Impacts of Futures Markets
Impacts of Futures Markets

Entirely and criminally abusive of real world trading, "index" futures (and most recently the similar "futures" created for the wash transaction negligible cash at risk criminal manipulation of individual stocks) have intruded since 1982 on the centuries long- established functional markets for common stocks, disrupting and distorting market pricing to ludicrous levels for destructive criminal purposes.  Appropriate in its own wierd way, because of the abuses and hostile control of the stock market using futures market tools for criminal manipulation in recent years, the original impetus for this article was the intrusion of a probably fraudulent promoter of futures trading and of short term manipulation of markets into the Usenet news group misc.invest.stocks. With their 95% rate of destruction of the assets of participants in their manipulated markets devoid of real world controls (and devoid too of rational regulation by the criminally corrupt "regulatory authorities" that they do have), such promoters of futures trading are inevitably on the prowl for "new blood", i.e. more money to steal from the public.  Even when they're not directly successful at getting public money involved in their own manipulated markets, their efforts are directed towards inducing participants in quite different and longer term based markets to behave in the same puppeted lemming-like ultra short term fact avoiding manner that their trivial duration unenforceable "contracts" (unenforceable against the so-called clearing agencies and "guarantors" who promote futures trading while having absolutely nothing in the way of value on deposit with the defrauded public participants) induce if not absolutely require in their own pits.
      The abusive fraud in misc.invest.stocks who inspired this article reminded me most clearly of the narcophony from Chicago, former pupil of the Junk Bond King and employee of that same criminal gang in which the Junk Bond King centered his efforts to loot the assets of the savings and loan industry, who engaged for months on end in criminal harrassment of me over my telephone line and via messages on my telephone answering device.  That one was so wired up on illegal drugs that he coulda fried an egg over a thousand miles of telephone line.  He wouldn't stop his criminally harrassing telephone calls until I asked the exchange of which his fraudulent brokerage firm was a member to put a stop to his criminal harrassments.  They are persistent, those criminal frauds who endeavor to snooker public money into their criminal schemes of manipulation and conversion of customer equity into commissions revenues.

Zero Sum Game
      Plus a dollar minus a dollar equals ZERO.  Plus five dollars minus five dollars equals ZERO.  Plus a thousand minus a thousand equals ZERO.  Plus a million minus a million equals ZERO.  Plus two billion minus two billion equals ZERO.  That is the nature of the criminal manipulations which their perpetrators euphemize as futures trading.  There is no business activity going on there.  Nothing whatever is produced.  Nothing is built.  There are no goods nor services for the rest of the world.  The entire process is a zero sum game, solely a means for transferring money from everyone else to the criminal habitues who run the swindle.  Actually, it is a negative sum game because of the huge amounts being transferred from participants over to the "introducing brokers" and other scammers and shills who run the game.
      I recall one of the many criminal frauds who engaged in unsolicited cold calling and criminal harrassment on my telephone line over the years bragging about how his fraudulent "introducing firm" had hired one of the roughest toughest faggot thugs from the local football team to represent their criminal gang in the pits.  It was clear from his description that futures trading via his firm had nothing to do with rational decision making, nor with voluntary trading.  They had hired a mindless criminal thug to go in there and bully, brutalize and flat out steal from other participants in the market.  Or so they said.  They may have even hired such a criminal thug to carry out their pit activities, but it was the mindless suckers who accepted their "logic" and contributed money to their criminal brokerage firm who were the real targets of theft by much more subtle means.  You send money to such a criminal gang, they create fraudulent bookkeeping to show that money being transferred to themselves in commissions or to other criminal gangs via losses in the markets, and the bottom line is that you wind up with nothing or very much less than nothing.  Don't ever forget that on the incredibly thin "margins" that they "allow" in futures trading, you can lose very much more money than you ever send to one of those criminal gangs.
