Before we get to the wonderful world of investing, it's important to set the scene. Make yourself a cup of hot chocolate, sit down and get ready for your blood to boil. You're about to find out how financial markets really work...

In the funniest TV exchange of the decade, a bundle of CNBC hosts and guests discussed the latest dodgy goings on in the markets. No, it's not the news that currency quotes are rigged. That's yesterday's news. Instead, a reporter discovered that the University of Michigan and Reuters provide early access to their consumer confidence information to a select few.

The public gets the data at 10am. The so called 'elite clients' at 9:55am and the 'ultra elite clients' get it 2 seconds before the elite. Sure enough, if you take a look at the trading data, markets move at 9:54:58 on days when consumer confidence is due.

Putting this into perspective, we also know that the following financial markets are rigged:

  • Libor - interest rates manipulated for traders
  • ISDAfix - swap quotes fixed
  • Platts - oil prices jigged
  • WM/Reuters - Foreign Exchange quotes front run
  • High-Frequency Trading - equity trades front run
  • Fed minutes - leaked

Throw in the effects of public policies like QE, and nothing is honest anymore. Of course, never forget that the gold and silver price isn't manipulated - that would be a conspiracy.

Back to the consumer confidence data. The CNBC crowd in the video was outraged that this early release happens at all. They reckon it's illegal and can't believe it's happening.

But Reuters says that because it mentions it sells the data early on its website, this is legal. You just have to pay top dollar to get 5 minutes on everyone else, and even more to get two seconds on those who think they're 'elite'.

If you have a big enough trading account, and a machine to analyse the data in a split second and send out the corresponding trade, you can make a killing. According to the journalist who broke the story, Eamon Javers, Reuters even implies this in its marketing material for subscribing to the early release.

After the pundits on CNBC finished expressing their levels of outrage, CNBC's man on the trading floor, Rick Santelli, dropped the real bombshells. Keep in mind this fellow triggered America's tax day tea party protests a few years ago with a rant on CNBC that went viral.

First of all, Rick claims the early data release for elite and ultra elite clients has been going on for years. Better still, everyone on the trading floor knows it happens, but nobody in the media would listen to their claims in the past.

CNBC's anchors were doubtful of Santelli's statements to say the least. So, in the midst of an argument on the matter, he pulled over a random guy from the trading floor live on air:

Santelli: 'Jerry, Jerry, you're a currency trader. Get over here, hurry up. Get over here... Jerry, you've been trading for years and years and years. Is it any surprise that subscription guys have gotten University of Michigan [data] early? You talk about it every month, right?'

Jerry: 'every month'

The anchor promptly changed the subject.

The video is a must watch to realise how clueless the media is, how clued in the guys on the floor are to the bizarre goings on in financial markets, and how dodgy those markets really are.

But even without front running, rigging and early releases, investing is difficult enough in times like these. The thing is, what if things ever get back to normal?

When Market Normality Became Dangerous

Central bankers and politicians wish the world would just return to normal. You probably wish for rising stock markets, rising house prices and abundant mining jobs luring your neighbourhood delinquents into the desert too.

But be careful what you wish for. Normal has become dangerous....

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