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Central Bank Buying Of S&P 500 Futures Extended Until End Of 2015
Three months ago, we revealed that - with absolute certainty - foreign central banks trade (and by "trade" we mean "buy") S&P 500 futures such as the E-mini, in both futures and option form, as well as full size, and micro versions, in addition to the well-known central bank trading in Interest Rates, TSY and FX products. The reason for the certainty was that one of the world's largest futures exchange, the CME, was quietly peddling a service geared exclusively to central banks, called the Central Bank Incentive Program, whose purpose was to "incentivize" central banks to provide market liquidity, i.e., limit orders, by charging them 34% less than ordinary customers on every E-Mini trade.
Back then we left readers wondering "the next time you sell some E-minis, ask yourself: is the ECB on the other side? Or the BOE? Or, perhaps, you are selling S&P 500 futures to Kuroda. Who knows: there is no paper trail anywhere, although a FOIA request and/or the discovery from a lawsuit, class action or otherwise, of the CME's central bank incentive program would likely yield some stunning results."
Actually no it won't: it is now a national security issue that nobody have proof that the biggest marginal buyer of equities are central banks themselves. Otherwise, "confidence" in central planning may crumble, even if everyone knows all too well that without central banks, the equity market's artificially propped up prices would be obliterated overnight.
There was one small piece of good news: the foreign central bank rigging (because the Fed is still technically not allowed to buy equity derivatives directly: instead it has been doing so via Citadel) would end on December 31, 2014:
Well, we have some bad news.
According to a modification of the Central Bank Incentive Program, central bank rigging of, well, everything and certainly the E-mini S&P future, will go on for a much longer time, with the revised deadline now going through December 31, 2015. Further, as the CME notes, "The Exchanges certify that the Program complies with the CEA and the regulations thereunder. There were no substantive opposing views to this Program or the proposed modifications."
Of course, there weren't.
It is amusing to note that the CME decided to hike the fee for US Treasury Futures and Options: the central bank demand there must be soaring.
But that's not the only place where the demand prompted the CME to hike rates. It did so with gold as well:

One wonders just what percentage of the total gold trading on the Globex takes place among the world's central banks, if the CME felt compelled to push up the cost per side.
Finally, for those curious to learn more about this program, or if they are perhaps eligible to enjoy preferential "central bank" terms, they should send an email to CBIP@cmegroup.com or contact CME Group’s International Department in Chicago at 312.466.7473. As the CME conveniently advises, "staff at this office can provide you with additional information and assist you through the application process."
h/t @Nanexllc; Source: Modifications to Central Bank Incentive Program. CME/CBOT/NYMEX/COMEX #14-038 and Modifications to the Central Bank Incentive Program CME Submission No. 14 - 433
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YEZIR ---- CONFIDENTIAL http://hedgeaccordingly.com/2014/12/leak-at-federal-reserve-revealed-con...
Contrarian indicator much?
i pray to god that you're not suggesting that the futures markets are contrived???
No he's pimping his blog by copy and pasting a prorepublica article that says the FOMC minutes were leaked earlier in October 2012. I read the entire thing waiting for something interesting and it was all bullshit.
Newsflash - the minutes are released early every month to those in the know - and i'm sure this dude knows that already but he pimps his blog by using the word confedential and posting his link.
you nailed it.. and actually it is not copy paste. it is a liscenced retransmission and there was updated information in the article.
keep pimping your silver. from 37$ in 2012 to 14.15 .
Good sir, my silver is not measured in dollars but in ounces.
I just happen to be the Chairman of the Central Bank of Narnia.
The CME told me I'm only allowed to naked short sell metals futures, not buy them.
Odd set of rules.
Is porcelain king, or perhaps a flush?
Anybody understand where The Fed hides Equity/Equity derivatives in its Balance Sheet? Or is it all "Off Balance Sheet"? With the protracted CB buying of equities, they must by now hold significant portions of the equity markets. Doesn't that also need reporting?
Special set of books for that....
I have always asked myself the same question...if the quasi government central bank owns the majority of publicly traded companies equities then at what point does the state control those enterprises? Please clue me in.
