Cancelled Nickel Trades on the LME
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- Опубликовано: 30 сен 2024
- In markets, there are few principles considered more important by traders than the idea that when a commitment to a deal is made, it should stand come what may.
So, there was uproar in the commodities market last week over the London Metal Exchange’s decision to bring the global nickel market to a halt and cancel futures trades because of a “short squeeze” on a Chinese tycoon facing potential billions of dollars of losses.
In one of the most controversial moments in its 145-year history, the LME cancelled an entire days’ worth of trades after a near doubling of the price of nickel, a metal used in stainless steel and electric vehicle batteries.
The rally, partially sparked off by Russia’s invasion of Ukraine, had left Xiang Guangda, the tycoon behind Tsingshan Holding, China’s leading stainless steel and nickel manufacturing group, unable to meet demands for extra cash on a huge bearish bet that backfired. The LME believes that if had it forced the settlement of the trades, it would have bankrupted some of its smaller members and its decision was “in the interests of the market as a whole”.
In today’s video we look at what happened in the nickel market and how it is working itself out.
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AMC is a Chinese controlled company. They sold off some actual stock but maintained complete control of the company itself. Since 100% of the company is actually CCP owned, more investigation is needed.
Law suit? Crowdfund a lawsuit? Divest LME from foreigners
I don't think even lawsuits will get people their money. Bcz ccp owns the queen the royalty and all politicians moms in the west are w.hõřes of Xi and the million ccp members
Hi, Cushlamush Irish Green for those magnates of Metaling cute hoors.🍀 don't put up with this.. Even though you may not see I still have a itsy bitsy crush on you don't blow your big head up futher your not my god patrick your my equal. even if you like girls or boys. oops forcasting that feeling. (Privately saying,) Public i had to take a hand fan out My laced fan from China to cool me off. oh pat your no good I had a thought thats all.Your Not a Enterprise.i love your semi dipples kind of cushlamush or is it malush, Malus.
You have a spammer in the comments section Patrick. I will block some but maybe warn others about it.
In the future this channel will be regarded as a documentary about the slow descent into madness of a professional trader during our roaring 20s. Love your content Patrick :)
Let's be honest, we always knew markets where essentially Numberwang. 😆
@@thomas316 "markets" are just too lucrative to not be gamed/fixed by insiders.
So disturbing it made him blink.
@@1MinuteFlipDoc except the lunacy we've been seeing these past few years has exponentially increased with real life effects. It's almost like an exodus
@@1MinuteFlipDoc i think i as a socialist even buy the efficiency of a market if it was just "nickel using factory buys nickel at the rate they need", but people just cant stop themselves to make a game out of it with imaginary structures like short positions. they should just be glad that nickel orices are high (maybe demand is rising?) and give their workers a nice bonus instead of smelling more profit and opening up shirt positions.
When you owe the bank a million dollars, it's your problem. When you owe the bank a billion dollars, it's the bank's problem.
Aka when you owe the bank a million dollars, they got you by the balls. When you owe the bank a billion dollars, you got them by the balls :)
...When you owe the bank a hundred billion dollars, it's the taxpayer's problem.
Please explain
@@bullseye0900 Because a small enough loss has a negative impact on your ability to do business. A big enough loss affects the banks ability to do business. A really big loss affects the economic stability of the country.
"We're definitely not helping china" *wipes out 7 billion in losses for a Chinese state own foundry*
Agree it’s ridiculous. We are helping them killing us
Exactly. That China was able to corrupt an entire exchange is frightening, and regulators need to act.
It also wiped out their own losses. Who do you think pays if short losses aren’t paid? It’s actually the broker’s fault for not controlling for this in the first place. This is like blaming home buyers instead of the banks for the 2008 crisis.
@@georgeo162 have you seen usa exchanges? They get massively manipulated daily to siphon wealth from everyday citizens and sec doesnt bat a eye. Lol cry me a river. All exchanges or markets are manipulated.
@@georgeo162 don't assume this particular case was due a bribe, though.
The Great Nickel Pickle of 2022
pickle Rick, funniest shit I've ever seen
Amazing
@@iworkforwendys nobody even mentioned pickle Rick yet we're all thinking it
Redickleous
Love it 😂
Halting trading is fine. Going back in time to cancel trades is BS.
