Evidence of market manipulation on the Chicago Mercantile Exchange?(vanityfair.com)
vanityfair.com
Evidence of market manipulation on the Chicago Mercantile Exchange?
https://www.vanityfair.com/news/2019/10/the-mystery-of-the-trump-chaos-trades
36 comments
>I'm not saying Trump, his reptilian cronies, and liked-minded types wouldn't be capable of imaging gross schemes like this, but this article goes almost nowhere in proving it.
What's the point of going here. There are crooked people of all political ideologies and this offers nothing of substance to the argument.
What's the point of going here. There are crooked people of all political ideologies and this offers nothing of substance to the argument.
If only there were some sort of regulatory body commissioned to investigate the exchange of securities that could take things farther than a magazine best known for its Hollywood elite photo spreads!
Not sure why you're getting down voted. All fair points.
Even if there is a foul play of trading on unannounced news, this should not be called "market manipulation". That may be informed trading, that is not illegal. And there is no evidence that this was done by all the same actor.
--- > Trump, ... boasted during the G7 summit that his counterparts in Beijing had come back to the table. Indeed, this single Trump lie briefly inflated domestic markets by hundreds of billions of dollars. “What this describes is, quite literally, market manipulation that constitutes criminal violations ...” commented George Conway, the conservative attorney and Trump critic.
This is just plain bad reporting. Yes, they questioned the expert, and the expert given them politically loaded opinion. For it to be market manipulations, Trump(himself, as mentioned in the article) need to profit from the action, at least.
--- > Trump, ... boasted during the G7 summit that his counterparts in Beijing had come back to the table. Indeed, this single Trump lie briefly inflated domestic markets by hundreds of billions of dollars. “What this describes is, quite literally, market manipulation that constitutes criminal violations ...” commented George Conway, the conservative attorney and Trump critic.
This is just plain bad reporting. Yes, they questioned the expert, and the expert given them politically loaded opinion. For it to be market manipulations, Trump(himself, as mentioned in the article) need to profit from the action, at least.
> For it to be market manipulations, Trump(himself, as mentioned in the article) need to profit from the action, at least
Maybe he's just a useful idiot for the real manipulator. Would Trump pick up the phone from a donor who is able to carry out these trades, and be convinced to utter something positive about trade?
Maybe he's just a useful idiot for the real manipulator. Would Trump pick up the phone from a donor who is able to carry out these trades, and be convinced to utter something positive about trade?
It depends on context: what's the info, who does it relate to and who's trading. There is a category of info called material non public information that is illegal to trade.
It's not illegal to trade per se, only in breach of a duty of trust or confidence to the source of the information.
Depends on the country and relationships involved. In the United States, employee’s making trades based on based on insider information is illegal. Similarly front running in the US is illegal: https://en.m.wikipedia.org/wiki/Front_running
Right. But it matters that they are employees, not just that the information is material and nonpublic.
>There is a category of info called material non public information that is illegal to trade.
This is absolutely not true.
This is absolutely not true.
The SEC does not agree with you
https://www.sec.gov/fast-answers/answersinsiderhtm.html
https://www.sec.gov/fast-answers/answersinsiderhtm.html
>in breach of a fiduciary duty or other relationship of trust and confidence
You can trade all you want on material non-public information if you're not an insider (or got your info from one under certain circumstances).
You can trade all you want on material non-public information if you're not an insider (or got your info from one under certain circumstances).
This article doesn't even try to answer the only relevant question: Are trades of this magnitude in the last 10 minutes before close unusual? The time leading up to market close tends to be the highest volume period in the trading session. These are big trades to be sure, but the S&P e-mini futures contract is extremely liquid.
It's an easy question to answer if you have the volume data. I don't happen to otherwise i'd run it myself, but the author of this article really should have before publishing this.
It's an easy question to answer if you have the volume data. I don't happen to otherwise i'd run it myself, but the author of this article really should have before publishing this.
That would be a reasonable starting point.
Also, it would be great to see how these trades relate to the expected amount of volatility for the weekend (also public).
For funds that don't want to trade out of and in to large positions on Friday and Sunday the e-minis are a great way to hedge your risk especially around high volatility events (of which there have been an increasing amount).
Also, it would be great to see how these trades relate to the expected amount of volatility for the weekend (also public).
For funds that don't want to trade out of and in to large positions on Friday and Sunday the e-minis are a great way to hedge your risk especially around high volatility events (of which there have been an increasing amount).
The interesting thing about the article is that, by the logic it presents, there are at least three parties profiting from inside information:
1. Someone who knows what the IGRC is about to do
2. Someone who knows what the Hong Kong government is about to do
3. Someone who knows what Trump is about to do
I guess this would mean that numerous unscrupulous people at different international power centers have all figured out the same thing on their own? Otherwise we're in Thomas Pynchon novel territory.
1. Someone who knows what the IGRC is about to do
2. Someone who knows what the Hong Kong government is about to do
3. Someone who knows what Trump is about to do
I guess this would mean that numerous unscrupulous people at different international power centers have all figured out the same thing on their own? Otherwise we're in Thomas Pynchon novel territory.
Well unless the Saudi refinery attack was a false flag inside job. That eliminates one thing.
And yet the one piece of attributed evidence this article even quotes is the CME saying it wasn’t a single actor.
These trades are fully attributed.
The exchange knows exactly who is trading them, the idea that a market actor would use inside info from many different governmental entities to buy giant blocks at the close for improvements over the next week is idiotic.
