LME Violates Number One Cardinal Rule: Never Cancel Trades
Nickel futures remain suspended after a Chinese producer could not come up with an $8 billion margin call. What's going on?
LME Cancels Nickel Trades, Image from Tweet on Nickel
Nickel Trades Still Suspended
On March 8, I noted Nickel Market Breaks, Price Doubles to $100,000 In 1 Day, Deliveries Fail
BOOM!!! Nickel prices surge above $100,000 a tonne on a huge metal short-squeeze. The London Metal Exchange has given a unit of China Construction Bank Corp. extra time to pay $$$$ in margin calls it missed Monday. Do follow @jfarchy for more and read this https://t.co/4lO5xbW3ph pic.twitter.com/BWaJodhiGC
— Javier Blas (@JavierBlas) March 8, 2022
After "Big Shot" did not meet margin calls, the LME cancelled trades.
Nickel Market Freeze Extended to Sort Out Big Trading Loss Amid Ukraine War
The Wall Street Journal reports Nickel Market Freeze Extended to Sort Out Big Trading Loss Amid Ukraine War
London’s nickel market will stay closed at least until next week, giving the London Metal Exchange more time to resolve a crisis caused by a huge loss-making trade originating in China.
The LME paused trading in nickel Tuesday, the first time it had suspended a market since 1985, and canceled trades executed before the suspension. The exchange late Thursday extended the freeze through the end of the week.
One question for the market before it reopens: What will be the price of nickel when it does? Most traders think the supply and demand of nickel don’t justify Tuesday’s record high of over $100,000 a metric ton. But some say the market moved in such a wide range before the suspension that it is hard to know where it will open.
“In an environment where we’re just exiting the pandemic, there’s a shortage of material and the Russians just invaded Ukraine, there were literally no offers in the market,” said Guy Wolf, head of market analytics at Marex, a member of the LME’s storied open-outcry ring. “Forced buyers, no sellers: Prices can go anywhere.”
“The number-one rule is never, ever cancel trades,” said Don Wilson, chief executive of Chicago-based trading firm DRW, which trades on the LME and had a position in nickel canceled. “Every other exchange in the universe gets that.”
Big Shot Wants to Keep Shorting
* CHINESE TYCOON TELLS BANKS HE WANTS TO KEEP SHORTING NICKEL
— Jim Bianco biancoresearch.eth (@biancoresearch) March 10, 2022
Why not!
If the price spikes again, he bankrupts the exchange/his broker, and they bail him out again.
If prices collapse, he walks away with $billions. Free call option.
And regulators tell me DeFi is dangerous? https://t.co/Rp6wLT3sDT
More Bianco Comments
1/8
— Jim Bianco biancoresearch.eth (@biancoresearch) March 11, 2022
Jeff's comments are spot on and deserve expansion in a 🧵
It is part of a disturbing trend over the last few months of financial institutions and Govts "just taking" (stealing) other people's money in broad daylight. @CliffordAsness @jdorman81https://t.co/YWDsLpZNiJ
4/8
— Jim Bianco biancoresearch.eth (@biancoresearch) March 11, 2022
gofundme closed the Canadian truckers account (with $9m) and if the donors did not figure out how to request a refund gofundme would donate it to a charity of their choosing (stealing).
gofundme backed off after a big social media outcry and processed refunds automatically.
5/8
— Jim Bianco biancoresearch.eth (@biancoresearch) March 11, 2022
Western Govts block Russia from Swift/central banks, effectively freezing (stealing) their reserves.
Western Govts confiscated the assets and money of rich Russian citizens (Oligarchs), including the EPL team Chelsea and London properties from its owner.
7/8
— Jim Bianco biancoresearch.eth (@biancoresearch) March 11, 2022
You may not like some or all of the players above and believe they should be punished. That's fine.
But understand we have crossed a Rubicon in the last few months that financial institutions and Govts can take money because they do not like that person or their activities.
Regarding Point 4 and 5 on Government Confiscation:
Bianco: "But understand we have crossed a Rubicon in the last few months that financial institutions and Govts can take money because they do not like that person or their activities."
Unprecedented Fed Action May Have Just Started a Global Currency Crisis
Jim Bianco is talking about what I discussed in Unprecedented Fed Action May Have Just Started a Global Currency Crisis
Unprecedented Action
The Fed, likely acting on orders from the Biden administration, froze the US dollar reserve assets of Russia.
Some may cheer this others not, but perhaps by the time I finish this post, those cheering now may have second thoughts.
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