Citi and a Cartel of Global Banks Fined $1.2 Billion By EU over FX Market Rigging

I wanted to call your attention to this story about brazen manipulation in the forex exchange markets by the Banks for three reasons:

1. The markets are too large to be manipulated. When accusations of market manipulation are made, spokesmodels and apologists will dismiss them by saying 'the market is too big to be manipulated' and then cite some gross total of the market trade. This is utter baloney and they know it. Prices are set at the margins, not on the whole, and there is no market that is too big to be manipulated in some manner by big enough players.

2. The government is the problem. If there was a free market you would not see any manipulation. Get rid of all government involvement. This is such a howler that I won't even waste many words on it, except to say that this sophistry implies that if we eliminated the law, then there would not be any crime.  This is utopian nonsense, repeated as slogans by those who have stopped thinking for themselves.

3. The Banks are too well regulated to manipulate markets.  It is the same big banks that are involved in these market manipulation schemes, again and again. They are serial felons who always blame each instance of the felony crime to some 'rogue element' or isolated trader, which is also nonsense. And in each case the fine, while nominally large by individual standards, is really just a cost of doing business.

These market manipulation schemes will end when people reject the narratives put forward by the Bankers and their enablers and think tanks, and choose to elect people who are serious about financial and political reform.

At some point the long term price/physical manipulation in the gold market is going to blow up, and no one in authority could have seen it coming. Because their eyes are firmly closed and gaze averted.

And Trump is no different from his predecessors, and in some ways may be worse.

"Citigroup Inc.[aka Dr. Evil], Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. are among five banks that agreed to pay European Union fines totaling 1.07 billion euros ($1.2 billion) for colluding on foreign-exchange trading strategies.

Citigroup was hit hardest with a 310.8 million-euro penalty, followed by fines of 249.2 million euros and 228.8 million euros for RBS and JPMorgan, the European Commission said in a statement on Thursday. Barclays Plc was fined 210.3 million euros and Mitsubishi UFJ Financial Group Inc. must pay nearly 70 million euros as part of the settlement with the EU’s antitrust regulator.

Traders ran two cartels on online chatrooms, swapping sensitive information and trading plans that allowed them to make informed decisions to buy or sell currencies, the regulator said. Many of them knew each other, calling one chatroom on the Bloomberg terminal the "Essex Express n’ the Jimmy" because all of the traders but one met on a commuter train from Essex to London. Other names for rooms were the "Three Way Banana Split" and "Semi Grumpy Old Men."

"Foreign exchange spot trading activities are one of the largest markets in the world, worth billions of euros every day," EU Competition Commissioner Margrethe Vestager said. "These cartel decisions send a clear message that the commission will not tolerate collusive behavior in any sector of the financial markets."


...The effects of the EU decision on banks will be “relatively mild, because the fines aren’t huge,” said Aitor Ortiz, an analyst at Bloomberg Intelligence. Referring to the third probe involving Credit Suisse, he said “we may still have to wait another year” to see the decision, because the bank has refused to join a settlement that would grant lower fines.

Traders exchanged information about outstanding customers’ orders, bid-ask spreads, their open-risk positions and details of current or planned trading activities. They would sometimes agree to "stand down" or stop a trading activity to avoid interfering with another trader in the group. They traded 11 currencies, including the euro, the U.S. dollar, the British pound and the Japanese yen...

Read the entire story here.

Stocks and Precious Metals Charts - Autumn - FOMC and Comex Option Expiration Next Week

There was a 'flash crash' in the precious metals futures this morning in honor of the quad witch option expiration.

This is the Dr. Evil strategy, as so named by the US traders who got nailed pulling this baloney in the European bond market some years ago.

It is a massive dumping of contracts into a dull market for the purpose of gaming the price to achieve some objective.

There is a rollback of financial reform and purposefully lax enforcement under the Republicans, who are servants to the moneyed interests. The corporate Democrats do not really care about financial reform either, except to pay it lip service. Like so many other donor-sensitive topics in our corrupt political system it interferes with their pandering to the big money interests which they favor.

One of the spokesmodels called this a 'risk on' day. While the VIX declined a bit, stocks really not robust at all. It was a quad witch day in which fundamentals apply even less than normal.

Next week there will be an FOMC meeting, with 100% probability of a rate increase, and also an option expiration on the Comex, mostly involving gold. I have included the calendars below.

