bondfingerBondfingers in every pie…but whose fingers, which pie, and why?

The Slog discusses how obfuscation, complication, corruption and manipulation in market trading serve to spread anxiety and lock out the People in favour of the few.

Welcome to the James Bond markets. These are like the stocks and bonds markets, only the plots are barely believable….and instead of one villain working for himself, there are dozens of the buggers working for other people – but nobody knows quite who, because it seems to change on a daily basis.

Bond yield manipulation to destroy Greece and warn Hollande, oil price juggling to jolt Russia, and currency interventions to bring Iran back to the negotiating table….fine: we all know the culprits there. But glitches on the Dow, pressures on Gold, sudden panics in China and secondary bank wobbles in Austria are less amenable to the clean (or dirty) explanation. Every odd event is father to a dozen conspiracy theories, and the ugliest theory of all sometimes turns into a real Black Swan.

Last week (and AEP has picked up on this too, so it does have the ring of truth about it) several key western media received unpleasant threats in relation their coverage of the continuing Shanghai Index meltdown. The general gist of the threatening language was that Beijing would prefer it if there was no coverage of these events, and this might explain why quite a few multinational press groups went quiet.

However, some of the exchanges involved hints about external market destruction. Chinese paranoia? Perhaps…but earlier today (Thursday) the Shanghai suddenly collapsed by 2.2% towards the end of play. I report this now in my usually fearless manner because, as yet, The Slog’s pan-global media empire of Lone Rangers has been threat-free going forward from a Beijing location. The point I’m making, however, is that somebody even further away from Beijing than I might soon stand accused of orchestration.

The first rule of investing, as Martin Wolf and others have written, is that you must know and understand all the influences at work in the sector. As nobody has that degree of certainty any more, all contemporary investment for the Ordinary Joe is a mug’s game.

But that’s just me being an incorrigible NVE, because everything is of course perfectly OK everywhere with everyone, which is why (as Wolf Richter records) the Glitz-bricks boom first identified by The Slog four years ago continues to make the San Francisco, London central, Dallas, Paris and all points Gated areas of the world turn into regions of gazumping on steroids. The only place where a few jitters have been apparent is in the world’s most overpriced city, Sydney: for Australia remains what it’s been for some time now – a country which, as China catches a cold – is doomed to get viral pneumonia.

Property in gated areas in safe cities makes for not so much a safe haven as the ultimate Raubritter’s impregnable castle.That’s why In 1995 the average Kensington & Chelsea home was worth five times as much as its equivalent in Merthyr Tydfil….whereas in 2015, it’s worth twenty times as much. There is not so much a flight to safety any more as a flight to normality and common sense.

The hands-off attitude to gold has been created by a heavily-spun campaign in business media, designed to be a self-fulfilling prophecy. The line taken here – by the various PRs working for central banks – is that gold is no longer a safe haven, but in fact just another metal of no value whatsoever. Soon, the long-term analysts say, it will be worth only $300 an ounce.

“A bet on gold is really a bet that the people in charge don’t know what they’re doing,” says Matt O’Brien of The Washington Post. My response to that is I’m not sure who they are at any given time, and while they don’t know what they’re doing – but they do know what they’re up to. For the CBs, gold price destruction is the name of the medium term game. But equally, some people would like to see the price destroyed, and some wouldn’t.

At the London opening, gold dropped $10 this morning. New York then opened and it headed north again. I’ve no idea of the why or who of this, and I doubt if more than half a dozen other folks on the planet do either, but this is a neat chart if one’s interested in the idea that not everyone is rowing in the same direction re this one:


Could be Goldfinger, might be Blofeld. Either way, it seems at times like the world’s markets are full of bald men stroking cats and saying, “Gerdebyee, Meesater Borrnd”.

The investment markets have simply become just one more avenue of honest, smart endeavour from which we’ve been excluded: small business growth crushed by cheating banks, independent Greek food distribution squashed by the Troika, mutual building societies conned by Wall Street, or radical governments enslaved by the IMF: we’re no longer allowed to be comfortable, we have to be poor. Then we can be blamed for being poor, and stripped of our welfare.

Yet people wonder why Jeremy Corbyn is the odds-on favourite for the Labour Leadership, and worker productivity is falling throughout the West. Itsh really quite shimple, Mish Moneypenny.

Connected at The Slog: Chinese debt and margin-call chaos


  1. Very much off topic but…..
    ‘Ken Clarke ‘groping’ accuser found not guilty of making a false claim
    Ben Fellows has been found not guilty at the Old Bailey of making a false claim that he was groped by former chancellor Kenneth Clarke’
    Now, if he has been found not guilty of making a FALSE claim…..Is his claim valid?


  2. If profits are up but wages are more or less flat, then productivity is going to fall. More for less is only going to work in certain cases.


  3. Clearly the yen-dollar carry trade has been driving asset prices up and commodities down. The trouble for the US, this means they are importing massive deflation. Today’s anaemic GDP figures from the US indicate any US growth is stalling and will soon be in reverse. Interest rate rises form the Fed and BoE, yeah right. I expect more market manipulation of gold when QE4 is slipped out in October.


  4. Speculators only make money if they can affect the trading of other traders or investors. If buying they need other buyers, otherwise they would buy and sell at more or less the same price. Likewise, if selling they need other sellers. A strategy used by large size traders is to move the market so that stops are taken out. For instance, they sell gold in large size moving the market lower so that stops below the market are taken out. That means other investors sell too and the gold price falls further. The original sellers can then buy gold at a lower price so that they close out their positions at a profit. Alternatively, they buy in bulk to drive the market higher taking out stops above the market, forcing more buying and allowing the original buyers to sell at a profit.


  5. o/t also but is anyone else convinced full moon makes people madder than usual? my wife and son are in their usual monthly “phases” and i Googled this “full moon family” but every article of half a dozen ridiculed this idea. Not one supported it yet every month it is similar – our family is slightly more on edge. I honestly think Google has removed articles refuting this idea.


  6. Leap 2020 have assured us that the silk road will come to the rescue of Europe and Russia of course.Beijing had initially blamed “outside forces”on their collapse.Might there be just a smidgeon of tension between Beijing and Washington as this idea of blame becomes embedded in the Chinese mind?


  7. Take a gander at Zerohedge – specifically the Swiss National Bank’s performance of late !

    Some day soon there’s going to be a bang almost as big as that which created the universe.


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