Oct 192015
 

Dave Fairtex, writing for Peak Prosperity, claims he has The Smoking Gun Proving Silver & Gold Manipulation. In identifying all of the 0.5% or greater one minute price spikes over the past 6 years I’d argue he has proven how infrequent it is.

Dave’s main result is that there were a total of 135 gold events and 869 silver events where the price moved up or down more than 0.5% within a minute, with 66% of the gold events, and 54% of the silver, being downward moves. While the data shows a bias to the downside, Dave doesn’t put any of the results into context, undermining I think what is a worthwhile analytical approach.

Dave’s data set includes every 1 minute period between 4pm-3am US Eastern Time from late 2009. That is an 11 hour trading window over 6 years. The number of 1 minute periods in the data set is therefore:

(52 weeks x 5 trading days) less 10 public holidays) x 11 hours x 60 minutes x 6 years  = 990,000 periods

A total of 135 gold events within 990,000 periods is 0.0136%, or 1 event per 7,333 periods. For silver it is 0.087%. That is not a lot of manipulation events and in the case of gold, Dave shows that oil, gas, wheat and corn had more events.

Dave’s other observation is that when you compare the aggregate dollar change over all manipulation events and express them as a percentage of price, gold and silver have much bigger price effects (-33% and -120%, respectively), compared to a few percent for the other contracts investigated.

However, I see two problems with this comparison. Firstly, the total dollar changes are just compared to current spot price. A $10 change on $1000 is not the same as a $10 change when the gold price was $1900. It would been more informative to have added all the percentage changes for the manipulation events so that apples were being compared to apples, in terms of price impact at the time.

Secondly, just as with the 990,000 period example, a 4% total change for Crude Oil may not be directly comparable to -33% for Gold as the normal volatility for gold and oil differ. Having a total dollar change up and down over the other  989,865 non-manipulation events would reveal the real impact these events had for the overall price change for gold and silver within the time period investigated. Given that the average gold price over the time period is well above $1150 I’d say that -33% may be overstating the case.

The other aspect of the analysis that I think can be queried is the choice of trading window, which is explained thus:

“Most goldbugs like to say that gold and silver suppression attacks occur in the “wee hours of the morning.”  Loosely translated, I take this to mean during non-US and non-London trading hours.  So that’s the time range I will use: 4pm-3am Eastern; from just after US market close through to the London market open.”

If it wasn’t for the fact that Comex and London do trade significant volumes, I’d say this was a US-centric “we are sleeping so it doesn’t matter” view. However, do not those same “goldbugs” proclaim that US and UK trading is all paper, compared to the “real” physical markets in Asia, using charts like this to prove their point:

ChinavsCMEDeliveriesAU

Below is a table of the key gold trading hubs and their usual trading hours. The highlighted areas are when those countries are operating their trading exchanges.

tradinghours

To argue that 4pm-3am is “when activity is relatively lighter than usual” is to argue that the huge physical markets of China, India, Japan and Dubai don’t matter when it comes to gold and silver prices. By the way, Perth is in the same time zone as China, which means the 300-400 tonnes of gold we trade each year must also not matter.

From the table above you can see that all of the major Asian markets close down their overnight electronic platforms around 3pm New York. This is not coincidental, as that is when CME’s Globex is winding down. I would argue that a more realistic period during which the global precious metal markets are relatively illiquid would be from Globex close at 5pm (New York time) to 9pm when the SGE opens, and maybe 2:30am to 5:00am, between the China/Japan break and the setting of the AM London Price.

I have left a comment on the Peak Prosperity article asking Dave to re-run his program with a change to the trading window and accumulating percentage changes for all manipulation events as well as all 990,000 periods. Hopefully he will indulge. It would also be interesting to see the analysis run for the entire 24 hour window, to get an overall sense of potential manipulation events.

China will save us

 Posted by at 10:02 pm  China, Narratives
Oct 162015
 

I have a lot of respect for Michael Kosares of bullion dealer USAGOLD but his recent commentary has a bit of the “China will save us” meme which has been around for many years and had its fullest expression in the Pan Asian Gold Exchange farce.