My mail order of Hula Daddy Kona coffee showed up today, just in time for the weekend.  My son is into coffees.  It's a treat for him.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - 'Smoking Gun' In Bank Silver Rigging

The precious metals turn in a weaker performance today based on dollar strength versus the euro.

The markets had a little difficulty in determining whether the action taken this morning with regard to their version of QE was hawkish or dovish.

Dovish finally won the day, and the euro slumped against Uncle Buck.

The most interesting news of the day is the discovery of a 'smoking gun' in the papers from the Deutsche Bank lawsuit and settlement that names a group of other Banks as active manipulators in manipulating the silver market.

You may read about that here and in a few other articles in today's selected reading. I particularly enjoyed the Wall Street On Parade piece that refers to the Banks as being a Silver Market Mafia.

Most informed participants could see the obvious price rigging in the gold and silver markets over the past several years.   Normal trading does not instruct one to dump billions of dollars in contract into the quiet market off hours.

And in fact this is a well known, time-tested market rigging ploy that some banks had internally referred to as the Dr. Evil Strategy.

How ironic that the CFTC, the primary regulatory body for commodities in the US, studied the silver market for about five years and then decided not to bother issuing any report, save for a simple statement that 'they found no evidence of market manipulation.'  

This is the sad story of our times of regulatory capture and pervasive 'soft corruption' in political circles.   As Senator Dick Durbin noted in the aftermath of the financial crisis of 2008, 'the banks still own the place.'

The American people, and the people of a few other developed nations, are sick of this duplicity and dishonesty in the political and professional class.

As well they might be.   And their attempts at redress and reform are ignored or stifled, and so the anger keeps building to what some fear will be a 'Versailles Moment.'   One would hope not that, but history suggests that this sort of situation does not end well when if finally does.

Have a pleasant evening.

Stock and Precious Metals Updates As Of 11 AM on Thursday - The Predators

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population.

Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism."

Charles Ferguson, Predator Nation, 2012

As you can see, gold was pushing much higher this morning, up to $1270, and silver to 17.60, and then they were slammed down rather hard by selling.  Some will say that this was because the ECB had done nothing in their meeting today.  Nothing that is, except to continue to provide unprecedented stimulus designed to prop up their financial sector while doing little for the broader public economy.

Financial assets in the US like stocks are being pushed steadily higher for some time now, I believe as either an instrument or an artifact of the bubble-nomics being promoted by the Federal Reserve and the Administration.  One tries to provide some semblance of prosperity for the sake of perception management, while others cash in based on their information about what is happening.

Again, this is not capitalism, by any stretch of the imagination;  it is mere plunder.  And it will remain as such until it stops being highly profitable with little risk of serious punishment to the predator class and their enablers.  And if you are expecting serious reform from the leading presidential candidates, then you may still be breathing the fumes from the pipe of 'hope and change.'

There will not be further updates today unless something extraordinary happens.

Mary continues on in intensive care.  Thank you for your kind thoughts and prayers.  One step at a time.

Thousands of Gold and Silver Futures Contracts Dumped at Market Open

This calculated slamdown was a little enthusiastic even by current market standards, or lack thereof.

About seven thousand gold futures contracts, representing 21.8 tonnes of paper gold, were dumped at market in less than one minute driving the price down to $1,080.

Several thousand contracts were bought back in the following two minutes.

No legitimate profit-oriented sellers would operate in this manner, since they are selling against themselves.  You do not dump large volume without limit into a quiet market unless you are trying to disrupt the price.

A similiar operation happened in silver.

Who would suspect a thing?  Certainly not the regulators, or even some market 'reformers.' Not when something is so obvious.

Oh, well done.

Zerohedge thinks that it might be another HFT inspired 'flash crash.'

I think this is another conveniently timed, clumsy attempt to clear out more of the August open interest and give a nice shot to the gut for any foolish enough to still buy options on the Comex. The next precious metals option expiry is on the 28th July.

Shanghai Gold Exchange Sees 61.8 Tonnes Withdrawn In Eighth Largest Week Ever - Talk To the Hand

"Gold has worked down from Alexander's time. When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."

Bernard M. Baruch

Asia continues to add significant amounts of gold bullion to their wealth reserves.

Wall Street and its sycophants would like us to consider gold to be just 'a pet rock' or 'like trading sardines.'   And yet central banks have turned to be net buyers, and Asia and the Mideast continue to buy bullion in record amounts.   Talk to the Chan.

