I don't see how this contradicts "price theories." Instead, it contradicts notions of perfect competition (under perfect information). It fits with the "asymmetric information theory" that's been in vogue for decades now. Almost any money and banking textbook has discussions of this kind of thing.
> http://www.bloomberg.com/news/2013-06-11/traders-said-to-rig-currency-rates-to-profit-off-clients.html > > Traders Said to Rig Currency Rates to Profit Off Clients > By Liam Vaughan, Gavin Finch & Ambereen Choudhury - Jun 11, 2013 4:00 PM PT > > Traders at some of the world’s biggest banks manipulated benchmark > foreign-exchange rates used to set the value of trillions of dollars > of investments, according to five dealers with knowledge of the > practice. > > Employees have been front-running client orders and rigging WM/Reuters > rates by pushing through trades before and during the 60-second > windows when the benchmarks are set, said the current and former > traders, who requested anonymity because the practice is > controversial. Dealers colluded with counterparts to boost chances of > moving the rates, said two of the people, who worked in the industry > for a total of more than 20 years. > Enlarge image Traders Said to Manipulate Currency Rates to Profit From Clients > > It may be difficult to prosecute traders for market manipulation, as > spot foreign exchange, the trading of one currency with another at the > current price for delivery within two days, isn’t classified as a > financial instrument by regulators, said Arun Srivastava. > Photographer: Jin Lee/Bloomberg > > The behavior occurred daily in the spot foreign-exchange market and > has been going on for at least a decade, affecting the value of funds > and derivatives, the two traders said. The Financial Conduct > Authority, Britain’s markets supervisor, is considering opening a > probe into potential manipulation of the rates, according to a person > briefed on the matter. > > [[snip] -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
