market selloff

[madhatter]

Gold Manipulators Busted After Zero Hedge Report On Flagrant Gold Spoofing

http://www.zerohedge.com/news/2015-05-0 ... d-spoofing" onclick="window.open(this.href);return false;

In the aftermath of the Nav Sarao scapegoating farce, one week ago Zero Hedge decided to give the confused CFTC a helping hand and launched a daily series highlighting the constant spoofing and "manipulation" (in the CFTC and DOJ's own words) that takes place in every asset class, but mostly in the E-mini futures ("Dear CFTC: This Is The Market Manipulating "Spoofing" Taking Place In The E-Mini Just Today"). Virtually every day since then we presented the "regulators" at the commodity trading commission a clear example of stock market manipulation, with the exception of Tuesday, when with the exclusive help of Nanex, we showed a clear case of gold spoofing.

This is what we said on April 28:

Here (courtesy of Nanex) are several examples in the June 2015 Comex Gold Futures this morning. All times are Eastern Daylight. In each of these cases, no trades (or a tiny few) executed against the large "spoof" order. You can see how prices were influenced by the sudden appearance (and disappearance) of these large, outsized orders.



1. June 2015 Comex Gold



Note how large buy and sell orders push prices up and down.





2. Another set of instances appear about 50 minutes after the first set (shown in chart 1).



3. Another set of spoofing instances appear about an hour after the second set (shown in chart 2).



You're welcome CFTC — it's the least we can do.



Best wishes,



Zero Hedge



Reminder: We won't stop this until you are forced to address the glaring hypocrisy and utter incompetence of everyone involved in the regulation of market microstructure.

Much to our dismay, overnight we learned that while the CFTC continues to be very, very confused and challenged by all those lobby payments by the world's "liquidity providing" HFTs and ignores all documented evidence of manipulation, the Chicago Mercantile Exchange - owner of the futures exchange where the bulk of modern manipulation takes place - did read this evidence of manipulation, and decided to immediately take action, suspending two traders for placing the manipulative "spoofing and layering" trades profiled here three days ago which were virtually identical to the ones that got Navinder Singh Sarao into headlines around the world last week. Except, of course, the asset class manipulated was gold. And, perhaps what's far worse, the manipulation sent the price of gold briefly higher.

The names of the perpetrators: perhaps not surprisingly, Heet Khara and Nasim Salim. Extend to Navinder Sarao and a pattern emerges...

This is the full CME release:

NOTICE OF SUMMARY ACCESS DENIAL ACTION: COMEX 15-0103-SA-1



NON-MEMBER:



NASIM SALIM



CME RULE: 413. SUMMARY ACCESS DENIAL ACTIONS (in part)



A. The Chief Regulatory Officer or his delegate, upon a good faith determination that there are substantial reasons to believe that such immediate action is necessary to protect the best interests of the Exchange, may order that: 1) any party be denied access to any or all CME Group markets; 2) any party be denied access to the Globex platform; 3) any party be denied access to any other electronic trading or clearing platform owned or controlled by CME Group; or (4) any Member be immediately removed from any trading floor owned or controlled by CME Group.



FINDINGS



On April 30, 2015, CME Group’s Market Regulation Department (“Market Regulation Department”), through its Chief Regulatory Officer, summarily denied Nasim Salim (“Salim”) direct and indirect access to all CME Group markets, the CME Globex electronic trading platform, any other electronic trading or clearing platform owned or controlled by CME Group, and all trading floors owned or controlled by CME Group. The summary access denial prohibits trading, placing orders, and controlling or directing the trading for any person or entity in any CME Group exchange product. The summary access denial further prohibits the affiliation or business dealing with any member or member firm of CME, CBOT, NYMEX, or COMEX.



CME Group’s Chief Regulatory Officer’s summary access denial of Salim was based upon the findings of an investigation conducted by the Market Regulation Department, which revealed that on multiple trade dates during the time period of March 1, 2015 through April 28, 2015, Salim engaged in a pattern of activity in which he repeatedly entered orders or layered multiple orders for Gold and Silver futures contracts without the intent to trade. Specifically, Salim entered these orders or layered multiple orders to encourage market participants to trade opposite his smaller orders resting on the opposite side of the book. After receiving a fill on his smaller orders, Salim would then cancel the resting order or layered multiple orders that he had entered on the opposite side of the order book.



