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Deutsche, Barclays FX Algos Busted For FX Rigging
First it was humans. Now it is vacuum tubes.
Having quickly learned that letting carbon-based traders engage in FX (or stock, or bond, or Libor, but not gold, never gold) rigging usually leads to said carbon-trader ultimately being fired with the bank suffering a violent slap on the wrist, banks are getting smart, and have - as we have been claiming for about 4 years - decided to let pre-programmed algos do all the market manipulation. Only this time it is not some tinfoil blog making this accusation, but New York regulators who according to Bloomberg, have found evidence that Barclays Deutsche Bank may have used algorithms on their trading platforms to manipulate foreign-exchange rates, a person with knowledge of the investigation said.
As Bloomberg reports, the practice suggests there may be a systemic problem involving automated tools that goes beyond individuals colluding to rig currency benchmarks and take advantage of less sophisticated clients.
Whatever tipped them off: was it looking at any given Yen cross for about a minute and seeing the now surreal stop hunts that take place on a constant basis as algos outrig each other in attempts to pick the pockets of any human fools who still think they have a chance in yet another rigged, manipulated market.
The algorithms’ use is being scrutinized by the New York Department of Financial Services, said the person. The investigators are looking into the practice at each bank and it isn’t clear if there’s a link between the two, according to the person, who asked not to be named because the matter isn’t public. The algorithms were embedded in Barclays’s BARX trading platform and Deutsche Bank’s Autobahn system, according to the person.
The two services provide electronic marketplaces for the banks’ customers to trade currencies. Rather than directly matching one client’s buy order with another’s request to sell, the systems aggregate all requests from the banks’ clients to create prices that are displayed to customers. The banks profit from the spread or the difference in the price at which currency is sold and bought.
Not surprisingly, Autobahn, which is offered to Deutsche Bank’s companies and institutional investors, was ranked top in a market-share survey by Euromoney magazine earlier this year (Euromoney also awarded the bankrupt Bank of Cyprus the award for Best Bank in Cyprus for 2011). BARX allows customers to trade more than 80 currencies, according to the London-based bank’s website.
Ironically, both Deutsche Bank and Barclays were not among the six firms that agreed to pay $4.3 billion to U.S., U.K. and Swiss authorities last month in the first settlements in the global probe. London-based Barclays dropped out of negotiations on the eve of the announcements after DFS Superintendent Benjamin Lawsky balked, viewing the penalties as too lenient, people with knowledge of the talks said at the time.
Of course, the foreign banks thought that with a few good human traders fired, the algos could continue their rigging unobstructed. Yet someone appears to have tipped off Lawsky to the full extent of just how manipulated the FX market is.
Which means that New York regulators are now losing sleepless nights thinking of the best way to throw an algo in jail, because clearly none of the humans who programmed it are guilty of anything. Remember: when an algo is caught rigging markets, it is a "glitch."
Oh, and we emphasize the phrase "foreign banks" above because while we applaud the NY regulator's push to "fix" rigged markets, we can't help but wonder why not a single US-based bank has fallen in the crosshairs? Could it be that there is just too much lobby spending on the line to keep lady justice interested in what the objective truth is?
But while this diversion is a welcome attempt to create the illusion that regulators are "on top of things", nothing will change when the biggest manipulators happen to be the central banks themselves, either acting alone or in coordination with Citadel.
Finally, while absolutely nothing will change in the US, one person who has clearly had enough with rigged FX markets - be it by humans or vacuum tubes - is none other tha Vladimir Putin:
- RUSSIAN INVESTIGATORS PROPOSE MAKING FX SPECULATION CRIME: TASS
- RUSSIA MAY MAKE FX MKT MANIPULATION, INSIDER TRADING A CRIME
Because when the west is a rigged grouping of insolvent banana republics, it is up to the former banana republics to acknowledge that the biggest criminal syndicate in the "new normal" are the bailed out banks themselves.
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The machine devil made us do it.
finally, a way to put someone, pardon, something behind bars
....
"Oh, and we emphasize the phrase "foreign banks" above because while we applaud the NY regulator's push to "fix" rigged markets, we can't help but wonder why not a single US-based bank has fallen in the crosshairs? Could it be that there is just too much lobby spending on the line to keep lady justice interested in what the objective truth is?"
of course no US-based bank would ever do something like that. they are known for their high standards. kudos to the author. it's always those "damn foreigners"
Jail for the computers. Nail gunning would be acceptable too.
Well good, now at least they can maybe send vacuum tubes to jail. Or are they too big to jail too?
If they are working they are closer to a hot potato which would lend itself to not going to jail because they can't be picked up.
The defense will claim that the effects were not permanent, merely transistory.
I think this is just the next step along the way. Those civil asset seizures are cases against the money or item being seized and not against the person holding said items. Now they are jailing algorithms rather than the creators thereof? It was the sheep's fault when ZH member sheepfukker was up to his usual shenanigans. It's never us people!!!
Silicon makes everything better.
Love that ass.
And I don't even mind the morning aches and pains anymore cause that's just part of life now, and besides I can't sleep at night without a full workout.
I pull the trigger ..... the bullet does the time.
Result.
https://www.youtube.com/watch?v=9QiN0zzqHEc
"For the crime of 1st degree aggravated market manipulation, I sentence you to be F-disked at a State Correctional facility by a member of Geek Squad."
Beat-down on Block C.
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&...
Manipulation - an economic weapon of mass destruction.
Brought to you by the US and UK, divisions of the Goldman Sachs group of companies.
Well yea.
This is like busting one college for atheletes taking/not taking, courses in reading, writing, and 'rithmatic. Or picking on 0care and executive memos as if that is the only fraud in our government, or faux rape, or faux racism, or faux IRS, or faux budgets, or faux data, or just about everything. I'm finding I'm having to channel Dennis Miller more often these days, "hey, it's fucked up and there is nothing you can do about it, so live it as best you can".