Michael notes the upcoming launch of a benchmark gold price by the Shanghai Gold Exchange and increasing involvement of Chinese banks in the setting of the London Price benchmark and says that “as a result, China’s influence in the gold market, already a key factor, should increase markedly and that “Chinese banks in London will be on the constant lookout for arbitrage opportunities that can be purchased and shipped to their home country”, concluding that “in this new gold market, China, perhaps inadvertently, will act as a proxy for gold coin and bullion owners all over the world” (my emphasis).

The tense of these comments – “increase markedly”, “will be”, “new” – implies that somehow China is not currently influencing the market to the fullest extent and involvement in benchmark pricing will help. This is just not the case. The Chinese government has approved all of its major banks to import gold and these banks have been very active in the kilobar market for many years now, something that the Perth Mint has experienced first hand.

As proof, consider this chart of the SGE premium. If there was any consistent restriction on China importing and impacting on the physical spot market this premium would not be near zero. Every week the Perth Mint offers 5 tonnes or so of physical gold to the market and we have rarely had a problem with banks, Chinese or otherwise, not being interested on bidding on it.

SGEpremium

Yes, there have been periods where premium develops, often due to demand surges which clear out onshore inventories and then the banks scramble for new supply from refineries worldwide, but the chart shows that in the long run the premium reverts back to more modest levels. As Adrian Ash of BullionVault says “it’s the Shanghai premium which, thanks to the magic of profit-seeking capitalism, draws in metal from abroad” – arbitrage is doing its thing.

So it isn’t a case that “China will likely serve as a foil to the current paper-based pricing regime” as Michael says, China already is serving as a foil.

The Gold Warrior

 Posted by at 9:08 pm  Bubbles, Investing
Oct 142015
 

“Fourty four years after the end of the Bretton Woods System global central banks have manipulated the cost of risk in a competition of devaluation leading to a dangerous build up in debt and leverage, lower risk premiums, income disparity, and greater probability of tail events” says Chris Cole of Artemis Capital in his recent paper titled Volatility and the Allegory of the Prisoner’s Dilemma: False Peace, Moral Hazard, and Shadow Convexity.

Izabella Kaminska at FT Alphaville, praised it as “rare glimpse into his imaginarium” but I wonder if this was also a way to downplay its talk about tail event risks which are “equated with a loss of faith in the entire dollar system”. Precious metal investors will consider it far from imaginary and find much to agree with, such as:

“We are nearing the end of a thirty year ‘monetary super-cycle’ that created a ‘debt super-cycle’, a giant tower of babel in the capitalist system. As markets now fully price the expectation of central bank control” it is not possible for those central banks to “remove extraordinary monetary accommodation with risking a complete collapse of the system”.

Chris makes a number of complex points in an entertaining way but ultimately I see the piece as a case against complacency. One point that caught my eye and which I think goes a long way to explaining gold’s bear market is his identification of a shift from the central bank put, “policy action employed in response to, but not prior to, the onset of a crisis”, to pre-emptive central banking, which is “monetary action in anticipation of future financial stress to avert a market crash before it starts”.

Chris says that this “shift toward pre-emptive central banking occurred in the summer 2012: first with Mario Draghi’s pledge to do ‘whatever it takes’ to save the Euro on July 26th; and followed thereafter by Bernanke’s QE3 speech at Jackson Hole on August 30th.” He demonstrates this shift on a chart of the VIX and financial stress indexes. I have reproduced this chart, with the gold price overlayed, below.

artemis1

Note that the period between Draghi’s ‘whatever it takes’ and Bernanke’s QE3 was gold’s last hurrah before its relentless downward trend. Once the markets realised that central bankers would intervene to prevent excessive losses, gold lost favour and we entered the weird world where “bad news is good news [but bad for gold] and vice versa because the intervention is more important than fundamentals”.

However, Chris argues that by artificially suppressing volatility all central banks have done is encourage “rampant moral hazard” and merely “taken tail risk from the present and shifted it into the future … the risk is not gone”. His solution is to “to own volatility on both the right and left tail of the return distribution … when markets are euphoric buy optionality to protect against deflation” in asset prices.

Izabella notes that such insurance is “expensive. For a reason. There’s a cost to maintaining resilient independent defences that depend on no-one.” I think it is obvious to this audience what that insurance might be, but Izabella notes a possible solution to this era of “central bank arms race of devaluation” as being “a united central bank equilibrium where all currencies became tied to one central global bank”.

