Well friends, here’s a quick Sunday story that will get your “Screw Wall Street" juices flowing: Ten of the world’s largest banks have been caught with their fat hands in the cookie jar by rigging a $465 trillion market. Wait… so big banks do rig the markets? Shocker… 

(Source: Giphy) 

As if you thought your local massage parlor was the only place with shady practices, JPMorgan Chase, Bank of America, and Goldman Sachs, among others, have been officially accused of conspiring to keep the interest rate swap (IRS) market as clunky as a Motorola flip phone in 2024. 

(Source: Reuters) 

Why? Because an inefficient market means they can charge higher fees and make boatloads of money… duh! 

Now of course, this isn’t the normal stock market we’re talking about, it’s all interest rate swaps. Which are basically financial agreements where two parties exchange interest rate payments. Simple right? 

(Source: Giphy) 

Well according to litigation reports, these banks have been making sure that everyone has to play by their rules. They’ve been blocking any attempts to modernize the market with electronic trading platforms. Instead, they keep everything over-the-counter (OTC) with something called “Dealer Defendants”, where they not only control the game but rake in billions in fees in the process. 

Obviously, this whole saga sounds like something straight out of a Michael Lewis’ novel (Think: The Big Short, Liar’s Poker, and Flash Boys)... 

Michael Lewis (Source: Giphy) 

But why interest rate swaps you ask? Well because it’s about 3x larger than the global stock market… so yeah, this is where the big money is, and Wall Street banks are making sure they rake in as much as they can from this $400 trillion buffet. 

Which is why after eight years of legal back-and-forth and hiding in plain sight, the banks have finally agreed to cough up $46 million each to settle the lawsuit. And with Credit Suisse’s payment of $25 million last year… the total is officially sitting at $71 million in settlements. 

(Source: The Daily Hodl) 

But in all seriousness, $46 million each? Really? That’s the amount of cash they make in less than a month, so either they have really good lawyers or someone on the other side is in their pockets. Both scenarios are extremely likely when it comes to Wall Street. 

(Source: Imgflip) 

Yet, if approved, this settlement will end the lawsuit, resulting in a small slap on the risk compared to the profits these banks have been making by rigging the game in their favor.. Obviously they’ve denied any wrongdoing, of course, but we all know the drill. Deny, settle, move on, repeat.

(Source: Giphy) 

So what’s the big takeaway for us investors this Sunday afternoon? 

Simply put, it’s a bittersweet reminder of what we all pretty much already know: the market’s are definitely rigged in some way shape or form, and Wall Street will do whatever it takes to keep their edge. They clearly have better information, better technology, and apparently, a better sense of humor about getting caught due to the fact they have the dump truck sized pockets to “settle” and move on. 

(Source: The Havok Journal) 

So, as we all gear up to jump head first into the market’s wild price action tomorrow morning, just remember that the next time you’re feeling down about your trading losses, the game has more than likely been rigged from the start. 

It’s always been Wall Street vs. us (the little guys). So with that said, how do we get back at’em? It’s simple: All Hail Roaring Kitty! jk jk… 

King Roaring Kitty (Source: Reddit) 

Stocks.News doesn't hold any positions in companies mentioned.