Did Someone Intentionally Try To Crash The Crude Contract?

Tyler Durden's picture




 

We have noted the incessant slamdown in the precious metals markets, and highlighted that the only thing that can slow the flood of liquidity into each and every market is a rise in energy prices. The former represents 'trust' in the system; the latter represents 'real economics' as it squeezes the global economy forcing the central banks to pull back or tighten (see China's lack of rev repo recently). To wit, we just noted the plunge in WTI this morning; but Nanex, given their depth of data, noticed something considerably more concerning... "Because the circuit breaker tripped after the market had somewhat stabilized, we think another large sale appeared that would have decimated prices - which CME's circuit breaker logic picked up on, causing the halt." Did someone intentionally try to crash the WTI Crude contract? And if so, who? We don't know, but the usual suspect (singular) does emerge, considering that with gas prices hitting new February daily record every day, and every dollar in increase in WTI means even less (seasonally adjusted) GDP, and less consumer purchasing power, those evil speculators who are taking the Fed's free money to buy commodities (and very unpatriotically not the S&P or Russell 2000) must be promptly punished.

Via Nanex,

On February 20, 2013 at 11:01:36, the April 2013 crude oil futures contract was hit with over 2500 contracts within 2 seconds sending prices sharply lower. Oddly enough, 12 seconds later, all CME oil futures contracts halted for 10 seconds. Because the circuit breaker tripped after the market had somewhat stabilized, we think another large sale appeared that would have decimated prices - which CME's circuit breaker logic picked up on, causing the halt. This large ghost sale must have been canceled before the 10 second halt ended. Another explanation is a software bug in CME's circuit breaker code, which we doubt because they have had great success with their circuit breaker logic.

 

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Wed, 02/20/2013 - 14:03 | 3260215 Confundido
Confundido's picture

Lennon....read yourself....you are simply expressing wishful thinking. Simple tautologies...Accept the fact that from time to time, if not always, the evil forces win.

Disclaimer: I am long gold up to my eye balls.

 

 

Wed, 02/20/2013 - 14:09 | 3260236 tecno242
tecno242's picture

haha.. and i'm the one that doesn't know what i'm talking about.

all commodity charts currently have the potential for some sort of deflationary event occuring.. although i'm not sure why.

if a deflationary event occurs... stocks and commodities will get hammered.  Your balanced book theory wouldn't mean jack..

for a very recent example.. the 2007 crash had the potential to be very deflationary.. as a result the stock market crashed and gold went from 1100 to 700.. right to the point where the FED took extraordinary measures printing massive amounts of money and switched gears from deflationary to inflationary.

I can't tell you why quite yet... but commodity charts are indicating the potential for a deflationary event of some magnitude.

I can tell you this much... if gold breaks 1500... Tyler is selling it.

Wed, 02/20/2013 - 14:10 | 3260254 fonzannoon
fonzannoon's picture

Then gold is just preceeding the huge crash coming in stocks. There is no way stocks get out of this unscathed. That brings the fed in to do massive additional QE and round and round we go.

Wed, 02/20/2013 - 14:13 | 3260271 tecno242
tecno242's picture

you are assuming that the market never changes it's opinion of the effectiveness of QE

if a big QE announcement ever fails to create the expected reaction.. from that point the FED is neutered and loses

Wed, 02/20/2013 - 14:17 | 3260301 fonzannoon
fonzannoon's picture

I personally think the fed does not want to risk getting neutered. They will not announce additional QE under any circumstances. It will be back door bailout after back door bailout from here until the day it's all over.

Wed, 02/20/2013 - 14:22 | 3260323 tecno242
tecno242's picture

they can back door bailout all they want..

if they lose control of rates and market reaction.. they can do nothing but watch

there would be a massive hoarding of cash as all assets fall, including bond prices, all at the same time.  Velocity of money will plummet therefor it wouldn't matter how much you intend to print.

 

Wed, 02/20/2013 - 14:57 | 3260494 SDShack
SDShack's picture

Never underestimate the ability of the Fed and Govt to do ANYTHING to protect themselves. Unlimited QE is the mildest remedy they will use. If the SHTF like so many say, and the barbarians are truly marching on Washington, then it will be Greece*Infinity, except the protesters will all be armed. That is why the Fed and Govt will stop at nothing to protect themselves. Drones will be the least of our worries. They will suspend all basic rights of assembly, search and seizure. Private ownership of gold will be outlawed. Gun right will be severely restricted or eliminated. Basically,  the govt will stop at nothing to protect itself and will sacrafice every citizen to do so. Sadly, many citizens will be sheep to the slaughter. 