This is exactly why this is so screwed up. they are buying all the assets up under the sun for basically nothing. And think of how many man hours and generations work it to to create some of the companys, say like Proctor and Gamble for instance. These a-holes just can buy it for air. They don't report to no one so you could never know how huge this is, you cant even get info on who these people are but a Bilderburg meeting would be a good place to start. They can steal everything that everyones 401k is invested in. I always knew this would be what they are after as it is the only pool of money big enough to solve their problems. A sneaking dishonest theft of generations of income. Im done with these markets for good.
They already screwed the bond markets up for good by buying most everything out there. It exlpains the straight up ramp since 08 and why all the old traders look at the market behavior in disbelief.This is way outside of any Fed mandate I was aware of. I thought it was a dual mandate to target interest rates and employment. And I never bought the explaination that we need them to determine the interest rate when a free market could value this just fine with demand without their help. CROOKED MOFOS, they own it all. They make money the old fashioned way, they steal it.
Makes me think of that spooky all seeing freaking eyeball on top of the pyramid on the back of their stinkin Federal reserve note. Conjurers and sorcerey for sure.
Well spoken sir.
The BoJ is likely the worst investor/speculator in the history of trading - fade accordingly.
If people had a clue what this was they still wouldn't have a clue what it means
US government contract for ambulance transport of Ebola and highly infectious disease patients?
Iraq denies Lebanon captured wife of ISIS Leader Baghdadi despite daughter’s positive DNA test
France parliament votes in support of recognizing Palestine, Israel says peace process will suffer
Ah ! Harry dent I knew you were correct, only if you could better time it
http://www.amazon.com/Dow-2008-Different-This-Time/dp/1893958701
Wow. So my SPXS is basically fucked. And this is only going to keep going up. So what happens when central banks pretty much own majority positions in pretty much every index? Which they buy with money they conjure out of thin air....
Your SPX (as with mine) will be good when the asteroid hits or the earthquake rips or the nuke explodes. Until then, not so much. Don't buy at the money puts. The far out of the money puts cost less and have the same (small) probability of success.
(Infinitesimaly) small.
Why, every single time stock indices are in a bull market, everybody thinks this time they're not going down.
Why, oh, why, oh why.
When you own everything does the price really matter?
@HedgeAccordingly WE ARE ZH'rs , we're not BOZOS, sheeps, stupid ........
Forward! The Ponzi continues.
Janet Yellen the Federal Resereve banksters will make us all tillionaires.
LOL, just like Zimbabwe.
http://zimbabwedollars.net/products/zimbabwe-100-trillion-dollar-banknote
Dammit, I'd been tempted to buy some VIX lately. So much for that.
I personally like this...alot..Cause when the house of cards comes crashing down not only will they have their Trillions of debt that they can never repay but they will also have their pile of worthless paper to go with it
I have a feeling they won't get hoisted by their own petard, but are actually counting on it. These people have it all figured out now, they win we lose....and even if they did lose they just change the rules in their favor anyway.
Central Bank Incentive program! FUCK OFF!
I like the way you put that. From here, on a clear day, you can see the giant steaming pile of shit that's our Federal Government.
My debt free ass is starting to re-think this entire thing. The best thing to be when this mother fucker slips under the waves would be up to your ass in debt. No one anywhere will ever be able to pay all of this off. There will be a giant reset and forgiveness of debt. In the 80's during the farmland crash....the guys with huge loans that were highly leveraged were bailed out by debt restructuring and are today some of the largest landowners in our county....The little guys with small debt loads lost everything they had when the banksters lined up their equipment and sold them out - and a few brave souls who had this happen to them committed suicide.....instead of walking into the bank and shoving a twelve guage up the banker's ass.
Don't fall for the trap man... i'm also debt free and think the same thots sometime but remember deflation procedes hyperinflation. If we hyperdeflate first those debts will kill you...
So? - you just default. It's not the end of the world, unless you're no longer of working age or have no marketable skills.
I'm starting to agree. Going against the herd has only lost me money.
There's making 'money' (only true if you end up buying gold or silver with your currencies), and there's spiritual righteousness.
One feels spiritually good when not having anything to do with debt.
I agree, and frankly, I don't have it in me to do what I'm talking about anyway.
The bankers, wall streeter's and government cohorts will disappear with their stolen millions or billions. The best we can hope for is there is a God and they will be delt with and remember, forever is a long time.
