Since he's always pooh-poohed the idea of manipulation by the banks, I'd be interested in knowing what cohodk thinks about the fact that this guilty plea proves manipulation.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
Since he's always pooh-poohed the idea of manipulation by the banks, I'd be interested in knowing what cohodk thinks about the fact that this guilty plea proves manipulation.
He believes it only proves the guy who pled guilty to manipulation was being manipulated. He is a pooh-pooher, just ignore him.
Keep an open mind, or get financially repressed -Zoltan Pozsar
@jmski52 said:
Since he's always pooh-poohed the idea of manipulation by the banks, I'd be interested in knowing what cohodk thinks about the fact that this guilty plea proves manipulation.
I've never said anything against short term spoofing. This has such a short term and negligible impact on prices.
I do not subscribe to your belief that there is a concerted effort among central banks and commercial banks to influence the current or direction of prices.
If you believe spoofing is the cause of silver going from 50 to 14, and sitting there for years, then I'm sorry, but you'll just have to ask your rocket scientist friend to explain.
I do not subscribe to your belief that there is a concerted effort among central banks and commercial banks to influence the current or direction of prices.
"Since the financial crisis of 2007 and 2008, many countries overtly rig their stock markets including Japan and China. This type of activity can be effective in the short term, but if equities markets are artificially inflated, the bubble will eventually burst."
Did someone say "bubble?"
Keep an open mind, or get financially repressed -Zoltan Pozsar
Didn't miss it. I do however have the foresight to see the bubble for what it is and have not let narrow vision prevent me seeing it and from preparing for it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
@derryb said:
Didn't miss it. I do however have the foresight to see the bubble for what it is and have not let narrow vision prevent me seeing it and from preparing for it.
Good for you.
Like jmski says...this ain't rocket science. Even a silver fish can do it.
f you believe spoofing is the cause of silver going from 50 to 14, and sitting there for years, then I'm sorry, but you'll just have to ask your rocket scientist friend to explain.
If you think that's what I believe, you are mistaken. Every time you put words in my mouth, I'm going to point it out. So, stop doing it.
What I do think is that the banking system is much like "the house" in a casino. They manipulate the odds, deal the cards, have full view of the whole casino from a vantage point that the players don't have, and they aren't on our side. Oh, and if they think they can get away with frontrunning their own muppet clients, they will do it, for an extra buck.
They are not "doing God's work" as Timmy Geithner famously asserted.
If the day ever comes when bankers and politicians are subject to the same rules and laws that most of us would be thrown in jail for breaking, and when the ability to "create" money out of nothing and give it to their cronies is finally taken away, that's the day I'll think about investing in the system.
Until then, I'm standing aside - as far aside as possible. You go have fun with that paper house of cards and virtual money. You can keep it, I don't want it.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said: f you believe spoofing is the cause of silver going from 50 to 14, and sitting there for years, then I'm sorry, but you'll just have to ask your rocket scientist friend to explain.
If you think that's what I believe, you are mistaken. Every time you put words in my mouth, I'm going to point it out. So, stop doing it.
Excuse me then. Your written words seemed to declare this as vindication of your manipulation theories. What then is the manipulation that you so proclaim?
As far as your bankers creating money out of thin air, then how should the system work? Should the bank tale in 1000 in deposits and make 1000 in loans? What do you think the interest rate would be if a bank could only make loans equal to its deposits?
@cohodk said:
Should the bank tale take in 1000 in deposits and make 1000 in loans? What do you think the interest rate would be if a bank could only make loans equal to its deposits?
2 to 1 fractional lending (not the normal 10 to 1) would be a good start. Maybe banks would be a bit more careful who they lend to instead of treating a loan as a "product" than can be sold. Remember all those pre-2008 housing liar loans? Package, sell, repackage, resell. . . wash, rinse repeat. . . until there is no more soap or water.
Current lending practices reward the borrower and punish the saver. Higher rates for the borrower would result in higher rates for the saver.
Interest rates? Let market supply and demand set them, not the FED. Higher rates would help force people to learn to live within their means. It would greatly reduce the amount of "bad" debt.
