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Don't Worry About The NYSE: If The CBIP Fails, It's Time To Panic

Submitted by Tyler Durden on 07/08/2015 12:18 -0400

The NYSE crashed and almost nobody noticed (for a few minutes) because market levels were stable (and because retail is long gone). Why? Because most trading these days is done via derivatives anyway on exchanges like the CME, where one specific program may be the buyer of last reserve today: the CBIP.

What is the CBIP (first discused here)? Here is a reminder.

1. What is the Central Bank Incentive Program?

The Central Bank Incentive Program (“CBIP”) allows Qualified Participants to receive discounted fees for their proprietary trading of CME Group products. All trading activity under the CBIP must be conducted directly through accounts registered to the Qualified Participant or separate accounts managed by a third party on behalf of the Qualified Participant. Qualified Participants receive discounted fees on CME, CBOT, and NYMEX products and COMEX futures products for electronic trading only. Qualified Participant will receive discounted fees January 1, 2015 through December 31, 2015.

2. How does an applicant qualify for the CBIP?

To qualify for and become a participant in CBIP (a “Qualified Participant”), the applicant must:

Be a non-U.S. central bank, multilateral development bank, multilateral financial institution, sub-regional bank, aid coordination group, or an international organization of central banks
Complete a CBIP application and be approved by CME Group
Execute all trades in the Qualified Participant’s name
Register one or more portfolio managers
Have a relationship with a CME Group clearing member
Have authority to participate in a fee incentive program (i.e. no public or internal policies prohibit participation)

* * *

Because if and when the central banks can no longer trade E-Minis with each other, we suggest you panic.

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Wed, 07/08/2015 - 12:20 | 6285377 williambanzai7

Wed, 07/08/2015 - 12:22 | 6285408 Headbanger

The markets are breaking because word is out that major players want out now.

Wed, 07/08/2015 - 12:25 | 6285428 FireBrander

Large NSYE sell orders from Chinese "investors" trying to cover margin calls at home?....wanna bet...how long before they start selling those realestate investments in the US and Canada?

Once that first domino falls, good luck stopping the rest of them.

Wed, 07/08/2015 - 12:33 | 6285499 ACP

Funny how this NYSE thing started around lunch time. Probably had to break the market to keep the market afloat until the Fed's "Team Ramp" gets back from their lunch break.

Wed, 07/08/2015 - 12:42 | 6285579 kaiserhoff

Two billion China men screaming say-oh say-oh say-oh will scare the horses.

Wed, 07/08/2015 - 12:44 | 6285597 stormsailor

dude, i don't think china men is the correct pc form. shut up walter, i'm not talking about guys that came over to work on the railroads.

Wed, 07/08/2015 - 12:54 | 6285707 John Law Lives

Like these guys working on the railroads...

https://www.youtube.com/watch?v=ue2gWNdIuCs

Wed, 07/08/2015 - 13:49 | 6286102 Manthong

Can somebody please tell me the difference between the financial markets and a rat’s nest?

Wed, 07/08/2015 - 14:55 | 6286520 e_goldstein

The rat's nest houses a lot less vermin.

Wed, 07/08/2015 - 17:30 | 6287242 messymerry

Certainly, a rat leaves his doppings out in the open for all the world to see. The BWANKERS, BROKERS, AGENTS, & DEALERS hide their droppings.

Actually I had a pretty funny expenience along these lines recently. I busted a mouse inventorying my pantry. I surprised him and when he saw me it literally scared the shit (and piss) out of him. We stared at each other for about half a second and POOF, he was gone. I had to go get a paper towel and clean it up. He was subsequently live trapped and evicted without a hearing...

;-D

Wed, 07/08/2015 - 12:38 | 6285548 FireBrander

Wed, 07/08/2015 - 12:53 | 6285701 clade7

my dad has a CBIP machine, on account of he has sleep acknea

Wed, 07/08/2015 - 12:53 | 6285697 FireBrander

NYP nails it...

Wed, 07/08/2015 - 13:08 | 6285818 earlyfrick

China and US are like two B*****s selling each other off

Wed, 07/08/2015 - 12:26 | 6285437 Bloppy

CNBC now has Cramer on to reassure us All is Well. Buy Buy Buy, Jim says so!

Wed, 07/08/2015 - 12:30 | 6285479 FireBrander

There will be a massive rally here at some point...days/weeks ahead...that's the wave two rally of the "three wave down" cycle when any bubble bursts...once that rally plays out, expect another breath taking drop.

Wed, 07/08/2015 - 12:37 | 6285543 Common_Cents22

third of a third is always the most fun.

Wed, 07/08/2015 - 12:32 | 6285489 wee-weed up

OMG! Not Cramer!

