Our Brave New ”’Markets”’

One thing is clear: These aren’t your daddy’s markets anymore.
Why? Because about 10 years ago the Rise of the Machines (aka high frequency trading algorithms) completely altered the terrain of what we call the ‘capital markets.’
Let’s look at this as a before and after story.
Before the machines, markets were a place that humans with roughly equal information and reflexes set the prices of financial assets by buying and selling. Fundamentals mattered.
After the machines took over, markets became dominated — in terms of volume, liquidity and pricing — by machines that operate in time frames of a millionth of a second. The machines and their algorithms use remorseless routines and trickery — quote stuffing, spoofing, price manipulations — to ‘get their way.’
Fundamentals no longer matter; only endless central bank-supplied liquidity does. Because such machines and their coders are very expensive and require a lot of funding.
The various financial markets are so distorted that I first resorted to putting that word in quotes – ‘markets’ – to signify that they are not at all the same as in the past. In recent years I’ve taken to putting double quote marks – ”markets” – in attempt to drive home their gross distortion. Not only are todays ”markets” something the human traders of a generation ago would fail to recognize, they’re no longer a place where human actions of any sort have much of a remaining role.

This post was published at PeakProsperity on Friday, July 28, 2017.

Trump World: What Happens to Your Investments Now?

Donald Trump’s victory came as the first surprise for many around the world. The reaction in the markets was the second surprise. Investors got what they expected for a few hours overnight as the ballot results came in; stocks were crushed and metals spiked higher. By mid-morning on Wednesday, however, stocks were surging and metals rolled over.
Now, a few days post election, commentators and ‘experts’ have written stories to explain the action in markets. Some of these stories may even prove true. But at this early stage, investors should recognize that markets mostly reflect hopes, fears, and high frequency trading shenanigans. Reality tends to arrive later.
All eyes are focused on the first 100 days of the Trump administration. That would be a good period of time for investors to wait and re-evaluate which of the stories currently driving markets are fiction and which aren’t.
Dig a little bit and you will find reasons to question whether the theories being floated will ever be proven out. For starters, there is plenty of reason to doubt the current notion that we will see persistently higher interest rates.
Rates jumped higher following the election. The supposed rationale? Trump has spoken critically of the Fed’s low interest rate policy in recent weeks, and he is also advocating for a trillion-dollar federal infrastructure program.

This post was published at GoldSeek on 15 November 2016.

Bullion Investors Versus the Machines

Precious metals prices fell sharply on renewed concerns the Federal Reserve will be raising interest rates sometime this fall. Friday’s jobs report painted a picture of healthy growth, fostering a new round of speculation that Janet Yellen and the FOMC will withdraw stimulus.
Investors have seen this a thousand times before. The reaction in gold and silver markets was almost as predictable as the sunrise. When markets continually respond to highly managed data from the Bureau of Labor Statistics – or some other bureaucracy – in a machine-like way, you have to assume it’s because most of the trading is actually done by high frequency trading machines (HFTs).
The algorithms calculated the Fed probably would not hike any time soon when employment missed expectations by a mile in early June. Precious metals rallied.
Gold and silver prices stumbled the following month when the same report showed much better than expected data. It was rally time again in late July when the GDP data turned out to be a big disappointment. Now there is ‘good news’ on jobs and the machines responded by selling.

This post was published at GoldSeek on 9 August 2016.

Author Michael Lewis: Rigged Markets Show Signs of a Desperate Slumlord

In the Afterword that appears in the paperback edition of ‘Flash Boys,’ author Michael Lewis writes that following the publication of the hardcover edition of the book in 2014 and his appearance on 60 Minutes (in which he called the U. S. stock market rigged and mapped out the case against high frequency trading) ‘it has sounded like a desperate bid by a slumlord to gussy the place up to distract inspectors. In any case, the slumlords seem to realize that doing nothing is no longer an option: Too many people were too upset.’
Doing nothing while going through the motions of doing something perfectly defines the Securities and Exchange Commission. Today the Securities and Exchange Commission is continuing its illusion of dealing with the rigged structure of the U. S. stock market by holding a meeting of its Equity Market Structure Advisory Committee, some of whose members have themselves been charged with rigging the market. Thedeeply conflicted SEC Chair, Mary Jo White, will deliver opening remarks.
As part of the day’s agenda, Venu Palaparthi, a Senior Vice President at Virtu Financial is scheduled to appear on a panel addressing ‘market quality.’ This is what Senator Elizabeth Warren had to say about Virtu at a June 18, 2014 hearing of the Senate Banking Subcommittee on Securities, Insurance and Investment:
‘For me the term high frequency trading seems wrong. You know this isn’t trading. Traders have good days and bad days. Some days they make good trades and they make lots of money and some days they have bad trades and they lose a lot of money. But high frequency traders have only good days.
‘In its recent IPO filing, the high frequency trading firm, Virtu, reported that it had been trading for 1,238 days and it had made money on 1,237 of those days… The question is that high frequency trading firms aren’t making money by taking on risks. They’re making money by charging a very small fee to investors. And the question is whether they’re charging that fee in return for providing a valuable service or they’re charging that fee by just skimming a little money off the top of every trade…

