EXCLUSIVE: HOW CME STOCK MANIPULATION SHOWS A CROOKED ELITE MILKING WHAT’S LEFT OF THE MUG-MONEY

How ironic it is that, as the paedo-nutters go over the same ground again about Cliff Richard, the world’s econo-political-fiscal situation looks ready to go over the cliff too.

Last Saturday, I posted this piece about the imminence of the neoliberal claptrap train plunging over a cliff onto the rocks of reason below. Here we are only twelve hours into Monday, and two things are immediately apparent: the Wall Street willy-pullers are still avoiding the ticket-guard; and only the wheels will be saved, for they’re coming off even faster than the train is travelling at breakneck speed towards Doom Junction.

The Wall Street Journal reported on Sunday that Credit Suisse helped put together billions of dollars in securities being issued by offshore investment vehicles of Banco Espirito Santo SA for sale onto the Portuguese bank’s retail customers – but the customers didn’t know the investment vehicles were loaded with debt issued by various Espirito Santo companies…..and served as a mechanism to finance the Portuguese conglomerate. There were no denials from either CS or BES – just lots of No Comment silences.

You see, once the Russians are lobbing grenades into the Chancellery gardens, there is no deed too ghastly for a Nazi looking to save his elephant-thick skin. Here’s another example:

Nobody has been more categorical than Terrence (Terry) Duffy, the Executive Chairman and President of the CME Group – the operator of the largest futures exchange in the world in Chicago – that the futures markets are whiter than the driven snow over a level playing field. But three weeks ago, Duffy’s credibility was effectively blown away when lawyers for three traders filed a Second Amended Complaint in the Federal Court against (1) Mr Duffy, (2) the Chicago Mercantile Exchange, (3) the Chicago Board of Trade and (4) other individuals involved in leadership roles at the CME Group. The complaint’s allegations read like something out of The Godfather.

Now a former CME employee has turned whistle-blower to give The Slog what Americans call a Heads Up on what’s really been going on. Let his testimony speak for itself:

‘On an average day, globex [futures] trading would be about 16 million trades in a day, a busy day could be like 21 million – that’s around 14 thousand trades a minute. Having a conversation with one them last month, it emerged that on average we were pushing 2 trillion dollars through the system in a day….with such high volumes of trades going through the globex system, its more than likely that about 80% of them are wash trades’

A wash trade is a form of stock manipulation in which an investor simultaneously sells and buys the same financial instruments. This is usually done (a) to artificially increase trading volume, giving the impression that the instrument is more in demand than it actually is, and/or (b) to generate commission fees to brokers in order to compensate them for something that cannot be openly paid for. (This was the most common MO favoured by the participants in the Libor scandal)

So to sum up, nothing has changed since 2008 in terms of the markets being, with very few exceptions, One Big Fix. But now take on board these other developments today:

* China’s demand for energy is down 3.3% (The Slog last Saturday: ‘Russia’s energy-biased economy is threatened by sanctions and, more seriously, firm signs that energy demand is going into reverse’).

* Asking prices for London homes fell by 5.9% during July. Oh dear: Has Squeaky the Chancellor peaked too early?

* Nomura says China’s housing slump is becoming serious – and, in their view, a threat to stability. JP Morgan says it is now affecting 91% of the country.

* Investment inflows into China slumped by 17% in July.

* After the great Abenomics hari-kiri fest, Japan’s public debt is now five times the size of its economy – or a gobsmacking 250% of GDP. That is off-the-charts relative to all other large developed economies, and is without parallel in previous history.

* The mess in Ukraine has resulted in a 4.7% decline in economic output.

Let me give the final word to my CME whistle-blower:

‘….markets are supposed to react when the world is on the brink of war – and CME markets rely on trust, stability and ability to deliver. Right now it seems to me, (and I could be wrong) like a car heading towards a brick wall at 90 miles an hour and there are no brakes.