• Tag Archives CFTC
  • Wall Street Firms Win Again, Regulators Capitulate

    Financial Crisis is forgotten. Even sounds of gentle wrist-slapping fade. Penalties imposed during the first half of 2017 on Wall Street firms by their regulators – the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), and the Financial Industry Regulatory Authority (Finra) – plunged 65% compared to the same period in 2016.
    During the first half in 2016, $1.4 billion in fines were levied on Wall Street firms by the three regulators. In 2017, the total was down to $489 million, according to data collected by The Wall Street Journal.
    In this context, Wells Fargo doesn’t have much to fear after admitting a week ago that since 2012 it had quietly added unneeded comprehensive and physical damage insurance to the car payments of 570,000 (or 800,000) of its auto-loan customers.
    The SEC imposed $318 million in fines in the first half, down 58% from the same period a year ago, based on The Journal’s search of federal documents and publicly available records on the SEC’s website, along with data provided by University of Virginia law school professor Andrew Vollmer.

    This post was published at Wolf Street on Aug 7, 2017.


  • “Visions Of Cataclysms”: Why Eric Peters Is Starting A Long-Vol Fund

    Is the recent streak of record low volatility about to end?
    While countless analysts, pundits and traders have previously talked their book (if not staked their reputation) on claims VIX is set for an imminent mean-reverting spike, so far that has not happened and in fact net spec positioning in the VIX just hit a record short print as of the latest CFTC week.
    ***
    And yet, on Friday night, in a notable change to the low-vol regime, Interactive Brokers announced it would hike volatility product margins ahead of what it warned could be a 100% surge in the VIX, a move which will be promptly copied by most if not all trading platforms. Will this then become a self-fulfilling prophecy – should maringed out traders decide it makes more sense to close out vol shorts than to add more cash – it is too early to know, however, in a separate confirmation that the current low-vol regime may be ending, last week JPM’s quant strategy team reported that “following robust performance in 1H ’17, PnL of short vol premia stagnated over the past month… We see further risk for short vol from both rate increase as well as CB balance sheet renormalization.”
    YTD, short vol PnL (+5.1%) exceeds that of traditional beta (+4.2%) and value (+4.1%). Momentum YTD PnL of -5.2% arose from a broad-based decline across global equity indices (-5.1%), sovereign bonds (-2.1%), currencies (-1.4%) and commodities (-12.0%). Carry was flat (+0.9% YTD) as it was buffeted by positive bond carry (+3.9%) and negative equity index carry (-1.6%). Over the past month, short vol has stagnated at 0.26% and momentum has continued its decline by – 0.71%.

    This post was published at Zero Hedge on Aug 6, 2017.


  • WTI Jumps Above $50 On Report US Prepping Sanctions Against Venezuela Oil Industry

    After both Brent and WTI rose above their respective 50DMAs on Friday, capping 2017’s best weekly rally for oil, the rising tide is accelerating as the latest CFTC COT data confirmed, when net specs boosted bullish Nymex WTI crude oil bets by 27K net-long positions to 423K, the highest in two months, as producers continued to cover short hedges, sending their net position to the most bullish since the summer of 2015.

    Meanwhile, oil started the Sunday session jumping out of the gate, with WTI rising above $50 for the first time since May in early Asian trading, following the usual non-material weekend chatter and “noise” out of OPEC (which to exactly nobody’s surprise “can’t stop pumping“), however what has attracted traders’ attention, is a WSJ report that following last week’s latest round of sanctions, and after today’s vote to overhaul Venezuela’s constitution further entrenching Maduro’s unpopular regime, US government officials are considering announcing sanctions against Venezuela’s oil industry as early as Monday, although as the WSJ notes, a full-blown “embargo against Venezuelan crude oil imports into the U. S. is off the table for now.”

    This post was published at Zero Hedge on Jul 30, 2017.


  • Why A Dollar Rebound May Be Imminent Even As Crash Insurance Costs Hit Nosebleed Levels

    Is the bottom in for the dollar yet?
    After hitting a 14 month low, the Bloomberg Dollar Index saw a modest gain of 0.1% as markets awaited this week’s FOMC meeting and kept a wary eye on Capitol Hill hearings which involve close members of the Trump administration. Quoted by Bloomberg, traders described flows as modest amid the elevated event risk we laid out earlier this morning. Besides another potential surprise from the suddenly dovish Fed, traders were keeping a weary eye on Capitol Hill hearings Monday and Wednesday that include Jared Kushner, Donald Jr and Paul Manafort, and what these could mean for Trump’s fiscal agenda. At the same time, the Fed is expected to keep rates and policies on hold, though it may elaborate on balance-sheet reduction or the timing of any future rate increases.
    To be sure, negative sentiment against the dollar has been pervasive, and as we noted yesterday when looking at the latest CFTC Commitment of Traders update, net specs are now the most short they have been the USD doing back to 2013.

