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

[Camtender]

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

I have to admit, at this point I am skeptical about some of the criticism(not all) that is being pointed at GATA right now.

If xPat and EJ are correct on the "no such thing as naked shorting in commodities", why didn't someone at the CFTC hearing simply say......... "there is no such thing as naked shorts in the commodities..............", "next person please..................."

After days of reading on commodities, Itulip is the one to break the big story days after the CFTC hearing that "naked short selling" is not in the commodities market?

Can anyone address the two comments I posted above that clearly indicates that the London Metal Exchange has physical delivery requirement on short positions, or is the London Metal Exchange full of crap too?

[gorkypark]

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

First, the 100:1 "revelation" relates to the LBMA, not Comex, according to the King World interview. As Spartacus said earlier, the LBMA is supposed to be unallocated physical, but physical nonetheless. Gata and Maguire clearly understand that Comex is generally paper.

Second, a major argument of Gata (and certainly Butler) is that the two big shorts are not hedging and therefore are in excess of existing position limits, and b) there is no way silver delivery could occur if required since the silver shorts are in excess of existing world inventories and/or (?) annual production.

BRAVO Pascal.....you have it...I'd like to see precisely those points rebutted..rest is just noise.....cheers

[ThePythonicCow]

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

First, the 100:1 "revelation"

Does anyone have the exact wording of this 100:1 revelation (in text, not audio)?

When I heard it, the one time I listened, it sounded like some mealy mouthed, technically correct but of no great substance statement that I'd expect from a well-trained bureaucrat. I dismissed it as not being worth the mental effort to "decode."

[Jesse]

Do the posters here realize that LBMA is NOT a 'futures market.'

I have not taken the time to read all this thread, but it should be noted that the LBMA, the London Bullion Market Association, is most decidedly NOT a 'futures market' like the Comex or the Tocom.

The LBMA is a dealer's association that came to prominence after FDR confiscated the US gold. I went into some detail here in this post about how the 'spot price' that one sees at Kitco is derived, and what it really means.

http://jessescrossroadscafe.blogspot...nd-silver.html

I think xPat has a knowledge of the American futures and the Globex, but gets it a bit wrong when he extrapolates what he knows to the metals industry overall.

The LBMA is the BIG bullion dealer market, with an emphasis on physical, and not futures, or promises to pay at some point in the future. You go to the LBMA to buy bullion in 400 oz bars of 'London ready' gold. I don't know about their silver business anywhere near as well.

Now, there is a certain amount of 'arbitrage' in any market, and it was thought that there was some 'double selling' or more in the unallocated accounts. But Mr. Christian seemed to indicate that it was 100:1. Now that may not be a shocker in the futures (actually it would but I won't quibble that just yet.). At the LBMA it was mindblowing.

Now Jeff Christian made some real faux pas at this meeting including one that even Gary Gensler barfed on, when he intimated that when the guys at LBMA get caught short on delivery, they go to the Comex and SELL the futures. Gensler was pretty amused. What Mr. Christian seemed to be saying was that they were using the US futures market to depress price and clear up their logjam in London.

Now, I think we all know that 'futures' are used for many things including for speculation. But when you are a 'commercial' and a market maker, there are some niceties that one needs to observe, even in the bond markets for example, as Citi found out with their 'DR EVIL' strategy of price manipulation. http://jessescrossroadscafe.blogspot...ms-use-of.html

You can't keep selling futures until the cows come home, and you press the price down to zero. Yes yes someone can stand for delivery IF they have pockets big enough to call you, but long before that even the lacksadaisical regulators at CFTC are doing to stop by and say, Oh by the way, just what do you think you are doing? We're getting complaints about this.

This is when the commercial must 'show their cards.' Oh, don't worry, we just hedging against mining. And we're just selling bullion we have at the LBMA.

this is why HSBC offered to sell a million oz on demand at the CFTC hearing. BTW and I cannot confirm this, someone took them up on it and they could not deliver and got a handslap. A rumour let say for now.

