As Though There Wasn't Enough Trump Regime Criminal Activity Being Exposed Now, Ted Lieu Is Onto Another Doozy!

Gangsta President by Nancy Ohanian

Yesterday, in response to a question I asked him about a letter he sent to the FBI, the SEC and the Commodity Futures Trading Commission, Ted Lieu wrote this: "In my experience as a former prosecutor and later as a securities lawyer, there were multiple large trades on the Chicago Mercantile Exchange that raised red flags. These trades occurred shortly before a major geopolitical event or statement by Donald Trump that moved the markets significantly. The resulting profits ranged from hundreds of millions to in some cases billions of dollars. Either these traders were all very lucky and everything was a coincidence, or there was insider trading occurring." This is the letter:

We write to urge you to investigate potentially unlawful behavior related to the trading of electronically traded futures contracts on the Chicago Mercantile Exchange in the last several months.

On October 16, Vanity Fair reported on numerous instances in which individuals or groups of individuals made millions, and in some cases billions, of dollars in profits by trading large numbers of Standard & Poor’s 500 (S&P) e-mini futures contracts immediately prior to major geopolitical events. In each of these instances, the e-mini contracts were traded within days, and often within hours, of the S&P rising or falling sharply. The trades preceded such events as the Saudi Aramco attack as well as announcements related to progress in talks between the United States and China over the trade war and the withdrawal of the extradition bill in Hong Kong. In one case occurring in August, the trader or traders made $1.5 billion when the S&P rose after President Trump lied about phone calls taking place between United States and Chinese officials.

While the aforementioned trades may be purely coincidental, their timing and scale raise serious suspicions about whether the traders received material nonpublic information that would affect the S&P and how they received such information. We urge you to swiftly investigate whether trading on insider information or any other fraudulent behavior occurred in relation to these trades.

Thank you for your attention to this matter. We look forward to your response.

The first member of Congress to have endorsed Trump, Chris Collins (R-NY) just recently resigned from his western New York-based House seat and plead guilty to a large number of charges revolving around insider trading. It's not uncommon for Republicans. And anyone who imagined Trump hasn't been working those angles, must be very short-sighted and naive. Long before Putin put him into the White House, Trump was a criminal. He still is-- but more so.

The Vanity Fair piece he was referring to, There Is Definitely Hanky-Panky Going On: The Fantastically Profitable Mystery Of The Trump Chaos Trades was written by investigative journalist William Cohan. Short version amounts to the question Lieu wants answered: "The president’s talk can move markets-- and it’s made some futures traders billions. Did they know what he was going to say before he said it?

In the last 10 minutes of trading at the Chicago Mercantile Exchange on Friday, September 13, someone got very lucky. That’s when he or she, or a group of people, sold short 120,000 “S&P e-minis”-- electronically traded futures contracts linked to the Standard & Poor’s 500 stock index-- when the index was trading around 3010. The time was 3:50 p.m. in New York; it was nearing midnight in Tehran. A few hours later, drones attacked a large swath of Saudi Arabia’s oil infrastructure, choking off production in the country and sending oil prices soaring. By the time the CME next opened, for pretrading on Sunday night, the S&P index had fallen 30 points, giving that very fortunate trader, or traders, a quick $180 million profit.

It was not an isolated occurrence. Three days earlier, in the last 10 minutes of trading, someone bought 82,000 S&P e-minis when the index was trading at 2969. That was nearly 4 a.m. on September 11 in Beijing, where a few hours later, the Chinese government announced that it would lift tariffs on a range of American-made products. As has been the typical reaction in the U.S. stock markets as the trade war with China chugs on without any perceptible logic, when the news about a potential resolution of it seems positive, stock markets go up, and when the news about the trade war appears negative, they go down.

The news was viewed positively. The S&P index moved swiftly on September 11 to 2996, up nearly 30 points. That same day, President Donald Trump said he would postpone tariffs on some Chinese goods, and the S&P index moved to 3016, or up 47 points since the fortunate person bought the 82,000 e-minis just before the market closed on September 10. Since a one-point movement, up or down, in an e-mini contract is worth $50, a 47-point movement up in a day was worth $2,350 per contract. If you were the lucky one who bought the 82,000 e-mini contracts, well, then you were sitting on a one-day profit of roughly $190 million.

A week earlier, three minutes before the CME closed on September 3, someone bought 55,000 e-mini contracts, with the index at about 2906. At around 9 p.m. in New York-- 9 a.m. in Hong Kong-- the market started moving and kept rallying for the next six hours or so, reaching 2936. Around 2 p.m. in Hong Kong-- 2 a.m. in New York—Carrie Lam, the Hong Kong leader, announced that she would be withdrawing the controversial extradition bill that had been roiling the city in protest for months. Whoever bought those e-mini contracts a few hours earlier made a killing: a cool $82.5 million profit.

