Another conspiracy theory bites the dust

derryb · November 9, 2014 4:00AM

All markets are manipulated, but it's OK and no one goes to jail as long as those with the power to prosecute get their fair share. Oh, and they get to determine what is their fair share.

UBS to settle over gold and silver price rigging

MGLICKER · November 9, 2014 4:52AM

Even more troublesome is that these banks can spit out multi billion dollar settlements and not miss a beat.

coolest · November 9, 2014 4:55AM

You are a conspiracy theorist, trying to confuse me with facts. 😴
Can you hook me up with some of those great paper shorts deals.😜

coolest · November 9, 2014 4:58AM

<< Even more troublesome is that these banks can spit out multi billion dollar settlements and not miss a beat. >>

And never stop the crime on top of that!

hchcoin · November 9, 2014 5:25AM

Financial market manipulation has always been and always will be. It is just a matter of how much regulation is allowed/accepted to try and manage it.

rawteam1 · November 9, 2014 5:45AM

<< All markets are manipulated, but it's OK and no one goes to jail as long as those with the power to prosecute get their fair share. Oh, and they get to determine what is their fair share. >>

U mean like all the casinos more actual people go to in Vegas n everywhere else?

roadrunner · November 9, 2014 6:55AM

The $9 BILL witness - JPM's biggest nightmare

This is one of the biggest financial conspiracies of all time though it appears neither side wants this to ever see the light of day....hence the $13 BILL "world-record slap on the wrist" settlement with JPM of which taxpayers footed a hefty part of it...and much of the rest was tax deductable. The US govt only settled part of the claim. But, they've been in no hurry to pursue any additional penalties.

ricko · November 9, 2014 6:58AM

And the profiteers are still laughing.....on their yachts or tropical getaways...Cheers, RickO

coolest · November 9, 2014 7:39AM

<< The $9 BILL witness - JPM's biggest nightmare

This is one of the biggest financial conspiracies of all time though it appears neither side wants this to ever see the light of day....hence the $13 BILL "world-record slap on the wrist" settlement with JPM of which taxpayers footed a hefty part of it...and much of the rest was tax deductable. The US govt only settled part of the claim. But, they've been in no hurry to pursue any additional penalties. >>

Lately I have been wondering where these huge fines actual end up? Can you imagine what happens with any funds collected by the USDOJ😜

roadrunner · November 9, 2014 8:40AM

<< ....Lately I have been wondering where these huge fines actual end up? Can you imagine what happens with any funds collected by the USDOJ😜 >>

The 401K's of bank CEO's and DOJ and SEC commissioners?

The MBS and CDS frauds that occurred in 2006-2010 netted out to around $35 TRILL notional. Even if you figure those to a lowly 2-3% in real terms that still $700B -$1 TRILL in money that changed hands. $9 BILL is a 1% penalty. 99% profit is hard to beat, especially with no jail time and an increase in overall financial power over the past 5 years.

cohodk · November 9, 2014 11:36AM

Did this "manipulation" (no sps given) occur when prices were rising or falling? I would really be interested in the extent of this manipulation and how it adversely affected prices.

So far, the end of the London "price fix" looks to have resulted in prices 20-25% lower.

RedTiger · November 9, 2014 11:50AM

<< Did this "manipulation" (no sps given) occur when prices were rising or falling? I would really be interested in the extent of this manipulation and how it adversely affected prices.

So far, the end of the London "price fix" looks to have resulted in prices 20-25% lower. >>

Seems like strong evidence that prices were manipulated higher. Most of these cases are likely from years ago during the bull market run, because they take considerable time to gather evidence and then prosecute the case. There was even one confession from a hedge fund guy about manipulating gold higher during the final run to $1900.

Bull manipulation is what tends to bring in the small fish speculators. Once the small fish are in, the net closes, and the big fish have their meal. Occam's Razor tends to favor the mostly bull manipulation argument. Sure there is short term manipulation to the downside, but most of these reports about recent settlements are likely from the bull market time. There isn't much near as much potential money in bear manipulation, especially in silver, which is a tiny, tiny financial market, and tiny physical market. By bringing in small fish speculators with a bull manipulation, there is potentially a lot more food for the big fish.

derryb · November 9, 2014 12:12PM

If prices can be manipulated up can they not also be manipulated downward? Is there doubt that the FED directed investment choices toward equities?

jmski52 · November 9, 2014 12:30PM

All the more reason to buy and hold physical.

cohodk · November 9, 2014 3:13PM

My question was based on all the comments we heard (and they are contained within these threads) about PMs being "held back". That prices should have been much higher than 1900/50. That every little dip on the way up was some sort of "smackdown".

