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CME Margin Hike Is 4th AND 5th - Charting The Parabolic Rise In CME Silver Margin Hikes

Tyler Durden's picture




 

Remember when earlier we said the CME had hiked silver margins for the 4th time in 8 days? We lied. In fact, what the CME did was to hike margins for the 4th (effective May 5) AND 5th times (effective May 9). That's right, dear reader, in one release, the CME has performed two concurrent margin hikes, which means today's action is the 5th margin hike in 8 days, a previously unheard of event! As of May 9th, the initial margin is $21,600, or 11% of the contract value, while the maintenance is $16,000. This is nothing short of sheer panic at the CME. At this point we can only wonder if the FDR-style precious metals confiscation executive order will come by way of the CME or the FBI. And for everyone asking, below is the chart of recent CME margin hikes in silver.

Spot the parabola:

Oh, and another thing: today (or technically yesterday) there was another drop in COMEX registered silver, with 4,758 ounces of silver withdrawn from Brinks.

 

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Wed, 05/04/2011 - 18:52 | 1240896 Turd Ferguson
Turd Ferguson's picture

WOW!

Frankly its amazing that silver is only down 20%.

Wed, 05/04/2011 - 18:54 | 1240911 McPoopypants
McPoopypants's picture

Funny how spot stayed stable today. Bottom?

Wed, 05/04/2011 - 19:14 | 1241015 Thomas
Thomas's picture

Didn't respond cause the big guys got a tip before it happened.

Wed, 05/04/2011 - 20:19 | 1241297 Stormdancer
Stormdancer's picture

Aaaand, it's gone.....

For posterity :):

by FunkyMonkeyBoy
on Wed, 05/04/2011 - 19:00
#1240931

 

Your followers will be glad to hear those words i'm sure.

Sorry turd, i read all the self-gloating on the way up... but any credibility is shot to pieces in a few days as call after call goes amiss now. Anyone following you now is following a headless chicken. Anyone would have to be mad to press that 'feed the turd' donation button now.

BTW, i buy precious metals, but i don't get caught up in all this precious metals blog hype, sheep to the slaughter those things, seen it time and time again.

  • **JUNK** (52)
  • Wed, 05/04/2011 - 20:32 | 1241343 Stormdancer
    Stormdancer's picture

    LOL...riiiiiight :)

    You demand 100% accuracy from everyone but yourself.  Real honest.  When you put yourself out there and have the guts to take a stand as opposed to railing against those that have the courage and knowledge to do so...I'll consider "honest" in a different light with reference to you :)

    And now I go to work seeing if we can junk this post into oblivion as well :)....just for giggles.

    Wed, 05/04/2011 - 21:27 | 1241559 Ura Bonehead
    Ura Bonehead's picture

    Come on, Storm.  Don't you see the sign?  "Don't feed the Monkey!"

    Wed, 05/04/2011 - 22:24 | 1241741 Stormdancer
    Stormdancer's picture

    Of course you're right.  Sometimes boredom gets the best of me :)

    Thu, 05/05/2011 - 04:34 | 1242222 Michael
    Michael's picture

    This is great. Silver will be the first commodity item in history not to have a gambling component factor influencing the price.

    We should do this with every commodity.

    Wed, 05/04/2011 - 20:43 | 1241387 Teamtc321
    Teamtc321's picture

    I don't recall you monkeyboy posting prior to margin hikes hitting, did you? If so I must have missed it, if you did, your a fucking prince.

    Goldman leaking it is hard to borrow silver and last thursday London floor close leak with CNBC on site saying silver was selling off was my clue.

    I sold my calls and bought more physical. Man monkey boy, wish we could have all seen it coming like you did.

    Wed, 05/04/2011 - 21:19 | 1241522 Pegasus Muse
    Pegasus Muse's picture

    I took advantage of JPM's Silver Sale today.  Bought more physical at 22% off. 

    Bet the Asians did too.  Did you?

    Wed, 05/04/2011 - 21:56 | 1241656 Ahmeexnal
    Ahmeexnal's picture

    Guess who's buying PMs with both hands while dumping greenbacks in the process?

    http://www.marketwatch.com/story/bank-of-mexico-buys-100-tons-of-gold-in...

    That might be the REAL reason the US has no currently defined ambassador in Mexico, and not the Wikileaks falseflag:

    http://www.foxnews.com/politics/2011/03/19/ambassador-mexico-resigns-fol...

    Wed, 05/04/2011 - 22:53 | 1241830 savara
    savara's picture

    Pegasus,

    I went to one of the India's biggest bullion market and people buying physical silver like crazy. FYI Indian's don't buy Silver in ounces, they prefer in KG's    

    Thu, 05/05/2011 - 06:21 | 1242265 goldenbuddha454
    goldenbuddha454's picture

    As the article states, there's probably an executive order somewhere down the road to confiscate all gold and silver should our debt obligations become unmanageable.  Its been done before by FDR in 1933, google it.  I believe strongly in gold and silver in the physical form, but with this administration do you think they would hesitate to take what you have by executive order?  I don't.

    Wed, 05/04/2011 - 21:29 | 1241555 TwoShortPlanks
    TwoShortPlanks's picture

    Hey, when you Homos have finished man-raping each other, I'd just like to point out that as of yesterday morning, the Perth Mint has only three 10oz Bars of Silver left.

    Hello, lot's happening people!

    Wed, 05/04/2011 - 22:28 | 1241761 donpaulo
    donpaulo's picture

    homos and manraping aside

    I bought at spotmex today

     

    Thu, 05/05/2011 - 03:29 | 1242196 Kopfjager
    Kopfjager's picture

    Spotmex aside, there's a lot of homos and manraping here.  

    Thu, 05/05/2011 - 05:40 | 1242252 TwoShortPlanks
    TwoShortPlanks's picture

    Spotmex, homos and manraping aside, can anyone remember what the hell are we discussing? Oh-yes, Silver...there's bugger all left dudes!

    Thu, 05/05/2011 - 00:05 | 1241960 angrybill
    angrybill's picture

    ....and as of today...

     

    No Oz coins...(well a few 2008 lunars but I can't be fcuked wasting the phone call))

    Wed, 05/04/2011 - 21:49 | 1241639 lawrence1
    lawrence1's picture

    What a piece of shit you must be.

    Thu, 05/05/2011 - 01:38 | 1242106 JW n FL
    JW n FL's picture

    Only $7.99 per coin over spot!
    Unopened "Mint Sealed" green monster box! No MS-70s have been graded at PCGS!! These Millenium boxes are tougher to locate.
    APMEX stands behind every product it sells with a satisfaction guarantee.

    http://www.apmex.com/Product/59386/2000_Silver_American_Eagle_500_Coin_Monster_Box_Sealed.aspx

     

    $39 looks a lot like $47 for bulk pricing! and this is the low side the others are $30k(ish) a box.. which is $60 per oz / coin!