The housing bubble popped because house values became much less than the amount borrowed. Result, foreclosure on a massive amount that resulted in massive loan default. What do you think will happen when the income producing value of today's borrowers becomes much less than all the money they borrowed? Result, bankruptcy that once again equals massive loan default. Consider massive credit card, student loan and automobile debt. Of note is the fact that the banks saw this coming years ago and were successful in pushing through legislation that keeps student debt from being protected by bankruptcy.
As I have stated many times, unsustainable debt, at both the personal and sovereign levels, is your next crisis. It was the root of your last crisis and yes history does repeat itself.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Do you think a bank could be profitable at 2 to 1 lending?
Don't you think the rate on bank loans would need to be very to cover costs and risks to the bank?
What kind of economy would we have if the rate to borrow was high?
Why should there be a moral obligation to force people to live within their means? Then shouldn't we force people to never smoke---the cost to society on smoking related diseases is quite high? Where does this end?
@cohodk said:
Do you think a bank could be profitable at 2 to 1 lending?
They would be forced to adapt and learn to be profitable just like any "normal" business. You might even see a resurgence of local, independent banks. Of course they would have to do away with the multi-billion dollar bonuses they pay themselves each year.
Don't you think the rate on bank loans would need to be very to cover costs and risks to the bank?
It would need to be higher. Higher rates would equate to less demand for a loan. Less loan demand would force banks to be competitive with their rates. Think supply/demand equilibrium. Look at what "payday" lenders charge, yet their doors are still open and they have plenty of customers.
Remember, banks are loaning out 10 times what they have taken in deposits. Higher loan rates follow higher saving account rates. Higher saving account rates result in more money being saved. More money being saved results in more money (times 10) being available to lend. The spread between loan interest and savings interest is where lies the bank profit; the spread remains unchanged.
What kind of economy would we have if the rate to borrow was high?
Hopefully, an economy not built on promises. We've been there before. The rate to borrow should be better adjusted, per borrower, based on risk and ability to repay. Bad risk should not be treated any where near the same as good risk.
Why should there be a moral obligation to force people to live within their means? Then shouldn't we force people to never smoke---the cost to society on smoking related diseases is quite high? Where does this end?
Never said there is a moral obligation to force people to live within their means. Just don't make is so easy for them to not live within their means, especially at a cost to the people who do live within their means (the savers).
Keep an open mind, or get financially repressed -Zoltan Pozsar
Those were some pretty good points. However, wouldn't higher interest rates cause higher inflation? And doesn't inflation punish savers? And doesn't inflation reduce net returns from collecting interest on savings?
@Baley said:
Those were some pretty good points. However, wouldn't higher interest rates cause higher inflation? And doesn't inflation punish savers? And doesn't inflation reduce net returns from collecting interest on savings?
"Under a system of fractional-reserve banking, interest rates and inflation tend to be inversely correlated. This relationship forms one of the central tenets of contemporary monetary policy: central banks manipulate short-term interest rates to affect the rate of inflation in the economy."
Keep an open mind, or get financially repressed -Zoltan Pozsar
@Baley said:
Right, if inflation rate gets too high, then the Fed raises rates.
So inflation increases will cause interest rates to go up. Got it.
inflation increases are cause for the FED to intervene with higher interest rates. As long as that policy holds then yes, higher inflation will result in higher interest rates. Inflation in itself does not trigger higher interest rates. It triggers the FED, under current polity, to raise its Fed Funds Rate. Absent the FED policy/action inflation will not cause higher interest rates. Normally when the FED raises rates it is because they see inflation to be a problem in the future. There are other reasons they raise/lower rates which means a pullback on rates does not necessarily mean their inflation fears have subsided. It only means inflation fears have taken a back seat to something they feel is more important at the moment.
Keep an open mind, or get financially repressed -Zoltan Pozsar
So, that's good, right? I'm old enough to remember, although i was a child, the high inflation and interest rates of the 1970's. People had 10 and 12% mortgages, the gas prices changed (went up) hourly, it seemed like a bad thing to happen, and good when it was over.
Also remember the boom in precious metals, which was great, and the subsequent bust, which wasn't. Flat metal prices, underperformance relative to other asset classes, lasted the better part of two decades...
Thus patiently targeting my gold and silver sales for the 2038-2041 time frame... Keep On Stackin'
(But if we see a spike to new highs before then, will be happy to sell much of it ..
