Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

[metalman]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

from Jesse - looks like someone in the Dept. of Justice thinks there may have been manipuation

http://jessescrossroadscafe.blogspot...and-civil.html
08 May 2010

NY Post: Feds Launch Criminal and Civil Probes Into JP Morgan’s Silver Trades





Fiat justitia ruat caelum.

Let justice be done, though the heaven's fall.

Gray's Economy
Feds Probe JP Morgan’s Silver Trades
By Michael Gray
Deputy Sunday Business Editor, NY Post

Federal regulators have launched both a criminal and civil investigation against JP Morgan Chase for its trading activity in precious metals market.

The Commodities Futures Trade Commission is looking into civil charges and the Department of Justice’s Antitrust Division are handling the criminal probe, according to sources who did not wish to be identified due to the sensitive nature of the information.

See More information in tomorrow's New York Post Sunday Business section

we got a winner! gata got 1 right out of 23,756 conspiracy theories in 11 yrs... goooood job!

[bart]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Behind the scenes manipulation has existed for decades and more. It's fact - end of story.



"Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight."
-- Daniel Drew, 19th century speculator

[metalman]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Behind the scenes manipulation has existed for decades and more. It's fact - end of story.



"Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight."
-- Daniel Drew, 19th century speculator

yep... business as usual.

[Anon21456]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

How does one become an insider ? I'd love to finally make money on the stock market

[jiimbergin]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

yep... business as usual.

I guess this is what happens when your business as usual is huge naked shorts!

http://jessescrossroadscafe.blogspot...ke-to-buy.html

11 May 2010

Silver S Q U _ _ Z _ : Would You Like to Buy a Vowel?




Another vertical move in silver from the New York open, as the bullion bears who are heavily short silver attempt to cover their paper shorts, which is a trick considering how tight the physical market is, and how vulnerable they are to discovery now that their attempt to suppress the price is falling apart. It is like watching the Hunt Brothers silver gambit in reverse.

If you like your markets opaque, imbalanced, and dangerous, the NYMEX is your Bartertown.

If this turns into a serious short panic the price of silver could reach its all time high. Markets that are allowed to become this out of sync with legitimate price discovery are inefficient and disruptive to the real economy.

But now we will see the bullion banks who have sowed the wind, reap the whirlwind.

[Spartacus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

and Gold followed a couple of hours later...
with no concomitant USD index move?

He's too eager to declare victory though ... nose held high is a good time to trip.

I'll wait to assign cause until there's proof that the short's being unwound

[medved]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

He's too eager to declare victory though ... nose held high is a good time to trip.

I'll wait to assign cause until there's proof that the short's being unwound

Agreed. I saw these celebrations too many times over the last 10 years. In my book it is a good reason to do some selling.

[metalman]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Markets that are allowed to become this out of sync with legitimate price discovery are inefficient and disruptive to the real economy.

puleeeease. the silver market is too small to matter to the economy. gold also.

[medved]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

puleeeease. the silver market is too small to matter to the economy. gold also.

This is what I like about them. Gold/silver are not oil, nobody will pay attention to them and speculators/manipulators/naked shorts will be ignored. Volatility will continue.

Honestly, I am so used to it, I just cannot imagine selling my mining shares and SLV calls and not being able to buy them back cheaper. If that happens, I will be stuck with iTulip allocation gold/cash without any extra cash flow. Poor me, little Teddy Bear .

[jiimbergin]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

This is what I like about them. Gold/silver are not oil, nobody will pay attention to them and speculators/manipulators/naked shorts will be ignored. Volatility will continue.

Honestly, I am so used to it, I just cannot imagine selling my mining shares and SLV calls and not being able to buy them back cheaper. If that happens, I will be stuck with iTulip allocation gold/cash without any extra cash flow. Poor me, little Teddy Bear .

I am doing the opposite. I sell covered call options on GLD when GLD seems to be up and buy them back when GLD drops a lot. Otherwise I let them expire. However this is the first time most of them may end up being exercised. But I will buy more GLD and sell more options since I do not have an immediate concern about GLD. I also have done this on SLV and GDX.