Wed, 07/08/2015 - 12:39 | 6285555 bfellow

United halted by "glitch", WSJ.com down with a 504 (Cough *DDoS* Cough), Zerohedge avaliblility has been on and off, NYSE halted due to "glitch", and DHS runs out an unnamed official saying, "Nothing to see here! Move along.." all while China has blown though over a dozen different attempts to stop the blood loss in their markets...

Tin foil hat time? Could it be possible that the Chinese government is behind these "glitches" in an attempt to show that there market losses aren't because of their policies, but because of global issues (which do exist), but my point is it's an page in an old play book, when you can't control what's going on, blame someone else.

Wed, 07/08/2015 - 12:37 | 6285536 EmmittFitzhume

And coincidentally, Jade Helm is about to begin across the USA!

Wed, 07/08/2015 - 12:28 | 6285465 Bluntly Put

Genius.

Wed, 07/08/2015 - 12:20 | 6285379 ymom11

The plunge protection team is probably working overtime at this point.

Wed, 07/08/2015 - 12:37 | 6285535 FreedomGuy

They're always on. Remember the 1913 idea that a Fed could prevent boom and bust, bubble and burst?

Wed, 07/08/2015 - 12:52 | 6285693 Lugnut

If they dont have a functioning market to actually trade in to, they arent doing too much work.....

Wed, 07/08/2015 - 12:20 | 6285384 CrazyCooter

So are they going to crash everything and blame it on NORKs?

Regards,

Cooter

Wed, 07/08/2015 - 12:20 | 6285386 This is it

Help help! The sky is falling!

Wed, 07/08/2015 - 12:20 | 6285388 Omega_Man

ha, and I just pushed the EASY button and that's all it took

Wed, 07/08/2015 - 12:23 | 6285398 slaughterer

Fed Minutes "accomodating" at 2pm. Then some hint of QE4 from Williams. Bear trap.

Wed, 07/08/2015 - 12:21 | 6285399 wendigo

I may be ignorant about stocks, but it looks like shit's getting real. Shoulda chashed out that IRA earlier.

Wed, 07/08/2015 - 12:22 | 6285404 OneTinTrooper

When it all flatlines, we are going to just have to channel WB7 in our brains

Wed, 07/08/2015 - 12:23 | 6285411 madbraz

this was idiotic by the CME to make this public. major faux paux.

Wed, 07/08/2015 - 12:24 | 6285422 Omega_Man

next stop cme

Wed, 07/08/2015 - 12:25 | 6285436 I woke up

EBT going down is a bigger problem

Wed, 07/08/2015 - 12:38 | 6285552 Thought Processor

That would mark the end of US economic stability as we know it.

Don't expect that one to happen for a while if ever. USD will be worthless before they stop handing out the EBT funds.

Wed, 07/08/2015 - 12:24 | 6285423 firstdivision

Nikkei is in some serious trouble. Later today will be 'holy open blood bath batman' time

Wed, 07/08/2015 - 12:37 | 6285538 Bernanke'sDaddy

I think you mean,

"Hory open brud baf, batman."

Wed, 07/08/2015 - 12:25 | 6285425 q99x2

Be a non-U.S. central bank, multilateral development bank, multilateral financial institution, sub-regional bank, aid coordination group, or an international organization of central banks

Sounds like they only accept terrorist organizations.

Wed, 07/08/2015 - 12:25 | 6285433 Rainman

NYSE moves 20% of trading volume. It's basically a prop set for the teevee .

Wed, 07/08/2015 - 12:27 | 6285444 Dr. Engali

It won't be the "market" crashing that makes me panic. I expect that. It will be the cut off from the flow of news due to the internet shut down that will make my sphincter pucker. It's no coincidence that all this is happening as they are preparing for Jade Helm.

Wed, 07/08/2015 - 12:40 | 6285565 Thought Processor

I agree. The news and internet being blocked will be a big signal. Maybe we're starting to see small signs of that now.

Weird day so far.

Wed, 07/08/2015 - 12:26 | 6285445 Clowns on Acid

Hey I wanna be a CBID .... where is the fairness... social justice ... I wanna be one.

Wed, 07/08/2015 - 12:41 | 6285571 lincolnsteffens

Its a Civil Right-equal protection under the "Law"! I mean...sheesh!

Wed, 07/08/2015 - 12:26 | 6285447 Chad_the_short_...

Here's my conspiracy theory. The us is behind china'a crash just like they are behind russia's crash so china retaliates with a cyber attack.

Wed, 07/08/2015 - 12:28 | 6285466 I woke up

Said the same thing to my brother this morning

Wed, 07/08/2015 - 12:47 | 6285626 Thought Processor

Think how funny it would be if China used the US as a scapegoat in their current crash, as in "we are now suspending the market activity due to unwanted foreign influences / manipulation." Done.

Would be a lot of very pissed off Chinese (at U.S.) and it would automatically relieve the Chinese Gov. of certain er..... issues with the fallout of a true economic crash. Nothing stopping them from doing this (cause Beijing can literally do anything they want anyway).