Meanwhile a lot of actors hedging positions in ways that hit the hedge is completely normal.
These trades are fully attributed.
The exchange knows exactly who is trading them, the idea that a market actor would use inside info from many different governmental entities to buy giant blocks at the close for improvements over the next week is idiotic.
Meanwhile a lot of actors hedging positions in ways that hit the hedge is completely normal.
Summarized succinctly in this tweet from MSNBC’s Stephanie Ruhle: https://twitter.com/sruhle/status/1184628336066289664?s=21
"One longtime CME trader who has been watching with disgust says he’s never seen anything quite like these trades, not at least since al-Qaida cashed in before initiating the September 11 attacks. "
Is there any actual evidence supporting this 9/11 claim? I don't see how they could print this without doing basic fact checking.
Is there any actual evidence supporting this 9/11 claim? I don't see how they could print this without doing basic fact checking.
This struck me as well. Snopes says the rumor was investigated and debunked. While there was "unusual" activity it was traced back to an institutional investor who had also placed offsetting trades. https://www.snopes.com/fact-check/put-paid/
Loophole: it's true that he said it.
No direct insight to the actual trades outlined here, but most of my mildly-informed WSJ/FT/Economist reading 3rd-tier software engineer 10% YTD gains have been from speculative forward/inverse trades when things appear calm or at maximum chaos.
The strategy has not been based on expecting the broader economic issues to actually be resolved, but instead: "things are too crazy in US-China/EU-UK/Middle East, good news coming soon, time to buy long" or "things are too calm/optimistic, someone is going to rattle saber soon, time to go short"
It doesn't take a rocket scientist to read the geopolitical mood and the level of bluffing going on, and I'm quite sure if I had more $$ to manage and more time to watch the ticker and newsfeeds, I would have made bigger bets.
that said, someone directly moving markets could do far better.
The strategy has not been based on expecting the broader economic issues to actually be resolved, but instead: "things are too crazy in US-China/EU-UK/Middle East, good news coming soon, time to buy long" or "things are too calm/optimistic, someone is going to rattle saber soon, time to go short"
It doesn't take a rocket scientist to read the geopolitical mood and the level of bluffing going on, and I'm quite sure if I had more $$ to manage and more time to watch the ticker and newsfeeds, I would have made bigger bets.
that said, someone directly moving markets could do far better.
There were rumors around the Street a decade ago that Chavez in Venezuela was encouraging Bolivia to talk up a debt default, he then sold CDS protection against the debt at inflated prices, and then encouraged Bolivia to pay after all.
Sadly a world of more liquid interconnected capital markets seems ripe for abuse by insider political actors operating globally.
Sadly a world of more liquid interconnected capital markets seems ripe for abuse by insider political actors operating globally.
This article is not necessarily convincing; however, the fact that we currently have an administration in power where it is potentially believable is disappointing. The president is actively profiting off of foreign powers and lobbyists booking rooms in his hotels to curry favor and with holding foreign aid to force investigations into his political enemies. His daughter is serving on his administration and actively receiving patents from the Chinese. His son in law is serving in the administration and actively
seeking (receiving?) investments from the Saudi's in order to fund his business. The presidents sons are actively seeking investments from foreign governments for their fathers business.
Whatever your thoughts on Carter he put his peanut farm in a trust to avoid any semblance of impropriety.
Would anyone be shocked if the article was correct in what it implies?
That is the truly upsetting aspect of our political reality not whether or not the president is responsible for this particular implied malfeasance.
Whatever your thoughts on Carter he put his peanut farm in a trust to avoid any semblance of impropriety.
Would anyone be shocked if the article was correct in what it implies?
That is the truly upsetting aspect of our political reality not whether or not the president is responsible for this particular implied malfeasance.
for reference: E-mini future contracts trade in the range of 1-2 million per day.
Most of the examples would indicate that, if anyone was doing it, it would be other parties(Chinese, Iranian/houthi rebels) erc
Legitimate question for all US citizens: At what point do we stop the grifters from gaming the system?
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Okay lets say I know in advance that in 3 days from now Trump will tweet something that will affect S&P500 in material way. I want to profit from it.
Why should I establish my position in a single huge trade, instead of slow accumulation thru the whole trading session? Do I really want to trigger some alarm in SEC system?
Why should I establish my position in a single huge trade, instead of slow accumulation thru the whole trading session? Do I really want to trigger some alarm in SEC system?
The ruse is that Trump is making money on his hotels, that's small potatoes. This is how he's making big money. Don't be fooled, he's a wicked genius who is fleecing the world.
Wonder if Peter Thiels fund will have miraculous returns this year.
I'm not saying Trump, his reptilian cronies, and liked-minded types wouldn't be capable of imaging gross schemes like this, but this article goes almost nowhere in proving it. As someone else points out, it also conflates all sorts of events (IGRC, HK, Trump) into a single conspiratory organism. Unlikely.
I'd also say there are myriad examples (some posted here) that indicate insider-trading/tipsterism often is not nearly as profitable as you'd imagine.
Further.... There is an econometrician Phillip Verlegger who, back in the 1990s was doing analysis of futures markets that suggested that Saddam Hussein was using headlines about the UN-Oil-For-Food program to drive oil futures prices (which presumably his cronies exploited). I can no longer remember the details of his analysis, but it was evidence-based rather than the sensationalism this article pumps.