- NSA phone data control may come to end (AP)
- China to rescue France: Peugeot Said to Weigh $1.4 Billion From Dongfeng, France (BBG)
- China to rescue Davos: Davos Teaches China to Ski as New Rich Lured to Slopes (BBG)
- Hollande’s Tryst and the End of Marriage (BBG)
- Iran has $100 billion abroad, can draw $4.2 billion (Reuters)
- Target Hackers Wrote Partly in Russian, Displayed High Skill, Report Finds (WSJ)
- Nintendo Sees Loss on Dismal Wii U Sales (WSJ)
- Goldman's low-cost Utah bet buoys its bottom-line (Reuters)
- Royal Dutch Shell Issues Profit Warnin: Oil Major Hit by Higher Exploration Costs and Lower Oil and Gas Volumes (WSJ)
- EU Weighs Ban on Proprietary Trading at Some Banks From 2018 (BBG) - so no holding of breaths?
- Sacramento Kings to Accept Bitcoin (WSJ)
Remember when banks were exposed manipulating virtually everything except precious metals, because obviously nobody ever manipulates the price of gold and silver? After all, the biggest "conspiracy theory" of all is that crazy gold bugs blame every move against them on some vile manipulator. It may be time to shift yet another conspiracy "theory" into the "fact" bin, thanks to Elke Koenig, the president of Germany's top financial regulator, Bafin, which apparently is not as corrupt, complicit and clueless as its US equivalent, and who said that in addition to currency rates, manipulation of precious metals "is worse than the Libor-rigging scandal." Hear that Bart Chilton and friends from the CFTC?
The Libor manipulation scandal has, as WSJ reports, ensnared at least 17 financial institutions and 22 individuals in a wide-ranging investigation spanning 11 countries and four continents. So far, it has netted at least $5 billion in penalties, with more on the way. The Wall Street Journal has taken the most complete list of allegedly involved parties and mapped an extensive web of 298 reported connections that reveals the depth of the alleged conspiracy from the 'alleged' ringleader Tom Hayes and involving practically ever major bank in the world.
- House Unveils $1.01 Trillion Measure to Fund Government (BBG)
- Credit Suisse Tells Junior Bankers to Take Saturdays Off (BBG)
- Spot the odd word out: ECB Sees Bad-Debt Rules as Threat to Credible Bank Review (BBG)
- Insert laugh track here: Spain GDP grows at fastest pace in almost six years (FT)
- Scandinavian Debt Crisis Waiting to Happen Puzzles Krugman (BBG)
- Fed Said to Release Plan to Limit Banks’ Commodities Activities (BBG)
- Thai Protesters Extend Blockade After Rejecting Poll Talks (BBG)
- China provinces set lower growth goals for 2014 (BBG)
Following yesterday's major market drubbing, in which the sliding market was propped up by the skin of Nomura's (and BOJ, and Fed's) teeth at 103.00 on the USDJPY, it was inevitable that with Japan returning from holiday there would be a dead cat bounce in the Yen carry pair, and sure enough there was, as the USDJPY rose all the way back up to 103.70, and nearly closed the Friday gap, before starting to let off some air. However, now that US traders are coming back online, Japan's attempts to keep markets in the green may falter, especially since it only has a couple of ES ticks to show for its efforts, as for the Nikkei which dropped 3% overnight, it has now lost all US "Taper" gains.
Following some early strength in the Asia session, which saw Gold over $1255 (its highest in a month), the European session has seen pressure on the precious metals leak lower. That 'leak' was then helped on its way by the almost ubiquitous 8amET volume dumptaking gold and silver down markedly (though not catastrophically for now). The only other asset class showing any real action is GBPUSD (with GBP being sold aggressively) with Treasuries flat and stocks down modestly but stable for now.
- Yellen’s Record-Low Senate Support Reflects Fed’s Politicization (BBG)
- Euro-Zone Inflation Rate Falls in December, even further below ECB's target (WSJ)
- Zambia politician charged for calling president a potato (AFP)
- Blame gold: India Savings Deposit Scam Collapse Leaves Thousands Penniless (BBG)
- Hedge Funds Raise Gold Wagers as Yamada Sees $1,000 (BBG)
- George Osborne limits cuts options with pensions promise (FT)
- Vietnam Raises Foreign Bank Ownership Caps to Aid System (BBG)
- But they said buy a year ago... Goldman to JPMorgan Say Sell Emerging Markets After Slide (BBG)
- SAC Trial Seen by Probe Convict as Latest Abusive Tactic (BBG)
The flash crash had the hallmarks of price manipulation. In order to protect investors and the integrity of markets, regulators internationally should again investigate the gold futures market where such manipulation appears to be taking place nearly on a weekly basis now.
From the first headline to the last, the following brief month-by-month summary of the year shows just how far markets and global happenings have come...
Allegations that banks are manipulating gold prices lower continue to gain credence and Bloomberg have published an article by Rosa Abrantes-Metz entitled ‘How to Keep Banks From Rigging Gold Prices’
From the United States to Europe and Asia: The world's central banks are flooding markets with liquidity and pushing deeper into unknown monetary policy territory. Jim Grant tells Germany's Finanz und Wirtschaft that he "fears that this journey will not end well." The sharply thinking Wall Street veteran doesn’t trust the theoretical models of the central banks and warns of irrational exuberance in the financial markets adding that "the stock market is increasingly full of stocks that are borne aloft by hope rather than demonstrated performance."
So simple the underwear gnomes could do it:
- Create a cartel
- Corner and manipulate the market
And that's why they (and Jamie Dimon) are richer than you.
- MOAR: BOJ Said to See Significant Room for More Bond Purchases (BBG)
- Meltdown Averted, Bernanke Struggled to Stoke Growth (Hilsenrath)
- New Mortgages to Get Pricier Next Year (WSJ)
- Republicans to Seek Concessions From Obama on Debt Limit (BBG)
- Hunting for U.S. arms technology, China enlists a legion of amateurs (Reuters)
- Jury Begins Deliberating in Case of SAC Portfolio Manager (WSJ)
- BP to Write Off $1 Billion on Failed Well (WSJ)
- Rajan Unexpectedly Keeps India Rates Unchanged to Support Growth (BBG)
- Thai protesters say they will rally to hound PM from office (Reuters)
- SEC Brings Fewer Enforcement Actions, Slows Early-Stage Probes (WSJ)
A month ago, regulators in Europe began their investigation into manipulation of the "London gold fixing" (and we explained the methods here). While the complete history of gold manipulation goes a lot deeper than just banging the close on this crucial benchmark (which goes back to first world war); the decision by Germany's financial regulator (BaFin) to probe Deutsche Bank signals greater concerns over the precious metals markets. As The FT reports, BaFin has demanded emails and documents from Deutsche Bank as part of an investigation into potential manipulation of gold and silver prices.
It has been another session of overnight weakness, in which, to quote Deutsche Bank, "something has changed" as ES algos no longer track every tick of the EURJPY (or other JPY pair variants). Usually in such transition periods where the robots are not sure how to trade risk based on highly leveraged inputs, things go bump in the night, and they did just that with the E-Mini trading just off its overnight lows, despite a notable rise in the EURJPY from yesterday's close. Keep a close eye on the now traditional pre-market ramp in the EURJPY - if unaccompanied by an increase in the E-mini, it may be time to quietly exit stage left.