Regulators must impose new restrictions on high-speed trading firms to limit “out-of-control” mathematical algorithms after a number of technology-related snafus have hurt investor confidence, says a recent Chicago Federal Reserve study.

The report said that industry and regulators have articulated “best practices” for risk controls, but many trading firms fail to implement all the recommendations or rely on other firms to catch an “out-of-control” algorithm or problem trade.

The report, which was released on Monday, comes after NYSE Euronext was fined by the Securities and Exchange Commission last week over allegations that it gave market data to some clients faster than others. It also follows the loss by investment firm Knight Capital Group Inc. last month of $440 million based on erroneous trades caused by a software malfunction, bringing the firm to the brink of bankruptcy.

This marketwatch.com story was posted on their website early yesterday afternoon...and I thank Scott Pluschau for our first story of the day. The link is here.

The great mystery story in American politics these days is why, over the course of two presidential administrations (one from each party), there’s been no serious federal criminal investigation of Wall Street during a period of what appears to be epic corruption. People on the outside have speculated and come up with dozens of possible reasons, some plausible, some tending toward the conspiratorial – but there have been very few who've come at the issue from the inside.

We get one of those rare inside accounts in The Payoff: Why Wall Street Always Wins, a new book by Jeff Connaughton, the former aide to Senators Ted Kaufman and Joe Biden. Jeff is well known to reporters like me; during a period when most government officials double-talked or downplayed the Wall Street corruption problem, Jeff was one of the few voices on the Hill who always talked about the subject with appropriate alarm. He shared this quality with his boss Kaufman, the Delaware Senator who took over Biden's seat and instantly became an irritating (to Wall Street) political force by announcing he wasn’t going to run for re-election. "I later learned from reporters that Wall Street was frustrated that they couldn’t find a way to harness Ted or pull in his reins," Jeff writes. "There was no obvious way to pressure Ted because he wasn’t running for re-election."

Kaufman for some time was a go-to guy in the Senate for reform activists and reporters who wanted to find out what was really going on with corruption issues. He was a leader in a number of areas, attempting to push through (often simple) fixes to issues like high-frequency trading (his advocacy here looked prescient after the "flash crash" of 2010), naked short-selling, and, perhaps most importantly, the Too-Big-To-Fail issue. What’s fascinating about Connaughton’s book is that we now get to hear a behind-the-scenes account of who exactly was knocking down simple reform ideas, how they were knocked down, and in some cases we even find out why good ideas were rejected, although some element of mystery certainly remains here.

This piece by Matt is basically a book review, but gives you an indication of how the best of intentions of reining in Wall Street end up on the rocks. It's possible that the reason that the silver price management scheme has not ended, falls into this book's pervue as well. It's worth reading...and I thank Ulrike Marx for bringing it to our attention. It's posted over at the Rolling Stone magazine Internet site...and the link is here.

Russell Wasendorf Sr., founder of the bankrupt commodities firm Peregrine Financial Group Inc., pleaded guilty to stealing more than $100 million from its customers.

On Monday, Wasendorf, 64, admitted to embezzlement, mail fraud and two counts of lying to federal regulators in an appearance before U.S. Magistrate Judge Jon Scoles in Cedar Rapids, Iowa.

In response to the judge’s direct questions, Wasendorf replied “guilty” to each of the four counts. He made no other comment.

The plea agreement calls for a prison sentence of as long as 50 years.

This story was posted on the Futures Magazine website on Monday...and I thank Donald Sinclair for sending it. The link is here.

A lone appeals judge bowed down to the Obama administration late Monday and reauthorized the White House’s ability to indefinitely detain American citizens without charge or due process.

Last week, a federal judge ruled that an temporary injunction on section 1021 of the National Defense Authorization Act for Fiscal Year 2012 must be made permanent, essentially barring the White House from ever enforcing a clause in the NDAA that can let them put any US citizen behind bars indefinitely over mere allegations of terrorist associations. On Monday, the US Justice Department asked for an emergency stay on that order, and hours later US Court of Appeals for the Second Circuit Judge Raymond Lohier agreed to intervene and place a hold on the injunction.

The stay will remain in effect until at least September 28, when a three-judge appeals court panel is expected to begin addressing the issue.

On December 31, 2011, US President Barack Obama signed the NDAA into law, even though he insisted on accompanying that authorization with a statement explaining his hesitance to essentially eliminate habeas corpus for the American people.

Ironically, this story was posted over on the Russia Today website yesterday...and is an absolute must read. I thank Roy Stephens for sending it...and the link is here.

Several Swedish retailers face closing down after hundreds of millions of kronor have disappeared in connection with the bankruptcy of secure cash transport firm Panaxia, responsible for transferring their takings.

