Friday, May 27, 2011

The Stock Market is Fixed!

Political Gangsterism
By Sheriff Jim R. Schwiesow, Ret.
October 21, 2011
It takes a crook to know a crook
Following is a historical statement by Al Capone, explaining why he would play the ponies but wouldn’t invest a dime on Wall Street: “It’s a racket. Those stock market guys are crooked.”
One has to give it to old Al; he was apparently as astute and perceptive in regard to corrupt economics as he was morally corrupt. That which he so aptly stated in his day in regard to the stock market is true even today; possibly more so. The markets are a racket and the fruits thereof – like those garnered in the nation’s gambling casinos – are transitory and misbegotten. The odds are always in favor of the house dear reader and the house in this regard is a government backed corporate clique that can be likened to a syndicate as venal and corrupt as the mafia ever was, and in fact profoundly more so.
The media, a/k/a our perpetual propaganda machine, would have you believe that a bull market is indicative of a healthy economy and of a productive society. Watching these medium puppets of government - and of the government’s corporatist confederates in economic chicanery - is akin to watching an old Edgar Bergen Mortimer Snerd puppet routine. The ostensible words that fall from the dummy’s mouth - via its manipulator - are profoundly foolish and innately stupid; and the words of the media manipulators of public thought are beamed as fact to a conspicuously ignorant and receptive people. Unlike Edgar Bergen, Mortimer Snerd’s manipulator, these puppeteers are not just amiable entertainers; they are the mouthpiece of a fraudulent collusive collective that is robbing the middle-class taxpayers of this nation blind.
Manipulated Investors
Have you noticed that these media shills for a controlling government have been continually buffeting their
viewers, listeners, and readers with a running commentary on minute to minute stock market returns? If you have been paying close attention you will note that when the markets have been stressed by public sell offs of stock they somehow mysteriously rebound and stabilize, often within days and many times within hours. Ah! You exclaim what good fortune now my 401K is safe and my retirement has been delivered from the precipice of disaster, whoopee! I’ll continue to invest. There is a word for such thinking, it is: Gullible! It does indeed seem that the sheep cannot wait to be sheared.
In reality while the media is dutifully ramping up your spirits the powers that be are propping up the markets by ramping up share prices via high volume buying of dumped stocks to create the illusion that shares are - rather than falling as is the case - in fact going up. It’s a rigged hand and even a dummy ought to be able to read the cards that are being dealt. These corporate cheats control the odds in the markets just as a casino owner controls the odds at his tables and games; an ordinary small time investor cannot win in such an environment.
I have written in the past, and I reiterate, do not gamble in the stock market if you do not have the funds to absorb monumental losses in order to make even more spectacular gains. Unlike the corporatists you are not guaranteed indemnity against loss through government taxpayer-funded bailouts, stimulus scams, or by an easy acquisition of loads of free Federal Reserve fiat money. Al Capone was correct your odds are better with the ponies than with the markets. The great difference between Al Capone and your government and its economic partners is that the government has granted itself a license to steal from you; Capone had to operate sans such legitimating circumstances.
Will it be Economic Failure or Insurrection that will Topple This Nation?
If I were asked to speculate in answer to that question I would be stuck for a reply. It will be one or the
other, but I would have to flip a coin and venture a guess as to which it will be. I would have supposed, some months ago, that it would be an economic collapse that would set in motion the destruction of this nation. But with the onset of the current so-called Wall Street Occupation that has seemingly spread from coast to coast I am tentatively revising that notion. And the reason for this revision of thought is the numbers, social makeup, and degree of worth of the protesters involved.
Once again a completely idiotic progressive media is attempting to obfuscate the nature of the occupy rebellion by equating it with the Tea Party movement. This in itself ought to provide a clear picture of the absolute corruptness and dishonesty of the fourth estate. Those having knowledge and spiritual insight know the difference between these two ideological causes, both politically and otherwise.