Salim introduced Heet Khara (“Khara”), who is also the subject of a summary access denial action, to his first FCM and Salim had an account at the second FCM at which Khara traded in a disruptive manner. Further, it appears that on multiple occasions Salim and Khara coordinated efforts to engage in disruptive activity. In an example from April 28, 2015, Salim entered small-lot orders on one side of the market in Gold futures, after which Khara entered large orders on the opposite side. When Salim’s small orders were filled, Khara canceled the large orders. Salim has not responded to correspondence from the Exchange.



The foregoing conduct, as well as Salim’s failure to cooperate with the Exchange, present a good faith determination that there are substantial reasons to believe that such immediate action is necessary to protect the best interests of the Exchanges and the marketplace.



ACCESS DENIAL:



Pursuant to Rule 413, this access denial will remain in effect for 60 days, commencing on the effective date below and continuing through and including June 29, 2015, unless the Chief Regulatory Officer or his delegate provides written notice that this access denial will be extended for an additional period of time.

We expect the CFTC and the DOJ to unleash the wrath of god now that the CME showed them how gold manipulation works, something they figured out by looking a this article.

And while we are delighted that yet one more alleged case of gold manipulation is now confirmed, we are curious if the CME, CFTC and DOJ will also prosecute instances of gold manipulation when the ultimate outcome is the price of gold going lower instead of higher, such as the one documented in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds", "Stop Logic" Gold Slam Was So Furious It Shut Down CME Trading Again" and on countless other occasions most of which have been duly documented on this website.

Finally, we wonder: will the CME, CFTC, DOJ, and FBI pursue as promptly all those instances of constant S&P 500 manipulation and spoofing we profiled over the past week in particular, and over the past 6 years in general? Or was this merely another "Sarao" case when several (non-Caucasian) traders are scapegoated by the regulators, with the naive expectation that investors will suddenly assume the market - in this case that of gold - is no longer rigged?
Average:

the "market" for ANYTHING paper is purely a speculative casino at this point, complete with the "house" rules we'll never be privy to, and the backroom deals we'll never see...But in the end the house never loses...

ebby day da cup go to a' well, one day da bottom do drop out, jes one day da bottom do drop out...

enjoy...

oh and take profits...

[Rime & Reason]

The drop in Gold is only half the story. The other half is the rise of U.S. stocks. While gold has lost a third of its value since this thread began ($1,800 down to $1,200), over the same time period the S&P 500 has gained about 50% (1,400 up to 2,100). If back when this thread started Geoff had sold an ounce of gold and bought a S&P 500 Index Fund, he would now have about $2,700. Madhatter, on the other hand, held on to the ounce of gold and now has only $1,200. Geoff could now buy 2 ounces of gold and still have $300 left over for stocks.

Yes Madhatter, some day stocks will go down just as gold has, but in the meantime, by pessimistically sitting on the sidelines, you’re missing out on a lot of gains.

On a related note ... what is it with all the Cat Puke going on around here. Did I miss the memo?

[madhatter]

The drop in Gold is only half the story. The other half is the rise of U.S. stocks. While gold has lost a third of its value since this thread began ($1,800 down to $1,200), over the same time period the S&P 500 has gained about 50% (1,400 up to 2,100). If back when this thread started Geoff he'd kinda have to have one in order to sell it no?had sold an ounce of gold and bought a S&P 500 Index Fund, he would now have about $2,700. Madhatter, on the other hand, held on to the ounce of gold and Still has an ounce of gold, that cost him significantly less than $1200 now has only $1,200. Geoff could now buy 2 ounces of gold and still have $300 left over for stocks.

Yes Madhatter, some day stocks will go down just as gold has, but in the meantime, by pessimistically sitting on the sidelines, you’re missing out on a lot of gains.more strawhatter bullsh!t fantasy on your part, I continue to take profits from a wide array of investments including the market...

On a related note ... what is it with all the Cat Puke going on around here. Did I miss the memo?

ZZZZZZZZZZZZZZZZZ1st of the month just rolled around, gotta go deposit them rent chex, you have a nice day at work now...The S&P's waiting for your next contribution...pump that sh!t up so I can take some more profits, I'm thinking about buying a motorhome and making some easy money off yer back will help the cause...

[Rime & Reason]

And the Cat Puke? You forgot to explain your fascination with Cat Puke.

