Posted on 10/16/2004 7:03:23 PM PDT by BCrago66
There is now no question whatsoever that the Bush re-election futures contract at Tradesports.com is being manipulated. Yesterday the price of the futures were sold down from about 55 (indicating the market's estimate of a 55% probability of Bush's re-election) to 10 (indicating on a 10% probability) with a single 10,000-lot order entered by a single trader. An order that size represents twice the normal volume of an entire typical day's trading. Within moments after the order was completed, the price recovered back to the low-mid-50's.
According to sources at Tradesports, yesterday's order was entered by the same individual who has heavily sold the Bush futures three times over the past month. The first instance was on September 14, when this trader sold the futures down from the mid-60's to 49.6. The second instance was in the middle of the second presidential debate on October 8, when the futures were sold down from the high 50's to 51.5. The third instance was right after the third presidential debate on October13. As the debate began the futures were priced at 57, and by the end of the debate they had risen to 60. Then a few moments later they were beaten down to 54 in a matter of minutes.
In markets this kind of behavior is called a "speculative attack." The idea is not to sell at the highest price possible -- the normal profit-maximizing strategy of a typical seller. Rather, the idea is to use one's selling to deliberately cause prices to fall. Why would any sane trader try on purpose to sell at low prices? In some cases it is in order to panic other traders into selling at even lower prices, so the attacker can buy back what he sold at a profit -- traders call that a "bear raid." But in a speculative attack the motive is more complicated. It is to cause people in the real world -- not just other traders -- to panic.
The classic example of a speculative attack is when George Soros massively shorted the British pound in September, 1992. The Bank of England was obliged to support the pound's exchange rate under the European Exchange Rate Mechanism. With the pound plunging and the BoE pouring billions into supporting it, prospects for the British economy were damaged -- making the pound even weaker. Eventually the BoE exhausted its will to support the pound , and had to pull out of the ERM. The pound collapsed -- and Soros is said to have made a billion dollars on this speculative attack.
It's all based on what Soros has often written about as his "theory of reflexivity." It's when financial markets affect the real world, and then the real world in turn affects financial markets. It's a vicious cycle set in motion on purpose. Here's a speculation of a different sort: could Soros be behind the manipulation of the Tradesports Bush futures? The amounts of money involved are pocket change to Soros. And it would fit his avowed intention to unseat the President. It would be a cheap way for Soros to damage Bush's credibility and panic his troops. I have no idea whether Soros is behind this or not. But it would fit.
"He that sells what isn't his'un, must pay it back or go to prison."
Personally, I'm expecting a very healthy "short covering rally" in the near term.
I've been watching tradesports for a couple of weeks now....somethings fishy there.
If TradeSports wanted to fix this, it's fairly simple. Put a limit on individual positions. Real markets do it.
But with our Halperinized press corps, the Tradesports action is ignored by the press until suddenly Kerry looks good. Then it becomes a front-page story. If they can sustain this for a day or two, you will see this happen.
If you want to see where Soros is REALLY spending his money in order to change the real world, just check out the futures market for gasoline in the US market. That's where his fingerprints show everywhere, and that's where he can see his actions impacting all of us. He figures the president will be blamed for the rise in refined petroleum products. Not all of us think it's cool messing with our monthly budgets.
Karma will one day exact one hell of a toll on that ___hole.
Did you see the thread today that linked Halperin and Soros?
Is there any way to find out who is doing this ..?? Or is this protected (private) information ..??
I will dance the day he dies, to be quite frank.
I think Soros is heavily involved in the OFF scandal.
Anyone thought about the Soros Oil futures Manipulation?????
I think that the oil futures market is way to big for even Soros, single handedly, to manipulate. Clearly though, plenty of hedge funds have been involved in driving up the price of oil recently, but not to effect the election, only to make a buck.
The hedge funds have largely run out of places to stick there money because volatility in equities and bonds is very low currently. Given the absence of getting outsized returns in bonds and equities, many have switched strategies and now trade commodities, like oil.
This will eventually blow up in at least one hedge funds face and the entire party in trading oil futures will end. Remember, as recently as 1998, oil hit $11 per bbl.
"Yesterday the price of the futures were sold down from about 55 (indicating the market's estimate of a 55% probability of Bush's re-election) to 10 (indicating on a 10% probability) with a single 10,000-lot order entered by a single trader."
This isn't manipulation, this is someone mis-entering an order and losing a ton of money in the process.
I wonder what their clearly erroneous policy is.
Where do you get the idea that Larry Kudlow is Bush bashing. Kudlow is a columnist at townhall.com and is certainly no friend of Kerry.
Sorry, wrong economist. It's been a long day.
If they are being manipulated, then really aren't more reliable than polls.
I wish I knew. But if he can caused the pound of England to collapse and make 1 billion dollars from that collapse, no telling what he will try in the US markets.
I think Soros is trying to drive down Bush futures. If so, this should be an opportunity to make some easy money.
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