     

    Backwardation? FUCKING DISONNECT BITCHEZ!!!

    Thu, 05/05/2011 - 08:21 | 1242461 tmosley
    tmosley's picture

    Hell, look at the 1oz bars.  $4 over spot.  Absolutely nuts.

    Wed, 05/04/2011 - 21:23 | 1241509 Hearst
    Hearst's picture

    On June 1, 1955 The Wall Street Journal reported that the US government had a “useless” stockpile of about 3 billion ounces of silver, and blasted the Treasury for paying the outrageous price of 90.41 cents for an ounce of silver.

    http://investmentwatchblog.com/why-silver-is-still-the-best-revenge/

     

    Great article if you haven't read it yet.  But doesn't that quote just pretty much sum up where we are at today?  Even back in the 50's when Silver was still legal tender and the US had 3 Billion ounces the propagandist MSM was badmouthing Silver.  Why?   Well one reason has to be because Silver is honest money and those greedy evil selfish cocksuckers at the top don't want that.  Why?  Because they want it all for themselves.  They have the sickness of utter greed and it is fatal.

    So there, 56 years later & 3 Billion ounces, gone!  I'm not old enough to have been around for the 80's turmoil so I can't speak with as much knowledge as some here.  But how can anyone view these actions as anything but unprecented and desperate on the part of the CME & bullion banks?

    Wed, 05/04/2011 - 22:31 | 1241764 piceridu
    piceridu's picture

    + 5 margin hikes!

    Thu, 05/05/2011 - 00:41 | 1242029 Goldenhands57
    Goldenhands57's picture

     Well.. not saying I know shit, cause I don't, and God knows I've had the crap stomped out of me in the Markets before like everyone who's been there any time at all..BUT.. the fact is I was there in the 80's and in physical metal (to the tune of about 40 pounds in 90% AG and around 5 lbs Gold..mostly in 18kt class rings I'd been buying since my late teens and early twenties..since 1975 when I graduated). The Hunt Brothers MAY have been immoral in what was SAID to be an act of trying to corner the Silver Market, but the Goovernment did a very illegal thing and pretty much destroyed the confidence in Free Market trading by barring them forever. BUSTED! They were pretty much fried at the stake. When Citi was on the ropes..and I mean..on the Friday they were down to LESS than $10 a share and looked to be definitly crashing in flames like Lehman and Bear Sterns had done, I entered in front month Put Options at a .60 Delta Strike to the tune of over $69K worth. Guess what? That bugprick Hank stepped in on Sunday and opened up the US Treasury (OUR Treasury...NOT his!) to all of the Mega Crooks including Citi (the Anti-Christ along with GS if there ever was one)..saying "too big to fail"..so in a flash on Monday that 69K Trade pretty much was zip.  Ok..yes,it sux bad..but that is part of the risk we deal with (no..it's not fair). My point is this younger guys. These bastards will do ANYTHING to keep this cluster THEY created and allowed to happen pushed down; and also want to make it look like YOUR the bad guys for "speculating". Don't be surprised to see when this latest attempt at crashing the AG Market fails they step in just like 1933 and pretty much put us all out on the street. They CAN do it..and all it takes is a signature from Bambi saying they can. What is going down now in Margins is like NOTHING I've ever seen, there is real fear out there by those that have the power to change the game in a flash. Be careful and a very watchful eye on what Congress did (and does) from here on...there is only ONE form of Physical Silver exempt from reporting (unlimited exemption too) beyond a sale ceiling. Why that one coin? You guys check it out and you'll see why the premium for those green Monsterboxes is worth the privacy.    

    Thu, 05/05/2011 - 01:47 | 1242110 Hearst
    Hearst's picture

    Thanks for your insight.  I have always felt that Silver Eagles (in America) cary a gravity of authentication that other buillion products lack.  Will the 1 oz SAE be destined to arise as the new Spanish Dollar of old? = http://en.wikipedia.org/wiki/Spanish_dollar  Time to start converting prices of goods into bits & ounces?

     

     

     

    Thu, 05/05/2011 - 03:22 | 1242190 swissbene
    swissbene's picture

    also burned heavily & repeatedly on short bank positions in the first crisis. usually sound bets -- just obvious & everyone else knew score.  too much bs to recount.  expensive/eventual lesson: do not trade in equities.  [although made exception for some sep 2011 spy puts]

    naive observation of pm markets from outside -- looks more crooked than stocks!  ie a handful know whats up, a handful can change the answer.  everyone else pays the machine and sometimes get lucky.  the info warfare/propaganda around silver in particular is remarkable.

    great to watch/learn.

    personally working on the lifestyle hedge: lower expectations now and discount future heavily.  ie no attachments b/c there are no rules.  i did buy some eagles just to see what all the excitement is about: admit they are therapeutic somehow.

     

    Thu, 05/05/2011 - 05:21 | 1242245 Snidley Whipsnae
    Snidley Whipsnae's picture

    GoldenHands... I appreciate your comments.

    Anyone that plays the bankers game will lose. A short read of the extreme measures that were taken by the then 'powers that be' is more than enough information to convince any logical person that the bankers have no intention of letting PMs become money in circulation again. Bankers will go to any lengths to prevent PMs from becoming money in circulation. 

    Buy physical PMs and place them in a location outside the jurisdiction of the bankers... and hope that the azzhat bankers crash and burn.

    Buying paper PMs is part of the bankers game and, in the long run, will be a loser for anyone that is not an insider. If you are holding a paper PM position that is subject to manipulation then you are playing in a crooked casino.

    A fair casino does not change the rules while the dice are in the air...  

    Wed, 05/04/2011 - 22:04 | 1241675 SRSrocco
    SRSrocco's picture

    SILVER OPEN INTEREST INCREASES as well as the BACKWARDATION

    If Tyler is correct in his assumption that the CME is in panic mode it must be due to the fact that Open Interest is not declining, but rather increasing:

    MAY 3 = 130,567

    MAY 4 = 131,907

    Looks like someone is coming in and buying more than overleveraged speculators are liquidating.

    Furthermore, the backwardation in silver has increased

     

    MAY 2011 = $39.383

    JUN 2011 = $39.387

    JUL 2011 = $39.388

    DEC 2011 = $39.396

    DEC 2012 = $39.040

    DEC 2013 = $38.651

    DEC 2014 = $38.331

    DEC 2015 = $38.071

     

    That's about $1.30 Backwardation going to the Dec 2015 contract.  Things are going to get a great deal more interesting if the open interest keeps rising as well as the backwardation.

     

     

    Wed, 05/04/2011 - 23:00 | 1241837 JW n FL
    JW n FL's picture

    U.S. Silver Coins 1 oz. spot was $39.32 (same a closing, jinx) and I paid $45.82 an oz.! 16% disconnect or backwardation from paper to physical. find my post from earlier for the exacts.