      According to an article in the Wall Street Journal, they even have a criminal capo annointed as an "Administrative Law Judge" working in the offices of the "Commodity Futures Trading Commission" who invariably decides against public participants whenever there is a complaint against the fraudulent activities of the swindlers and frauds who run the zero sum games.  They also have invariably made sure that their "regulators" were people of the sort that that member of the Enron Board of Directors (and former chief honcho of the CFTC) was:  themselves swindlers and thieves performing only a criminal organizing function to make sure that all of the criminal operators of the swindles perform efficiently as liars and frauds and thieves of public money.
      The zero sum game of commodity futures is solely and exclusively a means of transferring money from victims of the frauds and thieves who run it over to themselves and a minimal number of shills representing their interests.  Forget that fact, get wound up in the irrelevant bilge of "40 head of cattle or 5000 bushels of grain" or whatever other irrelevant and unrelated names the swindlers apply to their mechanism for transferring money from everyone else to themselves, and you promptly become one of the 95% who are caused to lose money as a consequence of participating there.  The other 5% are the brokers and shills and regular members who run the zero sum game.

Fast and Furious Action
      Action action action.  That is the lure that the swindlers of the futures market games use to attract suckers.  The shill who inspired this article with his promotions of the futures market scams was most eager to emphasize the "excitement" and speed of the "action" in the bellowing blarney swindlers game of the pits.  At best, futures "contracts" expire in days or weeks from the time they are created.  That brevity creates an environment of compulsion and forced action which the swindling shill described as  Because trends tend to persist.  Once prices start moving, they tend to keep moving in that direction (more or less).  What he didn't mention is that the reason such trends form in the commodity futures swindle system is that the beginnings of every movement of prices, however created, is reinforced by those participants, holding worthless contracts too often voided altogether by the hostiles running the game, who then are compelled to bail out of their negligibly margined "positions".  With criminal manipulation to get things moving in the first place, reinforced by compulsory liquidation of positions, that short term focus on "contracts" which expire within days or weeks makes irrelevant any longer term evaluation of the thing that is pretended to be traded in the pits.  Add in the reality that the paper being traded is nothing but the empty promises, of people who are notorious for abrogating their contracts every time it suits their convenience (e.g. gold in 1980, potatoes, dollar index futures, etcetera ad nauseum), and what you have is not a discussion of "margins" but of marching orders given by criminal manipulators to the naifs who wander in to lose their money in the zero sum games.
      Attempting to transform his criminal logic into the terminology of stocks, the fraudulent shill continued his argument saying  Do you realize how many people went bankrupt playing the game you are talking about [buying anything at lower prices as it declines] in the months and years following the market peaks in 2000?  Was LU cheap at $75?  How about $30?  How about $2?  This is a loser's game and if you play it you will be a loser.  This is NOT how you trade.  I replied to his stridency, observing that trading trash paper such as LU at *any* price was a losers game.  Ditto ENE.  Ditto every other fraud stock relying on futz type players for its very existence (all of the Internet Mania dot con and dot gone companies, for example).  It isn't buying on a scale down which is the problem (as every grocery shopper buying goods on sale that they would regularly purchase anyway know beyond a shadow of a doubt).  It is buying trash paper or other intentionally defective merchandise at all ever.
      Swindlers such as the shill promoting the trading of commodity futures contracts in the misc.invest.stocks news group was not merely off topic but entirely off world.  He *must* trade short term because the things that he trades have no relevant span of existence.  Those of us who trade stocks are trading perpetuities, things whose existence was designed and intended in general to be perpetual, to *never* go out of existence.  Same shares tucked away from three years or five years or forever ago are what is being traded those many years into the future, in general.  To be sure, there are problems with stocks and my writings are replete with examples of criminal practices which have been inflicted upon those intended perpetuities to cause them to disappear in very short periods of time.  Direct theft of stockholders equity via stock buybacks, transfers of ownership to embezzling insiders via egregious freebie stock options, bankrupting and transfer of the assets to fraudulent lenders via severe debt loading while wiping out the cash paid public stockholders (often for one of the first two purposes), looting via either of the first two purposes so as to produce deficit tangible equity , all are quite intentional criminal and/or fraudulent means of reducing the lifespans of things designed and intended to be perpetuities.  Even so, the reality of trading stocks is an entirely different reality from engaging in the zero sum gaming of the futures pits where existence beyond a few days or weeks was never even considered as a prospect, where every rule of the *game* was designed to compel marching to the tune of the worst criminal manipulators of the make believe "markets".

