More proof the Wall St looters have rigged all the financial markets to steal from small investors

Posted by freedomforall 7 months, 2 weeks ago to Business
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This example is european banksters, but this is just the tip of the iceberg. US banksters invented this kind of looting.
Excerpt:
The Deutsche Bank documents show, among other things, how two UBS traders communicated directly with two Deutsche Bank traders and discussed ways to rig the market. The traders shared customer order-flow information, improperly triggered customer stop-loss orders, and engaged in practices such as spoofing, all meant to destabilize the price of silver ahead of the fix and result in forced selling or buying. It is also what has led on so many occasions to the infamous previous metals "slam", when out of nowhere billions in notional contracts emerge, usually with the intent to sell, to halt any upside moment in the precious metals/

"UBS was the third-largest market maker in the silver spot market and could directly influence the prices of silver financial instruments based on the sheer volume of silver it traded," the plaintiffs allege. "Conspiring with other large market makers, like Deutsche Bank and HSBC, only increased UBS’s ability to influence the market."

Some examples of the chats quoted are shown below. In the first example a chart between DB and HSBC traders in which one HSBC trader says "really wanna sel sil[ver" to which the other trader says "Let's go and smash it together."
SOURCE URL: http://www.zerohedge.com/news/2016-12-08/deutsche-bank-provides-smoking-gun-proof-massive-rigging-and-fraud-silver-market


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  • Posted by  $  blarman 7 months, 2 weeks ago
    [shakes head]. That's why banking needs to be non-governmental. It would bring more market pressure to bear and things like this once reported (especially via social media) would put the company out of business.
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  • Posted by  $  Thoritsu 7 months, 2 weeks ago
    I see this issue, but I'm not sure what to recommend is done about it. What actions should be taken that in the end expand freedoms?
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    • Posted by 7 months, 2 weeks ago
      Start by removing restrictions on financing that give Wall St banksters a near monopoly and let companies raise funds on the internet in a free market. Let small businesses raise funds easily and be competitive. The current cartel system gives great advantages to large companies and acts as a conduit that suppresses smaller businesses, feeding them to Wall St and large less productive companies. Since the people on Wall St have no ethics about stealing from their customers, do not allow short selling on any shares of companies (without restricting such activity by producers of commodities.) imo, the share market should be a place to raise funding for productive activity, not a restricted cartel or gambling hall used by unscrupulous pirates to destroy the savings of everyone who actually works and produces.
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      • Posted by  $  Thoritsu 7 months, 2 weeks ago
        What restrictions do you mean? Restrictions on lending money?
        Did rules on short selling change significantly recently? I thought I could buy the right to sell a stock at its current price for a fee. Is that no longer true?
        I have an open mind, and just don't know the specifics you refer to.
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        • Posted by 7 months, 2 weeks ago
          I view short selling (and buying put options) as betting on failure and giving incentives (rewarding) speculators for wanting a business to fail. I think that serves to defeat the purpose of the share market. Short selling is a tool that is used by Wall St insiders to maniputale share prices of small companies, to gain control of them, and this serves large companies who fear competition from more innovative small business.
          Small companies who need financing are restiricted by federal regs (and possibly state regs) that make it nearly impossible to comply with the law unless the company hires a Wall St company for legal expertise and connections to prospective investors. The excuse for the regulations is to protect investors, but the result is to give near monopoly advantages to the Wall St gang who helped design the regulations for their own benefit. Look at recent history and imo investors have more to fear from Wall St than from small businesses who want to raise capital. iirc, small companies cannot exceed 30 shareholders without SEC scrutiny and lots of legal expenses for the small business. Wall St firms commonly take shares as a large part of their fees and use their connections and market tools (like short selling) to manipulate the share prices of small companies. When the small business needs more funding (issuing shares) the prices are manipulated downward so more shares must be issued and the original owners lose control. With the large competitors in collusion with Wall St this results in bigger companies buying out innovative small businesses at fire sale prices. With the internet as a tool today Wall St's monopoly is vulnerable to competition, but banksters will use their access (Treasury Dept) to prevent it as they have for decades.
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          • Posted by CircuitGuy 7 months, 2 weeks ago
            Short selling discourages bubbles and increases liquidity. It doesn't make equity prices higher/lower over the long run b/c the short position must be closed eventually.
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            • Posted by 7 months, 2 weeks ago
              Oh, and taking taxes from a productive person and giving it to a non-productive one is just as rational. In the "long run" Wall St banksters and big slow low productivity companies get bigger and wealthier while small companies and the assets of their productive owners are looted using short selling and other manipulation. In the long run, the productive innovative small businesses are dead and their inventions legally stolen. Those equity prices are permanently depressed to zero and people like you are encouraged to join in the looting because you don't realize what is really happening. Non producing looters win and producing inventors lose because they follow rules designed to destroy them.
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              • Posted by CircuitGuy 7 months, 1 week ago
                I maintain people should be free to take short/long positions and that trying to control the types of trades people make leads to speculative bubbles and market inefficiencies. I do not understand what you're saying or how it relates to this.

