CFTC Probe: No Silver Lining

[don]

05 August 2012

Credibility Trap: CFTC Said to "Drop" Four Year Investigation Into Silver Just Before Promised Release

CFTC To Investing Public: 'Drop Dead.'


This leak to the FT *could* just be a 'trial balloon' by Mr. Gensler and his crew to see if they can get away with it. But that seems unlikely.

This could be one of the best examples of the credibility trap in action. The government regulators can say nothing because of their government's long complicity.

If the CFTC in fact does 'drop' the investigation without presenting findings, one could consider that a slap in the face of the American public which on the whole asked for the investigation to be done in the first place, by the regulators who purportedly are hired and paid to serve their interests.

Given the recent admissions about widespread manipulation in LIBOR, the timing of this outcome to the CFTC invesigation could hardly be more arrogant and high-handed, and designed to put the investing public in their places. It will certainly not inspire any confidence in the integrity of the markets and their regulation.

It would probably be unwise for the investing public to accept this outcome without presenting some consequences.

I suggest that a mass cancelling of futures trading accounts and the withdrawal of all funds deposited there might be a step in the right direction.

Given the serial criminality that has been exhibited in the US futures markets, that action might be long overdue on the basis of common sense.

Financial Times
Four-year silver probe set to be dropped
By Jack Farchy in London and Gregory Meyer in New York
August 5, 2012 10:00 pm

A four-year investigation into the possible manipulation of the the silver market looks increasingly likely to be dropped after US regulators failed to find enough evidence to support a legal case, according to three people familiar with the situation.

The Commodity Futures Trading Commission first announced that it was investigating “complaints of misconduct in the silver market” in September 2008, following a barrage of allegations of manipulation from a group of precious metals investors.

In 2010, Bart Chilton, a CFTC commissioner, said that he believed there had been “fraudulent efforts” to “deviously control” the silver price.

But after taking advice from two external consultancies, the first of which found irregularities on certain trading dates that it believed deserved more analysis, CFTC staff do not have sufficient evidence to bring a case, according to the people familiar with the situation...

http://jessescrossroadscafe.blogspot...four-year.html

[don]

Re: CFTC Probe: No Silver Lining

update from Jesse's . . . note on George: it's been bandied about here on the 'tulip that representatives of the elite can either promise things will be better or use fear- mongering to stay in office. Orwell adds his won 2 cents to that theory . . .

06 August 2012

Curiouser and Curiouser: Bart Chilton Informs the Press About the 'Erroneous Report' on Silver

"A society becomes totalitarian when its structure becomes flagrantly artificial: that is, when its ruling class has lost its function but succeeds in clinging to power by force or fraud."

George Orwell

I am hearing from people who say they have received brief email replies from CFTC Commissioner Bart Chilton.

Apparently if there is a move afoot to can the silver investigation without presenting any findings after four years, he has not gotten the memo.

He has informed the press about 'the erroneous story' according to emails I have seen from people who have heard from him on the matter.

If this was a front page article on the Financial Times one would hope they double confirmed it, and the sources were good. That makes this even more puzzling.

So let's see what happens. As I said in my lead sentence from last night, this could have been a 'trial balloon' to gauge the reaction and blowback if they did ditch the investigation, not wanting to expose the findings, or expose a coverup to later instances of perjury.

This leak to the FT *could* just be a 'trial balloon' by Mr. Gensler and his crew to see if they can get away with it. But that seems more like the plot of a novel.

This could be one of the best examples of the credibility trap in action. The government regulators can say nothing because of the shadow government's long term complicity.

Mr. Gensler was the assistant to Robert Rubin and Larry Summers in the 1990's and is a Goldman alumnus, where he was the right hand to Jon Corzine. It could be that Bart as a dedicated civil servant is not on the A-team.

Or this could just be the usual shenanigans that the Street likes to play with the press.

All of this highlights the problems of the credibility trap and the lack of transparency in the US markets, made especially sensitive by a shocking series of financial scandals that are repeatedly distorted and often covered up.

Addendum:

Mr. Chilton apparently made this statement to the editor of the SilverDoctors site.

"The Financial Times report related to silver is not only premature, but inaccurate in several respects.

Whenever the CFTC does take an action or actions related to our silver investigation, I am hopeful that we will do so in a fulsome and transparent manner. That will certainly be my desire in anything we do.

I continue to believe, consistent with my previous statements to which you referred, and based upon information from the public, that there have been devious efforts related to moving the price of silver. Incidentally, I also believe there have been silver and gold market anomalies outside of the silver investigate window that have raised, and continue to raise, market concerns.

Perhaps there will be more coverage on this matter soon."

Now I am beginning to wonder if during this 'four year investigation' that the actual window of investigation into the market was relatively short, and that there was some effort made for the market participants to behave themselves during that window.

I have seen that sort of thing happen before. The investigators, who were industry consultants, exposed the pararmeters of the study window to their market cronies. The CFTC can then say that the formal investigation was 'inconclusive' and kick the can down the road.

One hears different and sometimes disturbing things about the US regulators. I even heard that the US Treasury is discouraging a UK initiative to beef up their Serious Fraud Office, and turn it into an Economic Crimes Agency with a more effective focus and resources.

Apparently the key metric in determing investigations into economic fraud these days is political. And this is the essence of the Glenn Greenwald piece I ran last night, which is that the rule of law has been replaced by the rule of expediency, where might makes right, or at least grants special exemptions from the law.

[doom&gloom]

Re: CFTC Probe: No Silver Lining

we need an empowered citizens panel to overlook the regulators who are supposed to overlook the crooks.

[don]

Re: CFTC Probe: No Silver Lining

we need an empowered citizens panel to overlook the regulators who are supposed to overlook the crooks.

Madame DeFarge?

[don]

Re: CFTC Probe: No Silver Lining

Jesse's comments go north:

I have to say that I was disappointed to hear that the Business News Network (BNN) network in Canada has decided to not only exclude anyone discussing the GATA findings on the metals markets, but has also reportedly banned the mere mention of their existence.

What makes the Western financial establishment so fearful of this topic? This is probably more fallout from the ongoing currency war that so many are not even seeing unfold yet.

Curiouser and curiouser.

[doom&gloom]

Re: CFTC Probe: No Silver Lining

Not surpising at all. The big banksters in CAN are well known for naked shorting and cratering their own metals securities firms both as they take them public and afterwards.