It is hard to trust these markets. Every market is a war zone and I don't want a plunge protection team stepping in on a crash or a short squeeze.
only sensible reasons is when the market glitches, ie when price discovery is wrong not due to trades (it is never wrong due to trades) but to technical factors IMO
? BS ? The Chinese banks didn't want to lose money. The firm that controls the trading is Chinese. There's nothing BS to the CCP since it's the way the mafia CCP ALWAYS operates. It would be BS if this exchange operated honestly, but of course it can't it's Chinese. Very simple because this is the standard operating procedure of the CCP. Instead of being confused, people need to read up on what China is, a mafia.
Gambling’s gambling. Insider trading is also a gamble and very few are ever busted for it.
@@benchoflemons398 Wait until this happens at the COMEX. If the big players are looking at same billions in loses COMEX would do the exact same thing.
LME is a complete joke of an exchange
In which world can you just reverse trades? This is completely corrupt!
In the Chinese world you can do anything. Black is white, up is down. The CCP is a mafia, this is how any mafia works. Do not be surprised, dig a little deeper, expect this type of behavior in the future.. always. This is standard operating procedure for the CCP.
@@tunahxushi4669 are you in China rn?
In the world where corrupt China is allowed to do whatever they want, that is, our world.
@@tunahxushi4669 At first I thought you were talking about the United States democratic party.
I look at EVERYTHING in the world as corrupt until I am proven wrong.
Congrats to those little guys who made millions going long, while risking it all. Then finding out 24-hours your exchange decided to change-the-rules in play, and wipe out your gains to bail out the big-guy. RIP guys...
i'm getting 2008 "too big to fail" vibes from this!
Oh those poor war profiteers!
We need to get rid of these intermediaries and develop decentralized exchanges.
@@LLlap you make no money
@@LLlap So you support corporate welfare and bailouts?
LME should never have done this and I don’t understand how they even could do it considering that traders formed contracts at the point where the offer was accepted. You can’t just reverse that… I think there will be a decade of Litigation from this. And LME could actually go belly up
_Should_ go belly up. You can't have an exchange with their thumb firmly on the scales. It's a farce.
i actually see no reason why traders or anybody would continue using the LME forward.
@@JESSEDIGI i feel like every important decision is just by two rich dicks somewhere
Sue the shite out them!
Suspicion against the UK rising sharply considering other suspect events during this time.
Surely this will be settled in UK courts too.
I don't think they'll get any out of LME.
A Chinese for-profit company owns the exchange. The biggest loser would be a Chinese company that is the biggest nickel producer on earth, whose biggest lender is a Chinese state-owned bank. Why do I think the “regulators” will at most issue a fine that is a tiny fraction of the trades that were cancelled?
The simplest answer is usually the correct one. The CCP controls this exchange. The CCP has chosen not to burn $8 billion, why would it? 100% of contracts from the CCP Chinese have not been honored. It's not amazing what happened, it's only amazing that people are shocked.
@@tunahxushi4669 Thank you for confirming my presumption.
No. If there's a definitive kickback established London will more than likely coerce Chinese state-backed companies to divest their shares in LME. This will infuriate Beijing, so expect retalliation in kind.
@@DG-wr6cl Did you click “view all replies?”
Expecting a gold mining company to be mining gold is very 20th century.
lol top comment
You sir, understand the markets.
Extra-ore-dinary
It all means not a free market. Different rules for some. Seems to show the LME is operating a flawed business model.
A Chinese finger is on the scale.
That's because free markets don't exist and never have.
Markets have always been influenced by govts and always will. Every market is a regulated market. It's not free. Nothing is free
@@xEnder515 otc or dark pools are mostly without government regulation. You find your counterpart and you trade what you want at the price you want. Exchanges are regulated by their own nature. I really don't get your point.
@@chemicalfrankie1030
Free markets never existed and never will. That's the point.
Nothing is free 👍
The market exists only insofar as it serves power and thus it is aligned to power.