One of the few coherent things Alan Greenspan said was that statists of all persuasions, both right and left, have 'an almost hysterical antagonism towards gold.' This is because gold resists their will to power over others.

So why isn't gold 'working' at this moment in history?

"We hypothesize that, having learned from the misadventures of the 1960s, the policy elites, well-versed in the practice of financial engineering and market manipulation, would have seen no need to dump stocks of government gold reserves onto the market, 1960s style, to keep the price in check.

Instead, synthetic gold, sourced in pyramids of credit extended to bullion bankers by central banks with little or no claim on physical substance, have provided a more efficient, better-camouflaged form of intervention. COMEX synthetic gold and related over-the-counter derivatives are traded in macro strategies implemented by hedge funds, high-frequency trades, and commodity funds in pair trades with interest-rate, currencies, equity futures, or even more exotic offsets. The volumes traded are huge, and bear little resemblance to actual flows of physical metal.

We suspect that shorting gold has come to seem like a riskless proposition as long as there is confidence in the Fed. Synthetic gold is the perfect substance for a carry trade: an easy borrow with very low carrying cost and little upside basis risk. Such a hypothesis, in our opinion, does much to explain the incongruity of a declining gold price while fundamentals for paper currency, and the U.S. dollar in particular, obviously deteriorate; while demand for physical gold has exceeded new mine supply for several years running; and while above-ground 400-ounce .995-gold bars located in London, New York, and other financial capitals (in cohabitation with speculative trading activity in paper markets) have steadily dwindled and disappeared into Asian financial centers reformulated as .9999 kilo bars."

Tocqueville Gold Newsletter 2Q 2015

The dumping at market of very large amounts of paper assets into quiet market hours has been well documented in many places. It is a well worn market manipulating strategy abused by some very large trading desks, often playing with other people's money. Citi privately called it their 'Dr. Evil Strategy.'

It is funny how the systematic rigging of so many financially related markets has been revealed, but the blatant manipulation of the precious metals market, which is certainly knowable by anyone with a basic knowledge of the markets and a computer terminal, is so willfully ignored. A love of money, lust for power, and a lack of integrity will alloy to make people hypocrites.

When we see such trash articles being written, and passed along mindlessly by those who yearn to warm themselves by the fires of the oligarchs, we know that gold has cast a cold fear into the hearts of those who would be kings, and their privileged servants.

And considering the long, cynical rally in paper assets that culminated in the financial crisis of 2008, when people start believing in the power of fraud and willful distortion of markets, we can only say as we did then, this will end badly.

A man cannot serve two masters. He will love the one and come to hate the other.  You love what you serve.

Gold Daily and Silver Weekly Charts - Unfortunately Predictable Absurdity

Gold and silver were hit by a brutal takedown this morning.

 

Welcome to the post FOMC reaction, as well as the end of the month, and the beginning of the active month of May for silver.

 

These jokers aren't even feeling the need to pretend anymore.

There was intraday commentary on silver here and the metals takedown here.

I hear that a carefully coiffed, long time teddy bear acquaintance says that some big traders are rigging the metals market, but "the government isn't involved at all."  For newbies, he has been saying this for about fifteen years so at least he is consistent.   But it is getting old now.

 

NO involvement. Really? 

 

When there is a blatant, wide open crime wave with daylight muggings and bombings, and the duly designated authorities aren't doing anything about it, I imagine you could say that technically they are 'not involved.'   After all they didn't do anything.  Except not do their jobs.

 

This kind of obstinate credulity is a big part of the problem.  Of course they are involved.  The only question is why?  

 

I have been watching the markets for a long time.  And this is starting to look like a bad dream.  These jokers never know when to stop.  They are emboldened by ever successful caper.  They start to feel like rigging the market is like an entitlement.

 

I will never forget the reaction from an ex pat trader from a major US Bank in London, who when caught red-handed manipulating euro bonds by smashing a quiet market with sell orders, was indignant at being chastised for it.  Hey, we do this all the time back home!  It even had a cute frat name, the Dr. Evil strategy.  He thought he had universal impunity.

 

It's funny but there seems to be a double standard for US traders and 'foreign traders.'   Have you noticed?  Doesn't it seem like the US always goes after the foreign banks and traders even when it involves a general free for all of criminality?