"too early")
high interest rates in the late 70's/early 80's did their job of reducing inflation. It's a good tool when used wisely and an even better tool when the right man, Paul Volcker, is holding it .
Keep an open mind, or get financially repressed -Zoltan Pozsar
@cohodk said:
Do you think a bank could be profitable at 2 to 1 lending?
They would be forced to adapt and learn to be profitable just like any "normal" business. You might even see a resurgence of local, independent banks. Of course they would have to do away with the multi-billion dollar bonuses they pay themselves each year.
Don't you think the rate on bank loans would need to be very to cover costs and risks to the bank?
It would need to be higher. Higher rates would equate to less demand for a loan. Less loan demand would force banks to be competitive with their rates. Think supply/demand equilibrium. Look at what "payday" lenders charge, yet their doors are still open and they have plenty of customers.
Remember, banks are loaning out 10 times what they have taken in deposits. Higher loan rates follow higher saving account rates. Higher saving account rates result in more money being saved. More money being saved results in more money (times 10) being available to lend. The spread between loan interest and savings interest is where lies the bank profit; the spread remains unchanged.
What kind of economy would we have if the rate to borrow was high?
Hopefully, an economy not built on promises. We've been there before. The rate to borrow should be better adjusted, per borrower, based on risk and ability to repay. Bad risk should not be treated any where near the same as good risk.
Why should there be a moral obligation to force people to live within their means? Then shouldn't we force people to never smoke---the cost to society on smoking related diseases is quite high? Where does this end?
Never said there is a moral obligation to force people to live within their means. Just don't make is so easy for them to not live within their means, especially at a cost to the people who do live within their means (the savers).
I would disagree on a few things (what else is new?), but i would rather not focus on the idea of using regulation on an industry to influence social behavior. IE..make it hard to borrow to force folk to live within their means. I don't think there has ever been an example of that working. You see the banks as being the problem whereas I would place blame on the individual.
I've always condoned personal responsibility and contempt for misguided blame.
@cohodk said:
i would rather focus on the idea of using regulation on an industry to influence social behavior.
The whole purpose of any regulation is to influence social behavior. Why should you and your fellow bankers be exempt? Lack of adequate regulation (and enforcement) is what allowed the banks to bring the economy to its knees the last time.
You see the banks as being the problem whereas I would place blame on the individual.
Banks make it easy for the individuals. They did it in 2007 and they're doing it again. So, if I leave my gun safe open and my kid gets hold of my gun, who's fault is it?
Yes, individuals ultimately make the bad decisions but only a fool cannot see that the banking industry as a whole, and those that regulate them, are complicit in facilitating those bad decisions.
Keep an open mind, or get financially repressed -Zoltan Pozsar
My point was that regulating an industry is a completely worthless mechanism to effect social change.
Think in your example you are blaming the gun manufacture as they produced a product that can kill someone, just as you wish to blame the bank for producing a loan. Is your issue the open safe or the guns inside?
We regulate alcohol and tobacco, yet folks still drink and drive and smoke cancer sticks. Only the price of product went up.
If you want to influence an industy, the you must change the folk who desire the product or service. Surely we can add more regulation to the banks, but what is the cost to the consumer?
In the lecture, Kidney calls the leadership of the SEC when he worked there “self-serving cowards” who didn’t go after the higher ups on Wall Street following the crash of 2008 because they were simply “looking to move on, to return to their Wall Street job.”
If you want to influence an industry, the you must change the folk who desire the product or service. Surely we can add more regulation to the banks, but what is the cost to the consumer?
During the Lake Forest College lecture, Kidney put up a chart to show how Wall Street’s epic corruption impacted the average American and the U.S. economy. The chart shows that $19 trillion in U.S. wealth was lost; there was a 30 percent drop in housing prices; 8.8 million American jobs were lost; and 10 million homes were lost to foreclosure.
. . . this is the cost if we don't enforce the regulations that already exist.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I'm old enough to remember, although i was a child, the high inflation and interest rates of the 1970's. People had 10 and 12% mortgages, the gas prices changed (went up) hourly, it seemed like a bad thing to happen, and good when it was over.