The Tea Party is comprised of enlightened, articulate, productive, law-abiding and morally responsible people who are seeking a delivery from government encroachment upon their constitutional liberties and a return to governance of and by the people. Their movement is orderly, lawfully conducted, and in accordance with moral precepts. One could walk among Tea Party participants without reservation in regard to their safety and well-being and without being offended by lewd and reprehensible animalistic behavior.
On the other hand…we have in the current inaptly named Occupy Wall Street movement an anarchic aggregate of neo-humanistic rabble without an identifiable objective other than to raise hell and to fornicate. That these inebriate half-wits are breeding in public like rabbits and dogs is in itself cause for consternation relative the anticipated impendent addition of a collection of future social misfits and malcontents to the welfare rolls of the nations’ governments’ troughs.
These people cannot be dignified as peaceful reformists; they are nihilists who would destroy for the sake of destroying. They are a dirty and unkempt collection of misfits and malcontents with no identifiable grievance. What the media has generously postulated, in their behalf, as grievances are in fact social conditions that these have brought upon themselves through irresponsible citizenship. A thoughtful citizen cannot be other than mortified by the crudely artful, inane, and inarticulate comments that are solicited of these dimwits by media agents and then broadcast to the world. Their nearly consistent slovenly appearance adds to the shame; they have the visual aspect of bums at a hobo camp. In actual fact even the bums, as I knew them, were infinitely more dignified.
Whether the impending downfall comes by way of an economic crack-up or by civil insurrection there will be no recovery. But, hey! You say, “this nation survived the great depression certainly we can do it again.” Here is the difference, my friend, and it is a huge difference.
It is a Matter of National Character
Understand that the circumstances of the approaching collapse will be entirely contrary to the circumstances that were attendant to the great depression. As stated it is entirely a matter of national character. The people of the great depression age had qualities of character that are missing from the majority of the current crop of noodles that populate this nation. In the main the people of the great depression era were possessed of moral soundness, they were industrious and ambitious, they were productive-minded and ethically inclined and sloth and laziness were not a part of their make-up. Above all they had courage, endurance, self-worth, and initiative all of which they used to survive, recover, and re-build. Our present decadent and debased society – when viewed objectively – obviates any hope for such a retrieval of post social stability in the event of an economic collapse.
A Reign of Bureaucratic Terrorism
One has to acknowledge the cleverness of the socialist agents for state ownership of capital and industry and for tyrannical control over human endeavor, and one must also grant that these did in fact seize upon the war on terror to inauspiciously enable a bureaucratic tyranny that far exceeds any threat from external sources.
911 presented a golden opportunity for these adversaries of republicanism to focus the attention of the American people on phantom international causes so as to obscure and cover-up a domestic agenda that included a dismantlement of the Bill of Rights and an emplacement of central totalistic control in the place of constitutional governance.
Indeed one can imagine that these domestic agents of progressive reform consider the untold billions of dollars spent, and the lives expended, in the international chasing of apparitional guerillas through baron territories to be a small price to pay for the successful and final transition of the nation from states’ rights and participatory democracy to absolutism. It is with great astonishment that one comes to the realization that this transformation came about through, and with the complicity of, the political representatives that were elected by the people to protect their freedoms and to preserve them from government tyranny.
Living in Dark Days
A dark and ominous specter hovers over this nation. The country currently meets the definition of a police state. Individualism and personal choice are suppressed and bureaucratic hooliganism is rampant. Subjective federal statutes rule over constitutional ensures, and the U.S. judicial system is rapidly being transformed into an arrangement of people’s courts similar to those of the former Soviet Union and the Third Reich. These increasingly jettison objectivity to affirm and enforce state authority over individual
The U.S. Code - consisting of many thousands of arbitrary statutory laws – is an enemy of the people. These statutes are not laws they are mandates that are specifically adaptive to entrapment and control. One cannot get through a day without violating one or more of these so-called laws; they are all inclusive, intrusive, and invasive to every segment of day to day existence. They comprise a virtual web of controlling measures that enables containment of personal freedoms, and they were specifically drafted to that purpose. The U.S. Code as it exists separates the people from their inherent God-given liberties.
