"Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole. If price discovery is compromised by manipulation, then we will all be gradually impoverished and the economy will be imbalanced and unstable.
Over the past 25 years the forces of regulatory liberalisation and demutualisation of markets have allowed the largest global banks to set the rules, processes and infrastructure of global markets to their own self-interested requirements."
London Banker, Lies, Damn Lies, and LIBOR
"American political corruption was the buying up of legislatures and assemblies to keep them from doing the people's will and protecting the people's interests; it was the exploiter entrenching himself in power, it was financial autocracy undermining and destroying political democracy. By the blindness and greed of ruling classes the people have been plunged into infinite misery.
It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Upton Sinclair
When I talk about the wiseguys 'running the stops' this is what I mean. They do it quite a bit in the metals markets but the rest of them, including the bond markets, as well.
There are commentators and sites to continue to excuse and cover up the thefts ongoing in the markets.
You might be correct, given all the evidence, to be a bit skeptical if not suspicious of
those professional scoffers and deniers of these frauds, and the perennial
promoters of 'free markets' in which powerful insiders have the ability
to cheat and defraud the public at will.
The pity is that it still continues, along with quite a bit of additional antics and shenanigans in our underregulated and systemically corrupted markets.
Here is something I wrote back in 2009 about this, which was called the Dr. Evil strategy by Citibank when the European regulators took them to task for running the stops in the European bond market. As their incredulous trader exclaimed, but we do this all the time in the US.
You can find the related pieces over time by clicking on the Dr. Evil topic here.