I don't believe that mortgage rates made it that high, but your point doesn't take into account what caused the rates to climb in the first place. Some of the financial pressures were the costs of the Vietnam War and the Great Society, and the price shocks in gasoline due to the 1973 Oil Embargo - all of which made wage & price stability harder to attain. Nixon tried wage & price controls in 1971, but the market pressures won out and prices started going up from there. The peak was in 1980, just before Volker jacked up fed funds and CFTC raised margin requirements on silver in addition to only allowing sell orders. Government policy caused the problems which then resulted in more government control & intervention. Neat, huh?
wouldn't higher interest rates cause higher inflation? And doesn't inflation punish savers? And doesn't inflation reduce net returns from collecting interest on savings?
Government policy drives Inflation which then becomes the driver for interest rates, as I pointed out above. Interest rates are reactionary in many cases, but they are intertwined with inflation and they have to be considered together. When the rate market does become the driver, it's because an imbalance has already been created by fiscal or monetary policy. What we have going on today makes 1971-1979 look like a day at the county fair.
As derryb points out, when people & organizations live beyond their means the result has now become a bailout or subsidies that punish savers and people who actually work for a living. The imbalances we have now are massive and the leverage involved can't be unwound without giving the perpetrators a free pass, as the FASB did in 2008 and has now doubled down on with Rule 56. It's bad mojo. Really bad stuff.
My point was that regulating an industry is a completely worthless mechanism to effect social change.
_. . . this is the cost if we don't enforce the regulations that already exist._
Especially when the regulators are complicit and there is no enforcement anyway. At least we agree on that much.
Q: Are You Printing Money? Bernanke: Not Literally
In the lecture, Kidney calls the leadership of the SEC when he worked there “self-serving cowards” who didn’t go after the higher ups on Wall Street following the crash of 2008 because they were simply “looking to move on, to return to their Wall Street job.”
If you want to influence an industry, the you must change the folk who desire the product or service. Surely we can add more regulation to the banks, but what is the cost to the consumer?
During the Lake Forest College lecture, Kidney put up a chart to show how Wall Street’s epic corruption impacted the average American and the U.S. economy. The chart shows that $19 trillion in U.S. wealth was lost; there was a 30 percent drop in housing prices; 8.8 million American jobs were lost; and 10 million homes were lost to foreclosure.
. . . this is the cost if we don't enforce the regulations that already exist.
Already exist. Yes yes yes. Enforce them. Im all for it.
As far as the "facts" listed above, why dont they talk about the 30% increase in home prices before they dropped? Or about that many homes were purchased with very little down payment and many more folks took cash out? Where is the personal responsibility?
Yes, the tools for harm were created, but only because of consumer demand. Nothing will change until "we the people" change.
This is just the same as the gun control argument.
Why does this matter, and if it matters, why doesn't it make us want to Sell our metal and don't be involved at all in a corrupt market?
It matters because it is offering you suppressed prices.
Yes...no more suppression. Whoohoo!!! Wait!!! These guys were caught in 2015. But, but, but....silver is currently trading about 10% lower than it was in 2015. How, how, how can this be???
It is naïve to assume that market manipulation ended, just because a couple bad actors were exposed.
It is naïve to assume that market manipulation ended, just because a couple bad actors were exposed.
To date, the Department of Justice has charged numerous bad actors from numerous banks. It is important to note that the futures markets' own regulatory enforcer (CTFC) has repeatedly claimed there is no illegal activity in the futures market, yet:
I'm willing to go so far as all the major players in the PM market spoofed. Spoofing has been a problem in general for a while. The concept of spoofing wasn't created 8 years ago.
I will continue to reiterate that spoofing only causes brief moves in a instrument's price so the bad actor can get a better fill.
"engaged in a classic “bait and switch” (spoofing) by placing orders they never intended to execute and then canceling them, which “weaponized” the forces of supply and demand to mislead other traders."
For example, Coscia and Panther would place a relatively small order to sell futures that they did want to execute, which they quickly followed with several large buy orders at successively higher prices that they intended to cancel.
By placing the large buy orders, Mr. Coscia and Panther sought to give the market the impression that there was significant buying interest, which suggested that prices would soon rise, raising the likelihood that other market participants would buy from the small order Coscia and Panther were then offering to sell.
.
.