I can't imagine making a twenty-five-million dollar profit and having some organization say "Nope, that's cancelled now like it never happened." It certainly shakes one's confidence in the exchange itself as a safe place to invest.
welcome to "fair capitalism!". Where you lose, it's on you, when we lose, we cancel your trade... Everything is fake
It's not "investment". We are talking about professional, corporate, speculators. They are not looking for safety.
@@alexanderSydneyOz They are looking for a moderate safety. Otherwise it is gambling. Professionals don't gamble. Btw since when speculation is a bad thing to do?
Taking long or short positions are speculation, not investment.
@@MrSmokinDragon you would be surprised, but speculation defined as investment.
Unbelievable manipulation and favouritism. Thanks for this clear report.
With the lost in trust, I wonder if the LME will be viable going forward. The big investment banks and funds can not allow this precedent to become the norm.
It already is. The LME does whatever it wants to protect whoever they serve, and gets away with it
The big investors are probably the ones getting the LME to do this.
@@joemerino3243 No it's Tsingshan and the HKEX (which is controlled by the CCP). The CCP probably ordered this trade halt at the LME to limit their losses on bailing out Tsingshan!
@@AsurmenHandOfAsur I bet the CCP is a pretty big investor.
It is the norm already. When a virgin woman gets banged she will never be a vigin again
This action by the LME turned our metals group upside down. The unwillingness to allow a market to collapse and firms to close just adds more powder to a keg that always blows up eventually. It will just be a bigger explosion later. No one is willing to accept the pain now. It is always kicking the can further. That is not to minimize the pain we would feel today if we let these systems collapse. It would be horrible. But kicking the can just makes the eventual explosion biblical instead of horrible. As it stands, we have to find a new place to hedge metals.
There is a difference. If it explodes now, those holding that can will die. But if the can is kicked down the road others get to die too!
Before this debacle, other exchanges might have been reluctant to step into LME's nickel business. I suppose the LME opened the door to nickel...and all the other products it traded. I think that would be a logistical nightmare. At least the lawyers will keep busy reworking public and private contracts.
LME is a joke ffs
@@drsgme69 It certainly was a centre of global commerce for a long time. One mistake could end it all.
@@marvelcomiks8078 Kicking the can down the road?
Maybe.
But worse yet it won't be galvanized, or plated.
inother words the chinese benefited from manipulating the markets in their favor. they might as well move the lme to china if they want to cancel legitimate trades.
I think the LME is owned by the Honk Kong Government. So maybe technically they are Chinese. I think that legal consequences of this action will either result in in a reverse of the decision or a collapse of the LME.
@@richardbloemenkamp8532 china took over hong kong and purged anyone that wanted democracy
On this day in history, a Nickel became a Dime.
or a quarter
😂👍🏽
Underrated comment...
What's the moral of this story? Robinhood was American. LME is Chinese. There is no free market. A truly free market would allow anyone, big or small to get wiped out on the fickle fingers of fate, a true casino. It should not care if one individual got crushed, or entire economies go in the tank and civil war breaks out.
The assumptiom that short squeeze was something just normal is a wishful thinking. Good that LME cancelled trades as it would had another hit on inflation.
If you believed that you wouldn't be here.
Robinhood stopped trading, they didn't reverse them, there's a huge difference there.
@Steve L I wasn't trying to excuse what Robinhood did, I don't use or even like them, I was pointing out that what the LME did is much worse.
I love this comment 😂
A bigger question is if owners of the LME exchange personally made bets on nickle. If so, it's textbook insider trading.
Yes it is.
How about this Tsingshang literally betting against nickel because "hey we gonna produce lots of it in the future"? Why isnt that called insider trading?
@@Kredeidi thats insurance.
@@Kredeidi "How about this Tsingshang literally betting against nickel because "hey we gonna produce lots of it in the future"? Why isnt that called insider trading?"
Seriously, is this question a joke? You are referring to producer hedging. ie the *specific* reason for which futures exchanges exist.
@@Kredeidi Because Tsingshang didn't own LME. It was a Chinese state backed venture, and a different Chinese state backed venture owned LME, hence why they're being treated as affiliated entities while having no explicit ownership.
Thank you for the video! If anyone knows of a class action lawsuit that retail investors can join, specifically people who lost not only their profits but their actual investments in Nickel via ETPs, ETFs, ETNs or futures , because of the LME actions - please post details of legal firms to be contacted. One would think LME cancellations are illegal and that FCA and PRA would help people who have been wrongly make to lose billions!