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

Silver Wildcats – And The Day Futures Died – Part 1

From Legends to Bankers Yes, there has always been price manipulation.
There will always be price manipulation.
From the time of Caesar, through the American Civil War and into the 20th and 21st centuries.
Equities, interest rates, bonds, currencies, and futures.
From wheat to silver, the Maine potato default, and the onion debacle, futures trading has been subject to all manner of interference.
The technology has changed over time. From carrier pigeons, the telegraph, the telephone, or today’s laser-assisted high frequency trading algorithms – the strategies and tactics remain.
No commodity has been spared.
A long list of colorful characters litter the landscape.
Legends like Jesse Livermore, Jay Gould, King Jack Sturges, Ed Parker and The Chicago Bear Ring, or The Wheat Kings of Chicago to name a few.
From J. Pierpont’s ‘Goldroom Manipulation’ at the turn of the 20th century, to the modern day equivalent of the massive commercial bank silver short.

This post was published at Silver-Coin-Investor on Jun 16, 2016.

Signals – From Gold and the S&P

Thanks to High Frequency Trading and the rise of the machines in the electronic markets, gold and the S&P 500 Index are difficult for non-machines to understand and predict on a short term basis.
What do they tell us in the longer term?
It is an exponentially increasing world! Both gold and the S&P 500 Index have risen exponentially for fifty years. Since they often move counter to each other, take the sum of the gold price plus the S&P 500 Index and you can see the overall trend more easily.

This post was published at Deviant Investor on on May 19, 2016.

Proof That One Good Man or Good Woman in Congress Can Make a World of Difference

Senator Elizabeth Warren, Democrat of Massachusetts, has breathed new life into bolstering Americans belief in our Democratic system of government and the notion that one good man or good woman can make a meaningful difference in Congress. Senator Warren was the driving force behind the creation of the Consumer Financial Protection Bureau which has opened a robust two-way dialogue and redress system with the American people regarding the financial crimes being inflicted on them – otherwise known as Wall Street’s institutionalized wealth transfer system – while it is simultaneously under relentless assault by corporate attack dogs masquerading as Republican members of Congress.
It was Senator Warren in 2013 that informed us that the so-called Independent Foreclosure Reviews to settle the claims of 4 million homeowners who had been illegally foreclosed on by the bailed out Wall Street banks were a sham. The ‘independent’ consultants had been hired by the banks and paid by the banks, with the banks themselves allowed to determine the number of victims.
Senator Warren was the pivotal person who put the high frequency trading scam described in the Michael Lewis book, ‘Flash Boys,’ into layman’s language. During a Senate hearing on June 18 of last year, Warren explained:
‘High frequency trading reminds me a little of the scam in Office Space. You know, you take just a little bit of money from every trade in the hope that no one will complain. But taking a little bit of money from zillions of trades adds up to billions of dollars in profits for these high frequency traders and billions of dollars in losses for our retirement funds and our mutual funds and everybody else in the market place. It also means a tilt in the playing field for those who don’t have the information or have the access to the speed or big enough to play in this game.’


This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

SPX 500: Is it This Simple?