Was the price manipulated by nickels and dimes and for how long? Did UBS bump the price of gold $5 higher/lower for a matter of minutes?

This has always been my contention with these manipulation/conspiracy theories. The only constant was the fervency of the message and very little contextual fact.

In the end, did it pay for the little guy to believe such manipulation/conspiracy theories?

rawteam1 · November 9, 2014 3:45PM

It's like the pitcher throwing a curve instead of a fastball, one pitch...blah, blah, blah...

jmski52 · November 9, 2014 10:04PM

The difference being, that in Las Vegas the House has odds on every game and it's legal.

In the financial markets, the law is supposedly there to promote a level playing field. Maybe the financial houses should be required to make their spreads public. This, of course will never happen. The reason is that Wall Street & Washington DC combined are more corrupt than Vegas. Gotta keep the skim on the working classes going.

rawteam1 · November 10, 2014 1:49AM

Funny WRM, yea so much manipulation that after they all got caught red handed, admitted to all wrongdoing, the price of silver has skyrocketed back to where it's true unmanipulated value is.... Lol...

Funny to think ones right when it's only semantics... And even if one is right, they are still wrong...

derryb · November 10, 2014 1:57AM

Benefits from manipulation can be had in either price direction. It depends on the goal of the manipulation - profit or price depression. While money can be made by manipulating prices in either direction, preferred assets can be protected by driving competing prices downward. The important thing to understand is that true valuation and price discovery (fundamentals) do not always apply regardless of the asset. Temporary interference in a market, whether it be lowering mortgage application requirements or increasing futures sell orders, will only temporarily influence demand and price. Temporary can last a long time but not forever - price always returns to equilibrium. Dot coms and most recently real estate have proven this.

<< the price of silver has skyrocketed back to where it's true unmanipulated value is >>

This is true only if it is no longer being manipulated.

jmski52 · November 10, 2014 2:25AM

so much manipulation that after they all got caught red handed, admitted to all wrongdoing

You see nothing wrong with this? Just curious.

the price of silver has skyrocketed back to where it's true unmanipulated value is.... Lol...

Let me help you understand. The goal isn't to move the price to any particular level and make it stay there. The goal is to draw in a crowd of muppets and then harvest them. One set of rules for the banks, a different set of rules for the muppets.

Don't make the mistake of thinking that you're not one of the muppets. There, does that help?

rawteam1 · November 10, 2014 2:42AM

<< so much manipulation that after they all got caught red handed, admitted to all wrongdoing

You see nothing wrong with this? Just curious.

Wrong within that particular market and not a major deal, never changed the overall trend/price, they pay a penalty, billicheck n patriots got caught didn't change who won the Super Bowl...

the price of silver has skyrocketed back to where it's true unmanipulated value is.... Lol...

Let me help you understand. The goal isn't to move the price to any particular level and make it stay there. The goal is to draw in a crowd of muppets and then harvest them. One set of rules for the banks, a different set of rules for the muppets.

Don't make the mistake of thinking that you're not one of the muppets. There, does that help? >>

The "manipulation" has affected no one here, more reason it's meaningless...
Muppets few if any playing those games, so for all intensive purposes meaningless, if they are playing, they know it's manipulated, lol, right?, so they are winning with the manipulators, why ever buy anything that can't go up? U know there is a fix, u bet with it...

jmski52 · November 10, 2014 3:00AM

The "manipulation" has affected no one here, more reason it's meaningless...
Muppets few if any playing those games, so for all intensive purposes meaningless, if they are playing, they know it's manipulated, lol, right?, so they are winning with the manipulators, why ever buy anything that can't go up? U know there is a fix, u bet with it...

The manipulation is designed to discredit precious metals as a savings vehicle or investment and to drive people into stocks. Since 2011, stocks have been the "smart" investment. Everyone has 20:20 vision after the fact.

