting. A spoofer might dupe other traders into thinking oil prices are falling, say, by offering to sell futures contracts at $45.03 a barrel when the market price is $45.05. After other sellers join in with offers at that lower price, the spoofer quickly pivots, canceling his sell order and instead buying at the $45.03 price he set with the fake bid.
…click on the above link to read the rest of the article…
Financial Markets: Pinocchio’s Enchanted Island
Financial Markets: Pinocchio’s Enchanted Island
The control of the commercials and the COMEX manipulators have is very depressing for the gold market investor. As soon as gold and the miners are about to get on another bullish leg, that the moving averages are positively aligned and re-crossing the 200-day MA, that the traders are standing by to get back in the market and are following the buying signals, BANG ! A new flash crash ! And, as usual, it is explained by vague and far-fetched reasons. The last example we have is what happened last Friday: Because of slightly better numbers on jobs creation in the United States, gold has been massively attacked and lost $40 in a single day ! Ten days like that would bring gold down to $834 ! This is gigantic ! One doesn’t have to look very far to realise that the manipulators are still running the show and are systematically keeping gold from resuming a bull market. They have failed to keep it under $1,200 for any length of time in 2014, but they are very active in keeping it under $1,300, because this would trigger technical buying orders.
The Fed will probably try to hike interest rates in June by 0.25%… so? The dollar is already too expensive and will hurt exports, the mountain of private and public debt in the U.S. will not be able to support a rate hike, and neither will the stock market, already in an historic bubble ! An interest rate hike in the U.S. would most likely totally extinguish what frail economic recovery there is. The Fed is about to make the same mistake Jean-Claude Trichet made for Europe: By over-estimating the capacity for economic recovery and by wanting to retain the weapon of rates reduction when recession hits, the central bank is going to choke an eventual recovery. The reality is that central banks are caught in a snare and the only weapon they have left is the destruction of their own paper money. One after the other, they go for competitive devaluation of their currency. After the Fed and the Bank of Japan, it’s now the ECB’s turn. Who will be next?
…click on the above link to read the rest of the article…
Is The CDS Market Manipulated? | Zero Hedge
Is The CDS Market Manipulated? | Zero Hedge.
Credit Event, Or Not? Is Another Market Being Manipulated? (pdf)
As investors and market participants become increasingly aware of the regulatory failures that allowed for manipulation of LIBOR, FOREX, municipal bond bidding and certain commodities markets, regulatory sources are increasingly expressing concern that they have paid too little attention to potential manipulations of an arguably larger, more systemically important and less regulated market – the CDS market as self-governed, through ‘regulatory license’, by the International Swaps and Derivatives Association (ISDA).
It appears regulators are now turning their attention toward the CDS market, its problematic self-regulatory structure, the myriad of conflicts of interest, the potential avenues for manipulation by large dealers and the opaque and potentially self-serving manner in which determinations of “credit events” are privately decided by ISDA’s Determinations Committees (DCs). A growing volume of news stories, the publication of several new academic papers, the reversal of Dodd-Frank’s “Push-Out” rule which would have forced banks to move their derivatives out of the depository, and the DCs’ handling of several recent questions have only served to increase regulatory concerns and cause some to point out numerous similarities between the various manipulation scandals, the possibility of manipulations in the CDS market and the implications to the global economy.
Why Gold Is Undervalued – And poised to re-price upwards from here Washington’s Blog
Why Gold Is Undervalued – And poised to re-price upwards from here Washington’s Blog.
Gold has been in a bear market for three years. Technical analysts are asking themselves whether they should call an end to this slump on the basis of the “triple-bottom” recently made at $1180/oz, or if they should be wary of a coming downside break beneath that level. The purpose of this article is to look at the drivers of the gold price and explain why today’s market value is badly reflective of gold’s true worth.
First, I think a reminder would be timely. Those who seek to trade gold are at substantial disadvantage:
- they line themselves up against too-big-to-fail banks which have the implicit backing of the taxpayer to bail them out of their trading positions;
- furthermore markets have become so manipulated and dangerous that gold should be considered as insurance against systemic risk instead of a punt.
Because the majority of market investors don’t fully grasp these risks, when the current global financial bubbles eventually burst, there will only be a tiny minority who end up possessing gold — by which I mean physical gold held outside the fiat money system.
…click on the above link to read the rest of the article…
