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

Gold Daily and Silver Weekly Charts - Management of Perception

"The contempt for the lives of the soldiers and for France herself has come to the point of calling people raw material and cannon fodder."

François-René de Chateaubriand, De Bonaparte et des Bourbons


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

Stefan Molyneux

There was little of interest that happened yesterday on the Comex for the inactive May gold contract.

Next Tuesday the 27th is an option expiration for the June gold and silver contracts. June is an active month.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Gross Complacency and Artful Delusions

There is no recovery.  There has been no genuine reform.

The betrayal of trust is comprehensive.

Have a pleasant evening.

Financial Crisis in America: If Only the King Knew!

Signs of Decay

1. Internal corruption
2. Imperial overreach
3. Inability to reform.
   

Harvard Law Review
Incentives and Ideology
By James Kwak
May 20, 2014

“'If only the King knew!', we cried a thousand times from the depths of our abyss.” Cahiers de doléances de Cahors, 1789

In pre-Revolutionary France, common people would often say of their problems, “If only the King knew . . . .” Whatever evils they suffered at the hand of their government must be due to the king’s ministers and officials, for the king himself could not be at fault.

But the king knew exactly what was going on. As Levitin shows, our financial regulators were and remain deeply enmeshed in a complex political environment. At the margin, they have the discretion to do favors for the industry or for specific institutions (such as the OTS backdating a capital infusion by IndyMac to make it seem well capitalized when it actually wasn’t). But major regulatory decisions, such as turning a blind eye to derivatives or bailing out banks, are made by the political system as a whole...

More generally, we can’t blame everything on the bureaucrats. The financial non-regulation that made the 2008 crash possible was the explicit policy of multiple presidential administrations, and some of its most important elements sailed through Congress with bipartisan support. The choice to bail out large banks rather than homeowners was made by the Bush and Obama Administrations.

And Congress passed the Dodd-Frank Act, which largely left in place the regulatory system that had failed so spectacularly, with the Administration lobbying heavily to weaken the most far-reaching reforms. In other words, President Obama knew exactly what was going on — just as President Clinton knew what was going on when he signed the Gramm-Leach-Bliley Act, allowing the consolidation of commercial and investment banking."

Read the entire article in the Harvard Law Review here.

Related:
Credibility Trap: Moyers and Barofsky on Failed Reform and Another Financial Crisis

Gold Daily and Silver Weekly Charts - Lions and Tigers and Pigs, Oh My

Intraday there was a move to push gold lower, but it really could not stick.

The capping continues.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Stick Save Yellen

The Fed minutes turned the markets around.

This will end badly.

They know this, but do not care.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Life Is a Cabaret

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.

Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."

Edward 'Eddie' George, Governor Bank of England 1993-2003

Yesterday I said,

"The capping in the metals is obvious.

There is no economic news or theory that is needed otherwise to explain it.

The question is how long it can last."

Someone asked 'why then is it happening?" I am sorry I had thought it was also obvious based on any number of recent posts.

The Anglo-American Gold Pool, and their coterie of client Banks, have made a policy decision to hold the price of gold and silver below 1300 and 20.

Why those particular levels?   Because any lower, and the miners would start going out of business, and the flow of physical bullion to the East might become unmanageable.   They are nice round numbers, with the obvious appeal to the bureaucratic mind.   Anything higher, or rather, with a more aggressive rate of ascent, and some of the natives might become restless, and the positions of some Banks might become untenable.

Their reasons are of course theirs, but I would imagine it is something along the lines of ZIRP, the TARP, selective justice, and the rigging of LIBOR and any other number of markets.  

The preservation of the status quo becomes paramount to those caught in a credibility trap, and especially among those who have risen to great wealth and power through 'extraordinary means.' 

L'etat, c'est moi.

Have a pleasant evening.