The CFTC Order requires Panther and Coscia to pay a $1.4 million civil monetary penalty, disgorge $1.4 million in trading profits, and bans Panther and Coscia from trading on any CFTC-registered entity for one year.
For example, Coscia and Panther would place a relatively small order to sell futures that they did want to execute, which they quickly followed with several large buy orders at successively higher prices that they intended to cancel.
By placing the large buy orders, Mr. Coscia and Panther sought to give the market the impression that there was significant buying interest, which suggested that prices would soon rise, raising the likelihood that other market participants would buy from the small order Coscia and Panther were then offering to sell.
.
.
The CFTC Order requires Panther and Coscia to pay a $1.4 million civil monetary penalty, disgorge $1.4 million in trading profits, and bans Panther and Coscia from trading on any CFTC-registered entity for one year.
note this is unrelated to previously mentioned cases and is an action actually taken by the normally dormant CTFC.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Comments
It's not rocket science.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Since he's always pooh-poohed the idea of manipulation by the banks, I'd be interested in knowing what cohodk thinks about the fact that this guilty plea proves manipulation.
I knew it would happen.
He believes it only proves the guy who pled guilty to manipulation was being manipulated. He is a pooh-pooher, just ignore him.
Keep an open mind, or get financially repressed -Zoltan Pozsar
It's not rocket science.
That reminds me, I have a friend who really is a rocket scientist. I'll ask him what he thinks of all this.
I knew it would happen.
I've never said anything against short term spoofing. This has such a short term and negligible impact on prices.
I do not subscribe to your belief that there is a concerted effort among central banks and commercial banks to influence the current or direction of prices.
If you believe spoofing is the cause of silver going from 50 to 14, and sitting there for years, then I'm sorry, but you'll just have to ask your rocket scientist friend to explain.
Knowledge is the enemy of fear
Believe it.
"Since the financial crisis of 2007 and 2008, many countries overtly rig their stock markets including Japan and China. This type of activity can be effective in the short term, but if equities markets are artificially inflated, the bubble will eventually burst."
Did someone say "bubble?"
Keep an open mind, or get financially repressed -Zoltan Pozsar
Well, again that's someone's opinion on how the world works.
People get rich from bubbles, see silver in 2011. Wasnt that great?
And this 10 year run in stocks was a bubble, then whoohoo, that sure was fun. Sorry you missed it.
Knowledge is the enemy of fear
Didn't miss it. I do however have the foresight to see the bubble for what it is and have not let narrow vision prevent me seeing it and from preparing for it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Good for you.
Like jmski says...this ain't rocket science. Even a silver fish can do it.
Knowledge is the enemy of fear
f you believe spoofing is the cause of silver going from 50 to 14, and sitting there for years, then I'm sorry, but you'll just have to ask your rocket scientist friend to explain.
If you think that's what I believe, you are mistaken. Every time you put words in my mouth, I'm going to point it out. So, stop doing it.
What I do think is that the banking system is much like "the house" in a casino. They manipulate the odds, deal the cards, have full view of the whole casino from a vantage point that the players don't have, and they aren't on our side. Oh, and if they think they can get away with frontrunning their own muppet clients, they will do it, for an extra buck.
They are not "doing God's work" as Timmy Geithner famously asserted.
If the day ever comes when bankers and politicians are subject to the same rules and laws that most of us would be thrown in jail for breaking, and when the ability to "create" money out of nothing and give it to their cronies is finally taken away, that's the day I'll think about investing in the system.
Until then, I'm standing aside - as far aside as possible. You go have fun with that paper house of cards and virtual money. You can keep it, I don't want it.
I knew it would happen.
Excuse me then. Your written words seemed to declare this as vindication of your manipulation theories. What then is the manipulation that you so proclaim?
As far as your bankers creating money out of thin air, then how should the system work? Should the bank tale in 1000 in deposits and make 1000 in loans? What do you think the interest rate would be if a bank could only make loans equal to its deposits?
Knowledge is the enemy of fear
2 to 1 fractional lending (not the normal 10 to 1) would be a good start. Maybe banks would be a bit more careful who they lend to instead of treating a loan as a "product" than can be sold. Remember all those pre-2008 housing liar loans? Package, sell, repackage, resell. . . wash, rinse repeat. . . until there is no more soap or water.