As it is thier current landing has gone from 'soft' to 'hard, painful and very messy.'

Wed, 07/08/2015 - 13:58 | 6286171 Tall Tom

At this point it will not be that difficult to paint the United States as the villian t their economic hardship. World War iII is a lot closer than you may think

Remember this quote from Hermann Goering?

"Naturally the common people don't want war: Neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, IT IS THE LEADERS of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is TELL THEM THEY ARE BEING ATTACKED, and denounce the peacemakers for lack of patriotism and exposing the country to danger. IT WORKS THE SAME IN ANY COUNTRY."

--Goering at the Nuremberg Trials

It is the sad truth, isn't it?

Wed, 07/08/2015 - 12:32 | 6285487 Latitude25

China at war with US

http://www.eutimes.net/2015/07/china-warns-russia-that-state-of-war-now-...

Wed, 07/08/2015 - 12:39 | 6285559 FreedomGuy

That's why we are going to have an epic downsizing of the military, right? Our President works for us, right or did I get confused?

Wed, 07/08/2015 - 12:27 | 6285452 slaughterer

USD/JPY now storming against today's Squid FX trade rec.

Wed, 07/08/2015 - 12:27 | 6285459 larry david

This is nuts...seems St Louis is a target?

http://map.norsecorp.com/v1/

Wed, 07/08/2015 - 12:40 | 6285566 Sweet Chicken

404 not found???

Would like to know more since I'm currently in the area, thanks! :)

Wed, 07/08/2015 - 12:51 | 6285690 CPL

Look where the attack is coming from in orbit.

http://www.digitalattackmap.com/#anim=1&color=0&country=ALL&list=0&time=...

Wed, 07/08/2015 - 14:24 | 6286275 LongOfTooth

Either from orbit or........ All right!!!! WHO HASN'T BEEN GOING TO CHURCH???

Wed, 07/08/2015 - 14:58 | 6286553 e_goldstein

Don't show that to knukles, it'll flip his shit.

Wed, 07/08/2015 - 12:32 | 6285491 Bernanke'sDaddy

WRONG TYLER(S)

IF THE MOTHERFUCKING GPS SYSTEM ON MY BOAT FAILS, THEN IT'S TIME TO FUCKING PANIC.

Wed, 07/08/2015 - 12:44 | 6285598 Almost Solvent

IF THE MOTHERFUCKING GPS SYSTEM ON MY MOTHERFUCKING BOAT FAILS . . .

fify

Wed, 07/08/2015 - 12:33 | 6285503 Consuelo

Is there enough confusion & distraction going on yet in Western markets for Putin to take Mariupol...?

Wed, 07/08/2015 - 12:33 | 6285504 Palladin

More good advice from Cramer:

http://www.youtube.com/watch?v=s3FEKQMtaKY

Wed, 07/08/2015 - 12:34 | 6285512 gcjohns1971

Can I declare myself to be an independent Central Bank? The Bank Of gcJohn's?

Why...that would fix everything!

I could issue my own currency using my Dollars as a reserve asset!

I could take loans out using my Dollars as collateral (please note that this is now twice I've plegded the same dollars)!

I could issue loans to subordinate banks or entities (myself) using my currency and foreign exchange reserves as collateral (third time pledged same dollars)!

And I get to front run the muppets too?

It is too good to be true!

Now I know why it is that CB's never go bankrupt! (Until their theft schemes become so burdensome that they destroy trade and productivity).

Wed, 07/08/2015 - 13:25 | 6285940 f16hoser

Hence the Snake eating its own tail. I wish it would hurry up...

Wed, 07/08/2015 - 12:34 | 6285514 JoeTurner

Watch the global Internet attack maps:

https://www.akamai.com/us/en/solutions/intelligent-platform/visualizing-...

http://www.digitalattackmap.com/#anim=1&color=0&country=EG&list=0&time=1...

Wed, 07/08/2015 - 12:45 | 6285608 Atomizer

Funny. Love that site.

Norsecorp and honeymap are good live information. It keeps us laughing on MSM propaganda.

Wed, 07/08/2015 - 12:56 | 6285727 CPL

All your base r belong to us.

https://www.youtube.com/watch?v=8fvTxv46ano

Wed, 07/08/2015 - 12:59 | 6285743 large_wooden_badger

Looks like New Jersey is winning all the cyber attacks in the United States. I'm guessing because Goldman Sacks moved their global data center there a few years ago.

Here it is, copy & paste link:

https://www.google.com/maps/place/Bridgewater,+NJ,+USA/@40.5698482,-74.6...!3m1!1e3!4m2!3m1!1s0x89c3eae1af7231f1:0x80bedb28bca3031c!6m1!1e1

Wed, 07/08/2015 - 12:40 | 6285569 jonytk