In an age of Algorithms, High Frequency Trading, Quant-injected performance engines and every Casino Patron with an e-Trade account hyper-stimulating the market after each bit of news that is fed (no pun intended) to us by the financial media and Policy Central, the lowly individual can be forgiven for feeling small and vulnerable; for feeling as if the answers are beyond her, or that long-termSUCCESS is out of his reach.
Indeed, this very publication has ground its gears pondering the fact that August-September market sentiment became historically over bearish in ratio to the relatively minor downside experienced thus far. That was a bullish, not a bearish thing. With sentiment now being repaired it is time to ask if we are giving the bulls too much latitude.
The market bounce is proceeding along nicely. In fact it is proceeding a little bit too nicely (nicely enough to jerk the ‘Dumb Money’ sentiment up with it in lockstep to market price per the graph we reviewed in Friday’s update). Our bounce targets are now being reached, with SPX 2000 and 2020 in the books and the others waiting just above.
My question to you is what if it is so simple and not at all different this time? Let’s use the Presidential election years of 2000 and 2008 as examples. I am not a cycles analyst, but this is pretty simple. Clinton hands off a brewing mess to Bush, who in turn hands a disaster off to Obama. Now, who is going to take the ball, another 8 years on?
As always, charts will state the facts of what has happened before. So let’s compare the current S&P 500 to the two previous cycles using weekly charts. What we have below (current situation) is a breakdown, a classic double bottom and now an upside re-test. Does that look like a lot of overhead resistance to you? It does to me too
The 50 week EMA supported the October 2014 decline after dropping below and hammering back above it. SPX is now at the EMA 50. That is generally the first notable resistance area. Next up is lateral resistance beginning at 2040 up to 2060. Beyond that, a spike (inverse to the downward one below the EMA 50 in Oct. ’14) the pattern’s measurement around 2100 cannot be ruled out.

This post was published at GoldSeek on 12 October 2015.

Spoofer Complains About Spoofing, Is Ignored, Starts Spoofing, Gets Busted

In light of Blackrock’s Hillary Clinton’s sudden interest in taming high frequency trading and imposing a fee on order cancellations, something we have said is imperative ever since 2009 and now is far too late to make a difference, it is worth highlighting that just today the SEC cracked down on yet another spoofing mastermind, no not Citadel, but another “basement” trader, Eric Oscher, 47, a former NYSE specialist and his firm Briargate Trading (an anagram of Arbitrage), who were busted earlier today for making the gargantuan profit of $525,000.
While the argumentation in the complaint is by now familiar to most – someone spoofs a given stock or index, then quickl takes the other side, and cancels the spoofing order – there are three very notable items in this latest crackdown on said spoofing “mastermind.”
The first explains why in a market in which volumes are contracting at a record pace, and where liquidity is so scarce flash crashes have become a virtually daily event, exchanges continue to proliferate like weeds. The reason is because spoofers like Oscher use one exchange in which they “telegraph” their spoof orders, they use another exchange in which to take the opposite side of the trade thus leaving no readily available trail of evidence exposing their conduct.
This is how the SEC explains it:

This post was published at Zero Hedge on 10/08/2015.

Gold and Silver Market Morning: Oct-8-2015

Gold Today -New York closed with the gold price at $$1,145.60 down from $1,146.80 yesterday in New York. Ahead of London’s opening the price moved down to $1,142 as recorded in London. China is open today. The gold price was set at $1,143.30 down from $1,147.90 at the LBMA gold setting. The dollar Index was down at 95.15 from 95.47 and the dollar was trading against the euro at $1.1305 down from $1.1254. In the euro the fixing was 1,011.32 down from 1,019.87. Ahead of New York’s opening gold was trading at $1,144.75 and in the euro at 1,012.61.
Silver Today – The silver price closed at $16.02 up from $15.80 up 22 cents over yesterday’s close. Ahead of New York’s opening, silver was trading at $15.67.
Gold (very short-term)
The gold price should consolidate today, in New York.
Silver (very short-term)
The silver price should consolidate today, in New York.
Price Drivers
The Shanghai Gold Exchange reopened today after the week long holiday, but its activity has not yet fed through to the gold price as developed world markets continue to dominate gold prices. In London and New York the current consolidation pattern is almost complete and a strong move either way is close. These days, with High Frequency Trading, this means high volatility. With the liquidity of the physical gold market falling uncomfortably we do expect dealers to turn their attention to physical prices from COMEX prices, as conditions tighten in the physical market. The result may well be a move of greater proportions than we have seen for some time! [More in our newsletter
– Subscribe http://www.goldForecaster.com [See a site where protection from confiscation is offered to gold owners: www. Stockbridgemgmt.com ] There were sales of 1.787 tonnes from the SPDR gold ETF but no activity in the Gold Trust. This leaves the holdings of the SPDR gold ETF at 687.196 tonnes and 160.62 tonnes in the Gold Trust.

