Market Manipulation

End Of An Era: The Rise And Fall Of The Petrodollar System

"The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. The sooner the better."

Herbalife: Media Materially Misstates FTC Outcome, Icahn Files Potentially Questionable Statement with SEC

In the classic "pyramid" scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same. But, like most news that goes out incorrectly, nobody noticed the retraction and nobody cared. Here’s what Dow Jones’ official retraction of the morning’s news looked like when it was issued later in the morning, with Herbalife stock already trading up nearly 15%

The Chinese Will Need Another Bailout

Here we go again. China is primed for more bailouts as their corporations and State Owned Enterprises (SOE) continue burning through billions of yuan.

China To Use Pension Funds As $300 Billion "Plunge Protection Team"

The country’s local retirement savings managers, which manage about $300 billion, are handing over some of their cash to the National Council for Social Security Fund, which will oversee their investments in securities including equities. Why the shift? Simple: to help stabilize markets during the next rout. During last year’s tumble, policy makers armed state-run investing company China Securities Finance Corp. with more than $480 billion to try and limit declines. Now it's the pensions' turn.

A Former NYMEX Trader Explains "The Mechanics Of Silver Manipulation"

What follows is how JPM manipulated the silver markets by selling the Silver contango during illiquid hours, then used their deep pockets to push settlements, then waited until margin calls made the large locals puke their positions. JPM in effect stretched the relationship between forward rates and futures spreads until they made no sense anymore. Not unlike a company trading at 50x earnings. It cannot last long. But it only has to last long enough until the guy with the position opposite you has to liquidate.

Why The Vast Majority Of Analysts Were Caught With Their Pants Down On Brexit

"If all an analyst does is track equities and sometimes commodities, they are never going to grasp what is happening in the economy.  Our financial system is not based entirely on numbers and graphs; it is a sociopolitical apparatus.  Political and social developments can indeed signal what might happen in stocks and on mainstreet.  The relations are there, but they are often indirect.  In 2016, EVERYTHING is snowballing with tension.  It was only a matter of time before something snapped."

Frontrunning: June 21

  • Tiny Tilt in ‘Brexit’ Polls Roils Global Markets (WSJ)
  • Oil prices slip after rally as market turns cautious (Reuters)
  • What to Watch for in Janet Yellen’s Congressional Testimony (WSJ)
  • Cracks emerge in the European consensus on Russia (Reuters)
  • Iraqi forces retake two Falluja districts from Islamic State, push west (Reuters)
Sprott Money's picture

As you know, gold has been on a tear in 2016 as investors and traders around the globe have profited form being long. You would think that some of the "smartest" and "best-connected" traders in the world - those on Bullion Bank trading desks - would have profited from this 20% move as well. However, if you think that, you're dead wrong.

HFTs Lose: IEX Granted Exchange Status As SEC Says The Speed Race Is Over

"The Staff acknowledges that market participants using the most sophisticated technology may today encounter access delays of substantially less than one millisecond when accessing the quotes of a single exchange whose data center is co-located with their own or located nearby.  However, even the most technologically advanced market participants today encounter delays in accessing protected quotations of other “away” automated trading centers that can substantially exceed one millisecond, that either are transitory or permanent."

All Eyes On Yellen As Global Stocks Rebound Despite Brexit Fears, Record Low Yields

US equity index futures and global stocks rebounded for the first time in 6 days, ahead of Federal Reserve Chair Janet Yellen’s remarks, while Chinese manipulation prevented a selloff in Chinese stocks when MSCI refused to add the country to its EM index due to fears about... manipulation. Sterling has rebounded despite ongoing Brexit doom and gloom. Oil is the only key commodity that has failed to stage a modest rebound, while gold is down alongside the dollar, just because.

Jeff Gundlach Warns That "Something Changed" At The Fed

Something has changed according to Jeff Gundlach.  After claiming that a rate hike is "inconceivable" as recently as a month ago, a stance which he softened somewhat in recent days, Gundlach said that the Fed has changed the conditions required for a potential interest-rate hike this year. Cited by Bloomberg, Gundlach believes that the Fed's thinking has shifted from, 'if the data pattern improves we will have the green light to hike,' to 'unless the data pattern weakens we have the green light to hike.'"

What Manipulation Does To The Free Market

Had the federal government held a constant measuring stick rather than "tinkering, engineering, distorting" key government calculations such as the size of the economy (GDP), the rate of inflation, level of unemployment, or size of federal deficits and federal debt...the reality we face would be plain and honest choices needed.  Instead, the responsibility of those working for "the people" has been breached via falsifying and distorting each of these (over decades).  This consistently improves the output and does not allow a true means to quantify and qualify the nations health.  Simply put, the government has continually tinkered, tampered, and distorted the accounting so as to mislead or create a falsely positive appearance. 

Citi Asks: "Are Investors Beginning To Price In QE4?"

"My conjecture is that investors have begun to price out June/July hiking risk they are beginning to reject the view that there is a high?probability fed funds path that is as shallow as the market is pricing in.  Before you get to negative rates you would have the hail Mary of QE4 which would act mainly to push down long term yields. In the past the prospect of QE supported equity markets, but there is so much skepticism at this point that the equity market reaction is negligible and the brunt of the concerns are falling on USD and long?term yields."