The Blog Of The Securities Industry Professional Association

Are You Not Entertained?

If Americans only knew 

In the famous movie “Gladiator”, the young and insane new Caesar named Commodus has a myriad of problems stemming from a failing economy, years of war and a weird crush on his sister.  As the members of the senate begin to press him for solutions, he soon realizes he is way out of his league and not fit to be Caesar. To deter and distract the masses of Rome from possible revolution, he begins holding public gladiator fights in which lions, tigers and humans kill each other to the wild applause of the masses, who don’t even realize their empire is falling.   They are too busy watching Maximus slay men and animals to care.

Today Americans are arguing about Russia tampering, Obama Care, tax reform, Anthem protests and Sexual harassment at every level of government and Hollywood, but while the press covers this nonstop, a lightly covered story emerged yesterday that dropped my jaw.

A group of 17 US public pension funds and insurers have filed a lawsuit in New York alleging that their access to some electronic trading venues in the world’s biggest government bond market was blocked by a group of banks. The new case, brought by investors such as the American Federation of Teachers, the Cleveland Bakers and Teamsters Pension Fund and the Alaska Electrical Pension Fund, marks an escalation in a two-year battle between banks and their clients over access to the best available prices in the $14 trillion US Treasury market”Click here to read collusion story


As always, the cartel was involved.  The complaint alleges that a smaller group of seven banks, including JPMorgan, Barclays, Citi and Goldman Sachs, joined forces to prevent large institutional investors from seeing the best prices on venues such as the bank-supported Tradeweb or Nex Group’s BrokerTec.

This was a rigged treasury market that basically amounts to pay for play that the Department of Justice has been supposedly fighting for years.  However, this is more than just the big boys colluding again on yet another segment of the market.  Colluding on an offering of Facebook or Pandora in a public offering may be illegal but it effects only those investors who want to buy one of these tech companies.  However, colluding on Treasuries effects the entire American economic system.  This is shocking and should be the lead story on any reputable news outlet, yet its largely ignored.   By rigging the sale price of treasuries, nearly a dozen markets are impacted including your money market rate, your mortgage rate, your variable interest rate, your savings account, your credit card borrowing rates, your pension account.  It can even be argued that Fed policy was impacted due to this fake demand and or pricing of treasuries.  This is outlandish on so many levels and how the US Treasury and the Federal Reserve Bank didn’t know this is insulting to say the least. There should be a special prosecutor looking at not just the banks, but the Federal Reserve and Treasury because there is absolutely no way they could not have known about 14 trillion changing hands. 

The artificially low interest rates of the last decade is, by and large, based on sales and demand of our debt.  This lawsuit shows that the fix was in and as we pointed out in story after story, including in 2015 “The Wizard of Fed Oz” we questioned why the Fed left rates at near zero, despite economic measures that for years would have resulted in a rate hike.  Rates were left artificially low and as a result, retirees were literally forced into a stock market that continues to soar today instead of the safety of CD’s or Treasury bonds.  This could be the greatest market manipulation in the history of Wall Street.  Some may argue that the market maker collusion in the 1990’s was the standard, but that event only effected investors looking to buy tech stocks, not every man woman and child in America.  So while everyone talks about Russia, Uranium one, Hollywood, anthem protests and perverted senators, ask yourself one thing:



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November 17th, 2017



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