A pumped-up stock market from QE doesn't mean that precious metals manipulation isn't happening, and it doesn't mean that stocks won't get hit when the stock market reverts to its fundamentals. Only the insiders get advance notice on QE, which IS the absolute essence of stock market manipulation, regardless of how it's been sold.

cohodk · November 10, 2014 3:07AM

Perhaps it is not being manipulated now and the price is where it always should have been?

Or, believing in such manipulation/conspiracy nonsense created a false sense of security and enticed people to buy PMs.

Or, lets say PMs are manipulated, then WTF would anyone buy them?

Maybe the manipulators created enough interest in PMs that investors and traders finally noticed this asset class and were able to push silver higher 10 fold and gold higher 7 fold in just a short 10 years enabling many to reap obscene profits---we all on this board seem to have stated our costs basis as being much lower than current, right. Maybe without the manipulators silver and gold would only be at 10 and 500 which would still be an outperformance of equities.

Interesting how extreme beliefs cloud thought. For personal experience everytime I feel a stock is a "lock" I know I should run away. Many PM investors, I believe, got overcharged emotionally.

derryb · November 10, 2014 3:21AM

<< Perhaps it is not being manipulated now and the price is where it always should have been?

Or, believing in such manipulation/conspiracy nonsense created a false sense of security and enticed people to buy PMs.

Or, lets say PMs are manipulated, then WTF would anyone buy them?

Maybe the manipulators created enough interest in PMs that investors and traders finally noticed this asset class and were able to push silver higher 10 fold and gold higher 7 fold in just a short 10 years enabling many to reap obscene profits---we all on this board seem to have stated our costs basis as being much lower than current, right. Maybe without the manipulators silver and gold would only be at 10 and 500 which would still be an outperformance of equities.

Interesting how extreme beliefs cloud thought. For personal experience everytime I feel a stock is a "lock" I know I should run away. Many PM investors, I believe, got overcharged emotionally. >>

Aren't you the guy who has all along said PM price manipulation is hogwash? Has that belief clouded your thought?

rawteam1 · November 10, 2014 3:25AM

cohodk · November 10, 2014 3:35AM

Nope, just trying to go along with "the game" and expose the folly of believing in such nonsense.

Believers of manipulation feel that manipulation is done to hurt them. They never see or comprehend any positives. Manipulation--to them-- is ALWAYS negative, especially if it hits them in their wallet. We have an excellent example going on right now. PM manipulators also believe the stock market is being manipulated and that stocks will collapse. Always a negative. Manipulation kept them in PMs (where they lost) and keeping them out of stocks (where they lost).

Stop believing in manipulation and stop losing. Its pretty simple. Belief in manipulation also feeds upon arrogance and ego. Believers KNOW they are right and therefor any outcome in which they lose is obvious manipulation as they CANNOT be wrong. They resort to emotionally charged rhetoric. Strong emotion combined with arrogance is lethal.

Baley · November 10, 2014 4:05AM

It can be hard to catch the same Muppet in the same Muppet trap twice. At least they keep changing the bait, and lucky for them, there's always a new supply of naive muppets every generation.

derryb · November 10, 2014 4:06AM

Government agencies (and those who do their bidding) don't manipulate anything.

Why does the Federal Reserve have a "trading desk?"

rawteam1 · November 10, 2014 4:09AM

Facts change, principles never change...

M=LI
Manipulation= Losing Investment

bluelobster · November 10, 2014 4:17AM

The theory of rigged markets and manipulation has a lot of value for two reasons

#1 if markets are truly being manipulated, and that a price of an asset is either artificially overvalued or undervalued, then, certainly, one has the ability to take advantage of the
inefficiency in price and should be able to increase their return.

#2 is where the big value for most is, imo. If an investor believes that the asset they are investing in is being manipulated against them (hardly anyone claims manipulation when the market moves for them),then, most importantly, it's not the investors fault the investment went against them it's the manipulators and banksters, etc.. No one wants to be responsible for lousy investment decisions, or worse, a fubared investment thesis and with manipulation, the poor investor is never really at fault...are they?

Baley · November 10, 2014 4:25AM

No one wants to be responsible for lousy investment decisions, or worse, a fubared investment thesis and with manipulation, the poor investor is never really at fault...are they?

