Tag Archives: JP Morgan

Silver Inventories In China Are Disappearing

This is a stunning article posted a few days ago by Steve of SRSrocco Report:

Chinese Silver Inventories Nearly 90% Depleted At Shanghai Futures Exchange

Myself and few colleagues have been of the view that the big banks are having an even bigger problem sourcing silver to deliver into India and China and that’s why they are so aggressively trying to pound silver using fraudulent paper on the Comex…You’re kidding yourself if you don’t think SLV silver has been massively rehypothecated for this purpose.

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.


Derivatives Meltdown Part 2 + Let’s See How Obama/Kerry Respond To This…

[Update on MH17]:  It’s starting to not look so good for the Ladies who doth protest too much (Obama/Kerry/Biden/Feinstein/McCain/etc).  Russia has satellite images showing Ukrainian troops deploying the type of missile involved and wonders why the U.S. won’t release satellite photos from a U.S. satellite that was directly overhead at the time, among other questions raised by Russia:   10 Questions From Russia For Obama

Oops – Obama pisses off China on MH17 now: China Condems Obama’s Response to MH17. That’s not good, given that China is America’s largest lender and enables the hoi polloi here to borrow and spend…

If you’re bored by the that topic already, then maybe Part 2 of our derivatives Armageddon series will interest you.  In this video we discuss some of the insanity that lies behind U.S. derivatives accounting rules and how they favor the banks at our expense:

The coming derivatives collapse is one of the primary reasons the price of gold (and silver) is going to the moon. Gold will start moving well in advance of this event but it will go parabolic once it becomes obvious to everyone.

Assuming the markets remain functional in the aftermath, the junior mining stocks will move even more than gold/silver.

The Action In The Metals Is Getting Interesting

That big spike up today that Zerohedge is saying is $450mm worth of paper gold occurred exactly at 8:15 a.m. EST, 5 mins before the Comex gold floor opens.  Someone either wanted to cover a big short or, less likely, a big fund decided to get very long.  I couldn’t see any news or event-related triggers. But the tape-action reflects a fear-driven trade if it was short-covering OR probably some sort of inside view of information not yet public if it was a trade to establish a long.


TF Metals report  (link) that GATA published yesterday contained excellent sleuthing by Mr. Ferguson.  When I saw that JPM had become quite net long gold futures several months ago, my first impulsive thought was that they were getting long in order to be able to turnaround and dump big quantities of contracts to control the Comex price at some point.  TF Metals illustrates this is likely what occurred with the published data as evidence. (CFTC Bank Participation Report).

HOWEVER, it occurred to me that – perhaps – IF JPM has to resort to building up long positions in paper gold to enable the banks to turn around and dump the contracts in order to execute effectively its Fed-mandated policy goal of capping the price of gold, is this yet another indication that the bullion banks are running out of physical supply to throw at the market?

In my opinion, it is.

The Natural Life-Cycle Of A Collapsing System

Retired SEC lawyer James Kidney:  “Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.”  Bloomberg link

This retired lawyer from the SEC came out and essentially admitted that the SEC does nothing except apply window dressing with respect to enforcement of securities laws.  Of course, it’s not like this guy split the atom for the first time with this revelation.

The SEC has been nothing but a lap-dog for Wall Street for years.  Everybody who gives a rat’s ass about this issue already knows that.  The current head of the SEC, Mary Jo White, was the chief legal defense bull-dog for Jamie Dimon and JP Morgan at Debevoise &  Plimpton.   Putting her in charge of the SEC is the equivalent of putting a serially convicted pedophile in charge of Kindercare.

Does anyone remember when Obama put that 29 yr. old kid from Goldman Sachs  in charge of the enforcement division of the SEC?   Good job Barack.   And then it was revealed that many SEC rank and file spent more time surfing porn than doing their job.  Again, Mr. Kidney there didn’t exactly invent plutonium with his newest revelations.

I was discussing today’s press release with a colleague, who was happy that the issue was getting media attention.  But I had to point out that a Bloomberg news report is only seen by an audience that already knows that the SEC is useless in its enforcement duties.  In fact, the SEC enables Wall Street’s fraud and corruption.

Most of the country probably is aware that our entire system is deeply corrupt.  But the interest in news and truth for the majority does not go beyond missing planes or the marital status of Hollywood starlets.

The truth is our system is rotten to the core and the marriage between Wall Street, corporate America and the Government is nothing more than the natural life-cycle of a collapsing system.

The only lesson we’ve learned from history is that we don’t learn the lessons of history.