Izabella summarises Chris’ comments about Mad Max 2 as “the ultimate long convexity film, because only someone with nothing to lose (no skin in the game) can really defend those who do”. Many have argued that gold sits outside of the financial system – being no one’s debt/obligation – making this “no skin in the game” asset capable of defending the rest of one’s investments from central bank hubris. Might it also make it an independent reference point to which currencies could be tied?

Frank Holmes of US Global Investors is known for talking about gold’s Love Trade and Fear Trade. Buried in Chris’ 50 page piece is a line which I think could be appropriated as the ultimate gold sales letter call to action:

“Buy the fear and you will be protected from the horror.”

The Gold Warrior

Oct 092015
 

On Wednesday Deutsche Bundesbank published “a list detailing its holdings of gold bars in custodian storage in Frankfurt am Main, London, Paris and New York”. While I welcome this move towards transparency and accountability on what is an important (and often controversial) public asset, it was disappointing that the Bundesbank did not think it necessary to produce a bar list that conformed to the usual standards that apply in the bullion market, which is to supply refinery, bar number, gross and fine weight, purity, and year of manufacture (where available).

The Bundesbank confirmed in an email to Ronan Manly that it has those details but said they were “not relevant for storage or accounting purposes”. They note that “whereas bar and melt numbers are issued by the gold refiner, inventory numbers are assigned by the custodian in whose vaults the gold is stored. Inventory numbers are either stamped or affixed to the bar using a label.” and identify different standards of disclosure between the four custodians of the bars:

  • Bank of England and the Banque de France: use internally assigned inventory numbers but are not willing to allow their customers to publish these
  • Bundesbank: uses internally assigned inventory numbers and has no problem publishing them
  • Federal Reserve Bank of New York: supplies the actual bar/melt number has not problem with customers publishing them

The Bank of England’s use of internally assigned inventory numbers (and only supplying that number, rather than the actual number stamped on the bar, to their custodian customers) was confirmed by Freedom of Information requests from blogger Bullion Baron in respect of Australia’s gold reserves.

I can understand that given the potential for duplicated bar numbers between refineries (and some refineries had a practise of restarting numbering each year) in any bar inventory control system it would be easier to design the database with its own unique identification key rather than rely on the combination of refiner/number/weight/purity/year as the unique key. However, this does not mean a custodian needs to stick a label on each bar as bars can be located and identified by their vault location (ie shelf or pallet number) and unique bars markings if needed. The Perth Mint manages to keep track of its physical stocks and client Allocated without needing sticky labels, so it is possible.

While internally assigned inventory numbers might suffice for “storage or accounting purposes” I would have thought it obvious that they do not suffice for independent audit purposes. I doubt any auditor would accept a sticky label on a bar for the simple fact that a custodian could stick different numbered labels on the same bar each time different customers come around to audit. This is why all of the exchange traded funds that publish bar lists provide full bar list details and do not list any internally assigned inventory numbers. This is clearly the industry standard and odd why the Bundesbank could not have just supplied the additional information that they have in their spreadsheets.


On to the geeky stuff of looking at the bar list itself. It would have been helpful if the Bundesbank supplied the bar list in spreadsheet form, rather than pdf, but thankfully the bar list guru, Warren James (who has a massive database of the major ETF bar lists) was able to convert the Bundesbank pdf into a 13mb spreadsheet, which you can download if you so desire.

A review of the pdf list shows that it has not been sorted by internally assigned inventory number and that some other sorting has been applied, most likely pallet or some other location identifier, or possibly by refiner, given the grouping we see in some of the Federal Reserve bar numbers.

One of the first things I noticed when doing a simple sort by weight check is bar number 11202, which supposedly weighs 23.810 ounces (see extract from bar list below from page 2258):

buba1

There are eight other circa 200oz bars (which are odd in themselves) so I would guess this is a keying error and should be 238.100 ounces. A 23 ounce bar seems highly unlikely but maybe in the olden days if the US Mint was doing a melt and had an amount of gold left over that wasn’t near 400oz they just poured whatever remained. Or maybe it is some sort of Easter Egg that the FRB NY put in to see if the Bundesbank was actually reviewing their bar list. Might be worth a call to the FRB NY to get them to check this bar and confirm its actual weight.