Al Capone would have been Envious of the Power and Immunity from Prosecution that Government Agents Possess
The Department of Justice has become a rat’s nest of sinister intrigue and malfeasance – indeed the Obama/Holder union and appurtenant minions have all the appearances of a crime consortium. Political gangsterism runs like a thread through the Department of Justice and the malfeasance of the agencies and agents thereof runs the gamut of questionable – if not outright criminal activities; gun-running, subversion of justice, illegal hiring practices and perjury before congressional committees come immediately to mind.
That none have been prosecuted, censored, reprimanded or dismissed for such causes seems to convey the message that these miscreants are beyond any form of accountability or reproof for their blatant in your face infractions. Holder lies in the face of congressional committee members then gives them a virtual middle-finger when they call into question his prevarications. The U.S. Code contains a silly statute that makes it a crime for a citizen to lie to an F.B.I. agent, but the agents and officers of the various agencies within the Department of Justice seem to be able to lie to congressional investigators with impunity. There is something wrong with that scenario, don’t you think?
Satan is Alive and Well
“Now there was a day when the sons of God came to present themselves before the LORD, and Satan came also among them. And the LORD said unto Satan, Whence comest thou? Then Satan answered the LORD, and said, From going to and fro in the earth, and from walking up and down in it.” -Job 1:6-7
This scripture brings to mind the days when my Dad who might suspect me of some chicanery of one kind or another would make a similar inquiry, to which he would invariably add, “And don’t you lie to me, bud.” It wasn’t necessary for God to add such an addendum to his query of Satan, certainly the omniscient Lord knew where Satan had been and what he had been up to. And if we have been in the spirit and paying attention so do we. The power and influence of the prince of darkness are clearly evident in the works of men.
The corruptness of our people, of our system, and of our leaders makes it exceedingly clear that Satan walks among us. He is indeed the god of this fallen world and the nations of it, including the United States. Every lie that is uttered, every crime that is committed, every inhumanity that is fostered, and injustice that is perpetrated bears witness to his presence among us. He is in fact the titular head of this nation, and the members of the three branches of government do his bidding.
If you love this nation and things of this world above the Lord the love of God is not in you; your corrupt bones will fall among the ashes when comes the fiery end.
If you believe: “Go ye therefore, and teach all nations, baptizing them in the name of the Father, and of the Son, and of the Holy Ghost: Teaching them to observe all things whatsoever I have commanded you: and, lo, I am with you always, even unto the end of the world. Amen.” -Matthew 28:19-20
Titanic Battle or Insider Trading? The S&P Downgrade and the Bilderbergers: All Part of the Plan?
By Ellen Brown
Global Research, August 18, 2011
What just happened in the stock market?
Last week, the Dow Jones Industrial Average rose or fell by at least 400 points for four straight days, a stock market first.
The worst drop was on Monday, 8-8-11, when the Dow plunged 624 points. Monday was the first day of trading after US Treasury bonds were downgraded from AAA to AA+ by Standard and Poor’s.
But the roller coaster actually began on Tuesday, 8-2-11, the day after the last-minute deal to raise the U.S. debt ceiling -- a deal that was supposed to avoid the downgrade that happened anyway five days later. The Dow changed directions for eight consecutive trading sessions after that, another first.
The volatility was unprecedented, leaving analysts at a loss to explain it. High frequency program trading no doubt added to the wild swings, but why the daily reversals? Why didn’t the market head down and just keep going, as it did in September 2008?
The plunge on 8-8-11 was the worst since 2008 and the sixth largest stock market crash ever. According to Der Spiegel, one of the most widely read periodicals in Europe:
Many economists have been pointing out that last week's panic resembled the fear that swept financial markets after the collapse of US investment bank Lehman Brothers in September 2008.
Then as now, banks stopped lending each other money. Then as now, banks' cash deposits at the central bank doubled within days.
But on Tuesday, August 9, the market gained more points from its low than it lost on Monday. Why? A tug of war seemed to be going on between two titanic forces, one bent on crashing the market, the other on propping it up.
