Calling all Manipulation Theorists

Discussion in 'Silver' started by wrcmad, Aug 5, 2020.

  1. alor

    alor Well-Known Member Silver Stacker

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    those high bars would disappear again when fairness hit back from other markets
    just like the sales going on here, just is microscopic scale
    just a bit expensive, people would not bite.
    bargain counters got buzz immediately within seconds
    got people unbuzz or go silence occasionally
    there are loop holes everywhere, if you are in control, then there is no knowing what can remain covered
     
  2. President Trump

    President Trump Well-Known Member Silver Stacker

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    I don't know the investigation you are referring to but if let me know, we can discuss it. To be clear I am just talking about long term 1 year+ manipulation of prices in one direction only. Short term in both directions happens all the time.
     
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  3. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    I wait with anticipation. :cool:
     
  4. STKR

    STKR Well-Known Member Silver Stacker

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    Turning first to the recent Merrill Lynch case, in late June this year the CFTC announced that it had fined Merrill Lynch Commodities Inc (MLCI) $25 million for manipulating gold and silver futures contracts on the COMEX exchange between 2008 and 2014. This was done ‘thousands of times’ according to the CFTC, by MLCI traders ‘spoofing’, or placing and then cancelling orders before they were executed. By creating artificial demand or supply and thus false prices, this interfered with the (already broken) precious metals price discovery that would have otherwise occurred.

    Interestingly though not surprisingly, much of the direct evidence the CFTC used in its verdict was from the myriad log files of trader chat apps which were used to coordinate the spoofing. For example, in one 2010 chat, a trader was quoted as saying “guys the algos are really geared up in here. f you spoof this it really moves . . .”.

    While a lot of money for most people, a $25 million fine is a paltry amount for a global investment bank such as Merrill Lynch and is just a cost of doing business on bank-ruled Wall Street. However, the ruling at least demonstrates that what many always thought about precious metals futures price discovery as being rigged and manipulated is in fact correct. As well as the $25 million fine, Merrill entered into a non-persecution agreement with the US Department of Justice (DoJ), agreed to cooperate with the DoJ investigation into criminal violations, paid a $11.5 million civil monetary penalty to the CFTC, and had indictments against two of its former MLCI precious metals traders, Edward Bases and John Pacilio.

    https://www.bullionstar.com/blogs/r...-manipulation-the-greatest-trick-ever-pulled/

    Didn't need to wait because I provided the links to you already, provided the links to you already, provided the links to you already, provided the links
    To
    You
    Already.
     
  5. RFHamre

    RFHamre New Member

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    Manipulated?

    Can you say Hunt Brothers?
     
  6. President Trump

    President Trump Well-Known Member Silver Stacker

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    Sure spoofing has occurred. This is where traders put in orders that they never intend to fill, in order to trick other traders into thinking there is demand in a particular direction. When the other traders or their trading systems see the fake orders they trade in the direction of demand but then the orders are pulled. Its a very short term manipulation... a few minutes to a few hours. it can't be used to hold down market prices long term. In the exact example you are quoting prices were influenced in both directions. Traders used the spoofing to get better entry and exit prices for their trades.
     
  7. alor

    alor Well-Known Member Silver Stacker

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    after so many years, the truth already out, but perceptions were wrong, the regulators pick on them to be guilty before the facts, its like judge by the medias as we know things now
     
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  8. STKR

    STKR Well-Known Member Silver Stacker

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    To be clear, I am aware of what spoofing is. The point is that spoofing affects market psychology. If you actually look at the log transcripts in the links I provided on page 2, you will see the intentions of the traders was to short the market.
     
  9. STKR

    STKR Well-Known Member Silver Stacker

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    Yes, but if you were to use spoofing along with high volume shorts, you could very easily suppress the price long-term.

    I'll ask you the same thing I asked Mr. Mad:
    Do you believe long-term price suppression is possible?

    Are you aware of the introduction of the CFTC's position limits? Proposed in 2011 and introduced in 2012?
    Are you aware of 'position limit exemptions' given to hedge funds and banking entities, who either possess or are custodians of physical silver holdings?
     
  10. President Trump

    President Trump Well-Known Member Silver Stacker

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    So a market is rising and you can "very easily" surpress it by putting in some fake orders in the other direction. No sorry that wont work. Spoofing only works when the market is more or less directionless. High volume trades will always move a market but if you are trying to move it in the opposite direction to which actual orders are driving it, say up, the you become the seller to the market. How long do you keep this up for, sounds very expensive. For what reason do you do this? If you are a trader aren't you trying to make money.