When things really start to buckle, I fully expect congress to change the laws on BK and debt in general. The little middle class guy/gal will be rolling into the greatest depression with a debt load that isn't repayable where default would result in debtors prison type outcomes (or worse).
Instead of being able to discharge debt and move on, people will literally be asset stripped to nothing and tossed out into the street.
Everyone thinks they are going to shove a militarized police taser up everyons butt however it is really much easier than that (from the elite's perspective).
Regards,
Cooter
I have no doubt you're correct. I expect some sort of National Service program to be instituted to cleanse student loan debt in the very near future. It would be OK at first, but at the start of the next real crisis it would turn into something more like you describe.
"Work makes you Free"; that sounds pretty good. I think I saw that someplace else ?
It was from a hallmark card in the gift shop
Nailed it. There's no way a commoner gets a free pass.
They'll change the laws to nail those holding debt and change the laws to take money from those with assets. No one in the system escapes but those connected. The issue will be is this enough to trigger a real system reset, e.g. middle-class revolt where they simple reject the law entirely.
S&P 500 ties 1929 with 48 record closing highs...
militarized police and armed DHS ..getting ready and trained to choke, shoot the citizen who refuses the liquidation of his property for lack of payment to TBTF banks and loan co's..the recent news of that poor man in NY one thing is missing for many..he was selling tax free cigs..in fact he died/was murdered for non payment of taxes..think what they will do for you deep in debt types who hope for debt forgiveness..ain't pretty.
"The little guys with small debt loads lost everything they had when the banksters lined up their equipment and sold them out - and a few brave souls who had this happen to them committed suicide.....instead of walking into the bank and shoving a twelve guage up the banker's ass."
"the resulting increase in liquidity benefits all Participants.....blah blah"
Yes if you are a participant in the ponzi scheme you get a benefit. How about if you are a common sense individual who thinks stocks are grossly overvalued and part of a giant ponzi scheme.
Then you get no benefit? FUCK OFF!
That, "it benefits all participants" part is what tips you off; it was the same psychological warfare they used selling globalization. As soon as anyone tells you anything "benefits all participants"; you know you're being conned. Did all the participants ask for this ? No. If they were asked if they wanted this would they say yes, No. Did a small group of wealthy assholes decide to do this whether you like it or not, Yes. It never changes.
You are right. The responsible people are always bailing out the irresponsible. The Germans with their strong economy are bailing out the PIIGS. The middle class is bailing out the free shit army and the banksters. Morality doesnt matter anymore. The people who eat sensibly and exercise have to subsidize the people who eat at McDonald's and other fattening foods through health insurance and Medicare.
S&P 500 ties 1929 with 48 record closing highs...
Helluva "market" we got here....hehehehehehe
Fuck it. Im going full retard on spy calls @220 expiring in march or june 2015.
Every move in this universe is full retard. To buy or not to buy is not the question.
what comes after a trillion?
Phat ho don't know bro?
Well, I know that a googolplex is 10^10^100, and the number of atoms in the known universe is approximately 10^78.
DavidC
How many atoms in a cyberdollar?
none
Therefore, the Fed's power is bigger than the universe
Quadrillion,
but don't tell Obola.
Quadrillion
http://www.unc.edu/~rowlett/units/large.html
I hear Mugabe is Jealous now
Hmm, the term "financial repression" comes to mind....
The central banks must be absolutely desperate now.
Please, make this insanity stop!
DavidC
We need Andrew Jackson, or maybe Jesus Christ, With a LashTM, we are in so much trouble.
Help us, we've fallen into a fiat trap and we can't get out.
That this can happen and no one is arrested tells us everything we need to know about the justice system, the economy, etc.
We can't even say we are communist. We are living in a neo-fascist state. The state for the state's sake, because...STATE!
Jesus Christ with three Lashes and an assistant would be a good start.
The system shall not fail.....the spice will flow
so, another year of magical overnight futures levitation...
Oh yeah! Well I wanna go on a crime spree too! Humph! How come I can't go on a crime spree and they can, huh? Huh? Tell me.
I'll get dementia if I try to figure it out too much
can you say price controls thru coordinated central bank collusion?