[madhatter]

http://www.zerohedge.com/news/2015-05-0 ... rly-valued" onclick="window.open(this.href);return false;



from the WSJ:

Gates Says Bet On Yuan As IMF Calls Currency Fairly Valued


Barclays Bill Gates China Global Economy International Monetary Fund Middle East Obama Administration Renminbi World Bank Yen Yuan






We’ve talked extensively about China’s currency conundrum which has put Beijing between a rock and a hard place as it seeks to combat rapidly decelerating economic growth (which, according to some estimates, is running as low as 3.8%). Facing rising capital outflows (totalling $300 billion over the past four quarters alone) on the one hand and falling exports on the other, there appears to be no ‘right’ answer, as devaluing the yuan to prop up exports risks throwing gasoline on the capital outflow fire, but failing to devalue in the face of a dramatic slowdown in the export-driven economy may ultimately prove to be completely untenable. This is all complicated by recent strength in the dollar and perpetual pressure on the euro and yen exerted by the potent one-two monetary insanity punch from the Draghi-Kuroda tag team. Meanwhile, China is keen to give the yuan a more prominent role in the global economy via the AIIB and Silk Road Fund and is also pushing for SDR inclusion by the end of the year.

Against this backdrop, the IMF is out suggesting that the currency — which, as we have noted on multiple occasions over the past several months, has appreciated to the tune of 14% on a REER basis in the last 12 or so months — is closing in on being fairly valued. Predictably, Washington does not agree. Here’s more from WSJ:

http://www.wsj.com/articles/imf-to-brig ... 1430697814" onclick="window.open(this.href);return false;



The International Monetary Fund is close to declaring China’s yuan fairly valued for the first time in more than a decade, a milestone in the country’s efforts to open its economy that would blunt U.S. criticism of Beijing’s currency policy.



The fund’s reassessment of the yuan—set to be made official in IMF reports on China’s economy due out in the coming months—follows years of IMF censure of Beijing’s management of the currency.



The IMF’s latest view undermines the Obama administration’s pressure on China over its management of the currency and could undercut congressional efforts to inject yuan concerns into pending trade legislation.



“It takes the rug out from under the feet of U.S. critics of Chinese currency policy,” saidEswar Prasad, a Cornell University economist and former China official at the IMF. “The U.S. relied to a significant extent on what was seen as the IMF’s objective assessment.”



The Obama administration disagrees with the IMF, maintaining a view that the yuan, also called renminbi, remains “significantly undervalued.”



The shift at the IMF comes as Beijing is increasingly challenging the established global order. In recent months, China has won broad support for its new Asian Infrastructure Investment Bank, an entity that would rival the World Bank, the IMF’s sister institution. China is also pushing plans to create a modern “Silk Road” by better connecting its economy with those in the rest of Asia, the Middle East, Africa and Europe. Chinese officials have asked the IMF to include the yuan in the elite basket of currencies that comprise the fund’s emergency-lending reserves, a decision the fund will consider later this year.



The yuan is roughly pegged to the dollar, and as the U.S. currency has appreciated against most other major currencies, it has helped push up the value of the yuan. In nominal terms, the yuan’s appreciation has leveled off. But accounting for inflation, the value of the currency has risen by more than 10% in the past year alone.



As China’s economy cools, some economists don’t rule out Beijing depreciating the yuan again to help juice exports and prop up its expansion.

eh, whatever, those chinese are idiots anyway, just look at all the gold they hold....they coulda/shoulda bought S&P shares...

[Geoff]

300pts and counting as the money says no thanks to hopey dope. the wealthy sit on the sidelines and weather the storm while the middle and lower classes take the hit. Who saw that coming? oh wait I did. No worries though helicopter ben will arrive soon to save the day. Gold 2k by jan 31 or sooner? we shall see...

China devaluing the yuan bumped gold back up over $1,100 today. A brief blip in the sustained march down to sub-$1,000.

[madhatter]

300pts and counting as the money says no thanks to hopey dope. the wealthy sit on the sidelines and weather the storm while the middle and lower classes take the hit. Who saw that coming? oh wait I did. No worries though helicopter ben will arrive soon to save the day. Gold 2k by jan 31 or sooner? we shall see...