The US has previously released it bar lists (see here) and it gives us something to compare to, particularly since some of Germany’s gold is held with the FRB NY. In contrast to the US’ gold, almost all of Germany’s gold is within the LBMA London Good Delivery specification weight of 350-430oz. Note that German holds a total of 270,316 bars versus the US’ 699,515 bars.

Weight Germany US
<350oz 0% 37%
LBMA Standard 350oz-430oz 99% 54%
430oz-452oz 1% 9%
Total 100.0% 100.0%

In terms of purity, all of Germany’s gold meets the minimum London Good Delivery specification of 99.50% or higher.

Purity Germany US
<99.50% 0% 83%
99.50% to 99.89% 85% 3%
99.90% to 99.98% 11% 10%
99.99%+ 3% 4%
Total 100% 100%

The large number of US sub-purity bars reflects coin melt from the 1930s confiscation. What is interesting is the 3 to 4% which are 99.99% or higher, including the existence of some rare 99.999% (five nines), as you can see from this extract from the bar list (these bars being held at the FRB NY):
buba2

The out of the 9,273 99.99%+ purity bars the Bundesbank holds 3,002 (totalling 1,197,116.298 ounces) are in the Bank of England and 3351 (1,326,074.084 ounces) are held by the Bundesbank itself. The reason I point this out is that when Asian demand is high, 99.99%+ purity 400oz bars can attract a premium up to $0.50 an ounce as refiners only need to melt and recast them into kilobars, which gives a lot quicker turnaround than refining dore up to 99.99%.

With over 2.5 million ounces of 99.99% bars easily shipped to Swiss refiners, the Bundesbank could earn over $1 million dollars by swapping them for 99.50% purity bars the next time Chinese demand surges (less freight costs). There might be some work getting all the 99.99% bars together but at least the bars in the picture below (from Koos Jansen’s post on the Bundesbank bar list) are nicely grouped together:

You can match the sticky label internally generated numbers above to the bar list below to see they are all 99.99%buba3

Just out of interest, the US holds 24,946 99.99%+ bars, which at $0.50 premium could be worth $5 million on a swap. Seems such a waste having these high purity bars just sitting in central banks vaults when the Chinese would love to have them.

Oct 072015
 

Back in July I reported on some unusual figures in the US Office of the Comptroller of the Currency’s (OCC) quarterly report on precious metal derivatives. In the OCC’s 2015 Q1 report they had a figure of $75.62b, which was a huge increase from the 2014 Q4 figure of $22.42b. However, in the latest OCC report, the 2015 Q1 figure has been revised down to $26.94b. I have cut and pasted the two figures from the previous report (in green) and the new report (in red) below:

occChange

No doubt someone on the internet will claim this is a cover up, but looking deeper into the numbers it seems to be a case of a fat finger keying error. If we go back to the 2015 Q1 report it is clear that the main contributor to the $75.62b figure was Citibank, as can be seen from Table 9 below:

occChange2

At the time Nick Laird of Sharelynx.com contacted the OCC and questioned them about the dramatic $42.048b and $10.970b figures (circled in blue) and the OCC confirmed that the figures were correct and provided the following screenshot of Citibank’s schedule RC-R as proof (relevant figures circled in blue):

OCCciti

I noted the large difference between Citibank’s centrally cleared derivative contracts figures versus their over-the-counter figures, saying it made “me wonder if the red figures are a fat finger and belong in a different row”. Looking at those figures in blue in light of the revised 2015 Q1 figure of $26.94b leads me to think the numbers are in the right row, just that the decimal place was keyed wrong by two points, that is, the figures were overstated by 100.

If we divide the centrally cleared figures by 100 and add them to the over-the-counter figures, we get revised Citibank white precious metal derivatives totals of:

Maturity < 1yr = 3,083,000 + (38,965,000 / 100) = 3,472,650
Maturity 1-5yrs = 703,000 + (10,267,000 / 100) = 805,670

If you plug these figures into Table 9, the Precious Metals All Maturities figure reduces from $75.62b to $26.88b. That is very close to the OCC’s revised figure of $26.94b and the remaining difference is probably the usual sort of minor adjustments the OCC has made to its figures in the past. So it doesn’t look like there was any real increase in silver/platinum/palladium derivatives in Q1 and nor was Citibank cornering that market.