     

    $5.50 for Certified Bank Check $6.50 for Cash per oz. for U.S. Silver from a Mint Authorized Dealer.

    Thu, 05/05/2011 - 04:35 | 1242221 Michael
    Michael's picture

    This is great. Silver will be the first commodity item in history not to have a gambling component factor influencing the price.

    We should do this with every commodity.

    Wed, 05/04/2011 - 19:08 | 1240975 firefighter302
    firefighter302's picture

    We've been here from $12 to $40.

    Where you been, you missed the triple-up?

    Wed, 05/04/2011 - 22:42 | 1241797 donpaulo
    donpaulo's picture

    agreed

    its a wonderful feeling to see a 20% drop and still be in black by a factor of 2 or 3

    Wed, 05/04/2011 - 19:08 | 1240978 Transformer
    Transformer's picture

    Soo, 100% accuracy is it.  That's the only thing that blows your dress up?

    Wed, 05/04/2011 - 19:08 | 1240980 Burnbright
    Burnbright's picture

    What an ass, you can't predict 5 margin hikes. 

    Wed, 05/04/2011 - 19:52 | 1241208 Gold 36000
    Gold 36000's picture

    No but you could have predicted that everything possible would be done to prevent silver from breaking 50.  Now you know what will happen next time.  Be prepared.  I thought you already were prepared because I kept hearing this brave talk about how you expected the comex to raise margins.  Did they really catch you by surprise?  Was all that brave talk just a bunch of boys in their basements looking at their coin collections and dreaming of being the neauveau rich in a new world full of skittles and lollipops and free from the curses of fiat?  Dream on wankers.

    Wed, 05/04/2011 - 19:53 | 1241218 Gold 36000
    Gold 36000's picture

    Gold for President.  Burn everything down.

    Thu, 05/05/2011 - 00:56 | 1242040 Burnbright
    Burnbright's picture

    Yeah only I knew we were getting a correction, it was being telegraphed from a mile away. 

     

     

    by Burnbright 
    on Fri, 04/15/2011 - 19:20
    #1174666

     

    Well most of the people on here are not traders Danger so to them the dips do not mean anything only the long term trend. Certianly people do not like to hear someone rain on their parade but as far as I am concerned you are correct, we should see a pull back before the all time High of the hunt brothers and silver will more than likely get smacked down to $40 but their is strong resistance in the $38-$42 range at that point, i would actually be surprised if it droped below $45 once it gets near $50. I think it is possible that it breaks $50 by June and trades in the high 40s to low 50s untill fall when it explodes again like it did last season.

    As far as a comex default is concerned I think that is what all the margin hikes are for, eventually however if they continue to margin hike they will drive speculators out of paper and into physical so they are really screwing themselves in that regard. 

     

    by Burnbright 
    on Wed, 05/04/2011 - 16:00
    #1239875

     

    I never gave you shit cause I thought shorting at around the Hunt brothers high was a good move. I expected resistance and reversal around 48 and thats what pretty much happened. Didn't think it would drop below 40, thought it would show strong resistance at 42. If I recall you called for a drop to 30-34 range, heck you might even be right in the long run, I think we will know for certain after this friday where its going to end up. But having said that I think we already touched the bottom on this pull back. 

    If I were you I wouldn't wait for anything under $38. We both have our positions though and calling it to $34 is a ballsy one so I will give probs to you if it turns out that way. My guess is you pulled that number from the stronger channel silver has traded for a while.

    We shall see.

    I haven't seen you call shit so stfu troll. 

     

     

    Wed, 05/04/2011 - 20:09 | 1241224 mogul rider
    mogul rider's picture

    you are closer to the truth than you think. Like all good runs there are winners and losers. Many here saw their dicks grow inches with each 5 bucks rise.

    They all thought they had finally figured out the mantra of Precious.

    Little did they know that they fell to the oldest trick on the book

    The pump and dump.

    The banksters are now cleaning up the walkways with dead or dying leveraged to the nuts basement traders and hedge funds who would not listen to caution.

    They are cannon fodder. Teaches you dicks for not listening. Shut the fuck next time and listen to those people who have experience in the markets. There are many here who expressed caution and were junked.

    Learn from your mistake and pay attention next time.

    Yes there will be a next time. Unlike most of you some of us have been through this before. It is ugly to watch you die but necessary.

    Yes the bull is alive, but it will clean wipe out some of you. That the Darwinian reality. Some are more fit than others.

     

    Peace

     

     

     

     

    Wed, 05/04/2011 - 20:08 | 1241267 maximin thrax
    maximin thrax's picture

    Since the Bull is alive, as you say, what do you consider today to be a really good buy-back-in price for silver?

    Wed, 05/04/2011 - 20:34 | 1241362 sscam2001
    sscam2001's picture

    I would wait to see if we get below $35

    Wed, 05/04/2011 - 23:02 | 1241843 JW n FL
    JW n FL's picture

    even if you see a paper price of $35, you still will pay in the $40's for real, in hand physical!

     

    if you want bars you can do better, getting closer to spot.

    Thu, 05/05/2011 - 05:32 | 1242249 Snidley Whipsnae
    Snidley Whipsnae's picture

    Fuck spot, fuck paper PMs, fuck the banksters that conned people into playing the margin/leverage paper PM game.

    Buy physical and hold... You will sleep better and not be on a fucking roller coaster continuously...

    Who thinks they can beat a casino that changes the rules while the dice are in the air? ... Only a damn fool!

    Wed, 05/04/2011 - 20:44 | 1241391 Robot Traders Mom
    Robot Traders Mom's picture

    If anyone gives you a price, they are full of shit. Obviously, we all agree that this is a manipulated market. We never know how hard they are going to fight on any given day and what day this all will end.

    Everyday is a good day to buy silver. If you are ignorant enough to believe you can time the dips, you might as well go trade something a little more predictable like tech stocks...

    Wed, 05/04/2011 - 23:35 | 1241910 Founders Keeper
    Founders Keeper's picture

    [Everyday is a good day to buy silver.]---Robot Traders Mom

    Good post, Mom. I agree.

    Get rid of your FRN "investments" as fast as you can. Store that garbage in something with intrinsic value. If next week silver spot is at $49 I say buy; if $55, buy; at $75 buy. Don't be the one left holding a bag of FRNs.

    Store it if you got it.

     

    Thu, 05/05/2011 - 01:44 | 1242112 whoflungdung
    whoflungdung's picture

    You're smack on the button there mom! Well said.

    Stuff the guy who junked you.

    Thu, 05/05/2011 - 09:40 | 1242855 Long-John-Silver
    Long-John-Silver's picture

    +1 and I demand an un-junk button.