                I do not understand your statements or wh
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                • Posted by 7 months, 1 week ago
                  At least you recognize that you don't understand.
                  Read my posts on this topic and perhaps you will start to understand. If you actually want to know the truth, do some research. Richard Ney exposed some of this in his books on the Wall St Gang, and it is even more insidious today. Speculative bubbles are created by Wall St for profit, then when the public is in a frenzy from the media propaganda, Wall St unloads their positions and goes short. Then they reverse the propaganda and use their ability to manipulate the markets and the news to profit from crashing the shares they encouraged the public to buy.
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        • Posted by  $  Dobrien 7 months, 2 weeks ago
          Hi Thoritsu,
          When you buy the right to sell a stock at it's current price for a fee. I believe you mean is purchasing a put option, but they have what is called a strike price not current price. The current price of the stock may be higher or lower than the strike price. The price you pay for the option will be the intrinsic value plus the premium. The premium relates to the time to expiration. Could be one day or nine months and for some stocks even longer.
          Another thing to keep in mind is not all stocks have options.
          Shorting stocks is another story you have to "borrow stock" to short it and sometimes it not available or there is a charge depending on demand. I have also seen a short seller forced to buy back because the borrowed stock is called away.
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          • Posted by  $  Thoritsu 7 months, 2 weeks ago
            That sounds weird. I need to learn these details better, I've watched a number of my bets go positive, but I never physically made them. It seems simple based on some basic facts: International currency price changes, market trends, technology trends, etc.
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          • Posted by CircuitGuy 7 months, 2 weeks ago
            Yes to all of this. And even if they have options, they may be illiquid options with a large bid/ask spread. Option buyers lose to time but gain on increased volatility. Short sellers of stock have to pay dividends.

            I'm long puts on SPY because I think the market understates volatility, and at these multiples we're "due" for a correction.

            I bought into the tech bubble in the late 90s, though, so you can't believe my predictions.
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            • Posted by  $  nickursis 7 months, 2 weeks ago
              The tech bubble was interesting, but those of us on the manufacturing side knew it had to collapse as it was a frenzied explosion of illogical claims. We played penny stocks in the late 90's and I bought a stock called DCHT as they made H2 sensors and fuel cells were all the rage then. Got to 2.50 and sold, which was good as it went to less than .01 soon after. None of it was based on value, but on "perceived future value". I also got tired of the IPO frenzy and the few who always got in on a stock, and everyone else trailed and made them all the money. As for fuel cells, amazing that they are now coming to be real, and I think Honda will have a FC vehicle this year. Just 20 years behind the curve...
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        • Posted by CircuitGuy 7 months, 2 weeks ago
          " I thought I could buy the right to sell a stock at its current price for a fee."
          They are puts. I trade them (buying and writing) all the time. Lately, though, I'm buying them b/c I think the market understates volatility and overvalues stocks. I'm right maybe 50% of the time, though, so you'll get better results with a magic eight ball than listening to me.
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      • Posted by scojohnson 7 months, 2 weeks ago
        I agree with this as well. The main problem seems to be the near-monopoly. There are really not that many traders (that are any good) and even far fewer market-making participants. The traders are heavily incentivized by performance, so of course, there is going to be some looting going on. There are only two things that would make a dent:

        1.) Instead of a bunch of bullshit regulations that are impossible by the losers at the SEC to enforce (many of whom are trying to get a job at a bank), lets try this - The government regulation is in the form of providing a cyber filter on the data connections to any licensed trading establishment. Guess what, no Twitter, no FaceBook, no text messages, emails are filtered through a SIEM for white and blacklisting, and phone call traffic is logged.

        2.) The traders work in a SCIF. Guess what, their cell phones don't work. They go in ahead of the market day, and they leave when its over. They can return personal phone calls at lunch when it wouldn't make any difference in the market.

        Ultimately, I happen to think the banks need to not be in the trading business and there needs to be a lot more transparency into what is bought and owned by pensions & 401k funds. On the individual investor level, let the buyer beware. Gold & Silver has always been a volatile investment, it ebbs and flows with the strength of the dollar (basically). Buying gold or silver is a bet against the dollar. I don't think I'd be betting against the dollar with a Trump presidency. 8 years ago when Obummer was firing up the printing presses at the Mint, it was the only investment in town.

        The Euro is going to pretty much be in free-fall with Brexit and now France and others considering a removal of themselves from the EU. It won't be long before the euro is basically the Deutschmark.
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        • Posted by  $  Thoritsu 7 months, 2 weeks ago
          The SCIF approach is interesting. Are you thinking we can still get data in there to request a trade (for example, but all this data would be monitored?
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          • Posted by scojohnson 7 months, 2 weeks ago
            Nobody requests trades anymore - that is 100% automated. Few exemptions exist, such as commodities pits, but almost everything is electronic.

