What We Read Today 20 September 2014

September 20th, 2014
in econ_news, syndication

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

  • Platinum Fixing Under the Microscope (Dimitri Speck, Seasonax, The Hedgefund Journal) Over a period of 16 years (December 1997 to April 2014) the price of platinum (Pt) increased from $376 an ounce to $1,440. During that time there was systematic price suppression at the two daily reference price fixings in the London Platinum and Palladium Market. There is now a class action suit for restitution and damages by those who traded physical platinum and palladium during the specified time period. (Palladium (Pd) increased from $203 at the end of December 1997 to $802 at the end of April 2014.)

Follow up:

Speck provides the following chart which includes data for 4,189 trading days. Manipulation is alleged because there has been a greater tendency for price declines before the fixing times. In a market that has risen several fold there would be the expectation that the average for the fixing prices would be no less than the average for each day and most probably higher. The graph below shows that the average price increase for each of the 4,189 trading days was 0.03%. The average decline to the am fixing was 0.02% and to the pm fixing 0.06%. Manipulators could have averaged a gain of 0.09% per day over the 4,189 days by buying at the pm fix and selling at the close. That may seem like a tiny amount, but if a trader can skim 0.09% a day from $1 million daily trades that is more than $200,000 a year into the skimmer's pocket and out of the other non-manipulating traders' pockets. That is a 20% annual gain just from the skim on a trading account, extracted from all the other market participants. With more than $5 billion of platinum produced each year, large traders can make millions a year in net skims.

For more about the class action suit filed for recovery of losses and damages from alleged manipulators, see GEI News.


  • Recent articles about Scotland Independence Vote :

Scotland referendum: Scots reject independence in historic vote (Fox News)

Scots spurn independence in historic vote, devolution battle begins (Reuters)

Scottish leader Alex Salmond quits after 'no' vote in independence referendum (CNN World)

  • Articles about wars elsewhere in the world:

Liberian female rebel Martina Johnson held for war crimes (BBC News)

Obama team: No timetable on Syria strikes (USA Today)

Syrian Kurds warn of mounting crisis as ISIS advances, takes more villages (CNN World)

Dem Rep: 40 American ISIS fighters have already returned to the United States (Fox News)

Turkish hostages held by IS in Iraq released (BBC News)

France Joins US Against Islamic State Over Iraq (abc News)

Buffer Zone Agreed on in Ukrainian Peace Talks (abc News)

Ukraine, Poland and Lithuania form joint military unit (Reuters, Yahoo News)

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