    Wed, 05/04/2011 - 20:25 | 1241312 Pumpkin
    Pumpkin's picture

    $14 trillion in debt, printing like a MF'r, Fed only real buyer of debt, 43+ million on food stamps, states are broke and must balance, silver takes a dump and you say it is a pump and dump???  Your an idiot!!!  Designed and executed.  They have unlimited dollars, unlimited silver they ain't got.  Good luck with that dollar thing.

    Wed, 05/04/2011 - 20:35 | 1241355 What does it al...
    What does it all mean's picture

    Wow, I was fighting the good fight by my self yesterday... all of a sudden, so many supported showed.   Interesting.

    Wed, 05/04/2011 - 21:17 | 1241525 mrgneiss
    mrgneiss's picture

    I love how all the trolls masquerading as helpful financial advisors are all over the sell signals the whole way up; but seem quite quiet on buy advice when we are oversold.  Balance = credibility

    Wed, 05/04/2011 - 21:33 | 1241573 What does it al...
    What does it all mean's picture

    Hi Pot, looking for Kettle?

    Thu, 05/05/2011 - 00:56 | 1242049 Burnbright
    Burnbright's picture

    Uh no, buying high is just as dumb as selling low. I love how all the PM trolls talk about PM bull chest pounding when it gunning higher but are too stupid to realize their own contrarian indicator when they move in to call us all stupid for buying when their is lots of blood in the water.

     

    Hello right now is a great time to buy, thanks for the signal. 

    Wed, 05/04/2011 - 22:26 | 1241755 SWCroaker
    SWCroaker's picture

    I admire anyone who uses "quite quiet" correctly.  Kitco forums resident, no?   Good on ya.

    Thu, 05/05/2011 - 03:16 | 1242186 Stormdancer
    Stormdancer's picture

    That was fighting to you?  Are you a girl?

    Wed, 05/04/2011 - 20:42 | 1241403 Bicycle Repairman
    Bicycle Repairman's picture

    You know after all the times margins were raised on stocks, oil, food commodities and the tightening of terms on mortgage lending, silver bulls really should have seen this coming.

    /sarc

    Wed, 05/04/2011 - 23:01 | 1241839 RockyRacoon
    RockyRacoon's picture

    Here's one for you, follow the link at the bottom for an eye-watering chart:

    How Far Does Silver Fall?

    By Jeff Clark
     
    With silver dropping roughly 19% in the last three days, a correction is clearly under way. Let’s take a quick look at how far it might drop.
     
    I’ve updated the “corrections” chart, which shows all major pullbacks in silver since our bull market began in 2001. The data measure any clearly visible drop in price greater than 10%, regardless of time length. As you’ll see, some drops occurred over short periods of time, while others were prolonged.

     
    It’s clear that silver has had some large and scary sell-offs. But the “silver” lining to that fact is the realization that our current volatility is perfectly normal.
     
    The average of all corrections is 19%. Applied to our high of $48.70 on April 28, silver would fall to $39.44 if it matched an average drop. So as I write, our current pullback is about average – though it’s been quicker than most.
     
    But corrections don’t happen in a vacuum. It’s generally true that the larger the rise, the bigger the subsequent pullback. Silver has registered an incredible 59% year-to-date gain – and measured from its January 28 low, it’s up an astonishing 82.5%. This is important to note because based on my research, this was the biggest surge in the silver price in the current bull market. Thus, it seems reasonable to expect that the metal might fall more than the average.
     
    You’ll notice a couple corrections where silver fell by about a third; if we dropped 33.3%, we’d hit $32.48. As another reference point, a 25% fall would take us to $36.52. And if it matched the giant 53.9% sell-off, we’d get to $22.45, though I wouldn’t hold my breath for that.
     
    The value in this, of course, is that it gives us some idea of where we might start buying again. I personally would love to see $32 silver, because that would represent a healthy sell-off and appear to have limited downside from there. Only if you believe inflation “loses” would you hesitate to buy at that level.
     
    Regardless of when you start nibbling again, it’s important to remember that the fundamentals driving this market haven’t changed one iota. The two big “Ds” – debts and deficits – are among the largest in history and cannot be repaid in sound currency. The U.S. dollar and other fiat currencies are getting inflated into oblivion – the full ramifications of which have yet to play out. In my opinion, viewing silver as a monetary replacement in our current environment is very prudent.
     
    So maybe the appropriate question to ask isn’t “How far does silver fall?”, but “When do I get to start buying again?”

    http://www.caseyresearch.com/cdd/eliminating-need-organ-transplants-comi...

    Thu, 05/05/2011 - 06:15 | 1242258 zhandax
    zhandax's picture

    Rock, a full Gann 50% pullback wouldn't put us underwater and everybody knows this is just the result of the buzzard's getting their tits caught in the wringer.  If the noobs are lucky they may get their chance for entry somewhere between $32-36 spot (hope they have Tulving's phone number).  I notice the 6:30 slam down tonight only netted about 40¢ even though price has drifted.  Wonder if Tyler's article made the Chinese realize JPM's benevolence and they are waiting for another dollar or three down?

    Thu, 05/05/2011 - 10:45 | 1243188 RockyRacoon
    RockyRacoon's picture

    Ted Butler says:

    "The decline in silver has been brutal and fear-inspiring. Let me try to dissect it and put it into the proper perspective.The current takedown has been a typical COMEX-generated production. In little more than ten minutes in the absolute least liquid trading time possible, light COMEX predatory trading took the market down almost 13%. That takedown resulted in the continuing follow-through to the downside. I'm told the CFTC is looking into that trading, but then again, they have been looking into the silver manipulation forever. (Note to CFTC: time to stop looking and start doing.) While extreme, this COMEX price smash is remarkably similar to previous silver smashes where the commercials sold small amounts of contracts in order to start an avalanche to the downside, so that the commercials could buy at distressed price levels afterward."

    "Also similar, is the general misunderstanding by the world at large of what actually occurred in these price smashes. That's because the world at large does not and cannot recognize that the silver market is manipulated. So when these price smashes occur, the world invents reasons for them other than the simple truth of a COMEX-induced manipulation."

    Wed, 05/04/2011 - 23:09 | 1241864 strannick
    strannick's picture

    'Peace' he says.

    Ignorance and smarmy hypocrasy in one post. Quite and acheivement.

    Thu, 05/05/2011 - 02:44 | 1242164 MolotovCockhead
    MolotovCockhead's picture

    Big mouth...small dick(saw their dicks grow inches)

    Wed, 05/04/2011 - 20:22 | 1241299 DosZap
    DosZap's picture

    Wanker?, your the Wanker.

    NO One could have predicted LSD was slipped in the CME's tap water.

    This is flat out market thievery.

    I call BS.