Are retail investors allowed on the LME?
The LME is Chinese owned so this is why they stopped trading. They where limiting the liability to the CCP.
When you own the exchange, you make the rules. Clearly a partisan move by an owner that doesn't understand how markets work and got caught.
Sure thing, but traders can decide to ditch that exchange for someone more reliable. it is wired they did not provide any explanation on why they cancelled the trades. I mean, if it happens once, it could well happen again in the future!
TFW you should limit foreign ownership but don't and pay the price
@@Carl-hs420a The term you're referring to is high treason and yes we should
@@joeblow9657 Indeed, the west has gone insane, adversarial foreign powers should never ever have so much control of your financial system.
@@TheMountainBeyondTheWoods It's like the Soviet Union buying the London Stock exchange but without the safety of mutually assured destruction. IMO excess immigration and the whoring out of institutions like universities, real estate markets, regulators, and finance markets is disgraceful.
a classic case of rules for thee, not for me
Patrick, you are the only adult in Financial RUclips. Don't change, and thank you.
make a course for $1000/month, golden vip platinum exclusive coaching programme, just 3 spots left, buy in 3 minutes to secure your spot.
LME needs to be sued into the ground. Regulators need to force divestment of lme from the chinese.
Remember the dudes tried the same thing with silver in the 80s? How did that go for them
Hunt brothers hahahah
UK gov should look into LME
They are in bed with the crooks
Narrator: They didn't.
This scope for this sort of "questionable dealing" was a major driver behind a certain segment of support for BREXIT. Rees Mogg represents the public face of it.
@@stateofopportunity1286 That's not true. The FCA launched an investigation, which was presumably closed with no wrong doing found as I can't find a follow up and the LME were taken to court by Elliot and Jane Street and the judges ruled that the LME had acted within their regulated power and done nothing wrong.
Imagine if they can do this even now without any tinge of shame, how much WORSE if they become the world currency? Its going to be mayhem.
All looking a bit broken isn't it. No such thing as a free market apparently, which isn't exactly a shock.
When you remove the unlimited risk of a short you destroy price discovery.
How so? Shorting should be made illegal.
It's called an ITM put.
@@hume1234561 how so? It has the same effect as put buying. In fact, you can perfectly replicate the exact risk/reward of a short using options.
@@hume1234561 If you can't bet against something that is rotten, then the whole world would smell like a dumpster.
LME: hey Gamestop bois... hold my beer!!
Thank you Patrick for a wonderfully hilarious summary.
:):)
Once again, Patrick methodically and *factually* reveals the absurdly biased and crooked joke of "free markets."
Your subtle sarcasm is epic 😂
LME is one of the weirdest exchanges. Buys and sells of a same contract don’t offset until the prompt data/expiration. It creates a box position.
I imagine it is due to the nature of its main participants, commodities producers who need to hedge their product vs pure financial hedging
@@chemicalfrankie1030 that’s fair. The producers and manufacturers don’t necessarily have the cash to close out a contract before prompt dates. For me, the idle profit is cash that isn’t earning any interest.
@@nitsuanew that's a good point
Weird "arbitrage opportunities" ensue...
thanks for the video!! some comments.
1. still not clear why LME cancelled the trades - the reputational damage is huge. Halting it or providing bands is (questionable but) fine, since it does not change the rules after he fact. Can anyone has any insight on why they did it?
2. OTC contracts are not a problem per se, due to their nature. Counterparts almost always find a solution.
3. is LME the only exchange for nickel price discovery? if it is traded (not OTC) somewhere else, why isn't the other price used (de facto making irrelevant their trading suspensions or bands - traders would just wait using another exchange as benchmark
4. very interesting how LME differentiate from other exchanges thanks to their warehouse capabilities, I was not aware of that!
It wants to suck the producer's dicks and says fu to pure speculators...
