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‘Spoofing’ and ‘Naked Shorts’ – Today’s Trading Strategies!

October 3, 2014

Today’s Wall Street Journal wrote about another criminal trader, Mr. Coscia, who used an illegal trading strategy called ‘spoofing’ to change ‘prices’ of commodities so that he could profit from this practice. Mr. Coscia booked some $1.6 million from his manipulative strategy (buying/selling and then cancelling). He is now being prosecuted by our Justice Department. So what is the strategy called ‘spoofing’? It appears that our high-speed computer traders can enter a buy order for (say 100,000 shares of) silver, and then immediately ‘cancel’ the order with the electronic commodity exchange (say the Globex). This ‘cancellation’ of an electronic order is a technique to cause ‘price’ changes in the commodity. Price changes can be effected via both buying and selling (with a cancellation of the order to follow). This is now a strategy given that buying and selling is done in milliseconds! Can you discern why traders today are only interested in the ‘price’ of an asset or commodity?

A high-frequency trader, Michael Coscia, was indicted for “spoofing” — placing and immediate canceling orders as a way to manipulate commodities markets — in what the U.S. Justice Department says is the first criminal case of its kind.

Our high-speed traders today have no interest in the fundamental ‘value’ of a commodity or an asset. What computers do best is manipulate ‘prices’. And its the changes in ‘prices’ where traders make their cyber money. The underlying assets of a company, the quality of the management, or the fundamental strength of a company is meaningless to todays high-speed traders. All they desire is rapid changes in ‘prices’ so they can book profits (shorting or going long). Is any of this representative of Capitalism? What kind of markets do we experience today? Why all the corruption, manipulation, and insider trading? Another strategy which has become ubiquitous within the silver/gold markets is the strategy called Naked Shorts. It appears the our CFTC (the Commodities Futures Trading Commission) and our regulators are allowing this strategy (which is illegal in most global markets). So what is a ‘naked short’ strategy?

The strategy of selling ‘naked shorts’ within the electronic futures market is meant to drive down the price of silver. Who could be using this strategy within our realtime computer markets? Why?

Naked shorts are merely a trade where the underlying commodity (say silver) is not delivered or covered during the trade operation. Essentially, the trader is merely selling (say silver) short to a hypothetical buyer who does not desire to own any silver and has no intention of receiving any silver to cover the transaction. The trade is basically a ‘phantom’ trade which occurs electronically on one’s computer but with no real person’s involved. I call this a ‘phantom’ transaction and others call this a ‘paper’ trade. In reality, however, there is no ‘paper’ being traded (between a seller and buyer)…all is electronic and within the computer screen (within cyberspace). We should really call this an ‘imaginary’ transaction between ‘phantom’ and/or ‘virtual’ traders. Does this strategy have anything to do with Capitalism or helping our economy? I don’t think so!

Notice the continual process of driving ‘down’ the price of gold even though demand has been growing! Price suppression is now possible via computer trading (irrespective of what supply/demand may desire)!

What we have today is a Casino mentality among the trading community and our regulators and our chief administrators are part of the corruption and manipulation. The biggest manipulator today appears to be our ‘independent’ Fed. The Wall Street Journal had an article today entitled, “New York Fed Boss Hits Back”. The chief head of our Fed (when it comes to realtime trading) is an unelected dude called William C. Dudley. Dudley is in charge of a huge trading room at the New York Fed, 9th floor, 33 Liberty Street, where secret trading is taking place daily in realtime. No one knows what these traders are trading and or what strategies they are using. We do know, however, that they are huge ‘manipulators’ of prices, interest rates, and liquidity transactions. They trade, swap, and manipulate the entire marketplace via their actions.

Manipulation of ‘prices’ is the goal today within our global trading operations. This includes our Fed and its trading room on the 9th floor of the New York Federal Reserve Building, 33 Liberty St.

Many of us have singled out this trading operation as the real SOURCE of our silver/gold manipulations. This secret trading room at the New York Fed (headed up by this dude called William C. Dudley) could be at the source of most stock, bond, derivative, and commodity manipulations. Why is this trading room off-screen from public knowledge and the media? It appears that Dudley and his cartel of bankers and manipulators desire that no one know what is happening within this ‘dark’ room. Why can’t the independent media and journalists monitor this trading room in realtime so Americans can discern if these traders are above-board and promoting real economic justice for our markets? Why all the secrecy and the desire that they not be ‘audited’ by an independent auditor (hired by the American public)? I think I know the reason!

Picture of Tim Geithner, Ben Bernanke, and William Dudley in 2012 (America’s chief financial manipulators)! Notice the signs in the background. People understand that these dudes are at the center of American money and finance!

There would be no need for secrecy if shenanigans where not happening within this trading room. What we have today is a huge Ponzi operation at the Fed and the FOMC and few understand what is happening during realtime events. Money is at the ‘source’ of most corruption in our World and my sense is that our so-called ‘independent’ Fed and their proxies (called primary dealers and leaders of our nonfunctional finance committee’s in our Congress) are operating this huge Ponzi financial system. Can you ‘smell’ a rat in the wood pile? I can! The entire Ponzi banking system is the real culprit as to why our economy is failing and will eventually crash and burn. Do some independent research on your own to discover what is real and what is deception! We now have numerous websites and blogs covering the corruption within our nonfunctional System! Enjoy! I am:


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