And For Today's Margin Hike...

Tyler Durden's picture

CME goes full retard, and is now seriously threatening to destabilize the clearing structure of the market with what appears a panicked margin hike every single day in one or more commodities. Among today's products impacted RBOB and RBOB crack spreads, up by 21% and 50%, respectively, as the CME makes it all too clear which products the Obama memo said need to be killed post haste.


CME 5.11

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Firing Pin's picture

Anytime the government is attempting to drive prices lower, they will invariably go higher.

Long-John-Silver's picture

and reduce the supply of it causing shortages and rationing.

Sudden Debt's picture

INVENTORY: a number on a piece of paper.


and what did I tell ya about numbers? Charts? Presidents?


Urban Redneck's picture

I'm waiting for Barry to break out the cardigan sweater and have a fireside chat next to a burning pile of FRN's.

Tim White's picture

  I could seriously see that...

duo's picture

yup, without being able to hedge, the producers will make ONLY what they can sell immediately.

worldlymrb's picture

By keeping prices artificially low, govt is risking SHORTAGES if anything.

Sudden Debt's picture

Yep, that's how it will end.

Other countries that don't manipulate their inflation down will just buy up all the cheap US stuff untill there's nothing left and Americans will be forced to buy foreign for 5 times the price.



cossack55's picture

1949= US gold at the fort     702 million oz.

2011= US gold at the fort(?) 261 million oz.

The rest was sold to everyone BUT amerikans for $35.00/oz to prop up the dollar.

That worked out well.

Hearst's picture

What is this becomming The Great Depression Opposite?  This time around the authorities are scrambling to keep prices down while in the 30's they were trying to push prices up.

Mentaliusanything's picture

I think I'm turning Chinese - Centraly Managed Everything.

Hail to the Chairman

Steaming_Wookie_Doo's picture

Yeah, but the Politburo is way better at mgmt than these clowns.

Tomified's picture

They're frightened by the collapse of the commodity bubble, not the bubble itself. Their game is to create inflation to fight deflation. I'm betting they won't win.


Fedophile's picture

They will beat deflation in the long run, the printing press always wins.

cossack55's picture

I hope so, 100 trillion dollar bills (Zimbabwe) in a small frame with a custom label (in case of emergency, break glass) make wonderful and affordable Xmas gifts. This year I used Weimar bucks. Next year 1946 Hugarian bucks (a little more expensive).

New_Meat's picture

Ya, saw a T-Shirt this weekend: "I Beat Anorexia!" and by-jimminy, so he had.  By a factor of 4. - Ned

Math Man's picture

The only one who has gone 'full retard'  is ZH.

Complaining that CME is raising marigns?  Are you kidding me?  We keep having huge volatility spikes.  They have no choice.

Commodities are completely and totally fucked here.  Corn, Crude, Wheat, Silver, Gold, etc.  They are all fucked.  Too much speculative froth.  And it is about to reverse.

There will be a ****LOT**** of money coming out of commodities in the coming weeks and months.  If you're invested in one of these so called "hedge" funds that happened to drop 20% on a 5% down move in the commoditity complex, you're not asking questions, you're just sending a redemption request.   The levered speculators are going to be pulled out of the market by both increased margin requirements and the good old fashioned way --- through redemptions.  And when the redemptions start hitting, look the fuck out.

This is only the beginning.

But on the flip side... if it spills over in to stocks, buy the shit out of them.  Lower input costs will be good for everybody.

cossack55's picture

You were just as fucking stupid on the other thread. At least you are consistent.

Hugh G Rection's picture

I'm beginning to think MathMan just has a really good sense of humor...


Either that or he's just a fucking idiot.


The whole JT Marlin I drive a Ferrari persona is just too convenient.


Highrev's picture


What's obvious by taking a quick, cursory look at the charts is that the carry got blow-up again today and the victims aren’t even getting off the mat.

The $64,000 question is how much more is to come the next couple of days into the weekend.


bothsidesnow's picture

ZHers too busy bashing Bernanke and failto listen to what he said in the press conference. ZHers became sheeeple of the PM's or Pimples.

These guys got the carry trade unwind right a few days after the press conference by analyzing what the Bernank said.



Doña K's picture


Soon it will be cheaper to buy PM's in cash than buy futures.

And the futures will only be traded by the TBTF and some other big fish cannibalizing on each other.

Hearst's picture

So where do you propose this ****LOT**** of money will go?  The grossly over bought stock market?  The toxic bond market?  Everyone's going to sit in cash earning negative interest rates (against real inflation)?  I'm happy to own 'commodities'.  


'CME goes full retard'  Still laughing Tyler thanks keep it up.



Strider52's picture

"crack spreads, up by 21% and 50%, respectively".

Sheeeeet, man, the crack in my hood is spread so thin you gotta buy 2 dimes just to get an ear-ringer anymore.

Math Man's picture

It just goes 'poof' - most of it is levered 10x or more.

And the rest of it goes in to the dollar....  that is where you idiots have it wrong.  Commoditites are driving the dollar higher.... it is not the dollar driving commodities.

Rynak's picture


Yes, and CME is not creating volatility - its just responding to it.

