Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

CFTC: Corrupt Foxes Tending Chickens

Politics / Market Manipulation Jul 07, 2009 - 02:57 PM GMT

By: Midas_Letter

Politics

Best Financial Markets Analysis ArticleAll the hyperbole in the mainstream media announcing imminent changes by the CFTC (Commodities and Futures Trading Commission) amounts only to so much spin and P.R. There aren’t too many thinking adults involved even peripherally in the global poker game known as the Futures market who still believe the house always wins by dint of natural statistical preference.


The game is rigged.

Tracing a pattern of predictions by the financial mafia powerhouse Goldman Sachs that just happen to coincide with the evolution of short and long positions in oil reveal a pattern where Goldman profits by touting oil bullishly while building a short position, then warns of price weakness when its ready to unwind the position into the panic of their own creation. The cycle is sickening to watch, though not without some grudging admiration for the sheer force and coordination of such a well-oiled criminal enterprise.

The CFTC has been the eunuch of the American Imperial Guard (AIG) since the last Chairperson with any shred of integrity was summarily squeezed out of her role in 1999 by incumbent banksters Lawrence H. Summers, Robert Rubin and retired don Alan Greenspan. At that time, she locked horns with the presidential bagmen over exactly the kind of deregulation that made possible the massively under-capitalized Credit Default Swaps, and similarly threadbare bets on future prices of commodities. The direct result of her exile is the incomprehensibly massive “nominal” values of derivatives contracts that now exist in various futures markets, and the unregulated exempt “custom contracts” that remain unreported, unaudited, and for the most part, not subject to clearinghouse rules.

This ‘dark market’ as it has come to be known, is the abode of the “Weapons of Financial Destruction” famously coined by Warren Buffett.

At the time of Born’s forced walking of the plank, Gensler was one of the junior financial capos who lobbied in favor of this brand of de-regulation. The fact that this team of elite hitmen have now emerged intact in Obama’s regime smacks of some kind of back room deal-making that points to a compromise in exchange for cooperation.

I’ll bet that the CFTC is now going to bring actions against some sacrificial corporate lambs who neglected to donate to the democratic election fund, who, upon having their wrists very publicly and resoundingly slapped, will be held up to the glaring media light as proof positive that the problems in the derivatives markets are now over and confidence is duly warranted in the global financial system.

Today’s announcement from Lieutenant Gensler stipulating limits on speculative positions and other regulatory fortifications is heartwarming spin but in actuality more closely connotes closing the barn door after the horses have been ridden off into the sunset carrying all the loot.

In the press release Gensler, writing in the first person, declares, “The Commission will be seeking views on applying position limits consistently across all markets and participants, including index traders and managers of Exchange Traded Funds (ETFs); whether such limits would enhance market integrity and efficiency; whether the CFTC needs additional authority to fully accomplish these goals; and, how the Commission should determine appropriate levels for each market.”

The apparent holistic application of such regulation is in opposition to the inclinations of Treasury Secretary Timothy Geithner, who, in a letter dated May 13 states that, “in order to contain systemic risks, all standardized OTC derivatives should be required to be cleared through regulated central counterparties (“CCP”). CCPs in turn will be required to impose robust margin requirements and other necessary risk controls. Centralized clearing for customized OTC derivatives will not be mandated, as long as ‘customization’ of OTC derivatives is not used solely to avoid clearing through a CCP. To that end, if an OTC derivative is accepted for clearing by any CCP, a presumption for its standardized nature is created and it should be required to be cleared through CCPs as a matter of course.”

The loopholes glaring out of this most disingenuous doublespeak are better defined as Special Interest Vehicles. (SIVs) In other words, all that has to happen to avoid the clearinghouse rules is to fabricate custom contracts as opposed to standardized ones, and have ready for inspection a certificate proclaiming that their customized character is a requirement of the transaction not for avoiding clearinghouse rules.

Cute.

Also, how much would you like to bet that these “CCP’s” will most likely be incestuously bound to either Goldman Sachs or J.P. Morgan, and will then subsequently be deemed organizations that are too big to fail.

The Commodity Exchange Act states that the CFTC shall impose limits on trading and positions as necessary to eliminate, diminish or prevent the undue burdens on interstate commerce that may result from excessive speculation.

Here again, the opportunity for loophole exploitation is transparent in the vagueness of the language. What’s to prevent such excessive speculation from being distributed to several organizations under the cover of “custom contracts” to build yet another rendition of the “dark market positions” currently menacing the derivatives markets?

Interestingly, or perhaps predictably, we have moved from Geithner’s letter of May 13th stipulating good intentions to Gensler’s statement of today stipulating hearings with good intentions, and our assumption then is that this will result in legislation that embodies the spirit of such intentions.

Is it conceivable that by the time any bill makes it into the congressional process, the new loopholes will be professionally sighted and targeted by the same forces that, by virtue of their insider status with the largest criminal organization in the world, we will have forgotten about this financial crisis amidst the artificial exuberance induced by yet another over leveraged bubble?

My money’s on the foxes.

By James West

www.MidasLetter.com

http://www.midasletter.com/commentary/090707-1_CFTC-corrupt-foxes-tending-chickens.php

© 2009 Copyright Midas Letter - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Midas Letter Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in