 

Is this some sort of imperial droit du seigneur when it comes to market rigging?  Is this like being able to say that you are a citizen of Rome and entitled to be judged by the emperor alone?

 

Have a pleasant evening.

 

 

 

 

Gold Daily and Silver Weekly Charts - Bucket Shop

Gold was hit fairly hard for no apparent reason this morning, but recovered shortly afterwards.

 

See the Dr. Evil strategy  favored by some of the large trading firms, and running afoul of the regulators from time to time when they step on the wrong toes, or skin the wrong cats.

 

Here is an account of Barclays being specifically fined for stepping on a big customer using gold manipulation.

This is the liar's poker market on the Hudson. 

The Comex is now the kind of market where speculators and trading companies wager with many thousands of paper positions representing various real world items, with no intent to actually take or give delivery of them with any connection to the real world of commerce.  

They wager with almost wholly synthetic positions.   As such, the Comex has become a virtual bucket shop that is by tradition and custom still setting many critical prices for the world markets.

As defined by those august solons on the US Supreme Court in Gatewood v. North Carolina, 27 S.Ct 167, 168 1906 a bucket shop is:

"an establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in."

These sorts of long term price manipulations have very corrosive effects on real world supply factors, and are often the source of market dislocations as they collapse, not to mention large fortunes for a few, and human misery for many.

 

There was intraday commentary here, Pictures of a Currency War, With Narrative.

 

They say that no non-purely defensive war can occur unless the moneyed interests see it as a profitable opportunity.   And I say, that goes double for 'financial wars' such as we are seeing now.

 

A little gold and silver were shoved around the plate today in the 'Delivery Report' and the warehouses.

 

Have a pleasant evening.

 

 

 

 

Barclays Fined For Brazenly Manipulating the Price of Gold With the 'Dr. Evil Strategy'

“The whole purpose of propaganda is to make the obvious seem obscure, or offensive.”

Stefan Molyneux

In this case action was taken because a large option customer complained to Barclays, which in turn gave the trader up to the FSA. And so Barclays threw one of their traders to the regulators.

Reform will come when the regulators proactively take action on such obvious market rigging maneuvers and establish sound price discovery and fair markets as they are charged to do by law.

These types of trading gambits are relatively easy to spot on the tape, and have been happening with some regularity on the Comex, in addition to the London markets. As in the case of Barclays, these short term manipulations are done to game the markets and cheat customers, who may have options positions and stop loss orders. They are theft, pure and simple, and it is being done in clear sight.

When some analysts and commenters say that they have never seen any evidence of price manipulation like this, both up and down, as large amounts of contracts are wantonly dumped or bought in quiet markets, they say more about themselves, with regard to either their expertise or integrity, than about the markets.  

Financial Times
Barclays hit with £26m fine over gold fix
By Andy Sharman
May 23, 2014

Barclays has been hit with a £26m fine after one of its traders manipulated the setting of the price of gold in order to avoid paying out on a client order.

The UK Financial Conduct Authority on Friday said it was imposing the penalty on the British lender after the trader, Daniel James Plunkett, sent out a burst of orders aimed at moving the price of the yellow metal. The behaviour occurred just a day after the bank paid £290m in penalties and became the first institution to be fined in the sweeping Libor and Euribor rate-rigging probes...

The FCA said Mr Plunkett had manipulated the market by placing, withdrawing and re-placing a large sell order for between 40,000 oz and 60,000 oz of gold bars.

He did this in an attempt to pull off a “mini puke”, which the FCA took to mean a sharp fall in the price of gold. As a result, the bank was not obliged to make a $3.9m payment to the customer under an option contract...

Read the entire article here.

Related: Barclays Fined For Manipulating Price of Gold For a Decade

Sunday Night Gold Action

"The real cause, the effective one, that makes men lose power is that they have become unworthy to exercise it."

Alexis de Tocqueville

In case you were wondering why so many are giving up trading metals on the Comex...

(h/t Zerohedge for chart)

Related: Gold and Silver - Sharks With Laser Beams

HFT: 60 Minutes Sanitizes Its Report - What Banks, What Exchanges?