This reminds me of the story about a certain college course a student took, a very difficult course in vector physics, the first time the student took it he got a D+, and the second time he got an A-

The first time through, it was spring quarter, and the class was the only one the kid had after lunch (he often skipped it to go to the pool or otherwise goof off) so was always behind

The second time, it was the first class in the morning, during winter quarter, and the kid studied hard

He said one time about it, "That was a tough course, the first time I took it, the Prof gave me a D+! But I repeated it, and the second time, I got an A-!"

See what the student did there?

When this was pointed out to the kid, he learned a lifelong lesson about subconscious defense mechanisms and objective thinking, and personal responsibility for decisions.

rawteam1 · November 10, 2014 4:27AM

Good thing u quit messin around Baley...

jmski52 · November 10, 2014 5:36AM

the folly of believing in such nonsense

Okay, let's take this slowly...

Explain what charges UBS is settling over?

hchcoin · November 10, 2014 6:18AM

When I think of financial market manipulation I think of speed limits. For example, if the posted speed limit is 65 on a highway, no matter how hard the police try to stop it, some people speed. The question is how much are they going to accept? 1 over, 5 over, 10 over? There will always be some form of speeding. The question is how much will the police allow. If they have more patrol cars and give more tickets, speeding is less, but there always seems to be somone willing to take that risk.

Now with financial markets, it is very similar from what I have seen. There will always be those willing to push the envelope. Why do you think the tax code has grown to the size it has? In 1913, when they instituted the tax code, it was 400 pages long. In 1954, it was 14,000. In 2013, it was 73,954 pages long. Why is this? because people are always pushing the envelope and trying to find a loophole. Same thing with financial markets in general, there has always been and always will be some form of manipulation. The real question is how much regulation and cost is the overseeing agency or government willing to spend to try and control it. If you don't think the markets are manipulated on a daily basis, you are living in a fantasy world.

The real question is what impact does this have on the markets. Some would argue that market manipulation is what makes the market so efficient. Some would even argue that the U.S. mint, by allowing certain buyers to get silver directly at $2 over spot, is creating a form of manipulation. Is that truly a free and fair market? Do all purchasers of silver have the same opportunity? Another example would be how often the U.S. mint changes its prices when the price of precious metals changes. If they do not consistently change prices at exactly the same time and interval when spot prices reach a certain level, that is a form of manipulation. Another example is the Federal Reserve itself. It is directly interfering with the free and fair trading of government securities everytime it makes and open market purchase or sale to manipulate interest rates. Is this not a form of artificial market manipulation?

Would the bank bailout constitute market manipulation? Did our Federal Government step in to try and manipulate markets? You be the judge

cohodk · November 10, 2014 7:01AM

<< 

<< Stop believing in manipulation and stop losing. >>

Again with the denial (and belittling). Manipulation is a proven FACT, not a "belief"!

Cheers, >>

So how has this belief of fact benefited you?

cohodk · November 10, 2014 7:03AM

<< the folly of believing in such nonsense

Okay, let's take this slowly...

Explain what charges UBS is settling over? >>

Explain how belief of manipulation benefited you? And now that UBS will give money to some entity, explain how you will benefit in the future.

cohodk · November 10, 2014 7:05AM

hchcoin..

rawteam1 · November 10, 2014 7:20AM

So WRM I guess u pulled the ol all hat no cattle trick... Good 4 u...
Or talk but alas actually perform the opposite action trick... Hmmm, seems worthless...

Edit to add: how does one validate a losing position, do u get some rebate or something or a monetary award?...

derryb · November 10, 2014 7:37AM

So, now we justify illegal manipulation?

The bank robber who steals $5 gets the same penalty as the bank robber who steals $5,000. But it's OK for regulators and financial enforcers, to show some tolerance? Wall St. has clearly demonstrated that if you give them a nickel they will take a dollar - just as speeders have shown that if you give them 5 mph they will grow to expect 10 mph.

Well at least we have moved on from "is there manipulation" to "is manipulation healthy." Progress is in progress.

One thing learned by Wall St. in the Long Term Capital Management fiasco, which resulted in massive prosecutions, was that they needed control of the regulators. Mission accomplished.

CaptHenway · November 10, 2014 8:08AM

So, if the crooks got caught (I didn't say prosecuted), why did gold tank again today?