Panaxia filed for bankruptcy in the beginning of September. The company had struggled to keep afloat after two top managers were charged for fraud and the company had made a loss of quarter of a billion kronor. Despite efforts to keep the company running, the board filed for bankruptcy on September 5th.

Two days after the bankruptcy, Panaxia’s board contacted the Economic Crime Authority saying that large sums of money seemed to have disappeared from a company account.

This story showed up late yesterday evening on the Swedish website thelocal.se...and I thank Gothenburg, Sweden reader Glenn Elvesund for sliding it into my in-box just before I hit the 'send' button. The link is here.

Greek judges went on strike on Monday, kicking of a series of walkouts by state employees ranging from doctors to tax officials in protest at wage cuts and labor reforms demanded by international lenders in exchange for more aid.

Judges were hearing only cases nearing the statute of limitations and are expected to continue their labor action throughout this week, potentially delaying thousands of cases waiting to be heard by the already overstretched legal system.

"We are determined to defend our current wages," the judges' associations said in a statement. "We won't tolerate the downgrading of the judges."

Judges say they have already seen their salaries reduced by as much as 38 percent and have warned that relentless pay cuts were putting their constitutional position as guarantors of the court system under threat.

This Reuters story, filed from Athens late Monday morning Eastern time, was something I borrowed from yesterday's edition of the King Report...and the link is here.

Argentina is on track to be the first country ever censured by the International Monetary Fund for not sharing accurate data about inflation and the economy.

The IMF’s board of directors, meeting yesterday in Washington, gave the country until Dec. 17 to respond to concerns about the quality of its official data, it said today in an e-mailed statement. If the deadline is missed, the board can issue a declaration of censure, a warning that has never been used and which means sanctions may be applied if the concerns aren’t addressed.

“The Executive Board regretted the lack of sufficient progress in implementing the remedial measures since its Feb. 1, 2012, meeting and expressed to the authorities its concern that Argentina has not brought itself into compliance with its obligations,” according to the statement. The board “took note of the ongoing dialogue between the IMF and the authorities regarding the measures, and called on Argentina to implement the measures without delay.”

This story showed up on the Bloomberg website early yesterday afternoon...and I thank West Virginia reader Elliot Simon for digging it up on our behalf. The link is here...and it's definitely worth reading.

The annual consumer price inflation based on all India general Consumer Price Index (CPI) for August on point to point basis rose to 10.03%, according to government data released on Tuesday.

The corresponding provisional inflation rates for rural and urban areas are 9.90 % and 10.19 % respectively.

Inflation rates (final) for rural, urban and combined for July 2012 are 9.76 %, 10.10 % and 9.86% respectively.

This very short story was posted on the indiablooms.com Internet site very late on Tuesday night India Standard Time. I thank Mumbai reader Avinash Raheja for sending it along...and the link is here.

The 81st anniversary of Imperial Japan's invasion of China has sparked a fresh wave of anti-Japanese protests. Relations between the Asian nations deteriorated after Japanese activists landed on disputed islands in the midst of a territorial row.

Thousands of angry protesters gathered outside the Japanese embassy in Beijing brandishing banners with patriotic slogans. They threw water bottles and shouted anti-Japanese chants, reminiscent of wartime enmity between the two countries.

"I came here so our islands will not be invaded by Japan," said Wang. "We believe we need to declare war on them because the Japanese devils are too evil. Down with little Japan!" shouted Wang Guoming, a 38-year-old retired soldier

Across China many Japanese businesses have been forced to close their doors in what is feared to be the worst day of anti-Japanese protests.

This story was posted over at the rt.com Internet site in the middle of the afternoon Eastern time yesterday...and I thank Roy Stephens for sending it...and the link is here.

Jin Baisong from the Chinese Academy of International Trade – a branch of the commerce ministry – said China should use its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to “impose sanctions on Japan in the most effective manner” and bring Tokyo’s festering fiscal crisis to a head.

Writing in the Communist Party newspaper China Daily, Mr Jin called on China to invoke the “security exception” rule under the World Trade Organisation to punish Japan, rejecting arguments that a trade war between the two Pacific giants would be mutually destructive.

Separately, the Hong Kong Economic Journal reported that China is drawing up plans to cut off Japan’s supplies of rare earth metals needed for hi-tech industry.

The warnings came as anti-Japanese protests spread to 85 cities across China, forcing Japanese companies to shutter factories and suspend operations.

This must read Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk Internet site at 8:30 p.m. BST last evening...and I thank Ulrike Marx for her second offering in today's column. The link is here.

The first is with Rick Rule...and it's headlined "Look For Sharply Higher Gold & Silver Prices". The next blog is with Richard Russell. It's entitled "Life, the Markets & Gold". Lastly is this blog with Dr. Stephen Leeb. It's headlined "Chaos, Inflation, $10,000 Gold & Silver in Triple Digits". The audio interview is with Bill Fleckenstein.

