Peek Paper Posted January 10, 2010 Report Share Posted January 10, 2010 In 1974 the business of America was not moving pieces of paper around it was Manufacturing and R&D. America is collapsing just like GB and Rome before it. Live it, Love it and try to stay out of the way while you make a little moonya. rhymes with booya who you gettin' yer 'vestment advice from, anyhoo? last time I got really short, i got shorter ... Link to comment Share on other sites More sharing options...
Charmin Posted January 10, 2010 Report Share Posted January 10, 2010 President Obama clearly gave the signal to buy stocks. He knew what was coming and gave fair warning that the greatest stock rally in modern history was about to happen. I highly doubt that was a coincidence. Has he come out and said it was a great time to buy a house? Link to comment Share on other sites More sharing options...
alceringa Posted January 10, 2010 Report Share Posted January 10, 2010 That the Fed meets with the Primary Dealers each morning is a fact. They are not having tea and crumpets and talking about last night's football match. They are determining what they need to do to meet the "needs of the Primary Dealers". The Fed may use euphemisms in describing these meetings, but it doesn't take much imagination to envision what goes on. The meetings are held between the FOMC trading desk and the trading desks of the PDs-- traders talking to traders with direct pipelines to the highest offices in the land. Use your imagination. I am using my imagination and I can't imagine them talking about who is going to get up early the next day to juice the GLOBEX futures when the Frankfurt Market opens. That makes no sense and doesn't pass the smell test. The fact that GLOBEX seems to get juiced alot during bull runs (a fact) doesn't mean that it is the Fed or one of the PD's doing it. (a belief.) Correlation is not causation, as they say. Anyone that thinks that being a Primary Dealer for the Fed is an absolute path to huge power and influence with the ability to manipulate markets to unfair advantage needs to explain just one little thing. How could Lehman Brothers go bankrupt while it was a primary dealer? Link to comment Share on other sites More sharing options...
patents Posted January 10, 2010 Report Share Posted January 10, 2010 To further stir things up. 1. (a) The CME performance bond by a clearing member is not the same as or equivalent to a requirement for margin for a trader. It is what it is called, a bond for performace, and is used to guarantee some underlyying value. (Do you think that GS got AIG to write their bond?) ( If one argues that the primary dealers (and other members of the Fed Res System) are subject to the same laws/regulations as others, I urge them to do due diligence in their research rather than speaking from "belief." There has been much written on this board in anger that is not at all accurate in law or in fact. 2. I personally care relatively little about who or why. I want to understand the rules. Look at the Heller article for the concept, not as a statement that that is what was happening at the time. But as to the who, it clearly are the members 3. I further care relatively little about the market structure 20 years ago and past OTHER than to learn from history. The market structure has not been the same since 1920. Nor will the market structure be the same 10 years from now. I just want to know what is happening today. 4. Does anyone deny that TODAY (not in the past) a single trader (at least certain single traders) can buy/sell with itself with impunity? This was not the case a decade or more ago, but little by little the rules changed or the enforcement has become non-existent. For example, trader X has 10 shares/contracts to sell and offers 5. Trader X can today buy 1 share at the ask moving price higher and flashing a buy side trade. (The share can even come from trader X's offer of 5 such that trader X is trading with themself.) Then trader X unloads the remaining shares. (This has been typical program trading algorithms reported in BusinessWeek and elsewhere for years now.) Example 2: GS/JPM buys an SPU contract from itself at the ask. Again, the concepts are not at all difficult to understand. And not a single person has addressed that similar tactics were extensively done in the past (1920s/30s) and that the securities laws were changed in the 1930s to stop similar practices and that those laws have been repealled/changed the past decade. Just why do you think the laws were changed? For the good of society? I personally want to thank Doc, Shorty, Jick, and others despite what they may think of me. As I counsel my children (which they ignore), please read/listen to understand, rather than to argue. First understand and then if the argument is wrong, speak with authority and authorities. Link to comment Share on other sites More sharing options...
patents Posted January 10, 2010 Report Share Posted January 10, 2010 . . . How could Lehman Brothers go bankrupt while it was a primary dealer? I am not aware that anyone said that the market structure today was the same as it was 5, 10 or more years ago. And in fact, I am the first one to suggest that today the rules ARE different. And I would suggest that the reduction in the number of major market players further facilitates the activities. It is easier to have a single lead dog lead a dog sled of 6 rather than 20. (I think that is the recommended term is "major market player or participant" with regard to market manipulation discussions rather than "primary dealer," which is a specific term in the Federal Reserve System and we are not talking about trading cash bonds.) Link to comment Share on other sites More sharing options...