Current lending practices reward the borrower and punish the saver. Higher rates for the borrower would result in higher rates for the saver.
Interest rates? Let market supply and demand set them, not the FED. Higher rates would help force people to learn to live within their means. It would greatly reduce the amount of "bad" debt.
The housing bubble popped because house values became much less than the amount borrowed. Result, foreclosure on a massive amount that resulted in massive loan default. What do you think will happen when the income producing value of today's borrowers becomes much less than all the money they borrowed? Result, bankruptcy that once again equals massive loan default. Consider massive credit card, student loan and automobile debt. Of note is the fact that the banks saw this coming years ago and were successful in pushing through legislation that keeps student debt from being protected by bankruptcy.
As I have stated many times, unsustainable debt, at both the personal and sovereign levels, is your next crisis. It was the root of your last crisis and yes history does repeat itself.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Do you think a bank could be profitable at 2 to 1 lending?
Don't you think the rate on bank loans would need to be very to cover costs and risks to the bank?
What kind of economy would we have if the rate to borrow was high?
Why should there be a moral obligation to force people to live within their means? Then shouldn't we force people to never smoke---the cost to society on smoking related diseases is quite high? Where does this end?
Knowledge is the enemy of fear
They would be forced to adapt and learn to be profitable just like any "normal" business. You might even see a resurgence of local, independent banks. Of course they would have to do away with the multi-billion dollar bonuses they pay themselves each year.
It would need to be higher. Higher rates would equate to less demand for a loan. Less loan demand would force banks to be competitive with their rates. Think supply/demand equilibrium. Look at what "payday" lenders charge, yet their doors are still open and they have plenty of customers.
Remember, banks are loaning out 10 times what they have taken in deposits. Higher loan rates follow higher saving account rates. Higher saving account rates result in more money being saved. More money being saved results in more money (times 10) being available to lend. The spread between loan interest and savings interest is where lies the bank profit; the spread remains unchanged.
Hopefully, an economy not built on promises. We've been there before. The rate to borrow should be better adjusted, per borrower, based on risk and ability to repay. Bad risk should not be treated any where near the same as good risk.
Never said there is a moral obligation to force people to live within their means. Just don't make is so easy for them to not live within their means, especially at a cost to the people who do live within their means (the savers).
Keep an open mind, or get financially repressed -Zoltan Pozsar
Those were some pretty good points. However, wouldn't higher interest rates cause higher inflation? And doesn't inflation punish savers? And doesn't inflation reduce net returns from collecting interest on savings?
Liberty: Parent of Science & Industry
No, just the opposite
"Under a system of fractional-reserve banking, interest rates and inflation tend to be inversely correlated. This relationship forms one of the central tenets of contemporary monetary policy: central banks manipulate short-term interest rates to affect the rate of inflation in the economy."
Keep an open mind, or get financially repressed -Zoltan Pozsar
So, then, higher inflation causes higher interest rates?
Liberty: Parent of Science & Industry
Only when the FED uses higher rates as a tool to cool spending/inflation.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Right, if inflation rate gets too high, then the Fed raises rates.
So inflation increases will cause interest rates to go up. Got it.
Liberty: Parent of Science & Industry
inflation increases are cause for the FED to intervene with higher interest rates. As long as that policy holds then yes, higher inflation will result in higher interest rates. Inflation in itself does not trigger higher interest rates. It triggers the FED, under current polity, to raise its Fed Funds Rate. Absent the FED policy/action inflation will not cause higher interest rates. Normally when the FED raises rates it is because they see inflation to be a problem in the future. There are other reasons they raise/lower rates which means a pullback on rates does not necessarily mean their inflation fears have subsided. It only means inflation fears have taken a back seat to something they feel is more important at the moment.
Keep an open mind, or get financially repressed -Zoltan Pozsar
So, that's good, right? I'm old enough to remember, although i was a child, the high inflation and interest rates of the 1970's. People had 10 and 12% mortgages, the gas prices changed (went up) hourly, it seemed like a bad thing to happen, and good when it was over.
Liberty: Parent of Science & Industry
Also remember the boom in precious metals, which was great, and the subsequent bust, which wasn't. Flat metal prices, underperformance relative to other asset classes, lasted the better part of two decades...