The Dubious S&P Downgrade
Many commentators questioned the validity of the downgrade that threatened to be another Lehman Brothers. Dean Baker, co-director of the Center for Economic and Policy Research, said in a statement:
"The Treasury Department revealed that S&P’s decision was initially based on a $2 trillion error in accounting. However, even after this enormous error was corrected, S&P went ahead with the downgrade. This suggests that S&P had made the decision to downgrade independent of the evidence.
[Emphasis added.]
Paul Krugman, writing in the New York Times, was also skeptical, stating:
[E]verything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs . . . .
In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.
In an illuminating expose posted on Firedoglake on August 5, Jane Hamsher concluded:
It’s becoming more and more obvious that Standard and Poor’s has a political agenda riding on the notion that the US is at risk of default on its debt based on some arbitrary limit to the debt-to-GDP ratio. There is no sound basis for that limit, or for S&P’s insistence on at least a $4 trillion down payment on debt reduction, any more than there is for the crackpot notion that a non-crazy US can be forced to default on its debt. . . .
It’s time the media and Congress started asking Standard and Poors what their political agenda is and whom it serves.
Who Drove the S&P Agenda?
Jason Schwarz shed light on this question in an article on Seeking Alpha titled “The Rise of Financial Terrorism”. He wrote:
[A]fter the market close on Friday August 5th, we received word that S&P CEO Deven Sharma had taken control of the ratings agency and personally led the push for a U.S. downgrade. There is a lot of evidence that he has deliberately tried to trash the U.S. economy. Even after discovering that the S&P debt calculations were off by $2 trillion, Sharma made the decision to go ahead with the unethical downgrade. This is a guy who was a key contributor at the 2009 Bilderberg Summit that organized 120 of the world's richest men and women to push for an end to the dollar as the global reserve currency.
[T]hrough his writings on “competitive strategy” S&P CEO Sharma considers the United States the PROBLEM in today’s world, operating with what he implies is an unfair and reckless advantage. The brutal reality is that for "globalization" to succeed the United States must be torn asunder . . .
Also named by Schwarz as a suspect in the market manipulations was Michel Barnier, head of European Regulation. Barnier triggered an alarming 513-point drop in the Dow on August 4, when he blocked the plan of Hans Hoogervorst, newly appointed Chairman of the International Accounting Standards Board, to save Europe by adopting a new rule called IFRS 9. The rule would have eliminated mark-to-market accounting of sovereign debt from European bank balance sheets. Schwarz writes:
We all should be experts on the dangers of mark-to-market accounting after observing the U.S. banking crisis of 2008/2009 and the Great Depression in the 1930s. Mark-to-market was repealed at 8:45 a.m on April 2, 2009, which finally put a stop to the short term liquidity crisis and at the same time ushered in a stock market recovery. Banks no longer had to raise capital as long term stability was brought back to the system. The exact same scenario would have happened in 2011 Europe under Hoogervorst's plan. Without the threat of failure by those banks who hold high amounts of euro sovereign debt, investors would be free to move on from the European crisis and the stock market could resume its fundamental course.
Schwarz notes that Barnier, like Sharma, was a confirmed attendee at past Bilderberger conferences. What, then, is the agenda of the Bilderbergers?
The One World Company
Daniel Estulin, noted expert on the Bilderbergers, describes that secretive globalist group as “a medium of bringing together financial institutions which are the world’s most powerful and most predatory financial interests.” Writing in June 2011, he said:
Bilderberg isn’t a secret society. . . . It’s a meeting of people who represent a certain ideology. . . . Not OWG [One World Government] or NWO [New World Order] as too many people mistakenly believe. Rather, the ideology is of a ONE WORLD COMPANY LIMITED.
It seems the Bilderbergers are less interested in governing the world than in owning the world. The “world company” was a term first used at a Bilderberger meeting in Canada in 1968 by George Ball, U.S. Undersecretary of State for Economic Affairs and a managing director of banking giants Lehman Brothers and Kuhn Loeb. The world company was to be a new form of colonialism, in which global assets would be acquired by economic rather than military coercion. The company would extend across national boundaries, aggressively engaging in mergers and acquisitions until the assets of the world were subsumed under one privately-owned corporation, with nation-states subservient to a private international central banking system.