And what insider profited from advance knowledge of this development on Friday?

derryb · November 10, 2014 8:15AM

<< So, if the crooks got caught (I didn't say prosecuted), why did gold tank again today? >>

As long as real money competes with funny money, and as long as the funny money printers want the funny money to be king, gold will remain controlled. This is why the direction of the dollar determines the direction of the gold.

derryb · November 10, 2014 8:20AM

double post

rawteam1 · November 10, 2014 8:21AM

<< So, if the crooks got caught (I didn't say prosecuted), why did gold tank again today?

And what insider profited from advance knowledge of this development on Friday? >>

Ahh, u know, the other crooks that haven't been caught yet... Untold thousands of em, maybe uncountable, til of course if price ever goes up where anyone bought some....

derryb · November 10, 2014 8:22AM

triple post

jmski52 · November 10, 2014 8:46AM

<< the folly of believing in such nonsense>>

Okay, let's take this slowly...

Explain what charges UBS is settling over?

<<Explain how belief of manipulation benefited you? And now that UBS will give money to some entity, explain how you will benefit in the future.>>

Why is it essential that you state this as my belief, when it's documented fact now? How does ignoring the facts benefit anyone? Why the question about how this benefits me? You're avoiding the question, but I'm not clear why you feel the need to do so.

When UBS concedes the case by paying the fine, it reaffirms my understanding of the markets. They aren't based on honest fundamentals, and I simply won't react with a knee jerk response to manipulation by the big boys. Money management and a good cash reserve is the key.

No need to be a muppet when you take a long view. No need to panic by jumping into an overvalued stock market either. Long term, not flash trading.

roadrunner · November 10, 2014 9:11AM

<< So, if the crooks got caught (I didn't say prosecuted), why did gold tank again today?

And what insider profited from advance knowledge of this development on Friday? >>

Because the crooks that got caught were given a slap on the risk.... and a wink to go and do it again....just with more discretion this time.

Clearly some big players benefited from Friday's NFP rally and today's sharp counter move. This wasn't exactly normal action.

derryb · November 10, 2014 9:46AM

Breifly, how it is done

"Futures contracts representing vast quantities of gold, up to forty tonnes worth, are dumped onto the electronic futures market over the course of a few minutes. This frequently happens after trading in Asia has finished and Europe is not yet open for business. In other words - at a time when the least amount of traders are available to buy. This guarantees a precipitous fall in the price.

Now that the conspiracy theory of PM price manipulation is fact, maybe the question of "why" will be confirmed next.

hchcoin · November 10, 2014 10:16AM

Great article derryb. As to why anyone would want to manipulate prices after a market closes, some of you may remember this market manipulation:

Late trading leads to big profits for favored customers

I am very familiar with the founder of one of the mutual funds mentioned in the article. He basically lost it all because he was allowing certain customers to profit from after hour market manipulation. He started the company from scratch and had built up a financial powerhouse to only lose it all to greed and manipulation.

cohodk · November 11, 2014 1:34AM

Well, WRM, one needs to be wrong to say it.

I've written to you via PM and in this open forum that even I have been able to manipulate prices in some stocks. The effect of th is manipulation was fleeting. My contention on this PM manipulation was that they do the same. There never is/was a conspiracy to drive PM prices significantly higher or lower. And I am still waiting for evidence to price otherwise.

You used this manipulation theory as a crutch to justify buying silver at prices much higher than today and that's the mindset I railed against in believing these theories. You were warned...

But please explain to me how I will become "free". I already am not shackled and constrained by these theories. That my dear friend is truth. I hope you find what you are looking for.

rawteam1 · November 11, 2014 3:12AM

Manipulation does not equal suppression ...
There in lies WRM 's failed ability to interpret the results of each...

Also once again, it's all rhetoric for sure, hot air, flyin bs, because why would anyone even pay attention to someone who doesn't even themselves believe what they are saying with any conviction, go all in, then spout your ideas, at least then maybe someone would listen...

cohodk · November 11, 2014 3:50AM

All manipulation is negative because it is the reason our analysis is wrong. "If it werent for that darn manipulation, i'd be right"!!!

Just like this quote from WRM......

"I'll continue to trade available FRNs for physical Silver, because it is the bargain of a lifetime" (WRM 4Q13PMR 1/2/14)

On Jan 2, 2014 silver was $20......so lets say that now I proclaim silver to be the bargain of a lifetime, but the price is $16. I will always be 20% better than WRM. Always.

Seems silly doesnt it.

Another conspiracy theory bites the dust

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