    This post was published at Zero Hedge on Jul 24, 2017.


  • Ted Butler Quote of the Day 07-14-17

    But there are other factors that may play into the only question that matters, namely, will JPM add to shorts or not. Among those factors are the widespread and growing attention to the extreme COMEX positioning changes and otherwise unexplainable and weird price action in silver, which can only be explained by COMEX positioning. Throw in the wildcard of the new Enforcement Director at the CFTC, James McDonald, and the game’s outcome goes beyond interesting.

    As far as I’m concerned, we’re on the verge of discovering if McDonald will go down as perhaps the regulatory hero of all time or if we’ll be calling for his head on a spike. Again, it all comes down to whether JPMorgan adds or doesn’t add to its silver short positions whenever the next price rally commences. I can’t get more specific than that.

    As far as what Friday’s COT report will indicate, the dramatic downside price action and extremely high trading volume point to yet another week of significant improvement – big commercial buying and managed money selling. This is also supported by an increase in total open interest in the reporting week (4,000 contracts in silver and 18,000 in gold). We may even see improvements on the scale of last week’s report, but regardless of whatever the actual reported numbers may be, it sure feels to me that we’re at or passed the point of a downside climax, particularly in terms of extreme contract positioning. Full and maximum exposure is warranted, particularly in silver.

    A small excerpt from Ted Butler’s subscription letter on 12 July 2017.

    More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.
     


  • CFTC Approves Options Trading In Bitcoin

    US regulators aren’t yet comfortable with bitcoin ETFs (although a quad-levered S&P ETF is just fine for mom and pop), but apparently options and swaps are another story.
    This week, the CFTC took a bold step forward in terms of granting institutional investors access to the bitcoin market, approving the creation of the first SEF or Swap Execution Facility. Previously, traders who wished to place bets in bitcoin derivatives markets were forced to operate in markets that were strictly OTC. But now the agency has issued a registration order to LedgerX, granting it status with the CFTC as a Swap Execution Facility, in the process approving bitcoin options trading.
    SEFs are platforms for swap trading that were created under Dodd-Frank to bring tighter regulatory scrutiny to derivatives markets. By authorizing the first SEF for bitcoin options, the CFTC is effectively clearing the way for institutional traders like hedge funds and CTAs to participate in those markets.
    ‘LedgerX is an institutional trading and clearing platform which has been patiently waiting for full regulatory approval from the CFTC to trade and clear options on bitcoin.

    This post was published at Zero Hedge on Jul 8, 2017.


  • A Rigged Game — Ted Butler

    There’s no question that the silver market is the most rigged game in the world because no one would be able to establish a more perfect trading record than what JP Morgan and a few other big shorts have achieved. The only question is what can and will be done to end it. In time, the charade will become clear enough to a sufficient number of people, including the victimized technical funds, to bring changes to interrupt the perfect trading record of the big shorts – knowledge is power and all that.
    I still believe a quicker route to end the silver scam could come at the hands of the regulators, including the CFTC’s new Enforcement Director, James McDonald. I don’t think there’s any chance that the agency will ever find JP Morgan guilty of manipulating the price of silver (as this crooked bank sorely deserves) for the simple reason that such an action would leave JP Morgan open to an unlimited number of lawsuits; enough to sink what is thought to be an unsinkable ship. No government agency would ever do that. But that doesn’t mean the regulators are helpless, either.