[swannmex]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

"As a long time gold and silver investor, not a trader, I’m probably the wrong guy to ask, because I’ve never been a fan of GATA and price manipulation theories. I think it's a lot of nonsense, and this story strikes me as no more credible than any previous one. "

EJ, in light of recent admissions by the CFTC that the silver market has indeed been manipulated by the big banks. Have you seen fit to re-think your stance that "price manipulation theories" are a lot of nonsense ??

“There have been fraudulent efforts to persuade and deviously control that price,” said Commissioner Bart Chilton at a hearing today in Washington, alleging there have been violations of the Commodity Exchange Act. “Any such violation of the law in this regard should be prosecuted,” he said.

http://www.bloomberg.com/news/2010-1...lton-says.html

[xPat]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

"...in light of recent admissions by the CFTC that the silver market has indeed been manipulated by the big banks...

There hasn't been any admission by the CFTC that the silver market is "indeed" manipulated by the big banks. Rather, than has been one statement by one CFTC commissioner, whose views are his own and are in direct conflict with his staff, that he thinks that there may be manipulation of the silver market by the big banks.

xPat

[swannmex]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

OK fair enough. In light of what Bart Chilton has said ( and I assume he has access to the files from the on going investigation ) and the fact that he is saying these things in public,and the 2 recently filed RICO lawsuits, do you think , ""price manipulation theories" are a lot of nonsense ??"

[swannmex]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

Jesse weighs in over at the cafe. http://jessescrossroadscafe.blogspot.com/

27 OCTOBER 2010

Full Text of CFTC Commissioner Bart Chilton's Statement on Market Manipulation

Has the US financial media mentioned or even discussed this? Today the Bloomberg television news people are busy discussing the World Wrestling Federation, a caricature of sport analagous to the Comex and NYSE as financial markets.

Statement of Commissioner Bart Chilton
U.S. Commodity Futures Trading Commission
Public Hearing on Anti-Manipulation and Disruptive Trading Practices
Washington, D.C.
Tuesday, October 26, 2010

I take this opportunity to comment on the precious metals markets and in particular the silver markets.

More than two years ago the agency began an investigation into silver markets. I have been urging the agency to say something on the matter for months. The public deserves some answers to their concerns that silver markets are being, and have been, manipulated.

The legal definition of manipulation under the law is a high bar to prove. It is a much different test than what the average person might consider as manipulation. Under existing law, to prove manipulation, the government is required to demonstrate not only specific intent; we also need to prove that as a result of the intent and market control, that activity caused an artificial price -- a point that can certainly be debated by economists.

Attempted manipulation is less difficult to prove -- requiring an intent to manipulate and some overt act in furtherance of that intent. There are also other violations of law that could contort markets and distort prices.

I believe that there have been repeated attempts to influence prices in the silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told by members of the public and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act have taken place in silver markets and that any such violation of the law in this regard should be prosecuted.

In saying this, I am fully aware of the prohibition from divulging trader names or information about their positions I am extremely careful not to violate the law in this, or any, regard. I also cannot pre-judge anything the agency may do with regard to our silver investigation, or any other matter.

The Wall Street Reform and Consumer Protection Act, which I strongly supported, contains new manipulation provisions as well as anti-disruptive trading rules. These new authorities, along with the implementation of thoughtful position limits in metals, will go a long way toward ensuring more efficient and effective metals markets devoid of fraud, abuse, and manipulation.

Thoughtful investigations take time. The CFTC staff has worked extremely hard on the silver investigation. That said, there is a point at which it is our responsibility to say something. Within the law, I have done so. I am hopeful that the agency will speak publicly about the investigation in the very near future and when they do so that it will be in a more granular fashion than I am permitted from doing at this time.

New COMEX Related Silver Manipulation Lawsuit Includes Charges of 'Racketeering'


Self-regulation and efficient markets hypothesis. Feh!

It will be interesting to see if this makes it into the discovery process and if any government officials will assist in the investigation process. This looks like a job for hairy knuckled prosecutors armed with subpoenas and wiretaps.