    Wed, 05/04/2011 - 19:09 | 1240981 Quinvarius
    Quinvarius's picture

    Because you are so awesome at predicting when brokers and exchanges will order people to sell?  LOL  Silver is going right back up after the FOREX bucket shops and the exchange gets out of their shorts and commitments.

    Wed, 05/04/2011 - 22:17 | 1241728 been there done that
    been there done that's picture

    +1 This thing is world wide. Demand from Asia will be strong. All the problems are still there, nothing fixed. This is the last desperate act and they are hanging themselves as the demand for physical will increase with this sale. I've had cash put aside waiting for something like this. I deployed 1/3 today at 39 area and am thinking 33-35 will be it. The allure of owning something real has caught on and players now realize that they CAN squeeze the PTB. They'll be back.

    Wed, 05/04/2011 - 19:13 | 1241006 Xibalba
    Xibalba's picture

    Every bull has a matador!

    Wed, 05/04/2011 - 19:13 | 1241018 mrcybermac
    mrcybermac's picture

    Read it and weep FunkyMonkeyBoy:

    "Again, I'm attempting to predict the future here. Please don't do not expect me to be 100% accurate with everything I state below."

    ----a quote from Turd Ferguson at 9:55 AM THURSDAY, APRIL 28, 2011

    http://tfmetalsreport.blogspot.com/2011/04/losing-game.html

     

    Wed, 05/04/2011 - 19:15 | 1241020 Muir
    Muir's picture

    -

    Most here are not traders. A few, very few, really understand the idea of parking wealth for some time in precious metals until such a time as opportunity presents itself.

    However, sadly, most believe that the moon landings were fake, that they were drugged into committing certain sexual acts at College and that the bird that shit their windshield is also another conspiracy. They do not understand the chaotic nature of life and competing conspiracies thought up by inept Inspector Clouseau conspirators.

    -

    Wed, 05/04/2011 - 19:36 | 1241150 slewie the pi-rat
    slewie the pi-rat's picture

    fake? the silver is real, and so are the prices, while they last. 

    but, the silver doesn't change like the prices.  however, the banksters will always offer to buy it, from anyone, for what they say it is worth.   physical.  the banksters can't make it;  and the banksters can't change it.  all they can do is write derivatives and then puts and calls on the derivative contacts.  and so on.  and, they can move the physical from one pile to another, or even to a different owner or city.  they are brokers and the damned silver either belongs to them or their clients...

    ...or us. 

    Hahahaha. i hope some of this is going into mint blanks for philadelphia and san fran. donchew?

    Wed, 05/04/2011 - 19:46 | 1241176 Transformer
    Transformer's picture

    Actually very few Americans know of the fake moon landings.  The fake ones were not televised like the real landings.  In Cuba, the school system teaches that it was all fake.  And oddly enough, 25% of Britons think it was a hoax.  But we know better, huh?

    Wed, 05/04/2011 - 20:24 | 1241308 New_Meat
    New_Meat's picture

    and all them kidz don't know who Usamma bin Laden is, neither.

    - Ned

    Wed, 05/04/2011 - 22:36 | 1241790 Real Estate Geek
    Real Estate Geek's picture

    What, exactly, was the step that NASA couldn't overcome which necessitated "faking" the moon landings?

    In the 60's, were we unable to get into orbit?  Or unable to achieve orbit around the moon?  Was it all bullshit, including the interminable Gemini missions?

    Thu, 05/05/2011 - 03:12 | 1242183 Great Dane
    Great Dane's picture

    Air conditioned space suits in a total vaccuum as condesation or something or rather doesn't work in space.

    Thu, 05/05/2011 - 10:07 | 1242968 Overflow-admin
    Overflow-admin's picture

    How can you explain Hubble was repaired if there was never EVA? Pictures/videos can be faked, sure, but how can you reject these massive facts?

    - EVA Hubble?
    - Hundreds EVA for ISS?
    - edit: Skylab solar panel repaired?

    http://www.encyclopedia.com/topic/Extravehicular_activity_(Manned_space_flight).aspx

    Thu, 05/05/2011 - 23:26 | 1246298 Real Estate Geek
    Real Estate Geek's picture

    And if that's not enough, the recent LRO photographs even show the footpaths the astronauts made between the LEMs and the science experiments.

    http://astrocoffeehut.files.wordpress.com/2009/07/lro-apollo14.jpg

     

    Wed, 05/04/2011 - 19:12 | 1241021 AmazingLarry
    AmazingLarry's picture

    AFAIC the Turd's record is spotless and I've been reading for 9 months. 

    And most of the Turdies are supportive and knowledgable not fanatical sheep. 

    So suck it.

    Wed, 05/04/2011 - 19:14 | 1241027 Bay of Pigs
    Bay of Pigs's picture

    Maybe you can tell us when it's safe to buy back in?

    Please go fuck yourself you pathetic armchair quarterback.

    Wed, 05/04/2011 - 19:31 | 1241104 stitch-rock
    stitch-rock's picture

    The now divergent nature of paper vs physical pricing, while

    considering the magnitudes of systemic issues at play with something as seemly so

    small as the price of silver, could lead one to think that, from here on in, the only sure

    thing with any true inherent value is the rock one holds in ones hand.

    That said, I believe any price paid under

    (current) 50 USD for physical silver will be beneficial in some measure of months,

    potentially a year or two if a large enough event can be manufatured to galvanize

    the storyline being told on the walls of the cave, one more time.

    Wed, 05/04/2011 - 19:17 | 1241028 Bullionaire
    Bullionaire's picture

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

     

    Thank you.

     

     

    Wed, 05/04/2011 - 19:23 | 1241038 dryam
    dryam's picture

    It's bad enough that ZH is now infested with trolls who work for the banks/Fed/etc. spewing out  disinformation 24/7 that dipshits like you have to also clutter things up with such retarded posts.

    Wed, 05/04/2011 - 19:26 | 1241108 Creed
    Creed's picture
    by FunkyMonkeyBoy
    on Wed, 05/04/2011 - 19:22
    #1241052

     

    Wow, i got 13 junks already, and i haven't even mentioned the jews yet.

     

     

    I gotta admit, you're a funny little nazi

     

    sieg heil fucker

    Wed, 05/04/2011 - 19:46 | 1241181 slewie the pi-rat
    slewie the pi-rat's picture

    i don't think he's a nazi.  certainly not a very strict one.  i hope i'm not.

    who's that leave?  what's with the german salute, creed?  you're getting weirder than monkey_boy, yet are neither as funky, nor as junky.

    Wed, 05/04/2011 - 20:26 | 1241318 New_Meat
    New_Meat's picture

    old flame warz rules: "he who first mentions nazi-he just lost".

    - Ned

    Wed, 05/04/2011 - 20:37 | 1241372 Creed
    Creed's picture
    by New_Meat
    on Wed, 05/04/2011 - 20:26
    #1241318

     

    old flame warz rules: "he who first mentions nazi-he just lost".