    Yes buy a central bank. No investment bank has the resources. But the Central bank could not simultaneously buy a market and suppress it. Central Banks. For what reason would a Central Bank do this?

    Yes I am.

    Yes none of this is targeted at long term manipulation.

    The transcripts in the links you posted on page 2. Talk about prices being pushed up AND down. There were just as many occasions the markets were being pushed up. The author is disingenuous. Its would be less offensive if he was stupid but I think he actually understands his is misleading people or at least playing to the belief of frustrated precious metal stackers. If you dig deeper you will seeing these were short term manipulations both up and down and the motivation was to make money over hours not years and the traders couldn't have cared less whether they were pushing the price up or down. Beware the fake twisted silver news.
     
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  11. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    You can keep cutting and pasting stories about spoofing as many times as you like, that wont make it magically become price suppression.
    And to draw the conclusion that it does via market psychology is just dreamy... especially when spoofing happens in both directions. There is absolutely no evidence to back up that claim.

    Not sure where you get your info from, but that statement is simply not true.
    In fact, given your demonstrated limited knowledge of the market workings, I'd bet that you just made it up.
    It would be nice if you offered up an example of how this could be done, as it would be fascinating to see your logic. Also, it would answer the very question posed in the OP of this thread. ;)

    Here is the factual counter argument:
    Any manipulation using naked shorts would be short-lived. If banks had massive short positions in the silver market, they would have to buy large numbers of futures contracts to cover their position and buy the physical metal to deliver it or roll their positions, buying expiring contracts and selling the next one out. In all cases the short-term impact of selling the futures contract would be reversed as banks would have to unwind their positions (investors should also not forget that for each seller of a futures contract there must be a buyer). Thus, the practice of naked silver short selling, existing or not, cannot explain the long-term bear markets in silver.
     
  12. bron.suchecki

    bron.suchecki Well-Known Member

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    That theory can be proven by looking at the behaviour of contracts approaching expiry. As Keith says in this article https://monetary-metals.com/thoughtful-disagreement-with-ted-butler/ (for which I did the number crunching when I worked for Monetary Metals):

    "We just need to look at the data, to determine which theory is true:
    1. If each basis skyrockets as the contract heads into expiry, then short speculators dominate the market. This is because short speculators must buy the futures contract, as they cannot make delivery.
    2. If each basis falls into the abyss, then it must be long speculators who predominate. This is because they must sell, not having the dollars to pay to take delivery of the silver."
    To-date Ted Butler has not responded to this post, nor anyone else pushing the "banks suppress the price shorting futures" theory.
     
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  13. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    Thanks Bron. :)
    As I have long considered you the forum's most formative authority on the subject, I rest my case.

    Batter up @STKR. ;)
     
    Last edited: Aug 8, 2020
  14. Ryurazu

    Ryurazu Member

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    Evidence is in the numbers volume and time of transactions. Very much like that of stock price insider trading, expect that there is a agree upon by the large silver traders whether this true price manipulation (which it is But not evidence would be made public) well that for individuals to decide.

    I only think that reckon has come now with this massive squeeze on prices and huge and massive wholesale back order, this might take months to unwinned as entities pull silver out in the form of delieveries.
     
  15. President Trump

    President Trump Well-Known Member Silver Stacker

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  16. STKR

    STKR Well-Known Member Silver Stacker

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    Well this just became a little more interesting.

    I was not suggesting that spoofing could solely be used to suppress the price, but I was suggesting that spoofing would affect market psychology and contribute to directional moves.

    I can't find any chats referring to buying the market when the market moves down. Again, I've made no claim that spoofing could be used to suppress the market long-term, only that it could to contribute to directional moves and could be used WITH high volume trades to help push the price down.
    Ive also outlined that supply and demand fundamentals of the physical metal is critical to the price suppression theory.

    Well it's interesting that you say that. President Johnson said this when signing the 1965 coinage act. It shows that governmemt had every intent and means to suppress the price of silver.

    "If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content."

    https://www.presidency.ucsb.edu/documents/remarks-the-signing-the-coinage-act

    If you look at the silver surveys prior to 2014, "government sales" were used consistently to boost supply when physical demand exceeded annual supply.

    https://www.silverinstitute.org/all-world-silver-surveys/

    Yet they do hold massive short positions and very few participants stand for delivery. They also have the physical metal to be able to place the orders they do.

    Thanks for providing the links. The proposal that banks are market arbitragers makes perfect sense. The article by Keith does a decent job at providing an alternate theory to the speculative position of the banks, yet it far from disproves the price suppression theory - It only addresses the speculative position of the banks.

