First Person Convicted Of Tricking Markets Gets 3 Years in Prison

We’re all just one action away from a life-ruining prison sentence. Imprisonment for victimless crimes is ALL THE RAGE in America these days. M. Coscia was just convicted to a 3 yr prison sentence for ‘spoofing’, a new crime, freshly made illegal by the retarded Dodd-Frank act, makes tricking adversaries in the marketplace a punishable crime.

Judge Harry Leinenweber, who tossed Mr. Coscia into prison, cited his $15m net worth and $150k monthly income in his decision, describing Mr. Coscia’s actions as ‘greedy.’

“This is a serious crime with serious consequences,” Leinenweber said before handing down the sentence. He noted that spoofing has been going on for a long time. Spoofing, which became illegal under the Dodd-Frank Act, carries a maximum of 10 years in prison. The practice typically consists of systematically placing orders without intending to execute them to trick the market into thinking there’s interest in buying or selling that doesn’t actually exist.

Bravo to Judge Leinenweber for ‘making an example’ and ruining someone’s life and being the first to sentence someone for a practice that has been part of the trading culture since the beginning of time.

Coscia was convicted by a jury in November of manipulating futures markets by placing unusually large orders he didn’t intend to execute and then filling smaller trades on the opposite side. Prosecutors said it was a bait and switch scheme that yielded Coscia, the head of Panther Energy Trading LLC, more than $1 million over 2 1/2 months in 2011. The scheme resulted in losses to high frequency trading houses that were placing and executing orders at the same time.

Jealous people always hate the success of others. When these people are in a position of power, liberties are stripped and bad things happen.

Prosecutors had sought a term as long as seven years and three months. Coscia’s lawyers said sentencing guidelines allowed for a term of only four to 10 months. His three-year prison term is to be followed by two years of supervised release.

Unfuckingbelievable.

It gets worse. Not only is he going to prison for something that every trader I’ve ever known has done, he’s paid back all of the gains ($1.4m) and an additional $3m fine to the fuckhead regulators.

What this is really about is his high speed algos were beating the shit out of someone with influence and power, causing some regulator to hone in on him and toss this modern day Edmond Dantes into the Chateau d’If.

The fuck out of here with this shit. Johnathon Stubbs called for a fucking death spiral, led by an oilmadggedeon back in February. But now, his glum views have been reformed, he’s turned bullish, and subsequently is lying his ass off on national teevee about the reasons why he’s found religion in the House of Citi.

Unlike this Stubbs character, I very much am still calling for an end of times scenario to play out. I will preside over the death of equities, as the oil market descends into sheer, fucking, anarchy.

Stubbs says his bearish call in February was merely a ‘cry for help’ and how the ‘rebalancing’ in crude is the reason why prices have shot higher.

WRONG.

Oil hasn’t rebalanced anything. A cursory google search will teach Stubbs that production is at RECORD highs and how our oil conglomerates are still producing crude at RECORD rates. Nothing has changed but the price of tea in China.

Lastly, his bear(d) game is weak.

To give the false illusion of economic prosperity, the Fed heads menace markets with interest rate hike promises. If you’re willing to debate me about the merits of the US economy, look no further than the value of homes less than 1 million since 2009. Zero growth there; but a fuckload of growth in homes worth more.

All of a sudden, BREXIT is a non-starter. The economy has recovered from that harrowing May jobs report and all is well.

“Considering the economic projections, I anticipate that it may be appropriate for up to two additional rate hikes this year,” said Harker, who does not vote on policy this year.

“Brexit is low on my list of risks, and I do not anticipate more than a transitory couple of 10ths of a percentage point slowdown in growth,” he added in prepared remarks.

Rest assured, just before the Fed is expected to hike rates, almost out of the blue, something will happen to derail it from happening.

Hilarious stuff out of the world’s most hated company. In an effort to remain independent and keep their top secret chimera science experiments under wraps, the Monsanto corporation is scrambling to get Bayer off their jock-strap. Instead of being acquired by Bayer for $122, Monsanto is telling its shareholders to fuck off and is considering merging with Bayer’s Frankenstonian agro-business.

The U.S. company is exploring various transactions, including the potential acquisition of BASF’s agriculture-solutions unit, the people said, asking not to be identified as the discussions are private. In return, Ludwigshafen, Germany-based BASF would likely receive newly issued shares in Monsanto, the people said. The discussions are at an early stage, and no final decisions have been made, they said. Talks with Bayer are continuing, they said.