China devaluing the yuan bumped gold back up over $1,100 today. A brief blip in the sustained march down to sub-$1,000.

this seems to matter a lot more to you than it does to me...always nice to hear from ya though...

meanwhile the DOW is up @3k since 07... whoop ti do...the market is a great place to make money but not such a great place to store the money you do make... take profits if yer smart enough to know how...

http://www.zerohedge.com/news/2015-08-1 ... -gold-card" onclick="window.open(this.href);return false;

EXCERPT:

Comex has only one ounce of physical gold for every 124 owners of paper gold

The only way that the US might counter the Chinese move, would be to revalue gold in Dollars; which is to say, the US would have to effect a corresponding devaluation of the Dollar against gold, to nullify the effect of the Chinese devaluation of the Yuan against gold.

At a Dollar price of gold of $1,517 Dollars per ounce, the Chinese devaluation would be left without effect: the present Yuan/Dollar exchange rate would then remain at 6.20 Yuan per Dollar: 9,408 Yuan/6.20 exchange rate = $1,517 Dollars per ounce.

This is the old policy of the 1930's, commonly known as "beggar thy neighbor", where countries carried out competitive devaluations against gold in order to preserve their manufactures and continue exporting. The response of importing nations was to raise tariffs on imported goods. (Say good-bye to an integrated world economy.)

Will China decide to "beggar its neighbors", the US and Europe? I think that the huge problem of keeping the Chinese economy on its feet and avoiding the political instability which would rage through China by not doing so - with a population in excess of 1.3 billion human beings - will be so compelling that China will practically inevitably resort to raising the price of gold in China.

When might this happen?

The world economy is going from bad to worse by the day. The Chinese may opt for this measure out of sheer desperation, and it may be a reality soon. I have the sensation that things are falling apart around the world at an increasing rate of speed. Perhaps China will move this Fall?

Devaluing the Dollar on the part of the US would upset the apple-cart of Dollar hegemony in the world. But not to devalue would price US goods out of world markets, along with European goods. "Damned if you do, damned if you don't."

Dollar devaluation would force a Euro devaluation and all Hell would break loose, as all countries would belatedly realize the importance of having gold reserves, and one country after another would devalue their currencies against gold. Import tariffs and restrictions on imports would once again prevail. The dream of "Globalization based on the fiat dollar" would evaporate in the orgy of currency devaluations against gold.

The era of the Dollar as reserve currency of the world, would have ended.

When the dust shall have settled on this giant crisis, the powers of this world will have recognized, once again, that gold is money; what would remain would be the work of establishing the gold standard de jure, by international accords, in order to abolish tariffs and import restrictions and renew the free international flow of goods.

However, another horrible scenario is possible: the US, run by those who insist on maintaining the plan for world domination through endless war, may decide to go to war with China and with Russia, too, for good measure. Let us hope that reason prevails and that the Dollar loses its status as world reserve currency in a peaceful manner.

it's all good, til it's not...

[Bubba]

Comex has only one ounce of physical gold for every 124 owners of paper gold

Welcome to the world of commodities trading. The number of contracts far outstrips the actual commodity volume traded. That's what end of month settlements are for - to net out the paper and allow a few parties to take actual delivery.

[madhatter]

Comex has only one ounce of physical gold for every 124 owners of paper gold

Welcome to the world of commodities trading. The number of contracts far outstrips the actual commodity volume traded. That's what end of month settlements are for - to net out the paper and allow a few parties to take actual delivery.

well except it's leveraged by @ 6x its historical ratio of @ 20:1 despite record physical demand worldwide...

Another way of stating this unprecedented ratio is that the dilution ratio between physical gold and paper gold has hit a record low 0.8%.

Indicatively, the average paper-to-physical coverage ratio since January 1, 2000 is a "modest" 19.1x. As of Friday it had soared to more than 6 times greater.

Which brings us to the usual concluding observations:

First: as we have said previously, at a time when all the gold selling (and naked shorting) is in the paper markets and when demand for physical gold is once again off the charts, with soaring purchases not only in India but also in the US, where is this gold going? Clearly not into CME gold vaults, which are once again a source of physical gold, and as the above shows, have never had less deliverable gold.

Second, total Comex gold has dropped to such precarious levels in the past and while on many occasions market observers have asked if the Comex is close to a failure to deliver, aka a default of the CME's gold warehouse, it has always avoided such a fate. Still, one wonders: the 10+ tons of deliverable gold at the Comex are now worth a paltry $383 million. It would not be very complicated for a next generation "Hunt Brother" to buy some $400 million in Comex gold, and promptly demand delivery: after all the gold crash of two weeks ago saw some $2.7 billion in paper gold dumped in the most illiquid market - why can't it be done in reverse. What would happen next is unknown, but unless somehow the Comex found a way of converting millions of ounces of Eligible gold into Registered, the CME would simply be unable to satisfy such a delivery request.

