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Are The Markets Rigged?

Tyler Durden's picture





 

Despite being found guilty of and fined for manipulations of every other market in the world (from FX to rates to energy), investors small and large continue to play the markets on the basis that they are fair and balanced. Aside from high-profile insider trades; day after day, the oddly high correlations, the obvious spikes, blips, and front-running are ignored... until now. In this brief documentary, CBC asks the critical question "are the world's stock markets rigged?" Amanda Lang concludes "there’s a sense among the general public that nobody seems to be maintaining the integrity of the system." as she highlights case after case "as though everything is rigged!" Conspiracy theory evolves once again into conspiracy fact as the system that's supposed to benefit many, but actually enriches a few.

 

"Historically, the system works because people have confidence in the rules and believe they are treated the same as anybody else.

 

But it’s getting harder and harder to ignore the stories of powerful people cheating the system for their own gain. As the bad apples add up, it gets harder and harder to ignore a troubling realization — “everything is rigged.”"

 

 

 

As we've noted before:

Courtesy of the revelations over the past year, one thing has been settled: the statement "Wall Street Manipulated Everything" is no longer in the conspiracy theorist's arsenal: it is now part of the factually accepted vernacular. And to summarize just how, who and where this manipulation takes places is the following series of charts from Bloomberg demonstrating Wall Street at its best - breaking the rules and making a killing.

Foreign Exchanges

Regulators are looking into whether currency traders have conspired through instant messages to manipulate foreign exchange rates. The currency rates are used to calculate the value of stock and bond indexes.

 

Energy Trading

Banks have been accused of manipulating energy markets in California and other states.

 

Libor

Since early 2008 banks have been caught up in investigations and litigation over alleged manipulations of Libor.

 

Mortgages

Banks have been accused of improper foreclosure practices, selling bonds backed by shoddy mortgages, and misleading investors about the quality of the loans.

 

 


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Wed, 12/11/2013 - 21:00 | Link to Comment JustObserving
JustObserving's picture

Jesus, if you have ask that .... you will next be asking is Obama a liar.

Wed, 12/11/2013 - 21:11 | Link to Comment knukles
knukles's picture

Seriously...

But then again, this is somewhat cutting edge for the Mainstream Propaganda Machine...
But I'll betcha it'll be like an FT article.  Point out all the fucking problems and then suggest bigger government and more regulation.
Ah, the propoaganda of it all!

aka directed history

Wed, 12/11/2013 - 21:35 | Link to Comment SafelyGraze
SafelyGraze's picture

a warehouse in detroit?

a freeking Warehouse in Detroit?

with a pile of aluminum inside?

are you kdding me?

honey, go peek inside comex storage. go poke around nyfed basement.

good grief.

a warehouse in detroit.

oh yeah. forgot. libor. 

hello? want to say a word or two about zirp?

bart freekin chilton.

you gotta be kidding me.

how can I unwatch that bit of video.

 

Wed, 12/11/2013 - 21:37 | Link to Comment SafelyGraze
SafelyGraze's picture

plus, taibbi legitimized that whole piece of nothing.

thanks matt.

thanks a lot.

Wed, 12/11/2013 - 22:03 | Link to Comment Four chan
Four chan's picture

are the markets not rigged?

Wed, 12/11/2013 - 22:04 | Link to Comment strannick
strannick's picture

Silver/Gold Market didnt even get an honorable mention

Wed, 12/11/2013 - 22:12 | Link to Comment Colonel Klink
Colonel Klink's picture

It's because they're supressing tradition.  They have no honor.

Thu, 12/12/2013 - 02:11 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Are markets rig!? Does papal see egestate in boreal forest?

Thu, 12/12/2013 - 03:34 | Link to Comment Deo vindice
Deo vindice's picture

@ strannick

Silver / gold didn't get a mention because the reporters don't have a clue as to the fundamental importance of PMs.

Thu, 12/12/2013 - 11:59 | Link to Comment XitSam
XitSam's picture

<- BTFD

<- Buy Twitter, Apple, Google, Faceboo.  All is well.

Nah, it was because the CFTC, the government agency charged with preventing market manipulation, did not find any silver manupulation.

Thu, 12/12/2013 - 07:23 | Link to Comment doctor10
doctor10's picture

any rational outfit would eliminate a non-performing group-such as the SEC and the CFTC.