There were some gaping holes in the 60 Minutes expose about the stock market being rigged. The story was spun in such a way to make one think that uncontrolled innovation had created some unfortunate and inadvertent technical arbitrage opportunities in exchange centers outside of Manhattan, but a clever insider, funded in part by ultimate insider David Einhorn and backed by the big dogs of Wall Street, had come up with a clever technical fix in a new and better exchange called IEX.  Protected by a spool of fiber to induce network latency.  

 Free market triumphs, mission accomplished.   And wait breathlessly for the IPO.

Don't even think about a minimum transaction tax, a speed bump rule such as a minimum order duration, or anything more comprehensive than that. A spoolful of fiber makes the medicine go down.

I was so enchanted that they allowed someone to say 'the stock market is rigged' on national television that I thought that giving it a day or two to sink in might be appropriate.  And it is rigged.  It is just not fixed, in the manner of genuine reforms.  It is a laughingstock amongst insiders. Well not everyone is laughing.

What was this 60 minutes piece, a limited hangout expose that will still be boldly and hotly denied? 

The Fight Today That Stopped Floor Trading on the NYSE

"How frightened hypocrisy hastens to defend itself."

Victor Hugo

What is coming down the road, another flash crash or a major market failure?  Or are the natives just getting restless?  Look, reform!  And it was self-regulating!  The major owner and executive chairman of CBS, Sumner Redstone, of the aptly named holding company National Amusements, could not have asked for a better script.

If you did not notice, they parsed HFT into two types.  Conventional HFT that rides on the bid ask, normally in small incremental orders, aimed at skimming and carving up the smaller orders of the retail investors.  What INEX is addressing is 'front running' HFT that games lags between exchanges to jump in front of BIG orders from powerful insiders. 

Never mind the front running, which was taking a bite from the pros,  how about the steady nibble at the bid and ask on virtually every order that is being placed?   Doesn't anyone remember the computerized transactional skimming in the movie Office Space? 

NY AG Eric Schneiderman himself praised mom and pop affecting HFT as 'providing liquidity.' I think that canard has been capably debunked in many places and much better than I can do. It is like sex in college. The kind of liquidity you get you don't want, and when you desperately need even that liquidity, its not there. Why not just praise portfolio insurance to abolish risk, and party like its 1987?

And what about the bombing of quiet markets with an avalanche of orders to brazenly manipulate the price?  We have indictments of American companies doing that from Europe to Japan, with the sexy title 'Dr. Evil strategy.'   And it is happening like clockwork, almost every day.

And as the king of Samoan metals traders, Salelologa Dave said, 'I’ll know that real change is coming to our system when the Government allows Sixty Minutes to discuss the manipulation of the gold market."

And brother, that is the truth. We can't even get the CFTC to disclose its five year study of manipulation in the silver market that we paid for.

60 Minutes Sanitizes Its Report on High Frequency Trading
By Pam Martens
April 1, 2014

Two of the chief culprits of aiding and abetting high frequency traders, the New York Stock Exchange and the Nasdaq stock exchange, failed to come under scrutiny in the much heralded 60 Minutes broadcast on how the stock market is rigged.

This past Sunday night, 60 Minutes’ Steve Kroft sat down with noted author Michael Lewis to discuss his upcoming book, “Flash Boys,” and its titillating revelations about how high frequency traders are fleecing the little guy.

Kroft says to Lewis: “What’s the headline here?” Lewis responds: “Stock market’s rigged. The United States stock market, the most iconic market in global capitalism is rigged.”

Kroft then asks Lewis to state just who it is that’s rigging the market. (This is where you need to pay close attention.) Lewis responds that it’s a “combination of these stock exchanges, the big Wall Street banks and high-frequency traders.” We never hear a word more about “the big Wall Street banks” and no hint anywhere in the program that the New York Stock Exchange and Nasdaq are involved.

60 Minutes pulls a very subtle bait and switch that most likely went unnoticed by the majority of viewers. In something akin to its own “Flash Boys” maneuver, it flashes a photo of the floor of the New York Stock Exchange as Kroft says to the public that: “Michael Lewis is not talking about the stock market that you see on television every day. That ceased to be the center of U.S. financial activity years ago, and exists today mostly as a photo op.”

That statement stands in stark contrast to the harsh reality that the New York Stock Exchange is one of the key facilitators of high frequency trading and making big bucks at it....

Read the entire piece with the details here.

NAV Premiums of Precious Metal Trusts and Funds - First Gold Halt of 2014

Nanex documents the first trading halt in gold, and the first smash-and-grab bear raid of 2014, here.