Why is all this important. BEcause the size of the shorts these jokers have are SO big, that as janet tavakoli the derivatives expert noted in her piece I also deal with, http://jessescrossroadscafe.blogspot...rner-gold.html , someone is going to take these jokers down and hurt them badly. They can't deliver. Now she approaches it as though it is the 'evil bulls' who will scheme to do this. I view that like the 'evil bears' called the banks' bluff on their crap CDO's.

so, that's why this is important. My position on this is to keep educating myself, and looking into the facts. And my take is that if jeff Christian is going to make a fool out of anyone, then bring it. But bring some facts, and some transparency, and show us what you've got. and park the smears and ridicule and rhetoric at the curb, I'm not interested.

the whole point of this exercise is to get more transparency in the markets, in this case commodities. If a guy wants to take a position, let them, but it has to be 'legitimate' if it is of a certain category.

I mean come on. even in the futures markets, have we learned nothing from Enron? what they did in the oil markets was criminal, and on the surface it does not look all that different from what is being done in silver. It impacts the real world, and whole industries, and the output of some developing and resource intensive nations.

the merry pranksters seem to like to lever up, take their bonuses, and leave the mess for the public to clean up.

And to me, this looks like the way its coming down again.

[Jesse]

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

On the matter of Rob Kirby, I can't speak to what he is saying. He is not GATA, and not as forthcoming. I have exchanged some info and questions with him. He has some 'connections' but I cannot verify what he says.

the tungsten story is interesting. I cannot tell how much of that is speculation and so forth.

But where I can, I try and learn and then share what I learn. And I know enough now when a guy who is full of it is jiving us, as I did I think my post today responding to the Huffington piece by Warren Mosler.

http://jessescrossroadscafe.blogspot...ifference.html

There is WAY too much secrecy in the markets in the US, and in the financial dealings of the Treasury and the Fed. Again, secrecy has a place, but when it is overused it is generally to hide blatant abuses, like Timmy's taking on crap from Bear onto the Fed, and lying about the quality of it.

I understand the desire for a trader to 'mask' their positions. but the proposals to the CFTC for position limits would respect that. Its just that when you are holding more than 5 percent of the O/I you have to start playing by big boy rules because you start becoming a counterparty risk. And when someone is looking for an industrial metal, or an energy product, settlement in paper dollars for things you sold may not cut it in the real world.

As for gold and silver, there is little doubt in my mind the prices are being manipulated. I mean, come on. the central bankers have pretty much come out and said it, and justify it as a policy thing, like their currency 'actions.' The british press is on Gordon Brown's ass for his gold sale to bail out a couple bullion banks. The US press is owned, somnalescent, and I mean to a shocking degree, more than I even imagined.

As for the car accident of Maguire, I can't speak to it. But these guys are scared. when I talk with them, they are worried. And intimidated in little ways. It is exactly how Markopolos described it when he was trying to out Madoff. I told them be ready for smears and ridicule, don't cut corners and don't reach too far. But they are scared. And I would be too.

It was kind of funny. As I recall, when the Citi trader was caught rigging the Eurobond market, running the stops and disrupting the market, he was indignant that this was how 'they always do it in new york.' LOL

At some point this is going to blow up again, and you are going to be asked to pay for it. Well, actually you won't be asked, you will just be handed the tab.

I mean seriously, what is it going to take to wake people up?

[xPat]

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

After days of reading on commodities, Itulip is the one to break the big story days after the CFTC hearing that "naked short selling" is not in the commodities market?

Let's be careful not to confuse apples with oranges here. What I said is that there is nothing illegal about selling a futures contract without owning the underlying. The phrase "naked short" is slang, so it's hard to definitively say whether it exists or not. If you define "naked short" as meaning selling a contract without owning underlying, then it certainly exists, and is in fact commonplace. The point is that it's neither illegal nor improper. The illegal version of "naked short selling" is a completely unethical, illegal practice in the stock market where shares are sold short without first being borrowed from someone who actually owns them. BTW, that practice is commonplace also, and unfortunately SEC has not done very little to enforce the law, but that's a whole separate matter.

Can anyone address the two comments I posted above that clearly indicates that the London Metal Exchange has physical delivery requirement on short positions, or is the London Metal Exchange full of crap too?