    This post was published at Silverseek


  • A Rigged Game

    76 years ago, ‘Joltin’ Joe’ DiMaggio was in the middle of the hitting streak of streaks that would come to 56 consecutive games and which has remained a major league baseball record to this day. That season (1941), the Yankee Clipper would bat .408 during the epic streak or more than 4 hits for every 10 at bats. Ted Williams, of the Boston Red Sox, had the highest batting average in 1941, hitting .406 for the entire season.
    What would you say if I told you that a batter had hit 1.000 for an entire season? Or that a pitcher threw no-hitters every time he played a game? I’m pretty sure you would say that’s impossible or that something was definitely wrong. And, of course, you would be correct – somethings are too impossible or outlandish to be true. Not just in baseball, but there are limits in almost every endeavor.
    Therefore, I wouldn’t blame you if you questioned what I claim is the winning streak of all winning streaks in trading COMEX silver futures. Data published by the CFTC, the federal commodities regulator, indicate that JPMorgan and two or three other large financial institutions, have never taken a loss, only profits on every single silver trading position they have established over the past nine years and, in fact, for a lot longer than that. You can question what I claim all you want, but do yourself a favor and make sure you question me deeply enough – please don’t let me off the hook easily.

    This post was published at SilverSeek on June 22, 2017.


  • Hedge Funds Have Never Been This Bullish About Small-Cap Stocks

    The last two weeks have seen the biggest increase in hedge fund bullish Russell 2000 positions since July 2008 pushing the net speculative long position for leveraged funds to a record high.
    The reflexive combination of hedge fund shorts being squeezed and FOMC Drift pushed Small Caps higher early in the week, but notably since the cut-off data for CFTC reporting, Small Caps have dropped…

    This post was published at Zero Hedge on Jun 18, 2017.


  • Ted Butler Quote of the Day 06-16-17

    As I see it, this is the defining moment for James McDonald, the new enforcement director for the CFTC. Either he will do something about the continuing silver manipulation or he won’t. In the event he doesn’t do anything to interrupt the big commercials like JP Morgan from continuing to snooker the managed money technical funds into and out of COMEX futures positions by illegal spoofing and other dirty market tricks, it will fall to something and someone else. I’m not worried that the silver manipulation won’t end dramatically and soon, but it is not written in stone that it will be the defining moment that McDonald will look back on with satisfaction many years from now. Defining moments can be either good or bad and by definition last forever.

    But it would be a mistake to underestimate the pressure he is under not to do the right thing. Essentially, for him to dismantle the crooked price discovery mechanism on the COMEX for silver (and gold) and on other futures exchanges for other commodities, he must repudiate more than 30 years of prior agency thinking, as well as overcome the secret and illegal agreement made between the U.S. Government and JP Morgan, on the occasion of JPM taking over Bear Stearns in 2008. Admittedly, that’s a very tall order. But the taller the order, the greater the defining moment.

    Certainly, the inability to overcome the standard line from the CFTC for decades, namely, that no manipulation was possible in silver, has plagued others who set out to do so. Gary Gensler comes to mind because he started off in hitting the road running to establish legitimate position limits in 2009 and seemed to be on the right path to doing so. Even Bart Chilton, the former and very outspoken commissioner who talked openly of the silver manipulation, eventually lost his public voice for the same reason as Gensler failed – neither could overcome the illegal agreement with JPM.

    A small excerpt from Ted Butler’s subscription letter on 14 June 2017.

    More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.
     


  • Hell Freezes Over: CFTC Finds Trader Guilty of Metals Price Rigging

    It must have been painfully awkward for the Commodity Futures Trading Commission (CFTC).
    Last year, Deutsche Bank settled a civil suit involving blatant market rigging and turned over reams of information, including chat logs and voice recordings. The trove contained plenty of damning evidence which had gone overlooked by the CFTC.
    CFTC investigators supposedly spent 5 years searching for illegal market manipulation, but somehow, managed to find nothing.
    The cheating became hard to ignore after Deutsche Bank turned over voice recordings and 350,000 pages of documents which revealed bank trading desks being run like the back office of a crooked casino.

    This post was published at GoldSeek on 13 June 2017.


  • Ted Butler Quote of the Day 06-09-17

    I’m convinced that because the ink was still relatively wet on the agreement between JPMorgan and the U.S. government when Gensler came on board — and because he was unaware of that until he was way down the road to instituting position limits and overall reform, all his efforts were for naught. Anything that would have inconvenienced JP Morgan at that time was not going to fly; neither the Treasury Department nor the Federal Reserve would allow it. As Gensler slowly came to this realization, he recognized his efforts would not come to fruition and he beat a retreat.