DrStool Posted January 10, 2010 Report Share Posted January 10, 2010 Lee, I did the math here recently on what the estimated "savings" were from one of these interventions on the net cost of issuance - IIRC, the specific instance involved something like a 9-figure cost reduction on a 13-figure coupon debt issuance (which would make this the only corner of the teaming federal government where penny-pinching occurs). I'm happy to rerun the numbers on the next available week's worth of coupon debt and assume that the clearing yield has been bid down entirely by intervention from the highest available yield that week prior to auction. But that's a different discussion. The one here involves Patents' view that some public entity is routinely active in the market for equity index futures with the goal of bidding up the underlying cash market. Do you believe that has occurred, and that it has been essential to the rally off the March lows? I did not understand the first point, partly because I don't know what IIRC means. I think what you are saying is that they don't really care if yields rise on an auction to auction basis. I don't think that I can agree with at because if that trend continues it will completely wreck any possibility of a housing recovery, and I think they are counting on that to happen. So I do think they care and I do think that they want to suppress yields. It's far more than a matter of just the cost to the Federal Government, although obviously the game can be continued for much longer with yields closer to 3 than 4. As to whether a public entity is "routinely" involved, it depends on what you mean by "routine". I think that they are involved occasionally in direct intervention. I know that they are involved every day in discussions with the Primary Dealers, and I do believe that there's a general strategic intent and collusion upon which the Fed and the majority of PDs agree. This I believe. It that flows in part from the fact that they meet daily to discuss their positions. So it would not be reasonable to believe that there wasn't collusive action flowing from that. Link to comment Share on other sites More sharing options...
DrStool Posted January 10, 2010 Report Share Posted January 10, 2010 I am using my imagination and I can't imagine them talking about who is going to get up early the next day to juice the GLOBEX futures when the Frankfurt Market opens. That makes no sense and doesn't pass the smell test. The fact that GLOBEX seems to get juiced alot during bull runs (a fact) doesn't mean that it is the Fed or one of the PD's doing it. (a belief.) Correlation is not causation, as they say. Anyone that thinks that being a Primary Dealer for the Fed is an absolute path to huge power and influence with the ability to manipulate markets to unfair advantage needs to explain just one little thing. How could Lehman Brothers go bankrupt while it was a primary dealer? And Bear Stearns and numerous others through the years. That goes to my second point. They are neither omniscient nor omnipotent. They make huge misjudgments. Furthermore, they are mostly sociopaths and are prone to self destruction. The thing is, they don't care if they take us down with them. Link to comment Share on other sites More sharing options...
patents Posted January 10, 2010 Report Share Posted January 10, 2010 . . . The fact that GLOBEX seems to get juiced alot during bull runs (a fact) doesn't mean that it is the Fed or one of the PD's doing it. (a belief.) Correlation is not causation, as they say. . . . Sorry to break things up, but - No one is saying that the Fed cabal is buying/selling every SPU contract. Think of the chemical concept of a catalyst. Or the physical concept of momentum. The Fed cabal just has to get the ball rolling in the right direction or stop the decline, for example (again see the theory of Heller). If a market is back-stopped such that it cannot go down, what is going to happen? Even a rat when they go down a path that is blocked will normally turn-around and head the other direction. It only takes a single selected/trained cow to lead a whole herd to the slaughterhouse. (Note that frequently the lead cow is spared and used again and again.) Link to comment Share on other sites More sharing options...
DrStool Posted January 10, 2010 Report Share Posted January 10, 2010 Years ago, I read an account of what is claimed to have happend in October 1987 - namely, a guy no one had ever seen before walking out onto the floor of the S&P pits and taking the long end of any trade available. Anyone have a link to anything about that? Preferably, a first-hand account? I'm pretty sure that what I read was a claimed first-hand account, but time plays tricks. Absolutely happened. There was a movie about it called Trading Places with Dan Ackroyd and Eddie Murphy. I saw it being filmed in Philly. I was there. "Look at them. They panickin!" MY GAWD Mortimer, he's RIGHT! They ARE panicking!" They don't make lines like that anymore. Link to comment Share on other sites More sharing options...