Estulin continues:
The idea behind each and every Bilderberg meeting is to create what they themselves call THE ARISTOCRACY OF PURPOSE between European and North American elites on the best way to manage the planet. In other words, the creation of a global network of giant cartels, more powerful than any nation on Earth, destined to control the necessities of life of the rest of humanity.
. . . This explains what George Ball . . . said back in 1968, at a Bilderberg meeting in Canada: “Where does one find a legitimate base for the power of corporate management to make decisions that can profoundly affect the economic life of nations to whose governments they have only limited responsibility?”
That base of power was found in the private global banking system. Estulin goes on:
The problem with today’s system is that the world is run by monetary systems, not by national credit systems. . . . [Y]ou don’t want a monetary system to run the world. You want sovereign nation-states to have their own credit systems, which is the system of their currency. . . . [T]he possibility of productive, non-inflationary credit creation by the state, which is firmly stated in the US Constitution, was excluded by Maastricht [the Treaty of the European Union] as a method of determining economic and financial policy.
The world company acquires assets by preventing governments from issuing their own currencies and credit. Money is created instead by banks as loans at interest. The debts inexorably grow, since more is always owed back than was created in the original loans. (For more on this, see here.) If currencies are not allowed to expand to meet increased costs and growth, the inevitable result is a wave of bankruptcies, foreclosures, and sales of assets at firesale prices. Sales to whom? To the “world company.”
Battle of the Titans
If that was the plan behind the market assaults on August 4 and August 8, however, it evidently failed. What turned the market around, according to Der Spiegel, was the European Central Bank, which saved the day by embarking on a program of buying Spanish and Italian bonds. Sidestepping the Maastricht Treaty, the ECB said it would engage in the equivalent of “quantitative easing,” purchasing bonds with money created with accounting entries on its books. It had done this earlier with Greek and Irish sovereign debt but had resisted doing it with Spanish and Italian bonds, which were much larger obligations. On Tuesday, August 16, the ECB announced that it was engaging in a record $32 billion bond-buying spree in an attempt to appease the markets and save the Eurozone from collapse.
Federal Reserve Chairman Ben Bernanke was also expected to come through with another round of quantitative easing, but his speech on August 9 made no mention of QE3. As blogger Jesse Livermore summarized the market’s response:
.. . [T]he markets sold off rather rapidly as no announcement was made about QE3. . . . It wasn’t until . . . the last 75 min of market activity [that] the DJIA gained 639 pts to close at a day high of 11,242. That begs the question, where did that injection of capital come from? The President’s Working Group on Financial Markets? Or did the “policy tools” to promote price stability by any chance include the next round of Quantitative Easing unannounced?
Was that QE3 Incognito, Ben?
Titanic Battle or Insider Trading?
That leaves the question, why the suspicious downgrade on August 5, AFTER the government had made major concessions just to avoid default, and despite the embarrassing revelation that S&P’s figures were off by $2 trillion? Suspicious bloggers have pointed out that Lehman Brothers was brought down by a massive bear raid on 9-11-08, echoing the disaster of 9-11-01; that the S&P downgrade hit the market on 8-8-11; and that the S&P fell exactly 6.66% and the Dow fell exactly 5.55% on that date. In Illuminati lore, these are power numbers, of the sort chosen for power moves.
But we don’t need to turn to numerology to find a motive for proceeding with the downgrade. On August 12, MSN.Money reported that it “wasn't much of a surprise”:
Wall Street had heard a rumor early on that the downgrade was coming. News sites reported the rumor all day.
Unless it was all a huge coincidence, it's likely that someone in the know leaked the information. The questions are who and whether the leak led to early insider trading.
The Daily Mail had the story of someone placing an $850 million bet in the futures market on the prospects of a US debt downgrade:
The latest bet was made on July 21 on trades of 5,370 ten-year Treasury futures and 3,100 Treasury bond futures, reported ETF Daily News.
