JPMorgan Loss Proves System Too Complex, China’s Gao Says

http://www.businessweek.com/news/2012-10-05/jpmorgan-loss-proves-system-too-complex-china-s-gao-says

JPMorgan Chase & Co. (JPM)’s $5.8 billion trading loss this year showed that the financial system is getting too complicated for even respected institutions, the president of China’s sovereign-wealth fund said.

“You are creating a system that very few people understand, much less the regulators because the regulators haven’t the incentives like the bankers,” Gao Xiqing, president of China Investment Corp., said today at a lunch hosted by the Economic Club of New York. “As a former regulator I think we do need to slow down a little bit instead of rushing up to all those fancy derivatives."

He expressed concern about a society in which “all the best engineers are engineering financial products.”

“You have all the smartest kids to design these products, the only purpose of which is to get money out of other people’s pockets,” he said. “That is not very good.”

Silver manipulation in progress

A whistleblower gave advance warning to the CFTC, the regulatory body which watchdogs the futures markets, about an illegal manipulation scheme about to take place in the silver market at the COMEX exchange. The price action behaved exactly as scripted on the target date, February 5, 2010, when non-farm payroll numbers were released at 8:30 AM ET. Within a few minutes, the price of silver then experienced a waterfall decline.

When allegedly free markets are that predictable with that much precision, then they are no longer free--rather they are rigged.

Read the series of emails chronicling the correspondence between whistleblower Andrew Maguire and the shiftless CFTC regulator.

http://www.gata.org/node/8466