The CFTC Commitment Of Trader Data Is Rigged After All

Myself and a few others – primarily GATA – have been suggesting for quite some time that contract open interest data the CME reports for the Comex is rigged.  While certain newsletter peddlers adamantly maintain the reports are accurate and honest in order to preserve their franchise, there’s nothing like a the CFTC imposing a fine on JP Morgan for fraudulently reporting “large trader” data:   CFTC Charges JP Morgan With Reporting Fraud.

JP Morgan has finally been caught and sanctioned for playing games with its position reporting in gold and silver in order to hide the true magnitude of its unhedged short positions on the Comex.    That JP Morgan does this is obvious to anyone who has spent several years studying and trading the Comex.

After all, how are the CFTC’s COT reports compiled?  They come from big banks who are the primary Comex market-makers, of course.  There’s no independent audit of the numbers.  The reports  are sourced from the banks then submitted to the CME and the CFTC.   It’s a “trust us” job – wink wink.

IF JP Morgan et al were to be honestly and accurately reporting the data published by the CME and CFTC, it would be the ONLY area of their financial reporting that is not completely engulfed with fraud.

Anyone who chooses to believe otherwise either has ulterior motives – like making a lot of money selling newsletters – or still believes in Santa Claus.

In fact, while the COT report still holds some small degree of validity in terms of showing us what was happening a week ago on the Comex, I believe that the COT is now largely useless for the purposes of making money on the information.

First and foremost, the numbers are to some degree fraudulent.   The second reason is that the  informational content for trading purposes has lost value.

Ten years only a few crazy gold and silver bugs looked at the COT reports and used them to trade.  Back then the informational content had market value as a source of informational “inefficiency” derived from the fact that so few “brains” and so little money on a relative basis was using the information to trade.

Now, everyone under the sun who follows the precious metals market looks at the COT reports and incorporates the information conveyed into their trading strategies and investment outlook.   Because so many “eyeballs” and a lot more money is involved, it can be said that the market has become more “efficient” with respect to this information – any informational “edge” that used to be offered from analyzing the COT is no longer available.

 

10 thoughts on “The CFTC Commitment Of Trader Data Is Rigged After All

  1. First they ignore you, then they laugh at you, then they fight you, then you win.
    Mahatma Gandhi

    Pretty soon all the condescending disbelievers (he is a little crazy, you know, all that conspiracy theory stuff is getting to his head. He buys gold and silver!!!) will not have the option of ignoring, nor laughing.

    Halfway!

    beep beep

  2. In addition, I believe that for many years now, the big banks are self-dealing on the Comex, a la Enron (wash trading).

  3. Everything is bullshit these days. The worst is having to watch the metals get pounded every month , week in and week out with the BLS -Bs , the Crimex options and the Fed meetings and minutes. It is relentless bullshit. I fucking hope the whole thing blows up, free markets my ass.

  4. No fan of JPM, but you need to read the CFTC release. The fine was for failing to accurately report the positions of large traders “carried on the books” of JPMS. These are likely Section 102 reports used by the CFTC to track trading and seek Form 40/40S related to those traders’ futures and swap positions. Thus, the reporting violation had to do with failing to report others’ positions properly and not J.P. Morgan or J.P.Morgan Chase Bank’s positions.

    1. It’s all one and the same. Really what is going on is JP Morgan is lumping some of its positions into the large trader category – something which myself and GATA have been postulating for a couple years now.

      The truth is, EVERY SINGLE REPORT which shows Comex/CFTC-generated trading data is COMPLETELY DEPENDENT on the reliability of JPM’s reporting.
      How much do you trust that? I don’t at all.

      And of course the CFTC is going to put liptick on a pig and feed the pig to the public.

      1. but but….

        Rickypoo just gave us plebes his best Officer Barbrady cartoon impression, saying a few days ago that this latest “correction” was absolutely 100% normal!
        i’m surprized he found the time in his busy schedule to issue that, what with running the carnival all last week in vancouver.
        maybe we need a second lerned opinion from another ….how about casey? LOL.

    2. Hey “Jimmy Lovely”,
      Wake up. A lie is a lie, is a lie, is a lie……………and on and on.
      I appreciate your due diligence in your argument with ALL those statutes you posted.
      But then again, what are they worth, when they are born from a lie, and meant to cover said lie?
      I can’t wait to see the “next statute”, to cover the statutes you mentioned.

  5. Why do I keep having dreams of pitchforks and tar and feathering?
    Anyone have any ideas? Ha!
    When this whole system falls apart and the people really find out what they have done
    all these years to steal from the public through manipulation it ay not be pretty
    Down on wall st, and other financial locations. Just saying.

  6. You can’t trust anyone anymore. There’s no integrity, no honor, the new motto is ” F thee and hooray for me ” What, someone tell me What and to whom do our youth have to live up to. To aspire to ? Like the man said ” It’s All about the Money, All the Time.

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