How Wall Street’s ‘fear gauge’ is being rigged, according to one whistleblower

Cboe’s VIX products is the target of a whistleblower (Getty Images)

 

One of the most popular measures of volatility is being manipulated, charges one individual who submitted a letter anonymously to the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The letter makes the claim to regulators that fake quotes for the S&P 500 index are skewing levels of the Cboe Volatility Index which reflects bearish and bullish options bets 30-days in the future on the S&P 500 to gauge implied stock-market volatility (see excerpt from the letter below).

The flaw allows trading firms with sophisticated algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital. This market manipulation has led to multiple billions in profits effectively taken away from institutional and retail investors and cashed in by unethical electronic option market makers. Continue reading

Jim Sinclair: Entire US Banking System Missed a Bail-in Collapse by a Hair Tuesday!

Jim Sinclair states this morning that the entire US and Western banking system just missed a complete collapse and full bail-in by a hair’s length at the end of the Memorial Day Weekend.

Full details on the US banking system’s narrow miss of a complete systemic collapse and a full banking holiday Tuesday are below:

The entire Western World banking system just missed the need for a bail-in by a hairs length.

The next crisis in finance in North America will be a product of the FASB, the Guardians of Auditing, allowing banks to value OTC derivative paper at whatever the bank wishes. This is a camouflaged black hole loss unstated that Western Banking system deposits could fall into to disappear partially or wholly, made up of your deposits. Washington made moves to override the CFTC, mandating proper valuations which the FASB has run away from. Had the banks been required by the CFTC to value these derivatives at anything resembling a real market (there isn’t any markets for the legacy OTC derivatives of 1991 to 2008), we would have had another banking crisis in the USA on Tuesday after Memorial Day. The USA just missed another banking crisis by a hair’s length. Next time it will be closer. Continue reading

‘Naive’ to Think Gold Isn’t Manipulated Too, Fund Manager John Butler Says

Gold and silver didn’t even begin to seriously sell off until about fifteen minutes afterthe big dollar index rally was done, so to pin yesterday’s precious metal price action on the currencies is laughable.

One of the other reasons that the sell-offs in the metal are hitting the shares so hard, is that mutual funds are feeling the effects of massive redemptions…and they have to sell whether they want to or not.  The markets are very illiquid…and this just makes matters worse.

But the one big question you should be asking yourself is this…”Who is buying all these shares that the precious metals investors are selling in such a panic?”  Think about it.  Somebody is…and whoever they are [and I have my suspicions] they have infinitely deep pockets…and are the very definition of “strong hands”. Continue reading