Drano Posted January 10, 2010 Report Share Posted January 10, 2010 How could Lehman Brothers go bankrupt while it was a primary dealer? Just because this story was widely circulated doesn't mean it's true, but, the story was, it was GS doing payback for Lehman refusing to help in bailing out the system during the LTCM meltdown. (I think that was the meltdown, could have been a different one) Link to comment Share on other sites More sharing options...
DrStool Posted January 10, 2010 Report Share Posted January 10, 2010 The point that things are different today is true. The instruments of manipulation today are not the same as 30-40 years ago. At that time it was a handful of NYSE specialists who ran the 30 stocks in the Dow. Richard Ney's brilliant work, Wall Street Jungle, colorfully described in great detail just how the specialists did their dirty work. If you go back 500 years you can see more or less the same thing in Joseph De La Vega's Confusione de Confusiones, where he detailed the manipulation in the Amsterdam stock market for the Dutch East Indies Company. There's nothing new under the sun. It's just that today the stakes are so much higher, and I BELIEVE that the government is more heavily involved than ever before. By the same token, it still boils down to the fact that successful trading depends on pattern recognition, and that's the purpose of technical analysis. There's no need to figure out who's manipulating what, when and how. It's all in the charts. Just trade the patterns. It's about patterns and probabilities. Maybe the government is manipulating. Maybe it isn't. It doesn't matter. The charts still work. Some markets you use trend following techniques and some you rely on cyclical techniques. Link to comment Share on other sites More sharing options...
Drano Posted January 10, 2010 Report Share Posted January 10, 2010 Absolutely happened. There was a movie about it called Trading Places with Dan Ackroyd and Eddie Murphy. I saw it being filmed in Philly. I was there. "Look at them. They panickin!" MY GAWD Mortimer, he's RIGHT! They ARE panicking!" They don't make lines like that anymore. One of our former members, whose name escapes me at the moment, was with one of the big firms, and said he witnessed that. (1987, not the movie ) I'm blanking -- he was in a bad car accident and sent one of his friends/colleagues here, who then was called up from the reserves to be a pilot in Iraq, and we haven't heard from either of them since. Anybody remember their handles? They were both great contributors and I'm really irked that I can't remember their names. Link to comment Share on other sites More sharing options...
DrStool Posted January 10, 2010 Report Share Posted January 10, 2010 Just because this story was widely circulated doesn't mean it's true, but, the story was, it was GS doing payback for Lehman refusing to help in bailing out the system during the LTCM meltdown. (I think that was the meltdown, could have been a different one) That story was about Bear Sterns, not Lehman. But that's not the reason. The reason is that they are human and fallible. The system is far too big and unstable for any cartel to control, even one involving the US government. In the long run, all attempts at manipulation are bound to fail. In the long run, all conspiracies die. All corporations die. All governments die. Link to comment Share on other sites More sharing options...
DrStool Posted January 10, 2010 Report Share Posted January 10, 2010 Dr. Bob Poodit was the second guy. I don't remember the first guy's handle at the moment. I always thought that they were one and the same. People can say whatever they want about themselves. We have no way of knowing for sure whether it's true. Link to comment Share on other sites More sharing options...
Drano Posted January 10, 2010 Report Share Posted January 10, 2010 Dr. Bob Poodit was the second guy. I don't remember the first guy's handle at the moment. I always thought that they were one and the same. People can say whatever they want about themselves. We have no way of knowing for sure whether it's true. You're right, it was BS I was thinking of. And yes, Dr. Bob was the one who said he was being called up to go to Iraq. I thought their writing styles were different so it never occurred to me that it might be the same guy, with 2 different handles. I think both (or the one, as the case may be) had some interesting stuff that proved to be correct, but as you say, who knows.... not everyone has quite as, erm, diSTINKtive a writing style as, say, Shorty, or Jickiss..... Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.