Armstrong thinks himself omniscient but knows nothing about anti-trust law


8:10p ET Monday, April 18, 2016

Dear Friend of GATA and Gold:

In commentary yesterday market analyst and newsletter writer Martin Armstrong minimized and misrepresented Deutsche Bank's admission that it manipulated the gold and futures derivatives markets with other banks.

Purporting to answer a subscriber's question --

-- Armstrong wrote that the crowing being done by "gold bugs" about Deutsche Bank's admission "is rather pathetic. It demonstrates how ignorant they are about trading and the marketplace."

... Dispatch continues below ...


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Armstrong continued: "The banks have been clipping people for decades ('manipulation'). ... This 'manipulation' has always been present in every market. The dealers know where the stops are, and if they are within striking distance, they 'manipulate' the market to execute them. ... If you have never traded size, you are not qualified to comment. You obviously have never seen how banks move spreads to clip clients all the time."

But the class-action lawsuit in which Deutsche Bank has just admitted violating the law and has pledged to provide evidence incriminating its co-conspirators is emphatically not about running the stops, not about "moving the spreads," and not about what Armstrong asserts is so routine.

Rather the lawsuit is about violation of anti-trust law -- that is, about collusion among major participants in the gold and silver derivatives markets, about conspiracy.

Here are excerpts from the accusation in the lawsuit's complaint, with emphasis added in italics:

"Defendants agreed to systematically suppress the gold benchmark rate through the submission of low net demand during the fixing process and through the publication of a rate that does not reflect actual supply and demand. ...

"Defendants reached specific agreements to manipulate the price of gold on particular days on which they expected to buy large quantities of physical gold or execute or settle futures positions. In carrying out those agreements, defendants agreed to submit net demand levels that do not actually reflect their order books.

"Defendants' joint action was required to carry out such manipulation, as the submission of fake small orders to buy or large orders to sell by just one defendant would not be sufficient to alter the fixing process significantly so to produce a depressed price.

"Defendants entered into fictitious trades so as to create artificial supply or demand at the time of the PM fixing. ...

"Defendants, knowing the outcome of the PM fixing ahead of time, used this nonpublic, valuable information to execute transactions on the futures market and reap additional profits at class members' expense, while agreeing to keep this blatant misconduct hidden from their customers and from the public."

The full complaint is posted at GATA's Internet site here:

While Armstrong considers himself ominiscient even after serving seven years in federal prison, he knows nothing about anti-trust law. Indeed, he knows nothing about the class-action lawsuit about which he presumes to draw conclusions. He "knows" only that markets can move only when he thinks they should move.

Really, now: If what Deutsche Bank has just admitted is, as Armstrong says, merely routine, why has the bank agreed to pay financial damages and to provide evidence incriminating its fellow conspirators? Don't Deutsche Bank's lawyers know that Armstrong is omniscient? Or, if Armstrong told them of his omniscience, would they just consider him pathetic?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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DeutschBankClassActionLawsuit.pdf5.32 MB