I never said the London exchange was full of crap. I don't trade on that exchange and can't attest to its rules.

This was a CFTC hearing about the U.S. futures market, specifically about position limits on COMEX metals contracts, not about LBMA. I agree that GATA was making allegations about LBMA in the KWN interview, but don't see that as relevant. I watched Jeff Christian's testimony personally, and I interpreted his 100:1 comments as pertaining to the fact that the vast majority of gold contracts traded on the COMEX are never delivered against. How GATA got from that accurate and non-controversial statement to their wild allegations about 100:1 "leverage" and scandals in the London market is a mystery to me.

xPat

[Camtender]

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

Thanks Jesse. Knowing what you know and knowing what you don’t is always a sign of competence.

[Spartacus]

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

Forget GATA for a moment. Here's the argument these guys are trying to make:
Take the case to its simplest form:

The price of Gold rose, YES.
So what were these guys doing:

The guy at the coin shop haggling for a 10 cent bargain

The father in India haggling over the price of bullion to be turned jewelry for a wedding

The guy "A" placing an order with a broker for COMEX gold, who when the price is $810, types in a limit of $800, hoping someone, call him "B" will place a sell order "at market", and "A" will get his Gold cheaper.

They were trying to reduce the price. Did they succeed? No, the price rose.

By your argument "price rose, so no manipulation" means these 3 guys who tired to reduce the price don't exist.

That's obviously wrong - just because the price ROSE, does not mean these 3 guys weren't trying to reduce (manipulate) the price.

how about the fact that gold is up 330% since 1999? where's the evidence of downward price manipulation? gata claims gold 'should' have been higher. why is it up to gata's detractors to prove that claim is baseless?

gravity is produced by giant magnets spinning in the center of the earth. prove me wrong.

If there was attempted manipulation (I don't know if there was), that manipulation failed to reduce the price. It doesn't mean there was no attempted manipulation.

A snail trying to stop a steamroller won't succeed. does that mean the snail never tried?

[xPat]

Re: Do the posters here realize that LBMA is NOT a 'futures market.'

I think xPat has a knowledge of the American futures and the Globex, but gets it a bit wrong when he extrapolates what he knows to the metals industry overall.

Hold on there... Yes, you are absolutely correct that my knowledge is of the American futures market, and I while I know what the LBMA is, I know very little about its rules and have never traded there. I didn't mean to suggest that I was an expert of any kind in the global metals market.

Now, there is a certain amount of 'arbitrage' in any market, and it was thought that there was some 'double selling' or more in the unallocated accounts. But Mr. Christian seemed to indicate that it was 100:1. Now that may not be a shocker in the futures (actually it would but I won't quibble that just yet.). At the LBMA it was mindblowing.

I won't disagree that this would be mind-blowing on the LBMA, but I didn't interpret Christian's comments that way. I interpreted his 100:1 comment to pertain to contracts traded on the COMEX, where I see nothing unusual or extraordinary about it.

Now Jeff Christian made some real faux pas at this meeting including one that even Gary Gensler barfed on, when he intimated that when the guys at LBMA get caught short on delivery, they go to the Comex and SELL the futures. Gensler was pretty amused. What Mr. Christian seemed to be saying was that they were using the US futures market to depress price and clear up their logjam in London.

I certainly agree that Christian put his foot in his mouth with the short hedging a short thing, and I applaud Gensler for calling him out on it. I didn't mean to defend that aspect of what he said.

Why is all this important. BEcause the size of the shorts these jokers have are SO big, that as janet tavakoli the derivatives expert noted in her piece I also deal with, http://jessescrossroadscafe.blogspot...rner-gold.html , someone is going to take these jokers down and hurt them badly. They can't deliver. Now she approaches it as though it is the 'evil bulls' who will scheme to do this. I view that like the 'evil bears' called the banks' bluff on their crap CDO's.

Now that's my whole point! This was a U.S. CFTC hearing about COMEX futures market position limits. GATA is (supposedly) in posession of damning evidence from Andrew Maguire proving that the concentrated short held by JPM that Ted Butler has written so much about is indeed being used in a conscious, pre-meditated agenda of price suppression. That's really big stuff, assuming it's true.