Porn-watching while rubberstamping criminal conduct is profoundly insulting to the taxpayer

Thu, 12/12/2013 - 10:26 | Link to Comment The Chief
The Chief's picture

Rigged??? I had a friend that once asked a very old oil man in Texas if the markets were rigged (in the wake of Enron) because if they were, he no longer wanted to trade or participate. The old man said, "Son, what choice do you have? The equity markets are like the ugly girl on the troop ship, they're the only game in town".

Never forgot that one and I laugh everytime I recall it.

Wed, 12/11/2013 - 20:57 | Link to Comment Prairie Dog
Prairie Dog's picture

In a poll of market particpants conducted by the Wall Street-sponsored Fair Markets Assocation, 110 percent of respondents said the markets are NOT rigged. So there.

Wed, 12/11/2013 - 21:25 | Link to Comment johngaltfla
johngaltfla's picture

Is this a serious article? Really? Time to move to Uruguay and smoke the local whacky tobacco to reach that purple sky version of reality. Of course the markets are rigged. GSJPMBACC, etc. wouldn't play otherwise!!!!

Wed, 12/11/2013 - 21:01 | Link to Comment beavertails
beavertails's picture

I love Amanda Lang, she's the golden mole ... lol

Wed, 12/11/2013 - 23:59 | Link to Comment BobPaulson
BobPaulson's picture

+1 to that my friend.

Wed, 12/11/2013 - 21:09 | Link to Comment krispkritter
krispkritter's picture

Something about Sherlock's effluent comes to mind...

Wed, 12/11/2013 - 21:12 | Link to Comment Seasmoke
Seasmoke's picture

if you want to see rigged..........try defending a fraudclosure !!!!

Wed, 12/11/2013 - 21:27 | Link to Comment alfred b.
alfred b.'s picture

 

     It's ok....the Prez was kept in the dark about this too!

 

Wed, 12/11/2013 - 21:27 | Link to Comment kaiserhoff
kaiserhoff's picture

Are the markets rigged?

Doth the Bear defecate upon the woodland?

Wed, 12/11/2013 - 21:39 | Link to Comment Ness.
Ness.'s picture

Doth the Time magazine person of the year wear a funny hat?  Yup  ... and deez markits iz rigged.

Wed, 12/11/2013 - 21:34 | Link to Comment CoonT
CoonT's picture

Is the America of today, the Germany of the 30's? Isn't that what brought Hitler into power; the public's outrage at the corruption of "the money changers," and what they did to the finances of their country.

Do you think a time will come, when America will witness a re-emergence of the Holocaust (like a holocaust 2.0, if you will) but this time they will be the one's initiating it?

 

Wed, 12/11/2013 - 22:01 | Link to Comment notquantumdum
notquantumdum's picture

I [especially] hate to admit it on ZH, but it is still apparently possible for the little guy to trade this [apparently totally rigged] market for a profit, even now, according to my portfolio [for now, until it gets smashed in the future, due to . . . ?].

It just requires [MUCH] more effort than it would have without those A-Holes.  Don't give up, but pay attention.

The little player is almost infinitely more nimble than the big one, if you make the right moves.

(After all, think about it.  Isn't it quite easy to front-run the Titanic before it completes a turn?!!!  ['If only you can see that it is happening -- which can sometimes be a big "if" in the new-normal, apparently.])

Wed, 12/11/2013 - 21:42 | Link to Comment Rehab Willie
Rehab Willie's picture

Canada will be Belgium soon, another battlefield for TPTB.

Thu, 12/12/2013 - 12:41 | Link to Comment general ambivalent
general ambivalent's picture

You mean due to voiced opposition to the black market? Or can you elaborate...

Wed, 12/11/2013 - 21:44 | Link to Comment ThisIsBob
ThisIsBob's picture

If you trade, doesn't matter.  "It ain't the meat, its the motion."

Wed, 12/11/2013 - 21:46 | Link to Comment SweetDoug
SweetDoug's picture

'

'

'

Don't forget!

---------------------------------------------------------------------------------------------------------

http://www.zerohedge.com/news/2013-07-30/jpmorgan-7-billion-fines-just-p...