Liberty: Parent of Science & Industry
Thus patiently targeting my gold and silver sales for the 2038-2041 time frame...
Keep On Stackin'
(But if we see a spike to new highs before then, will be happy to sell much of it ..
"too early")
Liberty: Parent of Science & Industry
high interest rates in the late 70's/early 80's did their job of reducing inflation. It's a good tool when used wisely and an even better tool when the right man, Paul Volcker, is holding it .
Keep an open mind, or get financially repressed -Zoltan Pozsar
higher interest rates would slow inflation
Bailey has the concept correct in his first post of this mini conversation.
Most people get it wrong. But it all makes sense when you understand what interest is.
Knowledge is the enemy of fear
I would disagree on a few things (what else is new?), but i would rather not focus on the idea of using regulation on an industry to influence social behavior. IE..make it hard to borrow to force folk to live within their means. I don't think there has ever been an example of that working. You see the banks as being the problem whereas I would place blame on the individual.
I've always condoned personal responsibility and contempt for misguided blame.
Knowledge is the enemy of fear
The whole purpose of any regulation is to influence social behavior. Why should you and your fellow bankers be exempt? Lack of adequate regulation (and enforcement) is what allowed the banks to bring the economy to its knees the last time.
Banks make it easy for the individuals. They did it in 2007 and they're doing it again. So, if I leave my gun safe open and my kid gets hold of my gun, who's fault is it?
Yes, individuals ultimately make the bad decisions but only a fool cannot see that the banking industry as a whole, and those that regulate them, are complicit in facilitating those bad decisions.
Keep an open mind, or get financially repressed -Zoltan Pozsar
My point was that regulating an industry is a completely worthless mechanism to effect social change.
Think in your example you are blaming the gun manufacture as they produced a product that can kill someone, just as you wish to blame the bank for producing a loan. Is your issue the open safe or the guns inside?
We regulate alcohol and tobacco, yet folks still drink and drive and smoke cancer sticks. Only the price of product went up.
If you want to influence an industy, the you must change the folk who desire the product or service. Surely we can add more regulation to the banks, but what is the cost to the consumer?
Knowledge is the enemy of fear
Former SEC attorney blows the whistle
In the lecture, Kidney calls the leadership of the SEC when he worked there “self-serving cowards” who didn’t go after the higher ups on Wall Street following the crash of 2008 because they were simply “looking to move on, to return to their Wall Street job.”
During the Lake Forest College lecture, Kidney put up a chart to show how Wall Street’s epic corruption impacted the average American and the U.S. economy. The chart shows that $19 trillion in U.S. wealth was lost; there was a 30 percent drop in housing prices; 8.8 million American jobs were lost; and 10 million homes were lost to foreclosure.
. . . this is the cost if we don't enforce the regulations that already exist.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I'm old enough to remember, although i was a child, the high inflation and interest rates of the 1970's. People had 10 and 12% mortgages, the gas prices changed (went up) hourly, it seemed like a bad thing to happen, and good when it was over.
I don't believe that mortgage rates made it that high, but your point doesn't take into account what caused the rates to climb in the first place. Some of the financial pressures were the costs of the Vietnam War and the Great Society, and the price shocks in gasoline due to the 1973 Oil Embargo - all of which made wage & price stability harder to attain. Nixon tried wage & price controls in 1971, but the market pressures won out and prices started going up from there. The peak was in 1980, just before Volker jacked up fed funds and CFTC raised margin requirements on silver in addition to only allowing sell orders. Government policy caused the problems which then resulted in more government control & intervention. Neat, huh?
wouldn't higher interest rates cause higher inflation? And doesn't inflation punish savers? And doesn't inflation reduce net returns from collecting interest on savings?
Government policy drives Inflation which then becomes the driver for interest rates, as I pointed out above. Interest rates are reactionary in many cases, but they are intertwined with inflation and they have to be considered together. When the rate market does become the driver, it's because an imbalance has already been created by fiscal or monetary policy. What we have going on today makes 1971-1979 look like a day at the county fair.
As derryb points out, when people & organizations live beyond their means the result has now become a bailout or subsidies that punish savers and people who actually work for a living. The imbalances we have now are massive and the leverage involved can't be unwound without giving the perpetrators a free pass, as the FASB did in 2008 and has now doubled down on with Rule 56. It's bad mojo. Really bad stuff.