    But that was then — and this is now. The secret and illegal agreement between JP Morgan and the Fed and Treasury is now nine years old — and long of tooth. None of the original U.S. Government arrangers appear to be in office and JP Morgan’s manipulative actions over this time are starting to ripen and smell. For cripes sake, JP Morgan hasn’t taken a single loss when shorting COMEX silver over the past nine years and has amassed 600 million ounces of physical silver at artificially depressed prices over the past six years. No way, no how was that ever intended by the U.S. Government at the outset (JPM’s intentions excluded).

    Now JP Morgan’s actions appear inexcusable and not to be tolerated for much longer. Enter the appointment of an apparently honest man to a position that matters at the CFTC and the whole dynamic appears to have changed. Who at the Fed or Treasury will demand that JP Morgan continue to be treated with kid gloves in silver because of a secret agreement made under duress nine years ago, particularly with more

    than ever openly recognizing the scummy and duplicitous actions of the country’s most important bank?

    A small excerpt from Ted Butler’s subscription letter on 07 June 2017.

      More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.


  • Ted Butler: Surprise CFTC Announcement

    I was shocked by Friday’s announcement by the CFTC of an order and simultaneous settlement of manipulation charges in COMEX gold and silver futures. I first saw it in a Zero Hedge article and subsequent articles on Bloomberg and in The Wall Street Journal, but all those accounts were somewhat off target compared to the CFTC announcement itself. This was one of those rare cases where the source announcement was much clearer than the articles describing it. I would ask you to take the time to read and reread the actual announcement from the CFTC, including both the press release itself and the complete order.
    In essence, for the first time in history, the Commodity Futures Trading Commission has brought charges against someone for manipulating the gold and silver markets exactly in the manner I have described for decades. This is so astounding on its face, that I hardly know where to begin. In addition, I am writing this less than 24 hours after reading the announcement, so I reserve the right to alter my opinion as time evolves. But there is much to say at this point.
    While it is true that the agency brought these charges against a former junior trader of an unnamed foreign bank (said to be Deutsche Bank), the price manipulation occurred during the time of the CFTC’s infamous five-year formal silver investigation. You’ll remember that the original investigation by its Enforcement Division previously concluded that there were no manipulation charges worthy of pursuing. Clearly, something changed the CFTC’s mind. Also, please note that all the alleged price manipulation took place on the cesspool also known as the COMEX and not on any of the foreign exchanges often bandied about.

    This post was published at Silverseek


  • JUNE 5/IN A VERY SURPRISE MOVE, THE CFTC LAYS CHARGES AGAINST THAT JUNIOR TRADER FROM DEUTSCHE BANK/GOLD UP $3.10 AND SILVER UP 6 CENTS BUT GOLD/SILVER EQUITY SHARES FLOUNDER/ANOTHER ISLAMIST ATT…

    GOLD: $1279.30 up $3.10
    Silver: $17.55 up 6 cent(s)
    Closing access prices:
    Gold $1279.95
    silver: $17.57
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1287.16 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: 1279.70
    PREMIUM FIRST FIX: $7.46
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1288.54
    NY GOLD PRICE AT THE EXACT SAME TIME: 1280.30
    Premium of Shanghai 2nd fix/NY:$8.24
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1280.70
    NY PRICING AT THE EXACT SAME TIME: $1281.25
    LONDON SECOND GOLD FIX 10 AM: $1279.95
    NY PRICING AT THE EXACT SAME TIME. $1280.15
    For comex gold:
    JUNE/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 57 NOTICE(S) FOR 5700 OZ.
    TOTAL NOTICES SO FAR: 1912 FOR 191200 OZ (5.9471 TONNES)
    For silver:
    For silver: JUNE
    229 NOTICES FILED TODAY FOR 1,145,000 OZ/
    Total number of notices filed so far this month: 447 for 2,235,000 oz

    This post was published at Harvey Organ Blog on June 5, 2017.


  • Is This The “Mystery” Massive Long Supporting The Oil Market?

    Usually when CFTC data shows a big speculative position, it is easy to spot the corresponding mood amongst traders. For example, take the current situation with the Canadian dollar. There are record net speculative shorts, and that bias is obvious amongst hedge funds and other professional traders.
    However, over the past few years, I have been puzzled by the building of a massive record net long speculative position in the WTI crude oil market.
    The monster speculative long position doesn’t correspond to the general attitude amongst traders. In fact, without looking at the data, I would argue most specs are negative towards crude oil. The data does not jive with my anecdotal evidence.

    This post was published at Zero Hedge on May 30, 2017.


