26 May 2010

It Doesn't Take a Whistleblower...

The most recent smackdown in Gold and Silver for the purpose of manipulating the price of metals for the COMEX option expiration was about as blatant and arrogant as I have seen. There was a big fat concentration of Calls at the 1200 strike price, and the temptation to make their expire worthless was an open invitation to the pigmen.

You do not need a whistleblower to spot these abuses. The banks and hedge funds are practically taking out billboards in their market price manipulation these days, and daring anyone to do something about it. Why are they so fearless under a 'reform administration?'

The gaming of the markets using derivatives and massed selling and buying, melt ups and flash crashes, is less a 'conspiracy theory' these days, and more like an IQ test.

And it's a damn shame. Especially when the enablers and the Wall Street demimonde ignore it and pretend it is not happening, or make up lame rationales attributing it to something else.

This sort of semi-official corruption grows like a cancer, until it subsumes all markets. And it has severe consequences in the real economy.