China doesn't care about reputation in the same way the West does
@Steve L I checked where nickel is traded after having watched this video (I'm not familiar with commodity trading I admit) and apparently CME does not trade Nickel and to trade Nickel in Shanghai, the other major avaible exchange for Nickel, you need to be affiliated with a Chinese entity... Coincidence??!! 11
@Steve L Australian nickel production comes in behind Russia, Philippines and Indonesia at about 10-13% of Global production, significant but not major.
"The nationality of the participant was not a relevant factor" - no, but their money, holdings and economic ties were. That's politics for ya!
The Elites in LME cancelling all the trades to help the Chinese short sellers.
Chinese own the exchange. The only shocking thing is that anybody is shocked. This is standard operating procedure for the CCP Chinese. No due diligence? Stop engaging in activities with the Chinese and this will stop happening.
We about to get Econ in this bitch
Did my Tesla just go up ten thousand dollars? 😳 Anybody want to buy a stainless steel refrigerator? This reminds me of the crash of 1987. A four dollar naked put option I wrote cost me $88.00 to cover. It had $26.00 of time value in it with one week to expiry. In a 24 hour period i lost my house, car, investment portfolio and eventually my marriage. A constant reminder that things can go wrong many magnitudes beyond the worse immaginable.
any advice from your expirences?
@@moneyobsessed stay on level 2 option trading and never write naked options you cannot cover. When you sell naked contracts you don’t own the underlying position and will have to spend a lot of money if things go south. Level 3 privileges let you sell naked options…. Stay on level 2. Only risk what you have.
Moves like this make you wonder what you really "own"
You will own nothing, and you will be happy!
LME, balatantly, cancelling Nickel Trades retroactively on, Tuesday, March-8, 2022, I think, has the effect not only just tarnished LME's credbility and reputation as a credible metal trading platform/exchange, but also more seriously impacted the creditability of HongKong & HKGEXchange, as a financial trading center & TradingHub in Asia. The reputation of HKG Exchange is worth and valued at ca. USD6.0 TRILLION, Th4, losing a couple of Billions$ for the Master, in order to maintain LME steadfastness and credibility, ultimately would have been fully justified. Now, the damage is done and may not be recovered.
No matter how many mistakes you make or how slow you progress in trading you're still way ahead of everyone who isn't trying
or who quite after the first bad experience! the falling 97-99% are not a myth! it is logical
People try their luck when they are scared to loose their money or have failed during the past and that's me making a loss of €4,670 last year October on crypto investments but not till I was referred to Mr Jurgen bright a rare and Trusted crypto expert trader who helped me recover all my losses and made extra profit for me
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With Jūrgen's guidance and teachings I've learnt not to sell in a panic when everything goes down and not to buy in euphoria when everything goes up, I advice y'all to forget prediction and start making a good profit now because future valuations are all speculations and guesses. The market is very unstable and cannot tell if is going bearish or bullish while myself and others are trading without fear of making a lose while others are being patient for the price to skyrocket, it all depends on the pattern you follow and the one handling your trades, I'm surprised seeing a comment about Jürgen really he's an honest and the best crypto trader
Patrick how as a financier did you gain such deep domain expertise on the industries that you cover? By which I mean areas like the Nickel production process. My goal is to one day have the same level of robust knowledge that you do to understand global markets as a whole and not in small pieces
Yikes! Sure, halt trading, but how the HELL can the LME cancel a day's trades? That's insane. "In the best interests of...."
I work in an industry that uses lots of stainless steel. Our products are required to be "free from Cuban nickel". Apparently Cuba has some of the largest nickel resererves.
Typical Chinese move, when you're losing the game, just change the rules at the expense of all participants (save for yourself).
Statistically speaking in China, investment performance is directly proportional to account size, meaning the top 10% of accounts consistently beat the market by huge margins while the bottom 10% consistently lose money. Meanwhile in the first world, not even well connected and rich and brilliant star fund managers can consistently beat the market average.
I wonder why...
Not sure it is about Chinese,
the house always wins,
they will treat you like a child, take your pocket money, make you think you can win big,
but it's all daylight robbery.
Well done Patrick, another great explanation . But what did anyone expect when you have Administrators with very little market experience running these exchanges. Why was the Whale allowed to run the LME nickle pit for his own benefit ??? And why did they open the the market that day , it was very obvious something bad was going to happen. But to cancel the days trading !!! unbelievable. If I was a member firm i would demand my fees back and move to OTC trading . RIP the LME.