My point is that GATA should be focused on the hard evidence they have that a really BIG concentrated short is in fact being used for market manipulation, in U.S. futures markets. That's what the hearing was about, and that's what CFTC has authority to regulate. Extrapolating testimony from the CFTC hearing into a scandal hypothesis about the LBMA does not seem productive to me, since CFTC has no authority to regulate LBMA in the first place.

Bottom line, I think GATA should be focused on the Maguire evidence and the work Ted Butler has done and demand that CFTC take action to rectify an apparently extreme impropriety in the U.S. COMEX futures market. If they really think Christian's comments somehow reveal a great scandal on the LBMA, I humbly suggest that they would be better advised to pursue that matter separately and later on. Right now CFTC is reviewing COMEX position limits, and the JPM short should be the focus of GATA's efforts, IMHO.

-xPat

[metalman]

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

Forget GATA for a moment. Here's the argument these guys are trying to make:
Take the case to its simplest form:

The price of Gold rose, YES.
So what were these guys doing:

The guy at the coin shop haggling for a 10 cent bargain

The father in India haggling over the price of bullion to be turned jewelry for a wedding

The guy "A" placing an order with a broker for COMEX gold, who when the price is $810, types in a limit of $800, hoping someone, call him "B" will place a sell order "at market", and "A" will get his Gold cheaper.

They were trying to reduce the price. Did they succeed? No, the price rose.

By your argument "price rose, so no manipulation" means these 3 guys who tired to reduce the price don't exist.

That's obviously wrong - just because the price ROSE, does not mean these 3 guys weren't trying to reduce (manipulate) the price.




If there was attempted manipulation (I don't know if there was), that manipulation failed to reduce the price. It doesn't mean there was no attempted manipulation.

A snail trying to stop a steamroller won't succeed. does that mean the snail never tried?

ok, let's accept that... they tried & failed... then f&ck 'em. they're useless. move on.

[Spartacus]

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

I would if I could.

I've never been really interested in Gold so have not examined the Gold market or GATA's claims in detail.

All I have is the standard, generic "James Randi, John T Reed, Henry Blodgett[0] type skeptical-consumer" stance, which I apply to all hot tips & analyses - my own and Butler's and Eric's.

C'mon guys. It's not cool to set up straw men. Too easy to beat and nobody improves their knowledge base.

Does anyone have any facts to counter Gata's arguments?

I presume they're there but I do not know what they are.

[0] Henry Blodgett !!!!!!! skeptical !!!!!!!!!!! It is to laugh. Now, if Kramer(R)(TM) stops spewing KramerKrap(R)(TM) I'll be in heaven

[Camtender]

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

bravo! another case of gold bugger scare mongering cracked by the itulip analysis posse...

Will you ever learn....................:p

Read, brother, read. I suggest a site called zerohedge.

Independent thinking can go a long ways........................

[Spartacus]

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

ok, let's accept that... they tried & failed... then f&ck 'em. they're useless. move on.

That's good enough for you Eric & me.

But the person who can conclude with 100% certainty that some parties have expended billions of dollars trying to reduce the price, that person has good reason to load up on Gold investments - he's been handed a big buy signal[0]

It won't be me, though ... it will have to be someone who's heavily invested either in Gold already and would profit, or someone heavily invested in those ideas and needs to find the proof for personal reasons. Or a whistleblower with a conscience.


[0] And he could still lose, if the fundamentals turn against him at just the wrong time, it won't matter that billions have been spent to suppress the price

[Ann]

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

Will you ever learn....................:p

Read, brother, read. I suggest a site called zerohedge.

Independent thinking can go a long ways........................

Zerohedge? Independent? Quite amusing.

[ThePythonicCow]

Re: Do the posters here realize that LBMA is NOT a 'futures market.'

I certainly agree that Christian put his foot in his mouth with the short hedging a short thing, and I applaud Gensler for calling him out on it. I didn't mean to defend that aspect of what he said.

My take on what Christian meant was that when a client of the bank goes short gold, the bank (this part elided) goes long on the other side of that trade, so then (back to what was explicit) hedges their long to that customer with a short of their own.