
Evidence of market manipulation on the Chicago Mercantile Exchange? - jbegley
https://www.vanityfair.com/news/2019/10/the-mystery-of-the-trump-chaos-trades
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audiometry
This article is not persuasive at all. With the exception of one quote ("That
was some 40% of the day’s trading volume in September e-minis") none of these
factoids were put in any context that indicates exceptionalism (or not) of
them. How many similar-sized trades also puked money instead of made?

I'm not saying Trump, his reptilian cronies, and liked-minded types wouldn't
be capable of imaging gross schemes like this, but this article goes almost
nowhere in proving it. As someone else points out, it also conflates all sorts
of events (IGRC, HK, Trump) into a single conspiratory organism. Unlikely.

I'd also say there are myriad examples (some posted here) that indicate
insider-trading/tipsterism often is not nearly as profitable as you'd imagine.

Further.... There is an econometrician Phillip Verlegger who, back in the
1990s was doing analysis of futures markets that suggested that Saddam Hussein
was using headlines about the UN-Oil-For-Food program to drive oil futures
prices (which presumably his cronies exploited). I can no longer remember the
details of his analysis, but it was evidence-based rather than the
sensationalism this article pumps.

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benj111
Not sure why you're getting down voted. All fair points.

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altmind
Even if there is a foul play of trading on unannounced news, this should not
be called "market manipulation". That may be informed trading, that is not
illegal. And there is no evidence that this was done by all the same actor.

\--- > Trump, ... boasted during the G7 summit that his counterparts in
Beijing had come back to the table. Indeed, this single Trump lie briefly
inflated domestic markets by hundreds of billions of dollars. “What this
describes is, quite literally, market manipulation that constitutes criminal
violations ...” commented George Conway, the conservative attorney and Trump
critic.

This is just plain bad reporting. Yes, they questioned the expert, and the
expert given them politically loaded opinion. For it to be market
manipulations, Trump(himself, as mentioned in the article) need to profit from
the action, at least.

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qeternity
It depends on context: what's the info, who does it relate to and who's
trading. There is a category of info called material non public information
that is illegal to trade.

~~~
bobcostas55
>There is a category of info called material non public information that is
illegal to trade.

This is absolutely not true.

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dcl
Depends on the jurisdiction? In Australia, I believe it is illegal.

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55555
This article is about the Chicago Mercantile Exchange.

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darawk
This article doesn't even try to answer the only relevant question: Are trades
of this magnitude in the last 10 minutes before close unusual? The time
leading up to market close tends to be the highest volume period in the
trading session. These are big trades to be sure, but the S&P e-mini futures
contract is extremely liquid.

It's an easy question to answer if you have the volume data. I don't happen to
otherwise i'd run it myself, but the author of this article really should have
before publishing this.

~~~
erikig
That would be a reasonable starting point.

Also, it would be great to see how these trades relate to the expected amount
of volatility for the weekend (also public).

For funds that don't want to trade out of and in to large positions on Friday
and Sunday the e-minis are a great way to hedge your risk especially around
high volatility events (of which there have been an increasing amount).

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leroy_masochist
The interesting thing about the article is that, by the logic it presents,
there are at least three parties profiting from inside information:

1\. Someone who knows what the IGRC is about to do

2\. Someone who knows what the Hong Kong government is about to do

3\. Someone who knows what Trump is about to do

I guess this would mean that numerous unscrupulous people at different
international power centers have all figured out the same thing on their own?
Otherwise we're in Thomas Pynchon novel territory.

~~~
kasey_junk
And yet the one piece of attributed evidence this article even quotes is the
CME saying it wasn’t a single actor.

These trades are fully attributed.

The exchange knows exactly who is trading them, the idea that a market actor
would use inside info from many different governmental entities to buy giant
blocks at the close for improvements over the next week is idiotic.

Meanwhile a lot of actors hedging positions in ways that hit the hedge is
completely normal.

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imjk
Summarized succinctly in this tweet from MSNBC’s Stephanie Ruhle:
[https://twitter.com/sruhle/status/1184628336066289664?s=21](https://twitter.com/sruhle/status/1184628336066289664?s=21)

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MiroF
"One longtime CME trader who has been watching with disgust says he’s never
seen anything quite like these trades, not at least since al-Qaida cashed in
before initiating the September 11 attacks. "

Is there any actual evidence supporting this 9/11 claim? I don't see how they
could print this without doing basic fact checking.

~~~
SomewhatLikely
This struck me as well. Snopes says the rumor was investigated and debunked.
While there was "unusual" activity it was traced back to an institutional
investor who had also placed offsetting trades. [https://www.snopes.com/fact-
check/put-paid/](https://www.snopes.com/fact-check/put-paid/)

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cat199
No direct insight to the actual trades outlined here, but most of my mildly-
informed WSJ/FT/Economist reading 3rd-tier software engineer 10% YTD gains
have been from speculative forward/inverse trades when things appear calm or
at maximum chaos.

The strategy has not been based on expecting the broader economic issues to
actually be resolved, but instead: "things are too crazy in US-China/EU-
UK/Middle East, good news coming soon, time to buy long" or "things are too
calm/optimistic, someone is going to rattle saber soon, time to go short"

It doesn't take a rocket scientist to read the geopolitical mood and the level
of bluffing going on, and I'm quite sure if I had more $$ to manage and more
time to watch the ticker and newsfeeds, I would have made bigger bets.

that said, someone directly moving markets could do far better.

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jshaqaw
There were rumors around the Street a decade ago that Chavez in Venezuela was
encouraging Bolivia to talk up a debt default, he then sold CDS protection
against the debt at inflated prices, and then encouraged Bolivia to pay after
all.

Sadly a world of more liquid interconnected capital markets seems ripe for
abuse by insider political actors operating globally.

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wonderwonder
This article is not necessarily convincing; however, the fact that we
currently have an administration in power where it is potentially believable
is disappointing. The president is actively profiting off of foreign powers
and lobbyists booking rooms in his hotels to curry favor and with holding
foreign aid to force investigations into his political enemies. His daughter
is serving on his administration and actively receiving patents from the
Chinese. His son in law is serving in the administration and actively seeking
(receiving?) investments from the Saudi's in order to fund his business. The
presidents sons are actively seeking investments from foreign governments for
their fathers business.

Whatever your thoughts on Carter he put his peanut farm in a trust to avoid
any semblance of impropriety.

Would anyone be shocked if the article was correct in what it implies?

That is the truly upsetting aspect of our political reality not whether or not
the president is responsible for this particular implied malfeasance.

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blobbers
for reference: E-mini future contracts trade in the range of 1-2 million per
day.

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oh_sigh
Most of the examples would indicate that, if anyone was doing it, it would be
other parties(Chinese, Iranian/houthi rebels) erc

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jdkee
Legitimate question for all US citizens: At what point do we stop the grifters
from gaming the system?

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nopriorarrests
Okay lets say I know in advance that in 3 days from now Trump will tweet
something that will affect S&P500 in material way. I want to profit from it.

Why should I establish my position in a single huge trade, instead of slow
accumulation thru the whole trading session? Do I really want to trigger some
alarm in SEC system?

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magwa101
The ruse is that Trump is making money on his hotels, that's small potatoes.
This is how he's making big money. Don't be fooled, he's a wicked genius who
is fleecing the world.

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swedish_mafia
Wonder if Peter Thiels fund will have miraculous returns this year.