Sheesh, what a shitshow this was. Who can ever trust the LME again? Great content and it was also great to watch Patrick trying harder not to laugh at this mess as the video progressed.
I absolutely love how all economic theory and game theory relies on the critical assumption of rational actors and limited to no intervention, because based on those simple principles we can assert as material fact that capitalism without any hint of socialism is the be all end all pinnacle of human civilization and productive enterprise. It's just so so funny were it not so utterly catastrophic lol
You cannot lose if you own the bank!
Please keep us informed on this fiasco. Thanks!
Owe the bank $1 milion it is your problem. Owe the bank a billion dollars and it is the bank's problem.
So banks are immune to failure?
Public risk, private profits.
why do we need this bs again? I work in an industry that uses nickel. Why do my colleagues and the workers in the mines need to put up with this bloated middle man that continually fucks up because of greed. This is not a free market. This is the government providing all the infrastructure and rich people playing a poker game for the spoils of actual peoples hard work. Nice that the market oversight bailed the chinese company out, but how selfish and irresponsible of the CEO to gamble with the livelyness of tons of his workers. I thought that capitalism was so great because someone who owns capital cares about it growing? It seems that at a certain point humans simply dont care and are willing to take risks that a worker with a family actually working in the mine would never take. Shouldnt due to glorious capitalist accountability logic the miner be in charge of the means of production? Or do we really just pretend thats the reason so that this bs can go on. Freedom of the markets means lack of freedom for the common man, change my mind. "25 million in profits lost" by poor poor brokers, i ask you, who created the ecconomic assets that back up these insane gains? Was it not workers in nickel mines, almost per definition? This ecconomic system is entirely fucked. If traders actually traded according to supply and demand (demand in actuall factories not by suitwearing goblins smelling a profit) it would be a different story. But that obviously does not happen, these people try to predict the future and are therefore no better in the long run than a communist government, with the difference that the traders leaverage everything ten times over and can actually crash the market. This rollback is essentially an admittance that the system is failing i hope.
Even if you want to keep this all capitalist, like boyle said, it needs to be a model of large contracts over multiple years. the kind of contracts that actually ensure resources to flow. I dont think the traders liquidity is actually all that needed in that case. Also there are other ways to gain liquidity, that dont stab you in the back as soon as they see a weakness in your stratagy (self caused as it may be). the price of that capital is instability, something that we shouldnt want in industries this large. but slow and steady growth only ensures employement and doesnt make people as filthy rich so i guess we will never get there.
Good content as usual ! LME will go down to history as a complete failure. Another example of how the simple freaking basic trading rules that apply to all participants actually don't apply to you if you are an important player of the market and state backed. Yep, you heard it. Trades cancelled... This is really the worst LME could do. My thought to all those who made millions in being long to Nickel only to find out that all their earnings were wiped out by a simple decision from the exchange ...
Patrick Boyle is hands down one of the most compelling, entertaining, and thorough teachers ive watched. He makes really conplex topic easy to understand. I feel like i learn a lot from him and often find myself laughing out loud at his jokes.
R.i.p. LME. They fucked up hard here.
Which is the alternative thou? CME does not trade nickel and to trade on ShFE you need connections with a Chinese company
I can understand that the trading has to be halted because the market is heated up and need to cool down but the exchange should not decide the price on basis of manipulative system because it creates a trust issue for the traders trading on their exchange.
The LME should now be treated as meme stock that it has become!
So whats new???
NYSE as cancelled " fat finger" trades that affected big houses but never for a small trader who was on the wrong button.
It was too bad, so sad for him. The big house calls the exchange and claims it was a mistake. Oh, then the trade (s) were busted in exchange lingo.
You are my favorite economics channel on RUclips and I wish I could meet more people like you.
Thank you for making videos that help me learn and grow.
Where do I go to get trades that made losses in the past cancelled? Asking for a friend. Thanks.
China.
A great video. I at least follow these when you do them. You really know how to explain difficulty subjects.
@♜þinned ßy Patrick Boylҽ My pleasure, both informative and entertaining.
@@mikecain6947 I thought nobody get's fooled by those cat fish, scam accounts.