Date: April 2011

Amount: $56 million

Behavior: JPMorgan was one of several banks called out in a class-action lawsuit for overcharging or wrongfully foreclosing on active-duty military personnel. The company apologized, paid out $27 million in cash, cut interest rates on home loans and returned houses that were wrongfully foreclosed upon.
adual shift to inflation from deflation

Date: June 2011

Amount: $153.6 million

Behavior: The Securities and Exchange Commission sued JPMorgan for misleading buyers by allegedly failing to inform investors that a hedge fund assisted in picking and betting against securities in a collateralized debt obligation JPMorgan had sold in 2007. JPMorgan paid $153.6 million to settle the charges without admitting or denying the allegations.

Date: July 2011

Amount: $229 Million

Behavior: In response to a suit by federal and state authorities, JPMorgan settled allegations that it rigged the bidding process for reinvesting bond transactions that affected 31 state governments. The bank paid $229 million to settle the charges without admitting or denying the allegations.

Date: August 2011

Amount: $88.3 Million

Behavior: Talk about shady dealings. The Treasury Department alleged the banking giant violated sanction orders by conducting transactions with people or entities tied to Iran, Sudan, Cuba, and Liberia. JPMorgan Chase settled the charges and violations by paying $88.3 million civil penalty.

Date: February 2012

Amount: $5.29 Billion

Behavior: JPMorgan and four other major mortgage servicers agreed to pay a combined $25 billion to settle charges with state attorneys general, the Justice Department, and the Department of Housing and Urban Development relating to what Washington Attorney General Rob McKenna called years of “shoddy loan servicing, illegal robo-signing, and faulty foreclosure processing.” JPMorgan Chase’s share of the settlement came to $5.29 billion.

Date: February 2012

Amount: $110 million

Behavior: Along with Bank of America and a few smaller lenders, JPMorgan settled consumer litigation that claimed the banks processed checks by size—rather than by chronological order—so they could charge unwarranted overdraft fees.

Date: March 2012

Amount: $150 million

Behavior: After being sued by pension funds and investors for investing their funds in a risky structured investment vehicle that failed at the height of the global financial crisis in 2008, JPMorgan settled the suit without admitting wrongdoing.

Date: November 2012

Amount: $296.9 million

Behavior: The Securities and Exchange Commission charged JPMorgan with misleading investors about the quality of mortgages that underlay mortgage-backed securities it sold. The bank settled the charges without admitting or denying guilt.

Date: January 2013

Amount: Unclear

Behavior: Ten banks, including JPMorgan Chase, agreed to an $8.5 billion settlement with the Office of the Comptroller of the Currency and the Federal Reserve over “robo-signing” and other alleged abuses of the foreclosure process. The banks were to pay $3.3 billion to harmed borrowers and provide a combined of $5.2 billion in assistance in the form of principal reductions or mortgage modifications. JPMorgan Chase didn’t disclose its share of the settlement.

Date: March 2013

Amount: $100 million

Behavior: JPMorgan Chase agreed to return $546 million to former customers of MF Global Holdings, the investment firm run by former New Jersey governor Jon Corzine that collapsed in 2011. While it did not admit wrongdoing, JPMorgan had been threatened with a lawsuit if it didn’t return the cash that had been transferred from MF Global during the firm’s chaotic final days.

* * *

Today we can add the following:

Date: July 2013

Amount: $410 million

Behavior: FERC accuses JPM of manipulating energy prices. JPM "admitted the facts" it was charged with, but "neither admitted nor denied the violations." Instead of being shut down like Enron for engaging in essentially the same activity if to a more modest degree, JPM is fined $410 million or 0.4% of its annual projected revenue of just under $100 billion.

 

•J•
V-V

Thu, 12/12/2013 - 01:49 | Link to Comment jonjon831983
Thu, 12/12/2013 - 10:27 | Link to Comment rainingFrogs
rainingFrogs's picture

just the cost of doing business.  only ones that really pay are the shareholders.  executives continue to get their bonuses.  until the financial criminals start getting long prison sentences and the profit from such criminal activity gets clawed back plus an onerous fine it will go on.  not much hope of that, of course.  corporate amerika may be run by a bunch of psychopaths, but at least they are rational.

Wed, 12/11/2013 - 21:53 | Link to Comment Downtoolong
Downtoolong's picture

"there’s a sense among the general public that nobody seems to be maintaining the integrity of the system."

Wrong, there’s an obvious, undeniable, disgusting, spit in your face, piss on your head, kick in your gut, and shit on your plate kind of awareness among the general public that nobody even gives a damn about maintaining the integrity of the system.

Wed, 12/11/2013 - 22:14 | Link to Comment Colonel Klink
Colonel Klink's picture

Since you started with italics I can't upvote +1 for truth.