  • Ted Butler Quote of the Day 05-17-17

    Not only has the crooked COMEX futures positioning scam become obvious to more observers than ever based upon the explosion in COT commentary, we are now seeing clear signs of adjustment to it in actual trading (apart from the large core non-technical fund managed money long position). Never before have the other large reporting traders and the smaller non-reporting traders bought so aggressively on sharply lower prices than they have over the past three weeks. Clearly, these traders have seen the COMEX wash, rinse, repeat cycle often enough over the years that they know what to expect, namely, when the technical funds are done selling to the downside, then up we go in price. Same as I preach here.

    Simply put, other futures traders see what is going on and are reacting to it. So here we have not only growing and widespread commentary and a substantial and growing core non-technical fund managed money long position, we now have bona fide evidence of other traders entering the fray opposite to the technical funds. I know the CFTC pretends not to see what many more are reacting to, but let me ask you this – with such strong and varied evidence that more are reacting to the COMEX silver manipulation, does this sound like something that will reach a ripe older age…or does it not have the elements of blowing up shortly?

    A small excerpt from Ted Butler’s subscription letter on 13 May 2017.

      More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.


  • Ted Butler Quote of the Day 05-12-17

    While the biggest single change in the composition of the concentrated COMEX short position has been the defection of JP Morgan to becoming net long by virtue of its physical metal accumulation, there are some other more subtle changes, including the complete absence of any economic legitimacy to the current short position. In essence, there are no legitimate shorts on the COMEX, in terms of miners hedging future production or those hedging against existing physical inventory. The big shorts, apart from JP Morgan, appear to be mostly foreign banks according to CFTC data and definitely not miners from the earnings statements from public mining companies. The speculating foreign banks are precisely the type of short sellers most likely to panic when silver prices start to rally and it begins to take hold on them that JP Morgan is no longer the shorts’ protector and short seller of last resort

    I have been studying the silver manipulation for more than 30 years — and over that time I have seen it spread to other commodities, certainly to gold, copper, crude oil and just about every market where the technical funds have risen as a potent market force to be manipulated and harvested. But no market has been as manipulated as has COMEX silver, thanks to the level of concentrated short selling compared to real world supplies. The recent selloff has affected many commodities and I do expect a vigorous turn up in gold, copper, crude oil, platinum and other markets once the technical fund selling is complete, but the rally to come in silver should far outdistance any other commodity rally.

    A small excerpt from Ted Butler’s subscription letter on 10 May 2017.

    More precious metals news & information available at
    Ed Steer’s Gold & Silver Digest.
     


  • Macron Victory Leads To “Risk Macr-Off” In Europe, Poor China Trade Data Doesn’t Help

    It was supposed to be Risk Macr-ON after Emmanuel Macron’s avalanche victory in Sunday’s French presidential elections; instead as some banks cautioned and as we showed early in the overnight session, the market reaction has been the opposite with the victory fully priced in (and more) and especially in the European currencies and stocks, as well as S&P futures, we have seen a modest episode of Risk Macr-Off. Treasury yields are falling 1-1.5bps in flattening fashion with the 10y at 2.33%. WTI crude oil has largely traded sideways and was modestly lower in early morning trade despite another monster jawboning session from the Saudi energy minister as well as Russia, both signaling they could extend production cuts into 2018, indicating that what little credibility OPEC may have had is virtually gone.
    After climbing for five of the past six days in the buildup to the election of Emmanuel Macron, overnight the euro succumbed to “selling the news” and after climbing above the “psychological” 1.10 level after Macron’s victory investors booked profits. While the common currency rose to $1.1023 during early Asia trading, further filling the gap following the U. S. elections in November, with that move taking it more than 2.7% higher since the first round of the French elections, subsequent fast-money names unwound part of their longs. That saw the currency fall as much as 0.6 percent to $1.0936 in the European morning.
    Discussing the Euro move, SocGen’s Kit Juckes said that “the Euro went up a bit, down a bit and ended pretty much where it was last week. It faces two short-term challenges. The first is that the FX market has moved a good way further in recent days than the bond market, with the Treasury/Yield spread not very different from where it was when EUR/USSD was under 1.08. Bunds need to catch up with the currency. The second hurdle is positioning. CFTC data show the smallest speculative Euro short in 3 years. That’s still a short position, of course, so much more of a short-term hurdle than a reason for a deep correction to lighten positions. A period of choppy trading is likely for now.”

    This post was published at Zero Hedge on May 8, 2017.