Now the investor’s gamble seems to have paid off after Standard and Poor’s issued a credit rating downgrade from AAA to AA+ last Friday.
Whoever it is stands to earn a 1,000 per cent return on their money, with the expectation that interest rates will be going up after the downgrade.
The Securities Exchange Commission announced on August 8 that it is investigating the downgrade. According to the Financial Times, the move is part of a preliminary examination into potential insider trading.
Whatever can be said about the first two weeks of August, their market action was unprecedented, unnatural, and bears close observation.
The Market is Fixed
Henry Makow Ph.D.
May 11, 2011
"If a ... bank's traders were able to make money every day of a quarter, were they really trading in any normal sense of the word? Or would vacuuming be a more accurate term?"
While hundreds of millions go to bed hungry, there are millions of people in the West who actually have money to burn.
Their incinerator of choice is the stock and commodity markets.
Wednesday for example, silver was down about 8% If you play silver using options, this translated into losses or gains of 40-50% depending whether you were long or short.
As most of you know, silver has doubled in price over the past year. The mushrooming US debt is destroying faith in the US currency. Squabbling over raising the debt limit raises the unthinkable specter of default!
Silver and gold bugs imagine precious metals will replace fiat currency as the medium of exchange. Some advocate buying silver because the big bankers have a short position. They can combine profit and politics by putting J.P.Morgan out of business!
So why did Silver tank Wednesday? It had nothing to do with any of the above. It seems silver suddenly is tied to the price of oil.
The traders hollering in the pits used Libya as an excuse to drive up oil. Now the air is coming out of that bubble and all "commodities" are falling.
Today silver is a "commodity." Tomorrow, it may be a precious metal again, depending on which way the big boys want the market to move.
The point is - the market is fixed. Everything else is controlled -- the media, education, politics, war. Why would the market be any different?
The market is designed to separate the small "investor" (aka speculator) from his cash. Just as the Illuminati can make skyscrapers collapse due to small fires and murder the long-dead Osama bin Laden, they can make the market go up or down.
Usually they draw in the suckers by creating a bubble. Then they go short. Joe Kennedy was a master of the "stock pool." The Great Depression was a giant version of this ploy.
A friend, Andrew, pointed me to a 2010 article that showed the banks made a profit every day of the first quarter. The author Jonathan Weil asked, "If a too-big-to-fail bank's traders were able to make money every day of a quarter, were they really trading in any normal sense of the word? Or would vacuuming be a more accurate term?"
The market is a casino. The house never loses.
Fiat Currency
A fiat currency is backed by psychology. The Illuminati bankers control the levers of mind control.
They control the business media. They control great stores of cash. It doesn't take much to set the herd stampeding in any direction they choose.
No matter how worthless the US currency is, they have to power to sustain it. The currency will not be worthless until we see signs of Wiemar-like inflation. I haven't seen these signs yet.
I'm not economist but I would think that housing would be an indicator of inflation. As you know, US house prices are falling.
The "debt" is an abstract concept since I don't think the bankers expect it to be repaid.
Spiritual Warfare
As my article, "Stock Market Porn" (below) states, we are engaged in spiritual warfare. The market is the Illuminati's most effective weapon. Not only does it rob many people, it separates them from their soul. It makes profit and loss the only criteria for behavior. It keeps them in bondage to the almighty dollar.
"You cannot serve both God and Mammon." Serve means worship, i.e. love/obey. Human beings must serve something. If we don't serve God to our salvation, we will serve Mammon to our detriment. Our choice is liberation versus bondage.
This is why gambling is regarded as a "sin" by true religions. It is to protect us from ourselves. We need principles to protect us from our greed and from those who take advantage of it.
If profit is our only principle, we deserve to be fleeced. The markets are rigged, and if we really want to combine principle and politics, we need to get out of them.
Seinfeld has a nice story about "putting his money to work." He says he lost on most of his investments. So he decided to let his money rest, and he'll do the work. Certainly paid off for him!