            The traders where the problem is are the ones trading for the banks and with the banks' money. They act for themselves, not on behalf of a client.
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            • Posted by  $  Thoritsu 7 months, 2 weeks ago
              I still don't follow. You mean traders who are managing your account for you, or traders that just follow your instructions?
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              • Posted by scojohnson 7 months, 2 weeks ago
                You might want to research the market itself. The major banks don't just manage accounts for clients, they have their own trading teams that invest the bank's own money into the market on a huge scale - hundreds of billions of dollars. For example, the largest owner of petroleum stockpiles in the US is Goldman Sachs, it's not a petroleum company.

                The dipshits with an art history degree that manage individual or mutual fund accounts and whatever are not these types of people, some of the bond desk and equity traders that work for the banks are in the tens and hundreds of millions in bonus dollar income range per year. They are the best of the best, and they don't bet on charts or intuition, they are certainly collaborating and "moving" the market in the direction they want. When you control hundreds of billions, you can make that kind of influence.

                http://www.wsj.com/articles/how-one-g...

                All of the banks are into the trillions of revenue and profit annually from their own market trading activities (not on behalf of a client).

                http://www.forbes.com/sites/greatspec...

                They also do high-frequency trading like most other large market participants, they have computer software that looks for momentary drops below average on a security and will buy everything available at that slight discount, then sell back when slightly above average, etc.

                A major criticism of the practice in general has long been that these guys are controlling massive sums of investable capital, have nothing but incentive to take a huge risk (for a huge bonus), and if they lose, it's not really their own money, they can go somewhere else or just make it up on the next trade. The bigger issue is that there is no one day when everyone is a winner on Wall Street, it's a zero-sum game, so every winner has a reciprocating loser. These guys are operating with a lot of information that isn't available or affordable to the individual investors they normally beat.
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                • Posted by  $  Thoritsu 7 months, 2 weeks ago
                  Good to know Goldman made the same bet that I did on oil prices. Of course mine is in stock.

                  While I agree in general daily trading Wall Street is a zero sum game, but in the long run this is just not so. Wealth is created by companies, and some of it is reflected in stock prices. Apple or Google for example did not take money from somewhere else to create their markets and stock value.

                  It seems to me, an argument can be made that high-frequency trading creates no value, is purely opportunistic and inappropriately favors the banks and large institutions. That might be an area some regulation is needed? Perhaps lift some ridiculous Sarbaynes-Oxley and add that.
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  • Posted by  $  allosaur 7 months, 2 weeks ago
    Me dino on a Squeaks the Minus Point Troll patrol.
    0 +1 = 1. Your post does not deserve a zero or maybe you asked the wrong question.
    Moving on to inspect three more zeros.
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    • Posted by  $  nickursis 7 months, 2 weeks ago
      Agreed. I always like to hear of these situations, as it is always assumed the business world runs on honest work. I have had nothing to do with stocks for the last 10 years, and only buy precious metal to keep for when we will need it. Glad to see things like this to show how much manipulation can be done (along with almost everything else getting manipulated). Honesty is almost a dead value replaced with greed = looters.
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  • Posted by ChuckyBob 7 months, 2 weeks ago
    Interesting comments. I have never gotten into trading gold, it just seems to be a bit flaky. Since there is little intrinsic value to most retail purchasers it is a market that could collapse on a whim, just like tulip bulbs. Silver has more commercial utility since a lot of silver is used in manufacturing. So it should have a more stable demand. However, all of my investing has been in real estate and stocks. Over the loooooooong term RE has always gone up, short term can bite. That being said, if you keep your ear to the ground market timing can be done in RE, but it IS NOT a game for most short horizon speculators. There really is quite a bit of transparency with the stocks of a publicly traded company. If you are willing to do the study required and not try to be an ignorant day trader the market will probably reward you on average. If you treat the market like a casino, it will treat you like a casino treats it's customers.
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    • Posted by CircuitGuy 7 months, 2 weeks ago
      I like all of this investing philosophy, except the part about silver being less volatile than gold. I think silver is actually a little more volatile than gold, but I do not know why.
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      • Posted by ChuckyBob 7 months, 2 weeks ago
        Industrial demand for silver is only part of the equation. You also have to factor in rampant speculation and manipulated supply.
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        • Posted by  $  nickursis 7 months, 2 weeks ago
          Exactly. If you want to make money look into Graham Summers Phoenix Capital. He specializes in almost a reverse method of using the system against itself, since it looks like he assumes there is a link between government control and crazy speculative trades. He claims to hit 95% success at it. He makes good arguments in his newsletter, but a lot of his predictions for overall events seem to lag as they always seem to have another way to prop up the unpropable.
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