    I'm also not entirely convinced the data presented relating to trader behaviour and contract expiry proves anything other than: Those who are long the market are largely speculators who have no interest in standing for delivery or holding their contracts to expiry.

    That's incorrect. Chris Powell from GATA has addressed both Keith Weiner and Steve Saville, and raises some very interesting points.

    http://www.gata.org/node/17707

    "Weiner's technical analysis is no refutation of silver market manipulation, for even if JPMorganChase is just doing arbitrage in silver, a judgment on manipulation would require knowing for whom the investment house was doing the arbitrage....

    ....Anyone who wants to engage in honest argument about gold and silver market manipulation needs to address a few simple questions:

    1) Are governments and central banks active in the monetary metals markets or not?

    2) Are the documents asserting such activity genuine or forgeries?

    3) If governments and central banks are active in the monetary metals markets, is it just for fun or is it for policy purposes?

    4) If such activity by governments and central banks is for policy purposes, do those purposes involve the traditional objectives of defeating an independent world currency that competes with government currencies and interferes with government control of interest rates, objectives documented at length by GATA here?:

    http://www.gata.org/node/14839

    Of course if largely surreptitious intervention in the monetary metals markets by central banks and governments is ever acknowledged, technical analysis of those markets is meaningless, which may explain why technical analysts like Weiner and Saville avoid the crucial questions and just sneer at those who raise them."

    @wrcmad Your comments about there always having to be a buyer and seller of every side of a contract conveniently disregards interest. I don't know why you feel it necessary to press on that point when it has absolutely no relevance to market movements.
     
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  17. alor

    alor Well-Known Member Silver Stacker

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    Of course if largely surreptitious intervention in the monetary metals markets by central banks and governments is ever acknowledged, technical analysis of those markets is meaningless, which may explain why technical analysts like Weiner and Saville avoid the crucial questions and just sneer at those who raise them."
    at Browns bottom, they make the intention public, before selling them in the market
    the news is the actual manipulative toll used to drive the price to their intended direction

    the inability to prove the existence, does not mean proving a negative of nonexistence

    of all markets, we only have one silver users association . the rest are sellers associations like opec, central banks, etc
     
  18. STKR

    STKR Well-Known Member Silver Stacker

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    That's right. Hence why the question of whether it's possible becomes front and centre to the debate.

    Market manipulation is undeniable. Long-term price suppression is yet to be proven absolutely. Does this mean that it's impossible? Absolutely not!

    @wrcmad I'd like to hear your reasoning as to why it's not possible. A bit of evidence to support your position would also be nice, if you care to oblige and step up to the plate yourself.

    As I have stated previously, whether the price is being suppressed or not has absolutely no bearing on why I buy or hold PMs, nor does it contribute to the perceived opportunity. I doubt that many others enter the PM space for these reasons either. I do, however, believe that people use it as an excuse or reasoning as to why the price drops so rapidly.

    Unlike you, I do believe it's possible - I even believe it's probable.
     
  19. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    OK, ...a lot to digest.
    It is difficult to keep up when you keep changing your stance.
    I'll respond to to the comments addressed at me, but first let me address your contradiction:
    It seems you did suggest spoofing could be used to suppress price, but have changed your mind?
    Regarding "the affect on market psychology" theory - I call BS. There is no substance or evidence to this claim, it is not measureable .... it is merely qualitative opinion at best, so counts for nothing in a debate, as it can't be substantiated. You need to let this desperate theory go.

    Now to the response addressed to me:
    Who holds massive short positions?
    It is typical of the suppression theorists to conflate JPM holdings with JPM client holdings. This has done many times before, but conflation does not substantiate your argument. Show me the data.
    As for delivery - not rocket science. The futures market is a hedging tool first and foremost.... not a bullion dealer. That would explain the few delivery settlements. The exchange is working exactly as designed.... nothing to see here.
    Again... who has the physical metal? "They" may not be who you'd like to assume for arguments sake.

    Not sure what you mean by interest? Maybe cost-of-carry?
    And if you think the buy side has no relevance to market movements, then we are back to the point where you have very limited knowledge of markets.
     
    Last edited: Aug 9, 2020
  20. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    My reasoning - arbitrage. Arbitrage is the leveller of all things. (that's where the buy side has significance).
    As for evidence... the onus isn't on me.
    But if it were... this is all opinion, just as is your claim that price-suppression is possible. There is no evidence.
    That is my point.... this whole price suppression claim is just hypothetical, baseless conspiracy theory.
     

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