"On January 6, 2014 at 10:14:13, Gold futures plummeted $30 on heavy volume. About 4,200 contracts send gold futures prices tumbling $30 and trigger a 10 second trading halt. "

1. February 2014 Gold (GC) Futures

Gold and Silver Futures Hourly Charts - Sharks With Laser Beams

There is not much doubt in my mind that the antics we saw in the silver, and to a lesser extent gold, markets last night were a classic hit and run, Dr. Evil market play.

It is not particularly sophisticated, more like a brazen street con, or a smash and grab.  But it does require a complacent regulatory environment, and a certain regard for fellow insiders who are in a position to see what has happened and raise objections with regulators and the exchanges.

One hits a quiet market with a very large 'sell at market order' and runs the stop loss orders on long positions.  And also triggers margin selling by longs.  But given the four minute turnaround it looked more like stop loss busting.

As the sell orders and any associated selling abates, which is generally rather quickly, the trader quietly buys back contracts and gets long 'on the cheap,' and allows the market to run higher and book a profit.

The point of this is not to manipulate the price lower and keep it there. The objective is to take out long positions in a quiet period and put them in your own pocket at below market prices.

This is one of the classic market cons and one of the reasons why prior reforms had instituted the 'uptick rule' on short selling. That rule has been eliminated and the regulating of naked short selling is a bit of a joke.  It is also why some are asking for 'position limits,' but this plea is falling on highly compromised ears often numbed by the revolving door between politics and finance.

So what next. Gold and silver were at extreme oversold position in terms of sentiment, Comex registered gold ounces, and chart technicals. The usual price suppression scheme was not going to keep going with the huge amount of physical offtake in the markets working against it.

So the smart money started covering the 'ancillary shorts' in cross markets such as mining companies, and went long in anticipation of a forced bottom.

There could be another bout of steady price suppression once this oversold condition is worked off.  It really depends on what had triggered this long effort to push the prices lower despite rising physical demand. 

Today Goldman Sachs says it sees 'more downside.'  You may recall that it was a 'short gold' call by Goldman that started this downside ball rolling through support some time ago.

Last night there were some related shenanigans in the Yen trade, but certainly did NOT look like a panic sell off by legitimate metal longs, although I am sure it will be portrayed that way by some. And I doubt it was a margin call either, except as the price plunged from calculated selling.

Although I would certainly appreciate any hard evidence that the CFTC could offer on this. In a better world we would not have to guess at how the prices of key commodities are being set, and shoved around the plate by those scavengers who are not involved in the real world process of demand and production.

That Banks who are on an ongoing public subsidy, and utilizing depositor funds, in order to game the markets and disrupt the real economy for their own profits is almost beyond belief, unless you have a knowledge of the history of central banking in the US.

And if they have a hand in implementing official financial policy for the Fed/Treasury, it would be understandable why they are untouchable when they engage in extracurricular activities like the market operation last night.  Or the coming moves in the equity market that could 'blow your mind,' as we used to say.  All these fellows know is 'more.'

Most of the discussion has been on the gold market, but I continue to think that the real chronic problem in the metals market is arising from the silver market where there is a real fear of a delivery default, or an uncoverable short position by a TBTF.

But in general this looks like another sign of the pathological environment on Wall Street and in Washington. 

In the target period only the NY Globex Market is open and volume is very light.

Silver Market Sunday Evening Follies

A large number of silver contracts were dumped on the Comex open on Sunday evening, a very quiet market period.

This ran the 'stops' and the price.

A similar number of contracts were then bought back at a lower price.  And then the market was roiled, but started to recover from a very obvious price smackdown. 

It is a little hard to see it on the 15 minute chart which just looks like a lot of selling.  I hear that 2500 contracts traded in 15 minutes is a near record for an off hours session.

The action is much easier to see on the 5 minute chart below that.

This looks very much like the Dr. Evil strategy which the banks and funds like to use when the regulators are turning a blind eye.

I have included a 15 minute gold chart just for comparison sake.

If this was selling by a trader with an eye to raising cash, that trader should be fired.  If it was done by a trader seeking to manipulate the price of the market, the CFTC should be able to find out fairly easily and publicly fine them.  But don't hold your breath for that to happen in the US.

The price of key commodities are being set by what is little more than a bucket shop.

The world sees this, and is appalled.