Third: while there are still over 7 million ounces of Eligible gold, why the recent spike in "adjustments" of eligible to registered gold (i.e., missing a warehouse receipt)?

Finally, we assume the mainstream press will once again start paying close attention to the total, and especially registered, gold held at the Comex: at a pace of 25K a day, the gold vaults that make up the CME's vaulting system would be depleted in just under two weeks of daily withdrawals.

In any case, we are very curious to see how this latest dramatic face off in the long-running war between paper and physical gold, concludes.

once again it's all good, til it ain't....I don;t like the GLD, leasing, trading and the rest of the paper manipulation game but I'm not an active participant in it... it's a buy and hold, selling only in extreme circumstances, otherwise it gets passed on or cashed in near end of life for frivolous liquidation,til then it's part of a complex and highly personalized insurance policy against bankruptcy and financial devastation...( "end of life frivolous liquidation" would be the ideal scenario in that it would mean "extreme circumstances" never occurred during my lifetime)until then the daily price has little real meaning and even then in almost any scenario the comex price is irrelevant as any sale would be to a retail buyer at whatever the buyer was willing to pay/trade not sold to comex...

[Guy in Shorts]

300pts and counting as the money says no thanks to hopey dope. the wealthy sit on the sidelines and weather the storm while the middle and lower classes take the hit. Who saw that coming? oh wait I did. No worries though helicopter ben will arrive soon to save the day. Gold 2k by jan 31 or sooner? we shall see...

China devaluing the yuan bumped gold back up over $1,100 today. A brief blip in the sustained march down to sub-$1,000.

Last week I was tempted to grab some of the gold mining stocks that I have been tracking as they hit their lowest levels in over 5 years. Advisor talked me out of pulling the trigger with Geoff’s argument that the bottom is still coming. Those stocks all popped up 25-35% in a week resulting in a sweet short term gain for the brave. Hate when I take conservative advice rather than going with my gut.

[Geoff]

300pts and counting as the money says no thanks to hopey dope. the wealthy sit on the sidelines and weather the storm while the middle and lower classes take the hit. Who saw that coming? oh wait I did. No worries though helicopter ben will arrive soon to save the day. Gold 2k by jan 31 or sooner? we shall see...

China devaluing the yuan bumped gold back up over $1,100 today. A brief blip in the sustained march down to sub-$1,000.

this seems to matter a lot more to you than it does to me...always nice to hear from ya though...

Just doing my community service reminding people of your financial genius :)

[madhatter]

300pts and counting as the money says no thanks to hopey dope. the wealthy sit on the sidelines and weather the storm while the middle and lower classes take the hit. Who saw that coming? oh wait I did. No worries though helicopter ben will arrive soon to save the day. Gold 2k by jan 31 or sooner? we shall see...

China devaluing the yuan bumped gold back up over $1,100 today. A brief blip in the sustained march down to sub-$1,000.

this seems to matter a lot more to you than it does to me...always nice to hear from ya though...

Just doing my community service reminding people of your financial genius :)

yeah, except you simply have no clue wtf yer talking about...otherwise good job...

[madhatter]

so, more fed intervention or does the market continue to slide? Not gonna be any rate hike in september now, that's for sure...

interestingly this isn't the first time the market has gone on a continuous downfall immediately following the puke report...

and what of oil? 40 dollars was tested and descended today closing slightly above (40.24)

the DOW is roughly2k points above its 2007 high and aggressively selling off into the close...and yep metals and other commodities suck too... but only if yer trading em, otherwise they are simply a backstop against total loss when physically possessed...

[Bubba]

The market was due for a correction, defined as 10%. I think we've about gotten there.

[madhatter]

The market was due for a correction, defined as 10%. I think we've about gotten there.

thanks captain obvious, yeah a correction is/was more than overdue and the DOW is now in correction territory, the question is what's next? more QE? will it matter?big market gains?, more losses?, the fed is looking for an exit strategy and seemingly doesn't have one...what about oil? 40 bux/bbl has a lot of implications worldwide...have central banks lost control? we've had virtual ZIRP for 7 years now, it hasn't helped japan who's had the same for 25 or so years now...