I've been proven wrong.
Pay more attention when it "looks like" the "real account".
Scammers get very creative, and when you see them, report them to help others.
LME acting in that Authoritative fashion. Guess, learning a lot from their Chinese 'partner'.
Thanks once again!
What a tangled web we do weave... I found one of the more interesting comments you made starting around 9:10 and going to 9:20. To paraphrase... this could devastate the global medals markets... As much as I like the image of the LME and brokers sitting on a yacht having a discussion about what to do I nevertheless wonder if there are larger concerns involved with those conversations too. Beyond just China. Say the EU and the US for starters? The issue that keeps flashing through my mind is that the present economic system has been corrupted, mismanaged, and this has been done so by greed and Central planners. However as much as I want some concept of free markets and natural market forces to rule I am nevertheless left with the central problem of how do we extricate ourselves from this present quasi reality in an orderly fashion without crushing the living capacity of half the world? Put another way... I have an Uncle who is a communist. He has for his entire career worked for government and through pension and healthcare is dependent upon government. He complains about the petrodollar at every given opportunity for years. The only time I can get him to shut up on the subject is when I remind him that without the Petro dollar his butt would be in a sling as there would be no capacity for the government to employ him let alone pay his retirement or lifetime health Care benefits. I sometimes wonder if we are in a trap of our creation and the only escape allowed is in fact as bad as being in the trap, maybe.
Perhaps the Chinese central bank saw an opportunity to sell some nickle reserves at inflated prices?
good story as always, LME regulation - trading without daily price notation limits ( so common in share exchanges) is quite unorthodox and could be explained in more detail.
This is hilarious. Looking forward to how this turns out. Nice video. Keep up the good work.
LME needs to be punished. Imagine building your thesis and your strategy and positions over a long time, then to have all your gains arbitrarily cancelled.
An exchange canceling trades is absolutely absurd and wildly inappropriate. It's shameful
Completely unacceptable to do what the LME did. It's a line crossed as you say.
I wish I could just cancel the football game when I am losing on a bet.
Blood nickel...got to love it....
Blood nickel transfusion!
This is screaming lawsuits.
LME crossed the redline hard on this one, they can't just go on as if nothing happened and say "hey I promise it's not because we're owned by Chineses and that the biggest loser was Chinese, pinky promise"
This is just plain bullshit
We've seen manipulations in the past, well it's happening everyday still but with tools provided to everyone (aside from inside trading, which is on top of all this a failed attempt at insider trading btw but anyway), this is really just a big (expensive) farce
That Chinese group fucked up, they shorted, they didn't cut their loss they should go belly up, that's how it works.
I lost money on the market as well, everyone did at some point and we don't get to have a do over, that's not how things work and should never work, period.
I hope LME get flooded with lawsuits and disappear from the face of the world, this cannot be allowed to move on without anyone responsible for this fiasco.
banger video
Crazy stuff. Stranger than fiction.
Love this. Wonderfully detailed and interesting breakdown, and hilarious at the same time. All boxes checked. Thank you
Patrick , how about a video on Barclays and Vxx ,is there a better example of trade abuse.?
"Gold is the oldest meme stock"
My kids will learn this in there uni just you wait
Alternatively the shorts could have closed their positions days before when the whole Ukraine mess 1st started
Another example of how over-globalization and over-financialization promoted volatility rather than prosperity?
looks more like a boozy roulette table than a market
No. You re welcomed to but locally if you don't like globalization. I'll buy where best price & quality.
Guess what would happen if we were to compete for clients given our suppliers?
lol why?? the LME was founded in 1877!
- allowing speculators is questionable, i admit, but favours liquidity (i.e. price discovery and fair prices fro EVERYONE)
- your credit card contract is more 'over-financialized' than a market exchanging commodity (which even allows for physical delivery!!)
I am not sure what you are talking about...
Hi Patrick! Great content. I have a question. The ETC WisdomTree Nickel 3x leveraged was shut down. The holders don't get a penny. How is that possible as the price went up, not down? And can they just do that and move on? And of yes, does it mean that if commodity trade is paused, most of ETC will collapse?