This post was published at GoldSeek on 8 October 2015.

Gold Manipulation And Conflict Gold

The king of high frequency trading, Nanex’s Eric Hunsader, has been on a crusade lately to expose the problematic and illegal manipulative side of HFT/algo-driven trading. No where on earth is the manipulation of any market more blatant and in-your-face illegal than in the paper gold market. Yesterday morning Hunsader tweeted out this, after the gold was taken down hard in the paper gold market:

Gold was smashed at exactly 8:20 a.m. EST when the gold pit at the Comex opened. The initial hit involved the dumping of 2,748 contracts – or 274,800 ozs of paper gold – in the first minute of floor trading. The Comex is only reporting 162,221 ozs of ‘registered,’ deliverable gold. Hmmm… From 8:00 a.m. – 9:00 a.m, 29,136 contracts traded, representing 2.9 million ozs of gold traded, most of it in the first 40 minutes after the floor trade.
Without a doubt, the blatant nature of the manipulation reflects the degree of desperation felt by the Fed and the bullion banks to keep a lid on the price of gold given that the Fed is unable to raise interest rates without crashing the system.

This post was published at Investment Research Dynamics on October 1, 2015.

Financial Strategist: ‘To Tie The Collapse To Some Date In September Is A Fool’s Errand’

There are scores of reports and analyses that peg a coming collapse of the economic, financial and monetary systems to the latter half of 2015. And while it is obvious that global stability is on borrowed time, analyst Craig Hemke of TF Metals Report isn’t completely convinced that we can effectively forecast such paradigm shifts the way we used to before the introduction of central bank intervention and rows upon rows of high frequency trading machines operated by Wall Street’s biggest banks.
In a recent interview posted by Future Money Trends Hemke argues that humans operating in free markets no longer carry the same influence as they did during previous events attributed to The Shemitah, Elliot Wave theory or Kondratieff waves:


This post was published at shtfplan on September 13th, 2015.

TAKE THE OPPORTUNITY TO BAIL BEFORE IT’S TOO LATE

Last week ended with the cackling hens on CNBC and the spokesmodels on Bloomberg bloviating about the temporary pothole on the road to riches. They assured their few thousand remaining viewers the 11% plunge in the stock market was caused by China and the communist government’s direct intervention in their stock market, arrest of a brokerage CEO, and threat to prosecute sellers surely cured what ails their market. The Fed and their Plunge Protection Team co-conspirators reversed the free fall, manipulating derivatives and creating a short seller covering rally back to previous week levels. The moneyed interests are desperate to retain the appearance of normality and stability, as their debt saturated system teeters on the verge of collapse.
John Hussman’s weekly letter provides sound advice for anyone looking to avoid a 50% loss in the next 18 months. The market has been overvalued for the last three years and now sits at overvaluation levels on par with 1929 and 2000. The difference is that fear has been overtaking greed in the psyches of traders. The average Joe isn’t in the market. Only the Ivy League MBA High frequency trading computer gurus are playing in this rigged market. The 1,100 point crash last Monday is what happens when arrogant young traders, fear and computer algorithms combine in a perfect storm of mindless selling. Suddenly the pompous risk takers became frightened risk averse lemmings.
The single most important thing for investors to understand here is how current market conditions differ from those that existed through the majority of the market advance of recent years. The difference isn’t valuations. On measures that are best correlated with actual subsequent 10-year S&P 500 total returns, the market has advanced from strenuous, to extreme, to obscene overvaluation, largely without consequence. The difference is that investor risk-preferences have shifted from risk-seeking to risk-aversion.
If there is a single lesson to be learned from the period since 2009, it is not a lesson about the irrelevance of valuations, nor about the omnipotence of the Federal Reserve. Rather, it is a lesson about the importance of investor attitudes toward risk, and the effectiveness of measuring those preferences directly through the broad uniformity or divergence of individual stocks, industries, sectors, and security types. In prior market cycles, the emergence of extremely overvalued, overbought, overbullish conditions was typically accompanied or closely followed by deterioration in market internals. In the face of Fed induced yield-seeking speculation, one needed to wait until market internals deteriorated explicitly. When rich valuations are coupled with deterioration in market internals, overvaluation that previously seemed irrelevant has often transformed into sudden and vertical market losses.

