"We Want The Names Of Anyone Who Sold" - China's Market Witch Hunt Enters Twilight Zone


This article from Tyler Durden (Zero Hedge), is a real eye opener. Fake trades are tolerated by governments until they are used to depress the price of stocks. They should be forbidden across the board, both on the way up and on the way down, but they are not.

Still, China has decided to go after the fake trades and shorts. It will be interesting to see if this one way (down) enforcement causes a massive bubble down the road when people become confident that the government can cause stock markets to never crash!

Since China did nothing to stop the upward pressure of speculation and churning fake trades, Durden calls this enforcement a witch hunt. In a way it is. But middle class people in China are being ripped off by these manipulators. Their wealth is disappearing daily. That is a big concern for China and should be a big concern here as baby boomers have been warned by Fidelity that they hold too much stock.

I posted to the Durden article that this sort of thing was happening at the CME as well. I wonder if it is happening as commodities are tanking or if it just happened on the way up:

Wow, creating the illusion of demand. Wow.
Apparently that may have happened at the CME for years. It could still be happening as there was a lawsuit stating that half the trades at the CME were FAKE.

Of course, it is hard to know if this chicanery happened with commodities as they go up and down, but Durden says it does happen with stocks both ways.


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