    - Ned

     

    even older saying that predates the internet NED

     

    WALK LIKE DUCK, TALK LIKE DUCK, IS DUCK

    Wed, 05/04/2011 - 21:54 | 1241659 slewie the pi-rat
    slewie the pi-rat's picture

    so he is a nazi b/c he says things about jewish people that you equate with hitler's germany?  what, exactly has the duck said that leads you this conclusion?  he makes hundreds of posts/week.  please show us 1 or 2 to bolster yer argument.  what exactly, did he say, please make yer "point" a bit more forcefully.  just junking people and name-calling doesn't take the place of thinking, here, ya know?

    i don't know him, personally.  maybe he is a skin head raving hate-monger murderer or just a nat'l socialist following orders.  what are you talking about?  are you and so many others upset b/c he doesn't cheer for the NWO or some such thing?

    i would say he's being extremely wry.  but, keep calling him names and junking him.  i really don't care.  i just don't know quite what he said to upset everyone so much.  i miss a lot.  what was it this time?

    Wed, 05/04/2011 - 22:03 | 1241679 Rynak
    Rynak's picture

    Wait, people are now duck-typed here? I'm so confused...

    Wed, 05/04/2011 - 23:26 | 1241895 ChookChoker
    ChookChoker's picture

    I've never heard a duck talk, except for Daffy... and he wasnt a real duck. Real ducks quack.

    Wed, 05/04/2011 - 20:39 | 1241368 sscam2001
    sscam2001's picture

    Well FunkyMonkeyBoy its a good thing the US has stopped printing money like no tomorrow balanced its budget secured its borders and has an open and honest administration in place so that we can return to economic stability now....YEAH RIGHT!

    Wed, 05/04/2011 - 21:31 | 1241576 Bay of Pigs
    Bay of Pigs's picture

    No, that isn't the reason silver went down. 

    And the reason you get junked (43 on this one) is because you're just another asshole in along line of them criticizing someone who put himself out there trying to help his fellow man (TF). What a big heart you have, so full of compassion for the little guy while the Wall St criminals steal, rape and pillage and literally destroy whatever's left of the markets. Sorry, you get a big fuck you from me. 

    Wed, 05/04/2011 - 22:01 | 1241668 slewie the pi-rat
    slewie the pi-rat's picture

    jeeez!  is he alwayz like this, fidel?  what a bad boy!  sounds like he's shit-faced to me!  maybe he turns into a nazi after a quart of demon rum? 

    Wed, 05/04/2011 - 19:53 | 1241205 Hugh G Rection
    Hugh G Rection's picture

    FMB-

     

    When speaking to TF address him as Mr Ferguson Sir.

     

    Sub $39 now! I need to liquidate some more useless shit and get more physical.

     

    100% Margins pussies, lets see it!

    Wed, 05/04/2011 - 20:29 | 1241327 DosZap
    DosZap's picture

    I PRAY they do 100% margins.

    All that leaves is the real shjit, wanna buy some?.

    Call a Dealer.They cannot control them, nor your wallet.

    As for being forced to use nothing but Bernak Bucks, screw you.No way I give up my rights to save real money.

    Wed, 05/04/2011 - 20:29 | 1241328 DosZap
    DosZap's picture

    I PRAY they do 100% margins.

    All that leaves is the real shjit, wanna buy some?.

    Call a Dealer.They cannot control them, nor your wallet.

    As for being forced to use nothing but Bernak Bucks, screw you.No way I give up my rights to save real money.

    Wed, 05/04/2011 - 20:07 | 1241256 let-them-eat-cake
    let-them-eat-cake's picture

    Wow, in my search for gurus, it looks like you might make my RSS reader - what's your blog address?

    Wed, 05/04/2011 - 20:16 | 1241276 Kina
    Kina's picture

    FunkyMonkeyBoy - Your bitterness bespeaks a personal element and makes your comment worthless.

     

    So all analysts must be able to predict unprecedented levels of blatant and breathtaking corruption not only on the part of banks, judiciary but of all the regulators that in normal times would see the corrupt banksters and corrupt regulators doing prison time.

     

    Your criticism of the TF blog has zero basis in fact who as it was from what I seen allowed for a more than usual level of corporate corruption. He just didn't figure on the level of breathtaking corruption shown by the CFTC, banks and CME margin hikes - all to help one bank with its problems.

     

    You know the USA is in deep shit when TPTB will destroy everyone else in order to help out one bank.

    Wed, 05/04/2011 - 19:11 | 1240993 Captain Benny
    Captain Benny's picture

    The Fed will be taking down the equities market next week.  We'll finally get a pullback in the S&P500.  That is why the Fed has been making their media rounds the last few days.  I've seen them first hand :)

    Wed, 05/04/2011 - 20:28 | 1241335 Zero Govt
    Zero Govt's picture

    it's 5 margin hikes in 8 days

    next week 9 hikes in 7 days

    Inflation Bitchez 

    Wed, 05/04/2011 - 19:14 | 1241014 mick_richfield
    mick_richfield's picture

    paid shill.

    Wed, 05/04/2011 - 20:35 | 1241353 AUD
    AUD's picture

    No, Math Man is correct. The exchange is well within its rights to change margin requirements at its discretion, that's what the rules of the exchange explicitly state.

    If you don't know the rules of the exchange before you utilise its products, that's your mistake.

    Wed, 05/04/2011 - 21:27 | 1241505 Math Man
    Math Man's picture

    I am correct, and I'm repeating it again here, because it has already been junked 38 times... and at 50 it goes away - and it is very important:

    There is a bit of the tail wagging the dog here.

    Margin increases are in response to the price volatility, not the cause.

    When vol is this high, an 11% margin can get wiped out in a day... leading to losses for the exchange.

    CME is only trying to cover their asses... there is no imminent default.

    Wed, 05/04/2011 - 21:55 | 1241651 dussasr
    dussasr's picture

    Math Man, stick to your guns.  COMEX will keep on hiking margins specifically to prevent a default. 

    Wed, 05/04/2011 - 22:05 | 1241687 Rick64
    Rick64's picture

     Margin increases are in response to the price volatility, not the cause.

     So I guess they know there will be even more volatility next week since they have already scheduled another margin hike on the 9th.  Seems like they got it backwards shouldn't it be after increased volatility.

    Wed, 05/04/2011 - 22:34 | 1241782 Bárðarbunga
    Bárðarbunga's picture

    A stupid prick that replies to his own posts begs to be junked.

    You've been asked to this before MethHead.

    Go fuck yourself.

    Wed, 05/04/2011 - 23:10 | 1241835 Rynak
    Rynak's picture

    yes, crackman, you are repeating yourself, in case you post gets 50 junks, which it just got.

