How Long Do You Think It Will Be?

[Randolph Kinney]

How many economists do you know that are billionaires? Zero. Economics makes no difference in markets because markets are always ahead of fundamentals. The market is a psychological game.

And you? Are you a billionaire? I am not, but I don't earn my income and live quite comfortable on my savings and investments. You see, it is more important to minimize risk at my age than maximizing gain. The return of capital is more important than return on capital.

 

[Randolph Kinney]

You want to post bank statements?

Not important, I can show you how well I live without a bank statement.

 

[Joe Flacco]

I am just saying tune out mainstream media because it is noise.

Market is master of manipulation and deception. These articles and data you are posting is not some forward looking or relevant information. It is mainstream thought. Everybody knows already. It's all priced in. Market action since 2000 and mainstream media conditioned most people to think that something like dot com and financial crisis is about happen again. Market is going to take off without all these people and these are the people that eventually get FOMO and get in at the top. Then market pulls the rug out.

 

[Randolph Kinney]

I am just saying tune out mainstream media because it is noise.

I am very selective on who I internalize after reading what they have to say. As a president has said, lots of fake news, made up news and just outright lies. That applies to the president too.

Market is master of manipulation and deception.

The market reflects hedging and high frequency trading. The individual is the food for these funds and traders. It has been for some time. The markets are rigged. The VIX is manipulated.

 

[Joe Flacco]

I wouldn't call the market rigged. It is just the nature of the market. People that say rigged are just people that don't get that it is a mental / psychological game. Market is designed to take your money. Especially if you are impatient.

 

[Randolph Kinney]

I wouldn't call the market rigged. It is just the nature of the market.

U.S. regulator sues 16 banks for rigging Libor rate

NEW YORK/WASHINGTON (Reuters) - The Federal Deposit Insurance Corp sued 16 of the world’s largest banks on Friday, accusing them of cheating dozens of other now defunct banks by manipulating the Libor interest rate.

https://www.reuters.com/article/us-...-for-rigging-libor-rate-idUSBREA2D1KR20140314

Gold, Silver Manipulation: CFTC Fines Deutsche, USB, HSBC For Spoofing Markets

Three major European banks have been fined by the Commodity Futures Trading Commission for “spoofing” and manipulating gold and silver markets.

Spoofing, according to some traders, is the result of high-frequency trading and is a manipulation technique where bids and offers are placed in bad faith to create a misrepresentation of demand and sentiment in the marketplace. The orders are quickly canceled before being filled.

http://www.kitco.com/news/2018-01-3...s-Deutsche-USB-HSBC-For-Spoofing-Markets.html

Top 3 Financial Crashes Caused by High-frequency Trading Algorithms

In the financial world, high-frequency trading has become the new norm. By using trading algorithms and dedicated tools, stock market players can execute trades in milliseconds. The ultimate goal is to increase profits in a near-automated way. However, there have been some notable issued with high-frequency trading in the past, all of which have caused significant financial losses in the process.

2010 Flash Crash
Although flash crashes are nothing new in the world of finance and trading, 2010 stands out as a peculiar year. On May 6 of 2010, the US stock market crashed and remained inaccessible for a total of 36 minutes. All stock indexes collapsed and rebounded in quick succession. This day marks the second-largest Intraday point swing recorded up until that moment.

The cause of this crash took some time to pinpoint. As it turns, high-frequency trading algorithms were driving the bids on dozens of ETFs and other stocks as low as one penny per share. Navinder Singh Sarao was eventually convicted for his role in the 2010 flash crash, as he used a spoofing algorithm to cause the crash. He set up thousands of futures contracts, which were refreshed roughly 19,000 times before eventually getting canceled. It is this type of high-frequency trading algorithm that caused the brief crash.

https://nulltx.com/top-3-financial-crashes-caused-by-high-frequency-trading-algorithms/

You have to be a fool not to know front running, computer hedging, bid rigging and interest rate manipulation happens all the time.