This post was published at The Burning Platform on 30th August 2015.

Gold Daily and Silver Weekly Charts – Fearful Odds

WESTMORELAND Of fighting men they have full three score thousand.
EXETER There’s five to one; besides, they all are fresh.
SALISBURY God’s arm strike with us! ’tis a fearful odds.
William Shakespeare, Henry V, Act 4 Sc 3
As I am sure you have heard the NY Stock Exchange was closed for technical problems from 11:32 AM to 3:10 PM today. There was a problem with their ‘FIX’ system. This was localized to the NYSE, but there were failures also at the Wall Street Journal site and at popular blog spot Zerohedge.
As you know there are about 11 stock exchanges here in the US now. And they are wrapped within a web of conscious complexity sparked by HIGH FREQUENCY TRADING, which is an abuse of honest markets.
Over 70 % of the stocks on the Shanghai Composite have halted trading for a more fundamental reason: no buyers, at least not at these lofty prices.
Gold and silver continues to be capped.
At this point it seems to my taste that cash, gold, and silver are the preferred investments.

This post was published at Jesses Crossroads Cafe on 08 JULY 2015.

The Criminality of The Comex

How is this even legal? That’s a serious question and I’d like a serious answer after the you read what is presented below.
Immediately following the short squeeze in mid-May that resulted in a 10% price move in just five days, the “Large Specs” in silver set out to rebuild (or were tricked into rebuilding) a massive naked short position in Comex silver. As you can see on the chart below, over the past five weeks, these Large Specs have added 41,806 gross naked short contracts to their accumulated position. This drove their total reported position up from 16,891 contracts on May 19 to last Tuesday’s 58,697 and is the sole, primary reason for silver falling by $2 over the same time period. (click to enlarge)
Here is where this “market” becomes fraudulent and clearly fails to serve the world’s silver producers and consumers. These “Large Speculators” as a group are collectively hedge funds, managed commodity funds and High Frequency trading funds. By definition, these are trading groups and they do not hold any physical silver. Therefore, they are truly “naked” in their position as they do not have physical silver to deliver to buyers at a future date (one of the rationale for having futures markets in the first place).
And let’s put this into perspective…
These Large Speculators added 41,806 naked short contracts over these last five weeks. At 5,000 ounces of “silver” per contract, that’s the equivalent of 209,000,000 ounces of silver.
In 2014, the entire world only produced 877,000,000 ounces of silver. Therefore, over just five weeks, the Large Specs naked shorted 24% of global mine supply. And, again, this is silver that they don’t have. Perhaps you think that, instead, this shorted silver has already been parked at the Comex for future sale. Well, as of Friday, the entire Comex silver vault holds just 183,000,000 ounces. So, over the past five weeks, these Large Specs have naked shorted 114% of the entire (registered and eligible) Comex vault. However, only registered metal is allegedly marked and ready for sale/delivery. As you can see on the CME Silver Stocks report below, Friday’s registered silver total was just 58,000,000 ounces. Using the same math, in just the past five weeks the Large Specs have naked shorted 360% of the total Comex registered vault.

This post was published at TF Metals Report on June 27, 2015.

DOJ Launches Probe Of Treasury Market Manipulation

Two months before the CFTC and DOJ slammed one solitary trader in a London suburb with “seasonally-adjusted” allegations that it wasn’t actually Waddell and Reed who flash crashed the market on May 6, 2010 as the SEC originally claimed but an E-mini spoofer named Nav Sarao (whose only real crime was exposing the rigging by the HFT cartel), we showed in explicit detail how HFTs were rigging the Treasury market with “egregious manipulation” in the futures market through spoofing.
To regular ZH readers who have seen countless intraday examples of Treasury rigging, not to mention the power of HFT demonstrated during the October 15 flash crash, this was nothing new, but what made this particular case unique is that it was brought up in litigation by one HFT firm, HTG Capital Partners, which charged unnamed “John Does” with doing precisely what we had alleged HFTs do in all capital markets, all the time. This is what we said:
… the catalyst that cracked the Libor conspiracy was when the members started to make less and less money, until ultimately the formerly golden goose was bled dry. At that point, their incentive to keep their mouths shut became nil, and in some cases negative. From that point on, it was just a matter of time before the regulators had a case against the conspiracy granted to them on a silver platter.
The same is now happening to high frequency trading, because in a market in which volumes are crashing to unprecedented lows, and where there are no longer whale accounts for the HFTs to frontrun, pardon “provide liquidity to”, there is no longer a need for as many HFT firms. And those firms which end up on the losing end of the technological arms race, now that there is not enough profits for everyone to go around, are suddenly incentivized to bust the whole criminal ring wide open. Or in the words of Louis XIV, “After me, the flood.“

This post was published at Zero Hedge on 06/08/2015.