    So, here is my "repeat".... as everyone sane could see in the recent days, the CME margin hikes created the high up-down volatility, which it "supposedly" seeked to fix. CME WANTS VOLATILITY, not solve it. When CME says volatility, what they really mean is "higher silver prices than we like, so lets fuck up the nonmarket by artificial intervention... if we just do if often enough, our justification may just become true... which is of course, what we wanted in the first place: a highly "unpredictable" (read "volatily") silver market, so that investors get scared".

     

    EDIT: I just saw that you edited your post to explicitely state that you are copying your post because it will be junked. Your only justification is that it is "important".... important to whom... the ones who pay you for spreading the inverse of the truth? Again, go fuckyourself with a screwstick and die in a corner, you mentally corrupted piece of shit.

    Wed, 05/04/2011 - 22:37 | 1241788 SWCroaker
    SWCroaker's picture

    Um, the exchange is also within its right to institute "liquidation orders only" policies, just like they did back during the Hunts debacle.  To assume that doing so, whether allowable according to their fine print or not, doesn't exert a tremendous downward pressure on price is a bit disingenuous, don't you think?  And maybe the same could be said about 5 margin hikes in 8 days, hmmm?

    Margin limits could be used to raise the cost of entry into a market, and keep problems from occuring, instead they are abused in desperate attempts to save one group of at-risk parties at the expense of others.  This is not free, not fair.

    Wed, 05/04/2011 - 19:14 | 1241025 Thomas
    Thomas's picture

    Gotta disagree.

    Wed, 05/04/2011 - 19:16 | 1241041 AmazingLarry
    AmazingLarry's picture

    If a tree falls in the forest and lands on his Ferrari, does Math Lady make a sound?

    Seems the CME is a BIT late to the party. Tis been volitile since QE deux.

    Wed, 05/04/2011 - 19:45 | 1241175 Math Man
    Math Man's picture

    But nothing like we've seen the last few days... 

     

    Wed, 05/04/2011 - 19:50 | 1241202 slewie the pi-rat
    slewie the pi-rat's picture

    that's not b/c of the margin hikes tho?

    t.y.v.m.!

    Wed, 05/04/2011 - 19:19 | 1241063 Teamtc321
    Teamtc321's picture

    Really? Why no raises for cotton, corn, or wheat? Hmmmmm 

    Wed, 05/04/2011 - 19:44 | 1241171 Math Man
    Math Man's picture

    Is the vol anywhere near as high as it is in silver?  We've seen 10% INTERDAY moves.... enough to wipe out the entire margin in one afternoon.  The exchanges are only protecting themselves.

    By the way, the shorts are the ones who force delivery, not the longs, so the COMEX default scenario trumpted by the longs is impossible.

     

     

    Wed, 05/04/2011 - 19:52 | 1241198 Gold 36000
    Gold 36000's picture

    Correct Mathman.  This is really strange having a conversation with myself but very fun.

    Wed, 05/04/2011 - 19:58 | 1241228 slewie the pi-rat
    slewie the pi-rat's picture

    please continue to chat between yerselves while you read what crossed, in silver, today!   DJ Comex Silver Delivery Intentions Breakdown - May 3

    Wed, 05/04/2011 - 20:11 | 1241266 Math Man
    Math Man's picture

    And the 16.8mm ounces that came out of SLV today.  Whoops.

     

    Wed, 05/04/2011 - 20:25 | 1241321 Stormdancer
    Stormdancer's picture

    Yes...somebody decided they wanted physical silver more than they wanted SLV shares now didn't they?  Looks like Authorized Participants are front running the tsunami .....

    Wed, 05/04/2011 - 21:19 | 1241521 Math Man
    Math Man's picture

    APs arbing the SLV creation/redemption mechanism causing silver to be sold at spot placing EVEN more pressure on silver...  16.8mm ounces worth.... 32 million since 4/25

    Thu, 05/05/2011 - 07:47 | 1242363 Stormdancer
    Stormdancer's picture

    AP's traded SLV shares for physical silver.  Neither you nor I know what happened to it after that, but personally I doubt it ended up on the spot market.

    Thu, 05/05/2011 - 08:09 | 1242405 Math Man
    Math Man's picture

    When the NAV of SLV is below spot, APs buy shares and swap them for physical and sell the physical at spot and lock in the profit....  free money, and arbitrage at its finest.  

    So, when sell pressure is high on SLV, SLV trades below NAV and silver is sold on the spot market.  32mm ounces since 4/25, 16.8mm ounces yesterday = KABOOM.  That plus the troubles in the futures market = double KABOOM.

     

    Thu, 05/05/2011 - 08:10 | 1242423 Math Man
    Math Man's picture

    PS, Gold is next.

    When people see how SLV exacerbated the decline in Silver, GLD will sell off too.

    And the puts are even cheaper than SLV ever thought about being.

    I've been buying the Sept 130s on GLD for around $1.   A 20% correction in Gold by September makes them worth $10 or more.

     

    Thu, 05/05/2011 - 08:27 | 1242480 tmosley
    tmosley's picture

    Someone turns on a sprinkler, Math Man starts building an ark.

    Wed, 05/04/2011 - 19:55 | 1241212 KinorSensase
    KinorSensase's picture

    By the way, the shorts are the ones who force delivery, not the longs, so the COMEX default scenario trumpted by the longs is impossible.

     

    Can someone explain this please?


    Wed, 05/04/2011 - 20:42 | 1241382 AUD
    AUD's picture

    I recommend that people read Math Man's link if they want to get some idea about how the futures exchange works.

    Wed, 05/04/2011 - 21:10 | 1241488 slewie the pi-rat
    slewie the pi-rat's picture

    i read it.  here it is: 

     

    I appreciate Zero Hedge quoting my “old work” trying to explain the mysterious “registered” and “eligible” categories of COMEX warehouse bullion holdings. The thank you (and yes, it is sardonic) doesn’t come because I agree with the context in which the reference was used but because it lends instant credibility to my response herewith. Simply put, the reason for my pontification on this esoteric subject was that the distinction being drawn between registered and eligible by many market commentators was misplaced: registered metal is no more or less likely to be delivered under an expiring futures contract than eligible and vice versa.

    And so we come to this most recent of nonevents in which the Scotia Mocatta warehouse “reclassified” about 5 million ounces of silver from the registered to eligible category. There could have been a number of reasons for this, including the possibility that somebody simply forfeited his or her certificate in order to hold the bullion in the same warehouse but using another, preferred format. If so, there would be nothing whatsoever to be gleaned from such an event since registered metal is not necessarily available for delivery in the first case as I pointed out years ago. Indeed, there is now an explanation for what really happened and it makes all of the speculation circulating on the Internet seem quite absurd. One need only read down far enough in this Advisory Notice that Zero Hedge was so kind to discover:

    As background, the Exchange utilizes a paperless Electronic Delivery System for  metals futures contracts. Delivery against the Exchanges’ metals futures contracts takes place by the electronic transfer of warrants between Clearing Members. In order to convert paper warrants to electronic warrants, the paper warrants must be endorsed by the Clearing Member to the appropriate Exchange Licensed Depository for conversion to electronic warrants.