Somebody Noticed
      Early in the discussions with the fraudulent shill attempting to promote the attitudes of players in the zero sum games of futures markets, somebody noticed that I was quite upset about that criminal scam being promoted in misc.invest.stocks.  Part of the reason is that I have been making my living trading stocks, full living expenses and more, since roughly 1985 (a time period predating the predatory shill's experience in any market as evidenced by his failure to pick up even on an intentionally wrong date that I mentioned as being when the abrogation of contract terms by the operators of the gold market occurred).  I had been trading less than full time prior to that, dating back to September 1961, with varying degrees of success depending.  What it depended on was whether I engaged in ultra short term (including futzes) taking of marching orders from criminal manipulators, or whether I dealt in securities of actual value and sufficient durability to provide profit.
      There are of course some "real winners" in the zero sum game of commodity futures.  One only has to look at such as the "cattle futures" wonder Hillary to know that. Or was that a criminal bribe intended to establish ownership of a rising politician so that criminal abuse of the public might be facilitated as she moved up in the political scene?  Whether bought and paid for or simply "sympathetic" to criminal scams, she did in any event while in high public office create and foster the most aggressive criminal looting of an entire generation of young savers and investors as had occurred at any time since the late 1920s.
      Responding to the person who noticed, I observed that the principle involved is that I despise swindlers who leave 95% of their victims broke-er.  I hate every scammer who ever hyped an Internet Mania dot con or dot gone stock to some child who had no concept of what was going on.  I hate Frauderal Reserve Bored chairman Greedspan for helping the criminal thieves of that swindle system by refusing to rein in their criminal manipulations with the tool that he had acknowledged several years before was going to be necessary in an "asset bubble", increasing margin rates.  While we're on the subject of particular hates, I also hate those criminally corrupt bought legis critters (just like Hillary only not as much public information about how they got bought) who refused to allow the Clinton SEC chief even to *gather* the information necessary to prosecute the criminal manipulators of the wash transaction game using index futures to rig the cash securities markets to ludicrous levels.
    That particular criminal system is how Greedspan's Plan to Bankrupt America has been made so effective at looting more than all of the money out of the companies owned by cash paid public stockholders.  Rig the prices of major companies up to ludicrous levels, coerce managements to "buy back" small portions of the shares at five ten and even infinite (when they're already de facto bankrupt) times their net tangible equity, and leave cash paid public stockholders holding an empty bag of worthless "name" company.  I think that is my strongest and most vehement hatred of the criminal gangs who run the "futures" biz.  They have been criminally trashing the cash securities market and the rights of Americans to own property *without* having it stolen by criminal looters in those "stock buybacks" games.  Not at first when the Raygun/Bush administration facilitated their criminal games back in 1982 but certainly by 1986 when the criminal system "tail" of index futures began to be used to wag the "dog" of cash markets.  Then in 1987, that entire blowoff and crash was overtly created by the criminal manipulators of the futures market and utilized by criminal mastermind Greedspan to get his looting and criminal theft system, euphemized as "stock buybacks", running "for the good of the markets".  Pshaw!  Criminal system beginning to end devoid of the good of anything but the criminal gangs which Greedspan and the Bush crime family which appointed him wanted for the purpose of destroying America and American values and the financial wherewithal of the American people.