The Stock Market Bubble In Two Charts

‘Things always become obvious after the fact’ – Nassim Nicholas Taleb
‘Facts do not cease to exist because they are ignored.’ – Aldous Huxley
The S&P 500 currently stands at 2,126, fractionally below its all-time high. It is now 300% above the 2009 low and 34% above the 2008 and 2001 previous highs. Most people believe this is the new normal. They are comfortably numb in their ignorance of facts, reality, the truth, and the inevitability of a bleak future. When the herd is convinced progress and never ending gains are the norm, the apparent stability and normality always degenerates into instability and extreme anxiety. As many honest analysts have proven, with unequivocal facts and proven valuation measurements, the stock market is as overvalued as it was in 1929, 2000, and 2007.
Facts haven’t mattered, as belief in the infallibility and omniscience of Federal Reserve bankers, has convinced ‘professionals’ to program their high frequency trading supercomputers to buy the all-time high. If central bankers were really omniscient and low interest rates guaranteed endless stock market gains, then why did the stock market crash in 2000 and 2008? The Federal Reserve’s monetary policies created the bubbles in 2000, 2007 and today. There was no particular event which caused the crashes in 2000 and 2008. Extreme overvaluation, created by warped Federal Reserve monetary policies and corrupt Washington D. C. fiscal policies, is what made the previous bubbles burst and will lead the current bubble to rupture.
Benjamin Graham and John Maynard Keynes understood how irrational markets could be over the short term, but eventually they would reach fair value:

This post was published at The Burning Platform on 26th May 2015.

Joe Saluzzi: Broken Markets

HFT, inept regulators & Fed distortion = more flash crashes
This podcast was recorded ten days ago. It’s publication was delayed a week due to last weekend’s annual Peak Prosperity seminar.
As luck would have it, we had Joe Saluzzi lined up to record a podcast the day the news broke recently that the suspected culprit for the 2010 flash crash, Navinder Singh Sarao, had been arrested. Saluzzi is co-founder of Themis Trading LLC, long-time cautionary on the dangers of high-frequency algorithmic trading, and co-author of Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street Are Destroying Investor Confidence and Your Portfolio.
In this discussion, Joe shares his suspicions about Sarao (a contributor to the crash, but highly unlikely to be the actual cause) and then provides his expert assessment of what has been done in the intervening years since the flash crash to safeguard the market against a similar failure (precious little). In his opinion, a winner-take-all high-tech arms race, clueless and toothless regulators, and central bank price distortion are conspiring to make us more vulnerable — not less — to another systemic breakdown:
What’s happened is the markets have evolved and they’ve obviously embraced computerization and technology. Some things have been very good for the markets and brought down cost. But regulators don’t seem to have evolved. They don’t seem to have caught up with times and they don’t necessarily have the eyes and ears out there to monitor things on a micro-second or nano-second level.

This post was published at PeakProsperity on Sunday, May 3, 2015,.

Ted Butler Quote of the Day 04-24-15

The big news event, of course, [was Tuesday's] joint filing of civil charges by the CFTC and criminal charges by the Justice Department against a London trader for his participation in the infamous “Flash Crash” in the stock market on May 6, 2010. That was when the Dow Jones Average fell 1,000 points in a very short period of time before recovering almost as sharply. Yesterday’s filing places much of the blame for the crash on this London trader who “spoofed” the market, by entering and immediately canceling large orders on stock index futures contracts whose prime intent was to manipulate prices. (I suppose he’s not the one spoofing prices lower in COMEX gold and silver today, Wednesday, but someone certainly is).

According to Eric Hunsader, from the market data company, Nanex, “I’m dumbfounded that they missed this until now.” After watching the agency’s handling of the increasingly obvious silver manipulation, I’m less surprised and I am left with the feeling that the evidence provided by the unnamed whistleblower must have been overwhelmingly convincing for the CFTC to change its tune so radically.