I'm beginning to think the rot is so deep, we, as a nation, may not recover, without a combination of Mad Max/Hunger Games types of chaos.
There are fewer places to hide from this madness, speaking as a sheeple.
C:\>CD WINDOWS
C:\WINDOWS\SOME
C:\WINDOWS\FOLKS
C:\WINDOWS\GOT
C:\WINDOWS\RIPPED
C:\WINDOWS\OFF
Do algos dream of electric sheeple?
Now even the machines are getting prosecuted!?! That's it this planet blows!
It's endemic. Nothing can be done now without the market collapsing.
I had predicted Barclays to be the next Lehman, the next sacrifical lamb.
My prediction may come true, soon
why them ,specially when this is a Illuminati bank ?
more details please
They'll be prosecuting guns soon and not the people holding them.
the gun manufacturers
We can only hope...we can only hope...
(But then there will be no more of TPTB. Surely some ZHer's gun doesn't like TPTB.)
Meanwhile . . . ( at occupythesec.org )
Quoted and cross posted from Occupy SEC website.
I really don't understand all the fuss and bother of passing these acts and ammendments. The bankers pay no heed what-so-ever to any of these "laws", so why bother watering them down???
MESSAGE TO THE FED / ESF / Treasury / Pentagon ..... & Jim Rickards ;-)
RUSSIAN INVESTIGATORS PROPOSE MAKING FX SPECULATION CRIME: TASS
Although the word "FIXING" was not included , it should be.
I cant breath!..... No wonder, it's because im in a vacuum...
Bankers don't rig markets, algos do!
And why would anyone ever think that "stop hunting" would go away with machines? Banks, hedge funds, and large traders for decades have always profited from running stops [buy and/or sell]. Nothing new here Sheeple - run along and watch "Dancing With The Idiots" while I trade these "rigged" markets for profit.
www.traderzoo.mobi
The Fed actively manipulates gold via the Globex system. The Globex market is punctuated with periods of “quiet” time in which the trade volume is very low. It is during these periods that the Fed has its agent banks bombard the market with massive quantities of gold futures over a very brief period of time for the purpose of driving the price lower.
Here are the other most common times when gold futures are sold during illiquid Globex system time periods:
– 6:00 p.m NY time weekdays, when the Globex system re-opens after closing for an hour;
– 6:00 p.m. Sunday evening NY time when Globex opens for the week;
– 2:30 a.m. NY time, when Shanghai Gold Exchange closes
– 4:00 a.m. NY time, just after the morning gold “fix” on the London gold market (LBMA);
- 2:00 p.m. NY time any day but especially on Friday, after the Comex floor trading has closed – it’s an illiquid Globex-only session and the rest of the world is still closed.
LOL, banksters pay the fee (cost of crime) and move on.
No, it's not the banks that pay. Dig deeper. It's the shareholders.
Fixed it for ya.
There's a Blankfein behind every manipulating mask.
Did any of us in our wildest imaginations even 2 years ago think it could ever get this bad?...
Yes.
Forex Kong – A LOUSY SERVICE AND A THIEF
This is to warn EVERYONE as to doing any sort of business with Forex Trading with Kong, or what ever he/she/it bills itself. I signed up to the “service” in May of 2014, and once on the site, the person proclaiming themselves to be Kong was in a maelstrom of trades – all down.
I found his combination of ranting about the markets, along with fuzzy and not explained or thought out trades was amateur at best. In fact, as a veteran trader, I took each and every trade of his on one of my demo accounts, with this “Kong” not spelling out as to whether trades he emailed on “alert” were short, mid or long term, and the ensuing results were hilarious. ALL down. I have the charts, and alerts he/she/it sent and the times he/she/it sent them, and to say this “service” is even competent is a stretch.
I’d be happy to share these charts, trades ( I took screen shots of the demo account with the idiot Kong trades getting reamed) with anyone.
The REAL “fun” started when I canceled – or attempted to cancel, my less than one month old account with Kong. First, to sign up to the…service, I had to join PayPal, which I did NOT want to do. This Kong character cajoled me into doing so “It’s the only way I work” – something to that effect.
WELL…Kong and PayPal kept right on debiting me. I caught them. Kept right debiting me AFTER I CAUGHT THEM.
I have the emails, bank statements – all of it. The good thieves at Forex Trading with Kong know this, and can not refute one iota of what I wrote. They are arrogant, claim they “never had a refund” (gee…I guess so).
STAY AWAY FROM FOREX TRADING WITH KONG. BE FOREWARNED.
THE SERVICE IS ASININE, AND THEY STEAL YOUR MONEY.
JPHFOREX at Gmail dot com….I can back up everything I just wrote.
Golden rule BB - those who can't, teach (though I know of one or two exceptions to the rule) . Sorry you got bummed by these goons :(
edit: Just checked out the site, some of those charts look like they were ripped off from Charles Hugh-Whatsit (he of the 'megaphone' fame).
Um, what did you expect? You think anyone with a secret to success is going to share it with you?
These services are bait for suckers. In this case, that would be you.
The solution to this problem is simple. Just add a small random delay to each transaction. It makes any HFT algo impotent. This isn't rocket science ... which proves, they don't want to solve the problem.
A "carbon based" trader WAS caught manipulating gold for Barclays.
Don't say it doesn't happen.
Barclays, neck deep in EVERY financial scandal.
Hello, Professor.
Would you like to play a game?
FX Rigging - As though the news/information will be exposed on the nightly news . . . or presented within the school system . . . giving rise to so many being so surprised upon the Day of Reckoning. . . . and so few being so surprised upon Judgement Day.