I'll let this post serve as your counter.

Wed, 12/11/2013 - 22:07 | Link to Comment RiverRoad
RiverRoad's picture

Are they rigged? Ever play Ouija?

Wed, 12/11/2013 - 22:18 | Link to Comment ThirdCoastSurfer
ThirdCoastSurfer's picture

There's smart money and dumb money. Smart is institutions, dumb is retail. 

Dumb money comes out of retail broker accounts that are easily identifiable by bots.

"Oh look, some dumb ass with a proven day trade account Fidelity account wants to short JCP with a 5k order, boss!

Institutions take the opposite side of any dumb money bet with a hedge in an attempt to scare the dumb money out.  

"Loan him the shares and buy a call and sell a put against it in a straddle" 

It's like sitting down at "no limit" Texas Hold 'em game against someone with an unlimited bank. 

What ever you bet, they look at your bank and raise because they collect the rake and have the power to force a magin call.

And jut like a poker table, the other seats are filled with institutional players and the game can create a feeding frenzy as they all attempt to out do each other in getting the dumb money to fold.

One last analogy to poker is the expression that: "If you don't who the mark is after 5 minutes of sitting at the table, it's you"   

Wed, 12/11/2013 - 22:46 | Link to Comment notquantumdum
notquantumdum's picture

You are absolutely correct regarding day-trading, in my opinion.  You are either very good at short-term technicals, or you are probably losing money to the market-makers, in the short-term (if not certainly also the long-term), if you day-trade.

'With a little more time-frame in your investment-horizon things can really change to the opposite of that.  ['Assuming you don't get screwed by some other exogenous influence like a central bank, a CEO, or a politician.]

Wed, 12/11/2013 - 22:32 | Link to Comment quasimodo
quasimodo's picture

Paging Captain Obvious. 

This statement below was the cherry on top that actually cleared my sinus cavity after lauging so hard.

Inquiring minds want to know just who the "people" are they refer to?

 

 

"Historically, the system works because people have confidence in the rules and believe they are treated the same as anybody else."

 

 

Wed, 12/11/2013 - 23:10 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

Of course the markets are rigged, they are crazy rigged and manipulated but what are you going to do?  

 

It is the only game in town and you can take either side of any trade so have at it.    Wanna squeeze my short calls in TWTR?  Have fun buying that stock at $50+, hell load the boat, throw a party!  I'll be here, rolling my calls if I have to, all the while collecting premium untill you are finished dicking around and or I hit my profit target and see a better place to use that capital. 

Wed, 12/11/2013 - 23:20 | Link to Comment Bunga Bunga
Bunga Bunga's picture
Are The Markets Rigged?

WTF?No!

There are no markets.

Thu, 12/12/2013 - 00:00 | Link to Comment rustymason
rustymason's picture

Good premise, stupid story. I think this video must be part of the controlled opposition. Warehousing aluminum to drive the price up? So freaking what? What next? Are you going to slam me for "hoarding" plywood in my garage for hurricanes? Frickin' commies.

Thu, 12/12/2013 - 00:56 | Link to Comment Randoom Thought
Randoom Thought's picture

There are no FREE markets. The US stock market prices are run by computers on the other side of every trade. They dictate the  price you can buy or sell at and they are designed to simulate free market dynamics... while still keeping you at a disadvantage.

The obvious conclusion of this is that IF YOU HAVE EVER LOST MONEY IN A RIGGED MARKET THEN YOU HAVE BEEN DEFRAUDED and all you should have to do in a court of law is prove that price is rigged and you should have recourse to have your money returned. A handfull of subpeonas should be sufficient to prove the rigging of market prices.

Thu, 12/12/2013 - 06:16 | Link to Comment FishHockers
FishHockers's picture

If your sitting at the table wondering who the Mark is, Guess What.

Thu, 12/12/2013 - 12:38 | Link to Comment general ambivalent
general ambivalent's picture

Can any of you kids recommend books or articles on manipulation?

And as a side, anyone know about connections between criminal organisations and trading/manipulation (specifically mafia activity)?

Thu, 12/12/2013 - 13:11 | Link to Comment Reader1
Reader1's picture

I thought the Late G. Carlin made this perfectly obvious.

Everything's rigged.

Mr. L. Cohen also informed us Everyone knows the dice are loaded...

Do NOT follow this link or you will be banned from the site!