The Big Boy!


Is there any particular country, company etc, who can manipulate the markets to a high degree, or is that rubbish!
Oh! boys, girls and moderators, maybe it was a crappy thread, im just trying to get a reaction to a half-ass question. Is that so bad?
You cant surely manipulate threads like this! Its beyond common decency?...surely you would agree!
Yea it is true. Although the more liquid the market, the harder it is.

If your a massive player and have a lot of size, it may be worth taking the other side to start a move (and lose a few points), wait for the move to be continued by other traders, to whom you then unleash your size into and beyond. Hopefully the result is that the lower average price you got out on would cover the loss on taking the other side to begin with, and certainly better than if you had just put them on the market with the current trend.

Thats the nice side of manipulation.

The bad side of manipulation is through false accounting, manipulation of statistics, fraud, Enron, corrupt analysts, etc

This manipulation can effect markets for minutes, hours, days, to unfold. Depends on the size of position.
Yes they can but in the end the market will always re-balance and win.

Good examples right now are the Japanese and American currency policies.

Japan is dependent upon exports. For Japanese goods to be attractive to importors they must be as cheap as other goods of an equal quality. As America is a large purchaser of Japanese goods then the Yen must not get too far out of step with the Dollar. The Japanese have been regularily selling Yen and buying Dollars to keep the Yen from speeding away from the Dollar. They will chuck a couple of trillion Yen at the market and the effect will last about 12 hours.

America on the other hand has a weak Dollar policy. This is to support the export of American goods and keep Americans employed. As the majority of the worlds trade is conducted in US Dollars they can simply print as many as they want and spend them with other countries. This policy is starting to have a very serious effect in Europe where car and software producers are finding it increasingly difficult to sell into the States and could be delaying the return from recession in France and Germany. So, the American policy is certainly affecting the markets.

The bit that the US seems to have missed is that by advancing the state of the US economy at the expense of its primary trading partners it is in danger of biting the hand that feeds it. If Europe cannot sell into the States then there is a real possibility that by the time the US relaxes it policy that the damage to Europe will have been sufficient to delay Europes ability to trade with the US. In effect the US could make the best and cheapest widgets in the world but if the world cannot afford them (regardless of price) then America will not sell them and the market will find a painful balance and win again.

So, yes, a country can manipulate the markets but only to a point. In the end it will catch them up and bite them in the .....
Good example, the currency markets. Another nice one is when back in 1979/80 the Hunt brothers tried to corner the silver market. The price of silver went up to more than $50, and then collapsed in waves to present levels.
Bunker Hunt played the market to the rules. He took delivery of contracts as they became spot. The authorities(was it the CFTC?) changed the rules by imposing a liquidation only directive.
That was the reason for the collapse.
You are right on that one. There was more politics involved, than market forces at work, that's for sure.

Best regards,
Andreas said:
Good example, the currency markets. Another nice one is when back in 1979/80 the Hunt brothers tried to corner the silver market. The price of silver went up to more than $50, and then collapsed in waves to present levels.

It collapsed, because COMEX changed the rules of the game, and banned fresh, naked shorts! This was axtually the Hunt's second ( lousy) attempt to corner the silver market- the first occured during the early 1970's, and was foilled when Mexico suddenly decided to backtrack opn an earlier statement, and decided to start dumping their silver hoardes and the newly inflated price.
Commodities in general seem rife for cornering- read up on the great ITC tin scandal of the late 1980's when a sovereign debtor was allowed to go bust ( end of that squeeze!)


Wasn't there something with copper also in the 80's ? Some scandal involving Sumitomo if I remember right. But I must say I do not recall the details.
Tin was about letting the Buffer Stock system collapse.
A licence to print money(and they did!)when it was operating. You always knew where your loss was....... :cheesy:

Sumitomo came out in 1996. Hamanaka was overtrading, I think they called it! :LOL: Nice little bull run, I remember :cheesy:

ps. have a look here
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Andreas- yes, Sumitomo abley assisted by a couple of old friends of mine from Winchester Commodities. Last heard, they were living in Monaco!

Oatman - the ITC was a UN backed buffer system, which worked well until the loses started getting astronomical, and the sovereign states behind it, walked away fromt heir obligations allowing the ITC to "go bust"
Hi juanbyte, boys, girls and moderators. I couldn't find my pills on that particular day. Sorry! PeeDee!
CityT, Yes I know all about the ITC.
And the convenient departure of the boys to Monaco :cheesy:
Oatman- I used to work with Ashley ( Levett) stayed with him in NY a few times...ah, those were the days..
Market Makers! Who are these people and how much legality have they got. Obviously, a lot. But what are the conditions or whatever, whereby somebody says you are a market maker. I could have put this question to Investopedia but the answer would not have been as exact and as verified as on this site. Any thoughts! Cheers! PeeDee!