I am not at all surprised at the article’s negative portrayal of the role of the CME in this matter. The article quotes the London trader, in an e-mail more than four years ago, as having told the exchange who was inquiring into his activities, “to kiss my ass.” I’m sure that wasn’t what took the CME so long to crack down on the trader, since there is no evidence the CME ever cracked down on him. The CME hasn’t cracked down on High Frequency Trading, no matter how egregious it has become for the simple reason it is the greatest beneficiary of the mindless and manipulative trading in the form of exchange fees. The CME is the prime promoter of HFT. That’s the problem with self-regulation when the regulator is a beneficiary of the manipulative trading – it will never be ended by the conflicted regulator.

The irony, of course, with the charges of manipulation in the stock market that occurred five years ago is that the same manipulation is occurring in COMEX silver and gold today [Wednesday – Ed] as I write this. As I’ve written previously, the HFT computer jocks have been careful not to trip off another stock market crash because they know it will not be tolerated. But because both the CFTC and the CME have openly signaled that high speed computer manipulation is OK in COMEX silver and gold, the manipulative practice has actually intensified. Whereas crashing the stock market damages too many investors, the number of investors hurt in the silver manipulation is so small in comparison that the CFTC and the CME look the other way. Th at's the way these regulators swing – they only do what they are forced to do.

A small excerpt from Ted Butler’s subscription letter on 04-22-15.

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

Never Play Another Man’s Game

If asked about ‘the rules’ of investing, Wall Street will offer endless variations, but never reveal the big one. Because to do this would point out to the legions hapless rubes (average investors) invested in the securities markets these days, that although stocks and bonds have done fabulously over the past six-years coming out of the 2008 financial crisis, still, for those who actually participated this must be looked at as good fortune more than anything else, especially considering you are ‘playing another man’s game’. Because stocks and bonds are not going up for the right reasons, they are rising due to a growing list of financial engineering gimmicks that do nothing but hollow out and destabilize these markets, with parasitic high frequency trading (HFT) and illicit corporate buybacks topping the roster, bringing the bulk of benefit to a small group of oligarchs at the very top of the food chain. Sure, the spoils are spread around to the dogs to keep them complicit in the game, and in a larger sense it’s still Wall Street against (fleecing) Main Street, but make no mistake about it, the real money is going to the top 1% disproportionately, because they set the rules of the game.
That’s right, the rules are shaped by these people because they buy political influence in the positive feedback loop that is the relationship between Wall Street and the Beltway, the largest collective fraud ring in man’s history. And that’s why the average investor should not be playing this game, because you take all the risk, and will likely suffer losses (again) in the next collapse because it has been engineered to occur very quickly. This is when the sharks come in and make lucrative proprietary deals off the market that guarantee themselves windfall profits down the road at the expense of taxpayers (again), who again, foot the bill. Why don’t you hear anything about this kind of thing in the news? Answer: Because like their political dogs, oligarchs the magnitude of Buffett own the mainstream media – who will not report contrary to his interests. (i.e. because they want the advertising revenue.) What makes it easy is the American public is fixated on the latest Ellen show (or some other distraction), so high level fraud like this goes on everyday because the average village idiot is brain-dead. They will wake up one day when they are not eating – it’s amazing how hunger will wake up even the dullest idiot – however this kind of thing can be expected to continue until truly dire circumstances befall the American public – and they abandon the distraction game.
This is when the ‘powers that be’ will play the ‘war card’, to both step up the distraction game and justify the austerity that will be required to ‘aid the effort’, but will in fact be a result of the continued rape of dopey public by the oligarchs. This is why Russia is beefing up their presence (nuclear) in the Ukraine, because they know the crazies in Washington are getting ready to escalate (nuclear), which will kick off in earnest when markets / economics allow for it. (i.e. when people will not complain because they are worried about getting more money.) As denoted last week in our commentary on what to expect from the Fed, with the exception of the fraudulent Employment Report, most of the economic data coming out in the States (and globally) is now accelerating downward, and in many instances is in contraction, which is getting increasingly difficult to hide. A carefully couched official Policy Statement from the Fed is designed to obfuscate this fact, however it’s important to realize this is happening right now, where it could be argued that from macro-monetary perspective, the Fed is already behind the curve, but nobody wants to admit it because this would be tantamount to admitting a global recession (depression) exists.

This post was published at GoldSeek on 6 April 2015.