But these wins were peanuts compared to the money made by a trader, or group of traders, who bought 420,000 September e-minis in the last 30 minutes of trading on June 28. That was some 40% of the day’s trading volume in September e-minis-- making it a trade that could not easily be ignored. By then, President Trump was already in Osaka, Japan-- 14 hours ahead of Chicago—and on his way to a roughly hour-long meeting with China’s President Xi Jinping as part of the G20 summit. On Saturday in Osaka, after the market had closed in Chicago, Trump emerged from his meeting with Xi and announced that the intermittent trade talks were “back on track.” The following week was a good one in the stock market, thanks to the Trump announcement. On Thursday, June 27, the S&P 500 index stood at about 2915; a week or so later, it was just below 3000, a gain of 84 points, or $4,200 per e-mini contract. Whoever bought the 420,000 e-minis on June 28 had made a handsome profit of nearly $1.8 billion.

Traders in the Chicago pits have been watching these kinds of wagers with an increasing mixture of shock and awe since the start of the Trump presidency. They are used to rapid fluctuations in the S&P 500 index; volatility is common, of course. But the precision and timing of these trades, and the vast amount of money being made as a result of them, make the traders wonder if all this is on the level. Are the people behind these trades incredibly lucky, or do they have access to information that other people don’t have about, say, Trump’s or Beijing’s latest thinking on the trade war or any other of a number of ways that Trump is able to move the markets through his tweeting or slips of the tongue? Essentially, do they have inside information?

Theoretically, market regulators are supposed to be keeping an eye on big trades such as these, to try to figure out whether they are just happy coincidences or whether there is something more nefarious afoot. And they say they do. But calls to the Chicago Mercantile Exchange, where the trades takes place, the Securities and Exchange Commission, which regulates the equity markets, and to the Commodity Futures Trading Commission, which regulates futures contracts, such as e-minis, were answered in different ways. Christopher Carofine, at the SEC, declined to comment. The CFTC did not respond to my inquiries, while a spokeswoman for the CME says the trades in question did not originate from a single source and they were of no concern.

There is no way for another trader, let alone an outsider such as me, to know who is making these trades. But regulators know or can find out. One longtime CME trader who has been watching with disgust says he’s never seen anything quite like these trades, not at least since al-Qaida cashed in before initiating the September 11 attacks. “There is definite hanky-panky going on, to the world’s financial markets’ detriment,” he says. “This is abysmal.”

In the case of Trump, market manipulation also yields political dividends. Perhaps the most obvious example dates to late August, when Trump, desperate to reignite trade talks with China, boasted during the G7 summit that his counterparts in Beijing had come back to the table. “We’ve gotten two calls-- very, very good calls,” he told reporters. “They mean business.” The market rose more than 900 points over the next few days. But a spokesperson for the Chinese foreign ministry said he was not aware of any such calls. An editor at the Global Times, the state-controlled newspaper, tweeted that he knew of no calls made in the days leading up to the G7 meeting and that “China won’t cave to US pressure.” Two U.S government officials later told CNN that Trump misspoke and “conflated” comments from China’s Vice Premier Liu He with direct communication from the Chinese. According to CNN, the officials said Trump was “eager to project optimism that might boost markets.”

Indeed, this single Trump lie briefly inflated domestic markets by hundreds of billions of dollars. “What this describes is, quite literally, market manipulation that constitutes criminal violations of the Securities Exchange Act of 1934,” commented George Conway, the conservative attorney and Trump critic.

Whether Conway is right or wrong is a matter of legal opinion, but given how fishy and coincidental the trading in e-minis seems to be these days, the SEC or CFTC would be doing a great service (and their job) for the American people by investigating who is behind these lucrative trades, and what they knew before they placed them. At the moment, what we’re getting from them is an indifferent shrug.

Federal regulators might start here: In the last 10 minutes of trading on Friday, August 23, as the markets were roiling in the face of more bad trade news, someone bought 386,000 September e-minis. Three days later, Trump lied about getting a call from China to restart the trade talks, and the S&P 500 index shot up nearly 80 points. The potential profit on the trade was more than $1.5 billion.

Mike Siegel, was a City Attorney for Austin, whose job almost seemed to be coming to work everyday and suing Texas' governor. Now he's running for Congress in a seat held by one of the wealthiest men to ever serve in Congress, Michael McCaul. Earlier this morning he told me that he's "thankful Congressman Lieu is investigating these suspicious trades. Unfortunately, we have an Administration of grifters, and even this level of corruption seems possible." Former congressman Alan Grayson-- who was so outspoken and so courageous that Chuck Schumer still starts shaking, physically, when someone mentions his name-- backed that up: "Fortunately, this is not a crime that one can commit anonymously. For every trade, there is a clear “paper trail” of who ordered what, and when.  As to ‘why’-- well, that’s obvious."