 

[Deleted member 128537]

Would that be raising interest rates? That's what the FED does after goosing the economy. The cost of zero percent interest and QE is that pension plans are insolvent and that is the next bailout.

As you well know the reason the FED lowered rates was to get us out of the recession. And as you know monetary policy is the easiest and quickest way to crawl out of a recession since fiscal policy takes too long to have an impact. I agree that it caused equities to go up faster because of bad rate of returns in fixed income. Clearly there was some over inflated demand. But the markets were doing pretty well before the crash when rates were higher.

That is why it is necessary for the FED not to go too quickly. On the other hand it has to normalize rates. Low fixed income rates have a negative impact on savings as well. I think the target over the next few years should be about a 4% return on the 10 year note. That will definitely move some investment from equities to fixed income. But that’s OK. Also if the FED moves too fast it could kill things like construction and durable good purchases.

If the FED keeps the eye on the inflation rate as the prime reason to raise rates that would be wise. That should be the reason to move rates in the first place.

Having said all this Trump’s tarriffs could screw everything up. I understand the need to stabilize trade. China has been using unfair practices for years. They don’t create a thing, but they steal a great deal. If Trump isn’t careful he could initiate an inflationary trend and that forces the hand of the FED. Thus that’s why the uneasiness in the market right now.

But I would prefer a bit more even handed and measured approach. We can’t rectify decades of stupid trade policy in a year. The economy is just too complex for that. Industries do not have time to adjust to the new environment. I agree with Trump on China. But I disagree with his approach. It’s far to much a “bull in the china closet.” Excuse the pun.

 

[Joe Flacco]

You have to be a fool not to know front running, computer hedging, bid rigging and interest rate manipulation happens all the time.

It's just the way it is. Trading is war. Winners and losers. Losers say the game is rigged.

 

[Randolph Kinney]

It's just the way it is. Trading is war. Winners and losers. Losers say the game is rigged.

Yeah, truth is, there are suckers who believe that the "game" is honest.


Forex scandal: How to rig the market

The foreign exchange market is not easy to manipulate.

But it is still possible for traders to change the value of a currency in order to make a profit.

As it is a 24-hour market, it is not easy to see how much the market is worth on a given day.

Institutions find it useful to take a snapshot of how much is being bought and sold. Until February, this happened every day in the 30 seconds before and after 16:00 in London and the result is known as the 4pm fix, or just the fix.

Since these violations came to light, the window has been changed to five minutes to make it harder to manipulate.

The fix is very important, as it is the peg on which many other financial markets depend.

So how do you make currency prices change in the way you want?

Traders can affect market prices by submitting a rush of orders during the window when the fix is set.

This can skew the market's impression of supply and demand, so changing the price.

This might be where traders obtain confidential information about something that is about to happen and could change prices. For example, some traders shared internal information about their clients' orders and trading positions.

The traders could then place their own orders or sales in order to profit from the subsequent movement in prices.

This can relate to the 4pm fix, with a trader placing a trade before 4pm because he knows something will happen at around 4pm.

It is easier to move prices if several market participants work together.

By agreeing to place orders at a certain time or sharing confidential information, it is possible to move prices more sharply.

That could result in traders making more profits.

Collusion can be "active", with traders speaking to each other on the phone or on internet chatrooms. It can also be "implicit", where traders don't need to speak to each other but are still aware of what other people in the market are planning to do.

Last November, the UK's financial watchdog, the Financial Conduct Authority (FCA) gave some examples of how traders at banks calling themselves names such as "the players", "the 3 musketeers", "1 team, 1 dream" and "the A-team" attempted to manipulate foreign exchange markets.

https://www.bbc.com/news/business-26526905

Joe, don't believe the mainstream media stories of rigging or manipulation. It could alter your reality of the markets.

 

[Joe Flacco]

Joe, don't believe the mainstream media stories of rigging or manipulation. It could alter your reality of the markets.

I am not concerned with intraday movements. That stuff happens all the time. So what? That's just the way the market is. You don't like it then you don't play the game.