Some Other Futzers
      As for futzers themselves, actually if I look way way back to when I was a bit less than half my current chronological age, one of them was *the* mentor who got me finally to accept that the world was not all peaches and cream and rational business deals but that there were in fact some criminal elements running things.  I still think of and *thank* that futzer for taking the time to talk some sense into the stupid kid that I was.  He's a goodly part of my motivation for trying to talk some sense into the "yes, investors are so stupid" crew that I meet on the Internet, a bit of payback to the universe for getting somebody to talk to me when I was just as young and stupid.
      I recall a criminal gang some years ago that wanted to sell trash paper so as to fleece the lambs while assuring law enforcement officials that they were good Xian criminals deserving of forgiveness for their crimes against the people of the United States.  Came up with a good name for their swindle system.  Dreg Sell, Burn Ham, and Lamb Bare.  Something like that.  Their most notorious action was bankrupting massive swaths of the Savings & Loan industry, particularly small town banks devoid of insurance on their deposits in such places as Nebraska, following from the criminal scam promoted by the national legis critters in one of their "deregulation" efforts to scuttle functional business activity.  The judge who sat on the case when the Junk Bond King himself was prosecuted certainly recognized that "good thief" pretense when she allowed the master criminal to keep half a billion dollars of the money stolen out of the lives of tens of thousands of human beings and provided him with two years of protective custody so that none of the lives he had destroyed could reach out and hurt the criminal ruiner in return.
      At the time of this writing, the shill promoting futures trading and futz pit criminal methods in misc.invest.stocks was attempting to scam people into squandering our money on his criminal fleecing system in which 95% of all who enter there are in fact looted (the other 5% work in the industry or are shills such as the Turtle Meister).  It was an interesting swindle that Turtle Meister.  Created by the pits themselves out of a nothing with no money into an illusion of $200 million net worth.  Sold by that very Dreg Sell, Burn Ham, and Lamb Bare to the public as a "successful trader" so as to raise $250 million which was promptly, without even much fanfare, returned to the pits so as to pay the Turtle Meister's debt to the pits for their trick of turning a sow's ear into a silk purse.
      The shill for futures trading and its methods was even using some of the same lingo of fabulous returns, although apparently he hadn't even been around long enough to note my intentional "wrong year" when the pits ran the criminal scam of *changing the rules* so as to make outside participants in the gold market that year into losers.  Abrogating their "contracts" is one of their standard procedures in the futures markets.  They did the same thing when the Potato King decided he didn't want to honor his contracts to deliver potatoes.  Revised the rules and arbitrarily settled the contracts at a nothing premium so as to let their favored "commercial" off the hook that he had gotten himself onto.  Potato futures did have the good graces to disappear after that particular swindle of public participants.  The operators of the "market" did the same thing again in the Dollar Index Futures.  Somebody from outside the pits "got it right" in analyzing the future values of the dollar index.  Report came out verifying that.  But golly, the outsider was so stupid as (1) not to realize that everybody on the other side of his long position was a floor trader, (2) placing stops making it a trivial matter for the criminal manipulators in the pits, regardless of the facts, to move the market "enough" against the outsider to trigger his stops, and (3) only after having completed the looting of the outside participant did they allow the dollar index futures to move with the facts (other than the fact of pit member interest in having the price decline).  The shill was of course promoting the use of stop orders so that his criminal cronies can repeat that particular kind of swindle against outsiders again and again and again whenever they feel like it.
      But my own interest in the matter is a bit more complex.  With a little help from the criminal gangs running that puppet play actor Ronny Raygun and writing his lines, the futzers even managed to create the perfect swindle for sustaining rigged cash market prices in stocks for more than a decade now.  Wash transactions based on those phony "index futures" are the perfect mechanism for criminal manipulation of cash stocks.  If John Law of the Mississippi Bubble in France had only known, his similar swindle would have lasted a lot longer than the two years it did.  Recently they even managed to finagle "individual stock futures" through the regulatory authorities so as to do a more refined form of criminal manipulation of the cash stock market.  Quite the amazing criminal enterprise those futures pits are.  They also have their own group, misc.invest.futures, which is where the shill belongs, but of course he's trying to con people from the stocks group into trading futzes so as to contribute their money to that swindle system that he says has rewarded him so handsomely for his own mickey mouse trading in the nothings of contracts which can't even be enforced because the people running the show abrogate the contracts whenever they feel like it.  Might get a few suckahs out of the deal.  For sure he and/or his similars are gonna continue their go at it.