How the COMEX Crashed the Silver Market
Gold and Silver Blog
May 6, 2011
By the close of trading on Wednesday, May 4th, the silver market had experienced significant selling pressure that drove prices down by 17.3% from Thursday, April 28th. This sell off corresponded exactly to a series of increased margin requirements by the COMEX for trading silver futures contracts.
Silver traders who may have been apprehensive about additional margin increases did not have long to wait. After the close on Wednesday, May 4th, the COMEX announced two huge additional hikes in silver margin, effective at the close of business on Thursday and another hike effective at the close of trading on Monday, May 9th. As of Monday, initial contract margin requirements would be increased to $21,600 and to $16,000 for hedgers. A year ago, when silver was trading in the $18 range, the margin requirement for a speculative contract was only $4,250.
The rapid series of five margin increases by the COMEX resulted in raising initial margin requirements for speculators from $11,745 to $21,600 - an increase of 84%. The margin requirements for hedgers also increased by 84% from $8,700 to $16,000. Silver futures traders would now be forced to come up with huge amounts of additional cash or liquidate holdings on price weakness. The collapse in silver prices on Thursday May 5th, triggered by the COMEX margin increases, indicates that many players were forced to liquidate positions.
The actions taken by the COMEX constitute a perfect text book example on how to crash a market. The non stop increases in margin requirements resulted in a dramatic reduction of liquidity in the silver market by forcing out small speculators who were not prepared to commit additional cash for margin maintenance. As prices fell in response to the COMEX margin increases, bigger players in the silver market were forced to liquidate positions to avoid margin calls and large losses on leveraged positions.
The last two margin increases by the COMEX, after silver had already declined by over 17%, created the perfect crash scenario. Silver traders liquidating positions to meet new margin requirements caused a further cascade of forced selling and the silver crash became inevitable. The elimination of liquidity from any market will result in falling prices and the COMEX knew this.
If someone wanted to crash the silver market, the moves taken by the COMEX were perfectly designed to accomplish this by reducing liquidity at a time during which the markets were already stressed from previous margin increases. The result was a collapse in silver prices from $48.70 to the $34 range.
In response to the outrage over the devastating series of margin requirement increases, Kim Taylor, President of CME Clearing, which owns the COMEX, issued a statement explaining CME's actions. According to Ms. Taylor, margin increases are related to risk management and done to prevent default by clearing member firms. Margins are adjusted based on market volatility and are not designed to move a market or discourage investor participation. Among the factors considered in setting margins is a CME calculation of a worst case scenario for possible portfolio losses.
Specifically regarding the margin increases on silver futures, Taylor stated that "we have made several changes in recent weeks to adjust to volatility in the marketplace...Our interest is in providing security for the entire market - no matter which way it moves".
CME's statement seems disingenuous at best. The protection they speak of is not for the benefit of investors, but rather for the benefit of CME and clearing house members. The actions of the COMEX in implementing a rapid series of margin increases, even after silver had already steeply sold off, resulted in large profits to short sellers and reduced risk for CME at the expense of huge losses for silver investors both large and small.
A slower series of margin increases would have seemed more appropriate to address price volatility. The CME knew or should have known that its actions would severely limit liquidity in the silver market. The decrease in liquidity caused further market volatility, requiring more margin increases, which in turn crashed the price of silver. Anyone looking into the great silver crash of 2011, can start by looking at the COMEX.
NEWS FLASH: The Stock Market Is Kinda Fixed ……..
by admin on 10/10/2010
Check out a clip of a CBC report on high-frequency trading one of the biggest trends on Wall Street where super computers not humans buy and sell thousands of stocks per second for a penny or less each time. The computers care nothing about the type of stock, or the company, their only job is to perform up to 40 million minute transactions a day which eventually adds up to big bucks.
Watch what some in the financial industry say about the fairness of companies who are heavily invested in high-frequency trading and have even gone so far as renting server space for super computers IN a New York Stock Exchange office so they can get information into their computers fractions seconds before everyone else.
We don’t think this is fair, but we want in!!!!!!