Wed, 02/20/2013 - 15:37 | 3260715 The Heart
The Heart's picture

"Sadly, many citizens will be sheep to the slaughter."

This is a strange kind of a calm before a storm?

Purim comes on the 24-25 and it just seems weird that there are these kinds of distractions happening to take the attention away from what may be happening RIGHT NOW in the ME. Who is preparing to do what?

http://www.zengardner.com/purim-why-war-on-persia-iran-could-start-march...

It seems that the babylonians are losing control, and more and more people are seeing the wicked money god beast for what it is. The one eyed, one legged retarded inbred chicken with a switch blade and it's finger on the button is trapped in the corner with a dozen 12 gauges aimed at it's pointed head. What will it do? That evil chicken that hates all of you is so tricky, and desperate. Dangerous waters we are approaching we are. Soon, it could come. Another False Flag Event to retake the control using evil Hegelian methodologies to attain the death and total lock down of the nation of the free and brave.

 

 

Wed, 02/20/2013 - 18:26 | 3261378 Bandit und Buster
Bandit und Buster's picture

 

Synagogue Rising   .... www.synagoguerising.com

Wed, 02/20/2013 - 23:55 | 3262208 The Heart
The Heart's picture

Correction:

Purim is on 23-24.

Because it is on a Saturday, the celebration is then held on the Thursday before. That would be the 21st, tomorrow!

So, 21, 23, 24, or when? The Monday after? Will Isreal strike Iran soon?

Is this why the fear factor and sell off is happening?

Tick...tock...

Wed, 02/20/2013 - 14:44 | 3260430 akarc
akarc's picture

"and that is why Central Banks have been loading up for the last few years."

Then they are getting or missing a hell of an oppourtunity.  1550 would be a bit scary. Seems to me a perfect oppourtunity for some country to rush in and be the one to own the most.  

Golds been acting wacko of late. The Fed trying to push the markets and the house doing their best to save the 2% that create all the jobs and where the fuck is the inflation???

I'm having a fuckin panic attack. What would I do w/ my gold? Buy butter? Who the fuck is gonna have any butter?

And ammo is getting scarce.

As a friend of mine said a while back.  Wait until the crowds in the big cities start heading for the country side!


Wed, 02/20/2013 - 15:01 | 3260517 tecno242
tecno242's picture

what u would do is relocate to a country with a stable localized economy (if one existed) and trade your gold there for the local currency

Wed, 02/20/2013 - 16:25 | 3260919 The Heart
The Heart's picture

"what u would do is relocate to a country with a stable localized economy (if one existed) and trade your gold there for the local currency"

And now, more and more all over the country people are asking just where is such a place that the babylonian banksters don't already have a controlling central bank at? North Korea and Iran? It has destroyed most countries already, set up china to be the next world's money engine, and now hungrily hounds to destroy the last somewhat free country, the USA. The whole chicken-pot pie is quite the amazing story even just seeing some of the dominoes that have been set up to crash the rest of the story, upon a Friday's ticking.

Lets see, Iran is about to be attacked possibly, and so is NK maybe. Now, where was that place to go? And where is it safe to be when all the fallout hits? Who is east of Iran after say God forbid, some sort of nuklear event happens? Just one small one. Ask, who is east or north, or even west of the fallout that will surly have it's way in the winds making fukushima look like a picnic in the dark park of death? Does anyone ever think about these things when it comes to profits, and the sustaining of ones own human life experience? Any third grader knows, that the fallout will absolutely effect every soul on board. No one will escape the initial hit or...the following hits.

If you have not seen this movie and completely grasped the deep meaning, you should.

http://www.youtube.com/watch?v=upg2eqNbF3w

Choice! The Creators greatest gift to each individual heart on board. Every single one has a vote. Total annihilation, or world-wide peace and plenty?

Choice!...please use it well.

Wed, 02/20/2013 - 15:11 | 3260583 Not Too Important
Not Too Important's picture

'Wait until the crowds in the big cities start heading for the country side!'

Not if they can't get the gas. Long suburbs!

Or at least until the food runs out . . .

Wed, 02/20/2013 - 16:00 | 3260821 The Heart
The Heart's picture

"Wait until the crowds in the big cities start heading for the country side!"

One tank of gas will be about the size of the diameter around most big cities that will fall into the chaos the babylonians have long been preparing for. There will be the road blocks and death pits that many will make a frantic dash to, and find the end of the road at.

Watch out for what comes on any Friday that can be the triggering event?