There is one other dramatic change in the OCC report – a 75% reduction  in commodity derivatives:

OCCcommod

No revision was made to the Q1 figure and almost all of the Q1 increase, and Q2 decrease, was JP Morgan, so we assume the +$4 trillion figure stands. Very unusual.

Oct 052015
 

On Friday there was a big move in precious metals, with gold up $25 to around $1135 and silver up $0.70 to around $15.20. In percentage terms the silver move was much more dramatic, approximately 4.8% compared to gold’s 2.3%. The move was in reaction to US non-farm payroll numbers, but in this recent post, Keith Weiner at Monetary Metals goes behind the headline grabbing move and looks a little deeper into what it tells us about scarcity in the silver market.

Keith focuses on the difference between spot and futures prices to get an insight into the hoarding or dishoarding of gold and silver, which he sees as more useful than conventional supply/demand analysis given the large stocks of gold and silver relative to their flow.

Metal is hoarded, or carried, if there is a profit to be had buying metal and selling it later in the future. This occurs when future prices are higher than spot (today) prices and is called contango – the measure of this is the basis.

If metal is scarce then people will bid up the spot price above future prices and this will create an incentive for gold owners to dishoard or decarry, as there is a profit to be had selling metal now and agreeing to buy it back later in the future. This situation is called backwardation and Keith’s measure of it is the cobasis.

The interesting thing about the increase in the silver price on Friday was, Keith notes, that “the cobasis (i.e. scarcity) fell. A lot. In fact, it is the biggest drop in the silver cobasis in years” falling from a profit of 2.9 cents to 1 cent. “Speculators bid up the price of futures so fiercely and so aggressively, that the spread between December and spot was compressed to about 1/3 its previous size.”

To put this move in pictures, I’ve stylised the market situation on Thursday according to Keith below (I don’t have his exact figures, but this chart has the relativities about right and I’ve assumed a bid/offer spread of 5 cents for simplicity).

AgThursday

Note that if you are looking to hoard/carry then you have to buy at the spot offer price and sell at the future’s bid price. If you want to dishoard/decarry then you are selling at spot bid and buying at future offer. Keith says there was a 3 cent profit to be had on Thursday for decarrying, which is represented on the chart up the upward sloping red arrow.

Now consider the situation on Friday.

AgFriday

The way I’ve charted this, by not putting Thursday and Friday on the same chart and using the same 15 cent y-axis scale, emphasises the change in the cobasis rather than the change in price. You can see that the red line is now nearly flat, indicating the compression in profit to be had from dishoarding.

The most interesting aspect of Keith’s post, however, is his discussion about the high silver coin premiums. Keith says that the premiums are not just an indicator of demand for silver coins but also reflects the fact that “the capacity to produce silver coins is inelastic. Manufacturers can only stamp them out so fast” and compares it to “like pulling liquid from a large pool through a thin straw. Yes, it’s drawing liquid out of the pool. But the straw can only flow so much.”

Keith then goes on to compare his cobasis indicator of wholesale market shortage with the coin shortage indicator (ie coin premiums):

His conclusion is that “the same market forces that are driving silver into scarcity can also drive coin stackers, but it does not work so well the other way. Stackers can’t pull enough silver through that thin straw, to cause any serious scarcity in the bullion market. Though they can exacerbate scarcity if it’s already rising”. Not surprising given silver bar and coin demand is only around 20% of global silver demand, although this chart from The Silver Institute would indicate that investors seem to be the marginal swing factor.

Oct 022015
 

The announcement that Switzerland’s Competition Commission has opened an investigation into some bullion banks for precious metal prices fixing created a bit of excitement in the gold blogosphere. I find it hard to get excited. Consider this recent history of precious metal manipulation investigations and lawsuits:

March 2013 – CFTC (US) “scrutinizing whether the daily setting of gold and silver prices in London is open to manipulation”
November 2013 –  Bafin (Germany) reviewing how banks participate in gold and silver price setting
December 2013 – Rosa Abrantes-Metz (US) publishes How to Keep Banks From Rigging Gold Prices in Bloomberg
December 2013 – Bafin (Germany) interviews Deutsche Bank employees as part of a probe into potential manipulation of gold and silver prices
January 2014 – The five banks that oversee the so-called London gold fixing form a steering committee to seek external advice on how the Fix process could be improved
January 2014 – Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal
January 2014 – Deutsche Bank announces it will withdraw from gold and silver benchmark price setting
March 2014 – Academic Brian Lucey (UK) questions Rosa Abrantes-Metz methodology and findings
March 2014 – LBMA publishes article questioning Rosa Abrantes-Metz findings
March 2014 – Kevin Maher (US) files lawsuit accusing the five gold-fixing banks of manipulating prices over the last 10 years based on a draft study by Rosa Abrantes-Metz
March 2014 – AIS Capital Management files lawsuit against the five banks that set the London benchmark gold price, alleging that the banks conspired to manipulate the price of gold for their own gain
March 2014 – UBS reveals in its 2013 Annual Report that a review of its foreign exchange operations was widened to include its precious metals business
March 2014 – The 2nd U.S. Circuit Court of Appeals said silver investors failed to show that JPMorgan Chase & Co conspired to drive down the metal’s price
April 2014 – FCA (UK) visits Societe Generale SA to observe London fixing process
April 2014 – Over the past two months, U.S.-based investors and traders have filed nearly 20 separate antitrust claims accusing Barclays , Deutsche Bank , HSBC , Bank of Nova Scotia and Societe Generale of colluding to manipulate the gold price
April 2014 – Deutsche Bank resigns its seat on the London precious metal fixes without finding a buyer
July 2014 – FCA (UK): “no clear evidence” that banks are rigging the price of gold
July 2014 – J. Scott Nicholson (US) files lawsuit alleging that the silver fix banks manipulated the physical and COMEX futures market since January 2007
October 2014 – Lawsuits filed by investors since July over the alleged silver price-fixing were consolidated on Tuesday in the U.S. District Court for the Southern District of New York
November 2014 – FINMA (Switzerland) says found a “clear attempt” to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS
November 2014 – Modern Settings LLC sues Goldman, BASF, HSBC Holdings Plc and South Africa’s Standard Bank Group Ltd for having conspired to rig the twice-daily platinum and palladium “fixings”
January 2015 – Bafin (Germany) finds no evidence to support allegations of manipulation in the gold market
February 2015 – Justice Department (US) antitrust division scrutinizing the price-setting process for gold, silver, platinum and palladium in London
February 2015 – WEKO (Switzerland) looking into possible manipulation of price fixing in the precious metals market
May 2015 – UBS wins immunity from criminal fraud charges in a Justice Department (US) precious metals investigation
May 2015 – Barclays fined £26m by FCA (UK) for systems and controls weaknesses that allowed a trader to attempt to profit at a customer’s expense by influence the 3pm gold fixing on June 28, 2012
September 2015 – COMCO (Switzerland) opens investigation against UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui into possible price fixing deals in respect of bid/ask spread

This is by no means an exhaustive list but note that after all that the only fine levied was a paltry £26 million on Barclays and not one successful manipulation lawsuit that I am aware of.

I doubt the COMCO investigation will find much, and it is a pretty limp claim – they did not mention actual manipulation of the price up or down, just the spread between buy and sell prices. Academic Brian Lucey found a chart of historical gold market spreads below (see his blog post for more details).

Note that if you convert this dollar spread into a percentage of the spot price it has, by my rough calculations, declined 50% from 0.12% to 0.06%. Decreasing spreads reduces a bullion bank’s profit and increases the attractiveness of gold to investors by reducing their trading costs – not sure how that is anti-competitive. While I guess one could still fine banks for conspiring to reduce costs, it is hardly the sort of manipulation smoking gun people have been looking for.

While there has been a lack of success in prosecuting bullion banks for manipulating gold and silver markets, I think Ross Norman is being a little too confident telling CNBC that “‘It is a good, clean, efficient market,’ … adding that certain banks have been investigated ‘dozens of times’ and ‘nothing untoward has been found’.”

The fact is that many of the major banks have been fined for manipulation of other markets and thus it would seem given the corporate culture these investigations have revealed that the odd are against their precious metals desks being 100% clean. Nevertheless, apart from the single Barclays case, nothing untoward has indeed been found.

I suppose the cynics would retort that maybe precious metals dealers are just a lot smarter than their LIBOR and FX mates, or that central banks don’t want regulators delving too deeply into how these markets work. It seems, frustratingly, that it is going to be a few more years before these cases work their way through the system and we get a definitive answer, one way or the other.