Tuesday, February 14, 2012

CME crude market halted for over 1 hr. / MIKE RUPPERT: Russia flops on Syrian regime change; invasion imminent, CME halt was a dry run?

BREAKING NEWS: Russia flip-flops on Syria

 Until I can absorb this I am giving this with Mike Ruppert’s comments.  I cannot fathom this complete volte-face.


IIt all started early on this morning when Zero Hedge reported that oil trading had been halted at the CME. Later in the afternoon they posted this explanation.

Zero Hedge handled this masterfully and with great professionalism .


Today's Black Gold Swan - Presenting The Reason Why The CME's Crude Market Was Halted For Over One Hour

Tyler Durden's picture

Earlier today, we reported on the extended halt of the CME Globex crude market, which following an errant trading pattern, did not quite crash, but did the next best thing - go offline for a full 75 minutes. Why did this happen? Our initial speculation was that this "may have been an algo gone berserk in advance of what may or may not have been a block order.... Someone take quote stuffing a little too far today?" It turns out we were not too far off. Below is Nanex visualization of just what occurred in those seconds between 13:59:57 and 14:04:55 when "a blast of quotes corrupted a memory queue causing the software to believe the queue was full all the time." In other words just under two years after the May 2010 flash crash, another algo may have been the reason for the halt in one of the world's most important markets. At least this time there was no 10% "correction." How long until there is, and when it does happen again, will it be limited to just 10%? Oh, and whatever you do, most certainly don't expect this little incident to be brought up ever again by those in control, for any precautionary measure to be taken, or for the SEC to ever get involved. Any of those three would immediately imply something is very wrong with the market. And that's simply not allowed.
From Nanex:
NYMEX Black Swan ~ The March 2012 Crude Oil Futures Quote Loop

On February 13, 2012, starting 13:59:57, quotes for crude oil began queuing. At 14:00:35, all of the queued quotes were sent at once. Again at 14:01:08 the same 38 second block of quotes sent earlier was sent again -- old timestamps and all plus a few new quotes. Again at 14:01:18, all quotes since 13:59:57 were sent again. This repeated 12 times.
From a programmers perspective, it looks like a system problem caused a blast of quotes that corrupted a memory queue causing the software to believe the queue was full all the time.

Tick chart of bid prices (red) along with quote age (blue).
Note that as the cycle repeats, it includes a few more quotes (the new quotes + those since 13:59:57). There are 500 quotes between time axis labels.

500 millisecond chart of ETF U.S. Oil Fund (USO) showing massive quote traffic as it reacts to stale futures quotes.

500 millisecond chart of ETF U.S. Oil Fund (USO) showing massive trade executions in reaction to stale futures quotes.


NOW, here's the back story.

Also today we learn that three Israeli embassies were attacked with explosives over the weekend. There are also credible stories saying that Saudi armor is positioning on the Jordanian border for a run to Damascus (only 140 miles) after promising military intervention within 72 hours (starting yesterday)...

Then suddenly today, Russia reverses position on regime change in Syria. That remains a huge mystery at this writing but it is reason to be very alert. What could Russia do/offer to keep Iran from joining the war? Iran is on the offense on many levels, and winning. I seriously doubt if Russia has abandoned Iran.

I know that I was not the only one who reacted from the gut, because a suspension of oil trades -- just prior to a multi-national invasion of Syria -- would be one of the clearest "duck and cover" moments I could think of. They will halt oil trades immediately if regime change is implemented or attempted. Count on it.

What happened today (Monday) may have been a dry run... for Tuesday or Wednesday

Saudi Arabia now has incentive to push for Assad's downfall. An emboldened Iran has unleashed an uprising in Saudi Arabia which today -- for the first time in history -- saw (Shia) Saudi citizens shooting at (Sunni) Saudi troops/police. It was a relief to see that France today issued a strong warning against military intervention in Syria but that may have been a cover.

Russia changes tack, signals open to Syrian intervention

This is stunning. It was unthinkable last night. If Russia is open to intervention, that means Russia will ensure that Iran is satisfied that no linked, follow-on attack on Iran is forthcoming. Don't ask me how that could be brokered or achieved. Don't ask me how Hezbollah would react. This is uncharted territory.
Something very big is in the wind, very big. -- MCR

Note - as of now this article is the only one I can find on the Net that says this - no other newspaper has confirmed this story at this time.

13 February, 2012

As the carnage in Syria worsened, Russia signaled a new-found willingness Monday to consider international intervention while the world’s nations planned a United Nations vote aimed at exposing the inaction of the great powers.

Syrian guns pounded anti-government strongholds in the opposition stronghold of Homs and the Arab League called for UN blue helmets to “to supervise implementation of a cease-fire.”

In Moscow, the shift indicated Russia was moving from defending Syrian President Bashar al-Assad, its primary Arab ally, to managing a transition.

Foreign Minister Sergey Lavrov said Russia, “together with other permanent members of the UN Security Council, (is) ready to promote the dialogue and an agreement.”

After twice vetoing Security Council resolutions condemning the brutal crackdown on pro-democracy protestors by forces loyal to Mr. Assad, Russia may be abandoning its absolute defence of the Syrian regime.

But Russia’s call for a ceasefire prior to any conference could prove impossible to achieve.
Meanwhile, in the General Assembly at the UN in New York, the world’s nations were planning to vote Monday on a resolution condemning Syria. Unlike the Security Council, where any of the five veto-wielding permanent members – Britain, China, France, Russia and the United States – can block any resolution, only a simply majority is needed in the 193-nation General Assembly. A vote is expected later this week.

But General Assembly resolutions lack the legally-binding force of the Security Council and can’t – for instance – be used to authorize military intervention.

An overwhelming majority vote, however, especially if it included strong backing from other Arab states of the resolution proposed by Saudi Arabia, would exert pressure on Russia and the other great powers to intervene, or at least, jointly condemn the Syrian brutality.

“What is happening in Syria leaves no doubt that it is not ethnic or sectarian war or urban warfare,” said Saudi Foreign Minister Saud al-Faisal. “It is a campaign of mass cleansing to punish the Syrian people and enforce the regime’s authority.”

More than 5,400 people have been killed – most of them unarmed civilian protesters – since the Arab Spring uprising flared in Syria last March.

Moscow, with a naval base in Syria that gives the Russian navy an outlet to the Mediterranean, and Beijing have both blocked Security Council efforts to condemn Syria.

Meanwhile, Mr. Assad has attempted to portray the uprising as terrorist attacks on his regime.
In the United States, some senior political figures are calling for an international coalition to arm and support anti-Assad forces. So far, President Barack Obama has ruled out any sort of one-sided intervention.

The 22-nation Arab League said it would offer “political and financial support” for the Syrian opposition but ruled out munitions.

However, the Arab League’s call for an international peacekeeping force seemed unlikely to attract much support among Western nations. The prospect of sending troops into another violence-wracked Muslim nation – even if armed only with a peacekeeping mandate – will be unwelcome in most western capitals where governments are busy trying to extricate their soldiers from Afghanistan.

In New York, UN Secretary-General Ban Ki-moon praised the Arab League’s efforts but warned that sending peacekeeping forces – or authorizing military intervention as happened last summer in Libya – was “a matter for the Security Council to consider.”

In a statement he implored: “All violence must stop” and called on the Syrian government to “comply with international law and immediately end the shelling and use of force against civilians.”

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