For many Americans, there is little doubt that some of the higher functions of the stock market and the general economy could be “rigged” for those at the top.
This is an all too common trope of the “big, bad” Wall Street enemy: The need to trample on the good people of this nation, create volatility in their retirement plans, manipulate the market, and all in the name of corporate greed.
It’s almost too easy to think of a dozen movies off of the tops of our heads with this general theme.
For years, however, insiders to the Wall Street underground have been attempting to warn us of the dangers of the fringe free market. Even high level libertarian minds such as Ron Paul have railed against the U.S. economic system, and, specifically against the intrinsic connections between big business, government lobbying, and Wall Street bankers. There are far too many cookie jars and far too many sly hands out there to keep everyone from losing.
Now, one highly credible whistleblower is attempting to blow a hole in at least one aspect of the market’s rigging, by exposing a longstanding scheme within the volatility indexes.
“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 SPX, +0.26% are skewing levels of the Cboe Volatility Index VIX, -2.30% which reflects bearish and bullish options bets 30-days in the future on the S&P 500 to gauge implied stock-market volatility.”
What’s worse; the mysterious author’s claims aren’t even entirely unique.
“The whistleblower’s claims are consistent with those documented by John Griffin, professor of finance at the University of Texas and Ph.D. candidate Amin Shams in May 2017 in research that says the cost of manipulating less-liquid SPX options would be more than paid for by a successful bet on the direction of the VIX. The paper is consistent with the whistleblower’s conclusion—that manipulators are moving prices of the SPX options by spoofing at settlement—entering quotes for trades that are never executed—to ‘paint the tape’ and, therefore, influence the value of expiring VIX derivatives.”
Now, the real question will be whether or not this marked release will gain any traction in a mainstream media who is entirely beholden to the massive corporations who are likely willing participants in the scam.
Given that CNN and others rely on massive advertising campaigns in order to sustain themselves, it is unlikely that these revelations will be allowed to interfere with that. Should the American people look to upset the apple cart of stock market rigging, they will likely need to do so themselves, with the help of the Free Press of the internet.