We all just witnessed on the big cruise line boat a live-lab sample of how fast society can break down into primal conditions, thus testing the real core essence of one's spiritual center. What the future holds for many is to be on one of two sides. Those who will eat, and those who will kill to eat. The god will become the stomach, and all that will matter is the scavenging for food and safety. The evil babylonians will use food as a weapon against the people they are setting up to be too poor to feed themselves already. In the first months, the babylonians will be slow to respond so as to let the populace chew themselves up first. After the slow to a crawl commerce on the roads ceases, and the well orchestrated depletion of the supply chain happens for months, those who have survived up to that point will be given the choice to come under the killing umbrella of the govt with GMO nano-chip laden food to offer for compliance and conformation to the new world order of the cashless society for the profiting corporate banksteronians all across the globe, but mostly in London.

Wed, 02/20/2013 - 16:54 | 3261052 ImReady
ImReady's picture

But, But... the FOMC said they may be looking at an exit strategy

 

 

 

Wed, 02/20/2013 - 14:01 | 3260208 fonzannoon
fonzannoon's picture

tecno no one who actually owns a real ounce of gold gives a shit anymore. $1500, $1100.....$500...

They will buy more, You are watching people flipping paper contracts.

The miners are the most interesting to me. They are getting shorted to death.  They actually create supply.

My guess is the US is causing a crash in gold so that they can get some sheep to dump physical so they can hand Germany a pile of gold jewelery that the sheep dumped.

Wed, 02/20/2013 - 14:11 | 3260261 tecno242
tecno242's picture

ironically... if you hold tons of gold.. you are betting that the FED wins

other than that.. you are only creating a SHTF guns and butter reserve.. which i'd rather have guns and butter.

Wed, 02/20/2013 - 16:34 | 3260963 Village Smithy
Village Smithy's picture

But guns and butter and gold would be best.

Wed, 02/20/2013 - 13:56 | 3260180 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If the Teams of POMO, internationally I might add, continue to try to make the markets, they will break them. 

Reality will trump magic at the end of it all.

Wed, 02/20/2013 - 14:01 | 3260207 Confundido
Confundido's picture

The question is....will you be still alive by then?

Wed, 02/20/2013 - 14:00 | 3260202 Downtoolong
Downtoolong's picture

Don't tell me, Corzine is back in the game.

Wed, 02/20/2013 - 14:01 | 3260203 Confundido
Confundido's picture

Why would precious metals also not halt trading at 2am, 4am, 8:20am, 10:30am?

Wed, 02/20/2013 - 14:03 | 3260218 Hongcha
Hongcha's picture

California is basically at $4/gallon right now ... this is the nose-above-the-waterline level ... if it goes on to $4.25 or merely just hangs above $4 a high-pitched signal starts in the immediate atmosphere ... never mind the crushing $3.50-3.80 that they are trying to condition people to accept ... they need to drop it back there ... SPR reserve release rumor in the wings?

Wed, 02/20/2013 - 14:59 | 3260504 SDShack
SDShack's picture

Gas is $4.19 to $4.39 a gallon here in SoCal right now. If nothing changes, it will be $5+ this summer. No way the economy can sustain this.

Wed, 02/20/2013 - 15:38 | 3260719 steve from virginia
steve from virginia's picture

 

 

 

Sorry kids,

 

Auto-centric Cali is in the Peak Oil cross-hairs. Too bad they ('They') got rid of the Red Car.

 

This is how it goes ... it starts getting worse as time passes. Eventually there are physical shortages and rationing. Coming to a suburb near you.

 

Wed, 02/20/2013 - 17:29 | 3261183 Ident 7777 economy
Ident 7777 economy's picture

 

 

Hongcha:

 

" ... SPR reserve release rumor in the wings? "

 

As a move to threaten crude-supply contract chasers? 'cause supply would not seem to be the issue (the SPR is not refined product) 

Wed, 02/20/2013 - 14:06 | 3260231 DUNTHAT
DUNTHAT's picture

AAAAAAAAAAAAHHHHHHHHHHHHHHHHHHhhhhhhhhhhhhhhhhhhhhhhhh!!!!!!!!!!!

Smell the M A N I P U L A T I O N.......

Wed, 02/20/2013 - 14:07 | 3260242 batz
batz's picture

 

 

 

Seriously, does nobody on Zerohedge have a feed to see what participant originated these orders? Come on, I thought this was a financial news site. Maybe that's where I'm wrong.

 

Wed, 02/20/2013 - 14:22 | 3260322 Central Bankster
Central Bankster's picture

It helps when the users know what they are talking about. 

Wed, 02/20/2013 - 14:44 | 3260428 batz
batz's picture

 

 

 

By, "know what they are talking about" do you mean, "has written a parser for said Nanex data feeds?" Because if that's what you mean - and you haven't, and I have - then by all means, go fuck yourself. 