A Word of Caution
      For all the defects and criminal uses of the futures markets against the real economy, there are some commodities for which such markets provide a genuine and useful function.  The identifying features of commodities for which they can provide or are already providing usefulness are:  (1) fractured, dispersed, and disorganized cash trading markets for the goods involved, (2) fungibility of the goods themselves such that one unit of the goods is sufficiently similar to any other unit of the goods that the only substantive question is delivery of the goods to the end user, and (3) large numbers of small producers of the goods and much smaller numbers of users of the goods themselves (this is point on which the extortionate criminal abuses of the electricity market failed to qualify, that market being precisely opposite in character from what is required for a futures or other derivatives market to be providing any socially useful function).  Under these conditions only, futures markets "can" provide the useful functions of genuine price discovery (as distinct from criminal manipulation), central meeting place for the discussion of pricing and quantities available and quantities needed, and generally available reference point for the widely dispersed cash market participants to base their buying and selling activities upon.
      Among the commodities which I tend to concur are appropriate for futures markets are the following:  (1) wheat, corn, oats, soybeans, soybean meal, soybean oil (despite the scandal which arose in that salad oil trading), grains generally; (2) foreign currencies despite the unary nature of the "suppliers" namely sovereign governments because it is the individual business transactors in those currencies who are the effective suppliers rather than the governments themselves and it is the individual counterparties to those business transactions rather than governments themselves who need to establish exchange rates; (3) hydrocarbons such as crude oil, gasoline, and heating oil; (4) interest rate markets such as Treasury Bonds, Treasury Notes, Treasury Bills, and foreign debt instruments where the cash market has always been fractured and concealed from public view; and (5) so called "precious" metals because of the massive numbers of producers and the limited (if not nonexistent) numbers of actual end users of the metals.  In each of these instances, the prerequisite of providing a central meeting place for pricing of goods for which there would otherwise not be a central meeting place and for which there is legitimate and appropriate need for a central meeting place (as distinct from intent to engage in criminal extortion for goods which cannot genuinely be transported long distances without major disruption of supplies locally, as with electricity) is the determining factor.
      There are no doubt substantial criminal abuses arising even in the futures markets for those commodities which I have acknowledged are appropriate for futures trading.  The abrogations of contract described earlier in certain of such commodities, engaged in by criminal members of futures trading exchanges against public participants, are clear warnings that all is not necessarily legitimate even where futures markets "can" provide a useful function.  Nonetheless, it is only when there already are fully functional cash markets operating in central locations with the futures markets having no purpose but usurping, defrauding, imposing external criminal control, and otherwise facilitating criminal disruption of those fully functional cash markets, that I perceive futures markets as being wholly and implacably criminal and hostile to the public interest (such as stocks and electricity supplies).
      These exceptions of appropriate use of futures trading duly noted, the intrusion of criminal manipulators from the futures business on the securities markets must necessarily be outlawed promptly and effectively.  Had the criminal manipulators been willing to tolerate normal Regulation T and Regulation U margins at the outset, complying with the laws governing all other securities trading instead of creating totally fraudulent trivially secured and virtually risk free means of manipulating the real securities markets, perhaps the outcome would have been different.  They were not since their entire purpose was criminal from the beginning.  Hence extinguishment of their criminal activity is now the only tolerable end result.  To the extent that cash market participants in areas other than stocks might wish similarly to outlaw those criminal manipulators of the futures pits from their areas of concern, I must ask that they write their own arguments for doing so.

      Bob Grumbine    :-)##