The military machine is awesome. It figured out how to print it's own cash forever. We will be swallowed in it whole until every last one of us is dead.
the military loves it some silver. why do you think the ASE's are minted at West Point? Because their major silver vaults are nearby. They want it cheap and its considered national defense to have a safe flow of cheap silver flowing from the miners to their vaults. Military grade machinery & weapons technology is loaded with silver.
THIS. IS. VILE.
Buying up equities, futures, whatever the fuck. CBs are buying everything up and manipulating the hell out of it, and no one gives a shit cuz they don't know what a central bank is/does, let alone what a regular bank is/does.
Physical under the mattress or not, I don't see outlasting the central bankster to make it worth anything.
Sometime the tunnel has no light at the end of it, sweet dreams.
Is this why China builds empty cities?
I'll bet the BoZ is #1 (Bank of Zion)
The serfs are wising up/
Bank of Israel - Press Releases - Report on the Investment of Israel's Foreign Exchange Reserves in 2012
Holy shit. DOW 30,000 here we come. Unreal.
this looks like a frontal strategy to take business (volume) from the dark pools and move it to the exchanges.
it reads like CBs get a discount on fees - not entirely fair, but how is this an incentive to buy more?
what this reads like is an incentive for CBs to bring their volume to the exchanges and away from the dark pools
f'ing psychopaths
I'm happy everyone is getting along.
Oooooooooooooooooooooohh......... those psychopaths
Umm, I'm not an economist or anything - but don't these these purchases require an eventual sale, or what's the fucking point?
Hellur? Moar printing. Say it with me. Mmmoar prrintinng! Sales are for fools.
No, seriously. If all this fiat vaporizes with the great reset, these indices vaporize too. I see only pitchforks.
Red roses too....
And I think to myself, what a wonderful world...
You'll be fighting the Feds knowingly or otherwise.
Which part of the term CENTRAL COMMAND is not clear enough and needs further explanation at this point?
All I can say is since Jesus Christ Himself hasn't showed up by now to put an end to all of these evil shennanigans, then I'm afraid my worst nightmare is coming true. Lucifer is in complete control....and right at Christmas time. How fitting.
Thery are just stories mate. Terribly contrived stories that you have been indoctrinated with. Just ask yourself, what would a world without a god be like. Chaotic? Brutal beyond imagination? Full of suffering? Overrun by greed and corruption? Now where does this sound like?
So" hold on to your physical and play the stock market for another year ...
oh god, this never ends does it !? five years i've invested of my life in this crazy story; five whole years & i'm still here (but, with less teeth.)
Few in power really care what negroes think or do. But if equities based retirement accounts start taking a hit - well, thats a whole different crowd.
The article talks about it as if the central banks are independent entities. They are not. The Fed is the BOE is the BIS.
The manipulation and control of markets and the required fiat creation is simply central bank masturbation twisted through the media to look as if there are independent actions.
If the bank called all of its loans it would own everything ... but it could not hold it.
The exchanges and the regulators are tied together with one string – the overwhelming power of the Federal Reserve. And this includes the CME Group which is an operative of the system, a system completely dependent on the owners and architecture of the monetary system.
Their program does not have a future.
The banking cartel of Goldman Sachs, JPMorgan, et al. - the Fed - is getting marked as a criminal activity. I even see it on Huffington Post from time to time. The TBTFs are no longer considered a civic entity for the public good by millions of people; the people can’t miss their criminality. It’s too clear.
And this thing about the stock market going one direction and the economy another with the market dependent on printed money also is clear. The good news is that knowledge of this plunder is now widespread.
The bad news is, as Frederic Bastiat would say, everything the Fed does is legal plunder, all done in accordance with the law perverted.
You see, many of these people write the laws.
G. Edward Griffin notes that sometimes he hears people say, “Well, they audit The Federal Reserve.” Or, “Do you know that The Federal Reserve has never been officially audited by an independent agency?”
And Griffin replies: “I don’t care if it’s audited. I don’t want to audit The Federal Reserve. I want to abolish it. Because I know that if they were to audit it, they’d find that The Federal Reserve was doing exactly what it’s supposed to be doing according to the law. Everything is legal. They’re stealing your money and mine legally.”
How does one identify legal plunder?
Wrote Bastiat in The Law: “Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
“Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law… is not abolished immediately, it will spread, multiply, and develop into a system.”