Not my problem there is a disorderly market finding price discovery of paper. I want you to imagine a CEO like me, who would have stuck to whatever rules were in place and if that meant brokers going bankrupt and all that entails, then that's cost of risk. I would have ensured confidence in the market and everybody gets what they deserve. Let it ride boys, we are in for an ugly ride. Not my problem there is a disorderly market in paper.
why is gold a meme investment?
Could you also cover the LME aluminum market and what happened with this market in the 2000s?
Cant trust chinese owned companies is the lesson.
The precedent is always more important than the decision itself.
The repercussions of the Exchanges actions will take 10 years to trickle through the Courts. Prediction that future metal trading WONT BE DONE ON AN EXCHANGE OWNED BY CHINESE. You will see covert buying and stockpiling of strategic metals.
I heard a rumor on the day there was a Chinese SOE involved, not surprised at this behavior, happens all the time on the mainland markets. The national side moves in to prop up trades. The LME shouldn't have been sold in 2012 but that was during the Chinese FDI heydays of magic money.
Am I the only one seeing crazy spread in nickel/usd currency pair?. my broker's spread is (90/300) pips and that's crazy considering that nickel has dropped to 21000$ in trade.
I would also like to ask if spread will tight in soon cause prior to the outrageous spike that happened some months back. The pip different b/w was"nickel/usd" 15-50 pip max.. the question is will it come back to normal
My poor understanding of the market makes me feel like there is a oversupply of funds at the moment due to the money printing that has taken place recently. Investors are desperate to find homes for their funds.
Ultimately that's what's causing irrational market movements. Something like this LME spike could have had massive knock on effects.
Having worked with casinos for many years I get the same feel from the current traders as I do from the casino punters. This could end very badly for everyone.
all on 14 red how do we short the LME surviving this
Only in China lol
They should not allow short selling as it is not fair to retail investors. Because short sellers get to win when they win and if they lose like this then it gets canceled so they win either way, whereas retailers if they win, well they just lost because they got canceled and if they lose then it’s fair game. It makes retailers not want to trade anymore, as it is unfair and they are at a disadvantage towards them
lol what are you talking about - what you say does not make sense
also, retail investors should not exists...
@@chemicalfrankie1030 So when short sellers lose big in the LME case; then it simply gets reset; whereby, the retail investor doesn’t get their profit. That’s not fair. But when the retail investor loses big in betting on the price going up; then it’s too bad for the retailer, as there’s no reset for them.
@@WORLD-OF-MERLIN baside the fact I do not hink retail investors are allowed in the LME, the practice of cancelling trades is wrong irrispective of the position who suffered the hit.
@@chemicalfrankie1030 in other words, that is what I was trying to say. It’s not fair to one side or the other. Makes traders lose confidence.
Not sure why we allow financial speculation on vital industrial commodities to begin with. Seems like orderly supply chains are more important than making money for hedge funds.
Nice video very engaging from the beginning to the end. Nevertheless putting our time and effort in activities that will yield a return in the future is what we should be aiming for.
👌
Change the name from LME to "Rich Chinese Guys can't lose Exchange" and of course always mention the phrase "too big to fail". Liars and Cheats.
You go into the casino one day, and win big.
The casino then declares the day’s gambling invalid. This is to “protect gambling”.
That is what the LME did.
I wish the market would shut down for a week when I'm squeezed out and get a margin call too.
Sure is nice..
Move to China, go 50/50 with Xi, and you too can gain access to the market on/off switch.
Would be interesting to hear people's opinion about reputational losses, that world economy would or may be wouldn't face. Here we have the trades cancel, EU taking property from russians (I think there is a video by Patrick about it) and that Switzerland is no longer neutral.. What do you guys think about it?
Frequently I stop and ask myself, what is so fundamentally WRONG with us humans, LOL!!!
"entirely lost faith in the exchange as a reasonable place to do business." this is why i wont invest in the U S stock market, only trade it, walk away with cash everyday. when the U S stock market operators change the game mid game because they are losing and the wrong people are winning, they turn it into a game.
Your 💯 correct..... The game on a global scale is rotten n seeping poison through its cracks, these cracks don't get smaller , they blow . At the rate of the way things are going these days , it's only a matter of time before the catastrophic event comes