My point was that regulating an industry is a completely worthless mechanism to effect social change.
_. . . this is the cost if we don't enforce the regulations that already exist._
Especially when the regulators are complicit and there is no enforcement anyway. At least we agree on that much.
I knew it would happen.
Already exist. Yes yes yes. Enforce them. Im all for it.
As far as the "facts" listed above, why dont they talk about the 30% increase in home prices before they dropped? Or about that many homes were purchased with very little down payment and many more folks took cash out? Where is the personal responsibility?
Yes, the tools for harm were created, but only because of consumer demand. Nothing will change until "we the people" change.
This is just the same as the gun control argument.
Knowledge is the enemy of fear
It is naïve to assume that market manipulation ended, just because a couple bad actors were exposed.
To date, the Department of Justice has charged numerous bad actors from numerous banks. It is important to note that the futures markets' own regulatory enforcer (CTFC) has repeatedly claimed there is no illegal activity in the futures market, yet:
Bank of Nova Scotia Agrees To Pay $60.4 Million in Connection with Precious Metals Price Manipulation Scheme
DOJ investigation of Merrill Lynch.
DOJ's investigation of JPM.
Could JPM Be Hit with a Fourth Felony Count for Rigging Precious Metals Markets?
Here’s the staggering amount banks have been fined since the financial crisis
Keep an open mind, or get financially repressed -Zoltan Pozsar
I'm willing to go so far as all the major players in the PM market spoofed. Spoofing has been a problem in general for a while. The concept of spoofing wasn't created 8 years ago.
I will continue to reiterate that spoofing only causes brief moves in a instrument's price so the bad actor can get a better fill.
oops there goes another one. . .
DB gold traders go to trial, found guilty
"engaged in a classic “bait and switch” (spoofing) by placing orders they never intended to execute and then canceling them, which “weaponized” the forces of supply and demand to mislead other traders."
Spoofing Is a Silly Name for Serious Market Rigging
Keep an open mind, or get financially repressed -Zoltan Pozsar
https://www.financemagnates.com/forex/regulation/cftc-fines-algorithmic-trader-2-8-million-for-spoofing-in-the-first-market-abuse-case-brought-by-dodd-frank-act/
For example, Coscia and Panther would place a relatively small order to sell futures that they did want to execute, which they quickly followed with several large buy orders at successively higher prices that they intended to cancel.
By placing the large buy orders, Mr. Coscia and Panther sought to give the market the impression that there was significant buying interest, which suggested that prices would soon rise, raising the likelihood that other market participants would buy from the small order Coscia and Panther were then offering to sell.
.
.
The CFTC Order requires Panther and Coscia to pay a $1.4 million civil monetary penalty, disgorge $1.4 million in trading profits, and bans Panther and Coscia from trading on any CFTC-registered entity for one year.
note this is unrelated to previously mentioned cases and is an action actually taken by the normally dormant CTFC.
Keep an open mind, or get financially repressed -Zoltan Pozsar
but it is still spoofing
just pointing out it is yet another case
Keep an open mind, or get financially repressed -Zoltan Pozsar
So the metals markets are rigged by the cheating profitable villains and the victims are the honest money losing end users?
Liberty: Parent of Science & Industry
Disinformation bots love whataboutism.
I'm not surprised your campaign weaponized it.
So the metals markets are rigged by the cheating profitable villains and the victims are the honest money losing end users?
Seriously? You honestly believe that there's no "there" there? Amazing.
I knew it would happen.
You don't seem to understand my question.
Liberty: Parent of Science & Industry
J.P. Morgan to pay $920 million fine
Keep an open mind, or get financially repressed -Zoltan Pozsar
You don't seem to understand my question.
You don't seem to understand my answer.
I knew it would happen.
I’m sorry to lol, but this is the classic husband and wife exchange.
there are a couple of married people here
I’m sorry to lol, but this is the classic husband and wife exchange.
You are new here, so you probably have never been to Baleyville.
I knew it would happen.
Yawn, so everyone wants to know.....has the Comex imploded yet? lol
The whole worlds off its rocker, buy Gold™.