The Muthoot group, India's 125-year-old non-banking financial major, has launched a 'Muthoot Group Apps' for Apple, iOS and Android smartphones and tablets users across India. The app will provide the prevailing rates for gold and silver and for various currencies. Users can buy gold and silver coins offered by the Muthoot Precious Metals Corporation.

Alexander George Muthoot, managing director at Muthoot Group said, "Our endeavour is to provide everyone with new and innovative ways to manage their financial investments. Being a customer driven segment, we are always looking for new mediums to connect with people."

He added that in the coming years, the sale of gold and silver coins via the Internet is set to become as popular in India as Internet banking and online travel and tour booking.

But will that be physical gold...or paper gold? This story, filed from Mumbai, was posted on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for her third and final offering in today's column. The link is here.

In jewelry stores on 47th Street and Fifth Avenue the important trust between merchants has been violated. A 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit.

Ibrahim Fadl bought the bar from a merchant who has sold him real gold before. But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold.

MTB, the Swiss manufacturer of the gold bar, said customers should buy only from a reputable merchant. The problem, he admits, is Ibrahim Fadl is a very reputable merchant.

This story showed up on the zerohedge.com Internet site yesterday afternoon...and I thank reader 'David in California' for bringing it to our attention. The link is here.

In this interview with Kerry Lutz of the Financial Survival Network. Nick Barisheff discusses the gold price spike in the wake of the US QE3. It's part of an irreversible trend, including the aging and retiring baby boomers, less availability of inexpensive oil and the declining employment trend. Taken together this means that inflation and gold are going way up. Nick believes that the only defense against this massive wealth destruction event is buying gold and silver.

The audio interview is posted over at the bmgbullion.com Internet site...and it's definitely worth listening to. The interview runs about 15 minutes...and the link is here.

Harvard University's graduates are earning less than those from the South Dakota School of Mines & Technology after a decade-long commodity bull market created shortages of workers as well as minerals.

Those leaving the college of 2,300 students this year got paid a median salary of $56,700, according to PayScale Inc., which tracks employee compensation data from surveys. At Harvard, where tuition fees are almost four times higher, they got $54,100. Those scheduled to leave the campus in Rapid City, South Dakota, in May are already getting offers, at a time when about one in 10 recent U.S. college graduates is out of work.

"It doesn't seem to be too hard to get a job in mining," said Jaymie Trask, a 22-year-old chemical-engineering major who was offered a post paying more than $60,000 a year at Freeport- McMoRan Copper & Gold Inc. "If you work hard in school for four or five years, you're pretty much set."

This Bloomberg story was posted on their Internet site sometime yesterday...and I thank Elliot Simon for his second offering in today's column. The link is here.

In one of the most bullish gold calls since the Federal Reserve announced a new round of easing last week, one strategist sees a 36 percent jump in the metal's price, to $2,400 an ounce, by the end of 2014.

“The new target reflects our view that the Fed will maintain mortgage purchases until the end of 2014 and will move to buy Treasuries following the end of Operation Twist this coming December,” wrote Francisco Blanch, a global investment strategist with Bank of America Merrill Lynch, in a note to clients Tuesday.

“Given the new open-ended nature of QE3, the upward pressure on gold prices should continue until employment is strong enough to require a change in policy," Blanch added. "In our view, this is unlikely to happen until the end of 2014.”

Wow...2014...I'm underwhelmed. I'd bet a fair amount of money that we'll be beyond that price long before then. But this is typical of the 'analysis' that comes out the brain-dead 'strategists' at the major Wall Street investment firms. This story showed up on the CNBC website early yesterday afternoon Eastern time...and I thank Elliot Simon for his third and final offering in today's column. The link is here.

This is Pierre's speech that he gave at the Denver Gold Forum on 10 September 2012. The video presentation runs for 21:47...and is worth watching if you have the time...and I thank reader Steve Lilly for finding it for us.

Pierre has a lot of charts that went with this presentation, so it's just like you are there listening and watching for free. Of course any talk of the gold price management scheme is conspicuously absent, as Mr. Lassonde is pure establishment...and would never rock the boat in this regard, even though he knows perfectly well what's happening. It's posted over at the gowebcasting.com website...and the link is here.

Reflecting on the likely claim by the U.S. Internal Revenue Service on the estimated $7 million in gold found in the garage of a Nevada man who died with only $200 in the bank, The New York Sun notes the injustice of mistaking mere inflation for capital gains. Gold and silver, the Sun argues, are money in themselves and should not be taxed just because their measure, some other currency, devalues.

I borrowed the headline, plus the above paragraph of introduction, from a GATA release yesterday. This very short editorial is headlined "The Miser's Tragedy" and it's posted here...and it's worth reading...especially if you are an American citizen.