To repeat: Abolish the Fed!
My question is why did it take till now for CB's to do this? why wasn't this done decades ago? So I'm assuming say the Bank of Japan bought say the SP futures up to 2200 then since it's here, the BOJ account now has a huge gain, then if another 10% selloff they buy back up to say 2400 and have a huge gain again, I assume this could go indefinitely.
"I assume this could go indefinitely".
Eventually the sun runs out of nuclear fuel so your assumption is way off.
It's called sarcasm
A guy with a screen name "BringOnTheAsteroid" said that to you. Might be sarcasm as well. He is sort of obligated to act out his space-o-centric identity.
Ditto. See what happens when people don't use sarc tags. Chaos ensues.
I just want to be around when it all goes BUST!...
And what will we do then?...Got the "precious"?
Just think of it like the government debt ceiling. When they hit the limit, they just move the limit.
At least in this case we don't have to listen to Congress babble about it for a month before they do it.
Nah, I think definitely this time the US government is good for the current debt limit.
This started in 1987 and will never end. As before there will be periodic sharp declines, so dollar-cost averaging will remain a poor strategy as little stock will be purchased in the brief but sharp decliines.
Just so everyone is clear.
This is how Stalin's Soviets, Mao's China and Hitler's Germany ran things.
Never you mind about all new overnight laws, regulations and temporary emergency fixes government regulators, advisers and other Deep State wonks push out their collective sphincters.
The Fed is running the entire country like China's Great Leap Forward.
Nobody gives up that kind of power voluntarily.
Only a calamity will ever "normalize" these so-called markets ever again.
The fascists won.
Consider 2015 to be Year One and plan accordingly.
Nobody is coming to your community's rescue.
The only exit strategy is to cannibalize and liquidate what little you personally can. This is open up a period of sustain contraction and more people head for the hills.
Any businesses in your county adding real jobs that support a family. That is your test.
I have but one up vote to give, I regret.
I am trying to figure out what to do with what I know. I'm trying to get my Zen on, bigger, more, deeper. Empty out. Give these assholes nothing. Apparently I ain't there yet.
No Hope.
No rescue.
No point.
No worries.
That's where I have gotten with it.
We have a solid economic market, we just need to bring in 5 million more slaves to join the free printing Quantitative Sleezing press extravaganza.
This is the zero hedge that comes to mind' . Wonderful people arguing fantastic intelligent ideas.
Fight Club / Bitchez
Hope your doing well. Bests wishes to your family.
This seems like Americas version of operation twist. Instead of swapping new debt with old debt, they are just monetizing the bad news in the economy to make whatever they need to work. Next thing you know they might consider buying gold!
This also reminds me of what some hedger said recently about the central banks having there own fight club.
It's called Paper Street Stock company
When they own and/or control it all, then they'll crash it. Afterwards war, violence and pestulance will be the order of the day. They will own you, body, mind and soul. Satan himself has nothing on these ministers of death. Probably the end of this civilazation and possibly the end of life for several millenia.
Yep, human kind is a real piece of work. Makes you proud... No?
Those of us who are aware of the economic plunder taking place (we know who they are) are outraged. It seems we are being diluted by a closely held entity of "insiders" who make the rules for this act of dissolution aren't we? There are far too many legitimate stakeholders coming to this realization and the numbers are growing exponentially, just wait. Why am I reminded of the years of "foreign aid" so much of which was skimmed off by one ruling puppet or another only to be re-invested in large real estate properties in the safe haven of major U.S. cities? The new twist is losing the foreign aid gig and working the new money conduits directly to banks (as if they weren't big players in the foreign aid scam of old).
The buy algos are programmed to not let the market go red when it's open and not let the futures go red when it's closed. Amazing to watch day in and day out.
"All non-US Central Banks may apply for participation"
Well that explains the trillion$ sent to foreign central banks by the US Fed during the bailouts...
July 2011
Fed Audit: Trillions For Foreign Banks, Conflicts of Interest
The Fed AuditWhich explains why the market didn't drop after the Fed ended its QE. Maybe the decline has been put off for a bit.
So, another conspiracy theory that even Zeroehedge wouldn't touch on only few months ago, just proved me correct...........again
ekm1, you are one of the very few commentors I follow on ZH. Keep up the excellent posts.