 

Wed, 02/20/2013 - 17:31 | 3261194 Ident 7777 economy
Ident 7777 economy's picture

 

 

 

batz:

 

Seriously, does nobody on Zerohedge have a feed to see what participant originated these orders? Come on, I thought this was a financial news site. Maybe that's where I'm wrong. "

 

My thought too ... in lieu of that info, we need a 'leaker' to reveal the source of the sell order ...

Wed, 02/20/2013 - 14:17 | 3260245 darteaus
darteaus's picture

It's a cash-out:

 

1)  Smash the price of PM & WTI,

2)  Trade cash for all you can get your hands on, and

3)  Let inflation out of the cage.

Wed, 02/20/2013 - 14:13 | 3260267 SDRII
SDRII's picture

EIA says US to Surpass Saudi Arabia production. And Russia in Natgas = shaping the battlefield. Add to it the EIA talking up the Cushing unlock coming to a theater near you soon...

IMF Warns on Saudi deficits.

Saudi Aramco cyber attack comes days after Saudi media says would shoot down IDF overflight

If you didn't know better, you might be mistaken in thinking someone wasn't trying to "shape the battlefield"

 

Wed, 02/20/2013 - 14:14 | 3260280 Eternal Complainer
Eternal Complainer's picture

It's just like the old Wild West where anything goes and everything criminal is the law of the land.

Wed, 02/20/2013 - 14:20 | 3260309 SillySalesmanQu...
SillySalesmanQuestion's picture

You hang on Missy...we go for a ride!

Wed, 02/20/2013 - 14:30 | 3260357 Orly
Orly's picture

Why do I have the feeling that something really big just happened?

Wed, 02/20/2013 - 14:49 | 3260462 akarc
akarc's picture

cause it is still happeniing?

Wed, 02/20/2013 - 17:16 | 3261127 fuu
fuu's picture

1564 by the end of Feb it seems, nice early call.

Wed, 02/20/2013 - 18:53 | 3261450 Orly
Orly's picture

Nah...something BIG. Like we can't even see it yet.  A sea change.

Wed, 02/20/2013 - 18:59 | 3261454 fuu
fuu's picture

Ok but I was just giving you props where props were due. I have no opinion on something wicked this way comes.

Wed, 02/20/2013 - 20:53 | 3261776 Orly
Orly's picture

Thanks but for what it's worth, yesterday I called for a reversal.  That's why I think something just happened.

Fed turned off the spigot to the European banks, maybe?  I guess we'll find out in about a week.  Somebody knows something somewhere.

:D

Wed, 02/20/2013 - 14:45 | 3260436 MountainMan
MountainMan's picture

One day per week of this action would be perfect!

Wed, 02/20/2013 - 14:47 | 3260449 nobusiness
nobusiness's picture

Do they ever Halt a stock on the way up?

Wed, 02/20/2013 - 14:54 | 3260484 bugs_
bugs_'s picture

Hello this is the JPM Contract Crashing Desk...

Oh its you....

Uh huh....

Yeah...

What do you mean wrong contract????

Wed, 02/20/2013 - 14:57 | 3260502 adr
adr's picture

So if oil jumped $10 would trading have been halted?

Wed, 02/20/2013 - 17:33 | 3261203 Ident 7777 economy
Ident 7777 economy's picture

... again, (RTFM) it was a follow on sale that triggered the breaker (during the halt the trade/sell was cancelled was my read) ...

Wed, 02/20/2013 - 15:04 | 3260527 earleflorida
earleflorida's picture

'as man walks through his life, he stumbles upon truth... then glorified bleached truths, and next onto lies, damn lies,and statistics, moving along he find himself in a delusional state, when finally reaching his wits-end, he realizes that a daily dose of a nostrum self-induced amnesia panacea is best for  his menial existence... as he trips upon his serendipitous equilibrium, only to find the downhill path of old age a tether-torn acquiescence meshed with a soulful  acquittal-- resting amongst the thrones a post'd sign appears, reading,'to old to soon... too smart to late', as he quietly laughs himself into a twilight slumber'    

just musing... 

Wed, 02/20/2013 - 18:46 | 3261418 Bandit und Buster
Bandit und Buster's picture
  • Or in Deutsch,   'Too soon alt, too late shmart!"
Wed, 02/20/2013 - 15:13 | 3260598 Soph
Soph's picture

...and we didn't see the collapse after the halt why, then? Clearly its got to be multiple shooters then, on the grassy knoll, and they need time to reposition to get a good shot.

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