Monsanto’s board is split over the merit of potential deals with rivals BASF and Bayer, one of the people said, with some executives keen to remain independent and others preferring a takeover. The company in May rejected a $122-a-share offer from Bayer, saying it was too low. It said in its earnings statement last month that it has been in discussions over the last several weeks with Bayer, as well as with other parties, about “alternative strategic options.”

Monsanto would likely face pressure from its shareholders if it opted to buy BASF’s division and issues shares to pay for it instead of accepting Bayer’s all-cash premium offer, one of the people said.

Monsanto doesn’t give a shit, as long as they’re permitted to continue to sue farmers and kick them off their lands for profiting from seeds that drifting into their fields by miracle or wind.

Color me skeptical. I hope Nigel enjoys his fucking fishing trips.

When oil went bust, I honed in on the debt/equity levels of the energy sector, knowing that it would be their sole source of capital once credit markets seized up. Lo and behold, this trend is beginning to take shape, especially as the 2017 debt wall looms.

Here are some opinions on the topic, which is being echoed through Wall Street now.

“The whole name of the game is trying to survive until oil gets back up to $60 or $70,” said Spencer Cutter, a credit analyst with Bloomberg Intelligence. “That may take a year or two. Nobody knows.”

“It’s all part of the same theme of de-levering,” Subash Chandra, an analyst at Guggenheim Securities LLC in New York, said of the share sales. “Part of that tool-kit is ‘backdoor equity,’ which adds inventory and obscures the dilution by adding something new.”

“Investors are looking at this and saying, ‘I know it’s not great now, but I think it’s going to get better in the future so I’m in,’” Wangler said. “It’s a bet on better days ahead.”

But what if oil prices don’t come roaring back? This idea that we need to hang in there because brighter days are ahead is gambling, 100%. No one can accurately predict where crude will be in a month from now, let along 1-2 years. If you’re investing in heavily burdened energy stocks now, you’re gambling–nothing more or less.

I’ll show you exactly what I’m talking about.

Should crude fail to rally, or God forbid fall from current levels, all of the companies below will find themselves in a credit crunch and will likely need to restructure their debt.

Once this happens, losses will be absorbed. The banks who lent the money will take hits. Hence, the ripple effect will be noteworthy.

Well, it looks like BREXIT will happen after all. Why else would Theresa May drag old Boris out from the dusty furniture and appoint him foreign secretary? I understand she is filling her cabinet with REMAIN folks too. But Boris was the fucking lightning rod, along with the quitter Farage, for this movement. Unlike Farage, who feels like he needs to have his little life back after plunging his nation into disarray, Johnson will try to lead his country via this new role.

Markets seem to agree. The pound is off by 0.82% and bonds are back in vogue again, as investors sashay in and out between risk on and risk off assets. Today is a risk off day, for those of you who are keeping track.

This is, without question, the biggest story of the day–even bigger than D. Gartman liking BAL.

Southern born and charmed in the way of cotton production, Dennis Gartman, is very much elated with the breakout in cotton. Yes, indeed, he’s gone as far as to say it should be purchased upon any and all dips.

It’s mighty generous of Mr. Gartman to offer us such good tidings on an otherwise moribund day.

BAL is one way to play this. It is up 16% year to date.

Obviously.

First, the morons at Sequoia sold out of their 10% stake in VRX. Then news broke that former CEO, M. Pearson, dumped 5 million shares of VRX for $96 million. Lastly, A. Left from Citron Research, the man, myth and legend who started this whole VRX to zero campaign when the stock was north of $200, announced he’s taking on a new short against the stock, comparing it to a sinking ship destined to be broken in half and heading towards a watery grave at the bottom of the ocean floor.

The stock is down 5.3% for the day. No word on what a certain B.A. Ackman is doing with his stake.

WTI is off more than 4% this afternoon, as stocks–genteelly–make their way towards new record highs. I understand many of you are of a bearish quality, always preying upon the sick and the addled, scaring thy neighbors out of his or her stock portfolio. But you should know, as students of the market, up is down and down is up and sometimes $600 billion in distressed energy debt is a good thing. After all, how do you think this country was built? Back in the olde colonial days, no one gave a shit about credit quality. They’d lend money to folks building rail lines and never see it again. Said fellows would be residing up in the very best European manors, enjoying the fruits of the lenders labor.

Markets will spring ahead because markets like to spring. You and I can bellyache all we want about Italian banks being greasy, dirty, and wholly insolvent. But who gives a shit? Grab a bag of cocaine powder and throw it into the faces of anyone trying to fuck with your mood…man.

For the moment, oil and those dastardly biotech stocks are leading the downside, while gold and utilities are erecting higher.