The mainstream media will most likely ignore this and the usual suspects from the demimonde of the financial media will dismiss it as nonsense.

One has to wonder if this is what CFTC commissioner Bart Chilton was alluding to in his recent statement.


NEW YORK, Nov. 3, 2010 /PRNewswire/ -- JP Morgan Chase & Co. (NYSE: JPM) and HSBC Securities Inc. (NYSE: HBC) face charges of manipulating the market for silver futures and options in violation of federal commodities and racketeering laws, according to a new lawsuit filed Tuesday in the U.S. District Court for the Southern District of New York


The suit – which alleges violation of the Commmodity Exchange Act and the Racketeering Influenced and Corrupt Organizations (RICO) Act – alleges that the two banks colluded to manipulate thhe market for silver futures starting in the first half of 2008 by amassing huge short positions in silver futures contracts they had no intent to fill, but did so to force silver prices down to their benefit.

The suit was filed on behalf of Carl Loeb, an independent investor in silver futures and options, by Seattle-based Hagens Berman Sobol Shapiro LLP, a class-action and complex litigation firm. "The practice of naked short selling has long been a serious issue on Wall Street," said Steve Berman, co-counsel and managing partner at Hagens Berman. "What we know about the scope and intent of JP Morgan and HSBC's actions in this short-selling scheme dwarfs any other similar attempt to manipulate a commodities market."

According to the complaint, JP Morgan amassed a sizeable short position in silver futures and options in part through its March 2008 acquisition of investment bank Bear Stearns. By August 2008, JP Morgan and London-based HSBC controlled more than 85 percent of the commercial net short position in silver futures contracts.

The suit alleges that, starting in early 2008, the two banks began manipulating the silver futures market by accumulating unusually large "short" positions and then secretly coordinating enormous sales of silver futures contracts on the Commodity Exchange, which is known as "COMEX" and is part of the New York Mercantile Exchange.

According to the lawsuit, JP Morgan and HSBC used a variety of methods to coordinate their manipulation of the market for silver futures contracts, signaling when to flood the COMEX market with short positions, which caused the price of silver futures and options contracts to crash.

The suit describes two "crash" events that were set in motion by JP Morgan and HSBC, one in March 2008, and the other in February 2010, after defendants had amassed large short positions. In the wake of both events, the suit alleges, COMEX silver futures prices collapsed.

"We believe that JP Morgan and HSBC's scheme was carefully conceived and coordinated to maximize their profits at the expense of innocent investors who believed that they were trading in a market free from manipulation," Berman said.

The complaint also contains allegations that in September 2008, the U.S. Commodity Futures Trading Commission launched an investigation that would eventually consider allegations made by a London-based independent metals trader named Andrew Maguire that the silver futures market was being manipulated.

The complaint alleges that Maguire disclosed to the CFTC on Feb. 3, 2010 that he received a signal from the two banks of their intent to drive down the prices of silver futures two days later, on Feb. 5, 2010. Maguire's information was correct and the price of silver dropped dramatically between Feb. 3, 2010 and Feb. 5, 2010.

In addition, the lawsuit states that both JP Morgan and HSBC still maintain highly concentrated holdings in short positions in silver futures and options, giving both banks the ability to continue manipulating the price of silver.

Plaintiffs' attorneys have asked the court to certify the case as a class action and enjoin JP Morgan and HSBC from continuing their alleged conspiracy and manipulation of the silver futures and options contracts market.

Attorneys also ask the court to award damages and attorneys' fees to the class.

Just remember that Blythe said Don't Panic. She's got your backs. Or is busy cutting a deal. You will have to decide which is more likely.

I also hear that high flyer Steve Black, who was promoted up at the beginning of the year, will be leaving JP Morgan.

[Spartacus]

Re: Silver price manipulation? If it looks too bad to be true, it probably is - Eric Janszen

one CFTC commissioner, whose views are his own and are in direct conflict with his staff
xPat

I believe Jeffrey Christian claimed (without proof in the interview I heard) and AFAICT Chilton did not explicate, that the staff disagrees on the existence of manipulation.