Thanks for the laugh. Go long flying pigs now!

clymer's picture

you poor, attention-starved and socially inept little, impotent man.


It must be hard to be you, using this forum as your only device for obtaining attention

Bicycle Repairman's picture

"We keep having huge volatility spikes.  They have no choice."


They've created the volatility.  F#ck you.

Keri at Bankster Report's picture

I don't have a problem with the margin increases, but that does not mean that I am unable to see the vast political impetuses of the decisions: I think I would be blindly following the CME's "risk" flute if I didn't see them.  The CME knows that there are many ways to skin a cat, and they know the most public ways, too.  I think this is what ZH is pointing out.

There have been comparable times in very recent history when commodities (specific comms and groups) have exhibited equal or greater volatilty, and yet the CME nor other exchanges did not respond with targeted margin increases in the extraordinarily aggressive way we are seeing with the market moves right now.  Some could say that they are learning from their mistakes; some could say that they are under an external (political) pressure; some could say...

My question for you is this: where is the money coming from, for those who want to continue playing in the comm market--from what source are the moving it to buy more chips in comms?  You make it quite clear that you think the entire comm complex is overbought; you might be right---it is hard to tell with USD right now, in my opinion.  The metrics are gone and have been for some time.  But anyways, more money, at least currently, is going into it.  Where is it coming from?  Trades are too sided: you're clearly predicting a crash, so who is on the other side?  Names?  Who'll clean up?

Today, both USD and silver breifly crossed (both from below) their respective 50dma's. Of course, silver fell through its 50dma last week in spectular fashion, while USD has been consistently below under since mid-Jan.  Fun times.


Pale Green Horse's picture

The problem you have with your thinking is when you raise the margins you move the commodity closer to supply and demand price and further from the speculators price.

In other words, there was no reason for oil or silver to be at those prices.

I own physical silver and knew it was over priced and was not buying and am still not.

cossack55's picture

It is not over priced, it is over manipulated. Do the math.

FlyPaper's picture

So how do you determine the supply/demand price for Silver?  No disagreement that its manipulated.  

Pale Green Horse's picture

Since I am a physicist, would you like me to use DE or what? It is simple math, the longs were leveraged beyond their ability to make the margin, the shorts were not. The price of oil and silver has been over priced by speculators, not supply and demand. Once you realize this you won't fall for the parabolas anymore.

You can argue with my economic theory but I will beat your ass on the ground everyday with math. It is what I do!


Ask yourself. who is doing the manipulation? The producers and the consumers or the leverage?


Pale Green Horse's picture

I would say I bet less than 2% undertood what I just said.

Stares straight ahead's picture

Within the document, it is said that one may sign up for future announcements of rate hikes here:

Long-John-Silver's picture

It's like asking the waiter what the special of the day is.

Xibalba's picture

At least now we know what they're short.

Sudden Debt's picture



I could have told you that a long time ago.


Mr Lennon Hendrix's picture


No one is allowed to own oil except the oil corporations.  Got that?

-Your handlers

sdmjake's picture

Thanks Turd ~ That is fantastic.

Al Gorerhythm's picture

Yes, but your avatar is

Mr Lennon Hendrix's picture


Stop fucking with our money!  We don't like our money to be fucked with!

-Barry's handlers

ReallySparky's picture

Turd, that was funny.  I have no idea why anybody would junk you.

tmosley's picture

Sockpuppetmaster with an agenda.

Teamtc321's picture

lol, oh turd. That is

Keri at Bankster Report's picture

I understand that this is satire, but what do you mean by this?  That oil companies are holding up the price of oil?  If this is your intent, then below is my response to you.  If it is not, then below is my rant to people who do think this.

I have heard this so many times, and have yet to see anyone front me some evidence.  Look at the energy markets back to 2000, and then back to 1990.  You'll see what something BIG changed around 2000, and it wasn't that oil companies started.  It was that banks got the ok to open to the prop trading desk and entered the market with 40:1 levered dollars and margin buying.  I'm not saying that oil companies are great, but there are dozens of oil companies and thousands of sources across the globe.  I will say that I have long contended that the biggest oil companies, particularly BP and Dutch Royal Sheel, are not oil companies but rather financial institutions supported by governments, and I would extend that to the OPEC sources, but they make no bones about it being 100% true.  The enabler is the banking machine: banks own everything, and we just keep giving them more.

If I was head of the CFTC, the oil companies wouldn't be the only ones allowed to own oil, but who ever wanted it would not only have to buy, but have to take delivery of it. Yeah, son: you want oil?  Good---take it.  You don't want oil?  Stay out.  Not just oil, either.  The old school would be back....and then I'd "tragically" take a header down two flights of stairs, including a sharp 90 degree turn on the landing, just minutes after meeting with my collegues at the Federal Reserve.  Ain't that a bitch.

monkeys.pick.bottoms's picture

Don't margin hikes ultimately kill the ability to destabilize the market by raising margin requirements? Is it possible that 100% margin means a win for our side? Just sayin...

hedgeless_horseman's picture

I can't spell PhD, but I would say that, hypothetically, you would be correct, if it is done across the board for all capital investments.  Not, however, when it is done selectively.  That is moral hazard.  Nothing more, and nothing less.