    So there you have it. Some Clearing Members (futures brokers) have not endorsed the paper certificates so they can be converted to the electronic system now used for delivery. Another take on this subject can be found here.

    I suppose it might be time also to update my slightly outdated explanation of registered vs. eligible that Zero Hedge has been quoting. In 2009, the COMEX and NYMEX unified and conformed their rules and that was also when the electronic system was officially put in place. Warehouse certificates are no longer being called that by the exchange, they are now called warrants and as just stated these warrants are now electronic. The rest pretty much works the same way — the licensed warehouse is still obligated to report to the COMEX all bullion being stored for customers that meets the COMEX delivery requirements (“eligible”) and the owner of the bullion still has control over the issuance and redemption of a “warrant” that is recorded electronically by the exchange (“registered”).

    Now back to the story. Perhaps there is a reason why the conversion of some paper certificates to electronic warrants has not taken place, such as the client’s refusal to do so. If so, it could mean that the client does not ever want that registered silver delivered and is only holding it in certificate form as a convenience. Fine. But on the flip side there are 33 million ounces of registered silver that did have certificates converted. Can we assume these are all available for delivery under the May contract? I’m not suggesting the answer is yes, but I do suspect that a drop in May futures open interest below 6,600 contracts by the end of tomorrow could mean that the longs have failed to corner the market once again. Perhaps the disappointment will have consequences in the market? Only time (a few days) will tell.

    end paste.  there's more.  again, if you can explain it, please do.  but if you can't, please stop quoting something you don't understand.

    specifically, is he saying that if the shorts don't cover, the longs can't corner the market again, this month?  read that again.  i mean it, ok?  again, i invite you people to try to join the dialogue.  i would like to understand these markets better,  they are pretty opaque in many ways. 

    so, get real, or get lost, ok?  if you can help, help.  don't just quote some encyclopedia with charts, ok? 

    Wed, 05/04/2011 - 21:20 | 1241529 AUD
    AUD's picture

    specifically, is he saying that if the shorts don't cover, the longs can't corner the market again, this month?

    No, he is saying that if the shorts can't deliver then they must cover by the first notice day, which means any short squeeze will occur before the first notice day.

     

     

    Wed, 05/04/2011 - 21:29 | 1241557 Math Man
    Math Man's picture

    Bingo.

    Wed, 05/04/2011 - 20:44 | 1241395 slewie the pi-rat
    slewie the pi-rat's picture

    why don't you explain it in your own words, unless you're the "metalaugmentor" b/c he's pretty hard to understand. 

    he says there is a time for the shorts to declare that they are going to deliver.  ok, but is this the same as:  "by the way, the shorts are the ones who force delivery, not the longs"???  there comes a time when the shorts declare whether they are playing for physical, or not.

    they are not forcing anyone to do anything.  there are 33 million ounces of registered silver, you moron!  that's over 6600 contracts.  registered!  somebody wants it, COME ON DOWN!!!!

    if you put up a link to the encyclopedia britannica, are we s'posed to think you know/understand what's in it?  do you think if methman owns 5,000 oz of registered silver in a crimex warehouse he needs to put up margin to sell a contract? 

    Wed, 05/04/2011 - 20:58 | 1241458 AUD
    AUD's picture

    It is the 'short' who makes the notice of delivery, not the 'long'. If the short does not have the metal for delivery he (or she) must close out their contract, I quote from metalaugmentor; "by the first notice day, which is typically the last day of the month prior to the delivery month".

    "it might also even be possible that more longs intend to stand for delivery than shorts are initially willing to deliver, but here is the important part: the issue must be resolved by the end of the first notice day. In other words, if a short cannot stand for delivery, that short must cover at presumably a price above market that entices a long to sell or otherwise another short to take the “naked” short’s place."

     

    Wed, 05/04/2011 - 21:19 | 1241531 slewie the pi-rat
    slewie the pi-rat's picture

    quote him 500X!  do you know when this day is/was & what happened, and how & why it proves the shorts call the shots on all deliveries?

    please do not hesitate to teach us what this guy means, ok?  most of us have never traded this shit and never will.  i haven't seen the prospectus, have you?  that is a yes/no personal question.  have you read & understood a crimex trading account prospectus from a crimex broker or not? 

    Wed, 05/04/2011 - 21:27 | 1241562 AUD
    AUD's picture

    Didn't I just say that it is the short who makes the notice of delivery? The long doesn't do anything except take delivery from a short or sell his contract to a short & maybe roll his money over into a future contract.

     

    Wed, 05/04/2011 - 22:12 | 1241711 slewie the pi-rat
    slewie the pi-rat's picture

     

     

    you said that is what the guy in the link says, i believe.  which is why i aked you if you had read the prospectus.  perhaps you trade on the crimex and have not read the prospectus.  i don't care.  i just want to know if you know what you are talking about.  again, here are the intentions for tomorrow:  DJ Comex Silver Delivery Intentions Breakdown - May 4  

    you're saying that these shorts, who can call for delivery any time till may 26, decided to deliver tomorrow.  is that correct?

    can we also say that the university of texas endowment fund took possession of $1Bn (then mkt value) of gold b/c the shorts forced them to?

    Wed, 05/04/2011 - 22:32 | 1241777 AUD
    AUD's picture

    The shorts didn't force the Uni of Texas to do anything, the U of T could have sold out to a short before delivery, taken the cash & shoved it up their arse for all I care.

    I say it one more time, it is the responsibility of the short to cover if they cannot deliver on their obligation by the delivery period. If shorts cannot cover because longs are waiting for delivery this will show in the open interest for the delivery month, which is presently well below the number of ounces at COMEX registered warehouses (this includes SLV), thus no default.

    That link means nothing to me since I don't trade on the COMEX, but if you've read the prospectus, why are you asking questions on ZH?

    Wed, 05/04/2011 - 21:49 | 1241630 KinorSensase
    KinorSensase's picture

    Yeah I read it but I'm not savvy enough to get it.  Regardless of what happens with the paper silver world, a short squeeze is on in the real world.  Industrial demand would eventually eat up all the bullion silver and so much silver is economically unrecoverable that supply will never keep up with demand.  Then, of course, add in all the other factors waiting to unwind, and it's unavoidable: silver is the poor man's gold.  Fundamentally, if you're holding physical, it's win-win.  BTFD.

    Wed, 05/04/2011 - 20:19 | 1241287 slewie the pi-rat
    slewie the pi-rat's picture

    don't know, really;  here's my limited understanding:  there is a buyer and a seller to open.  the may contract last trading day is tues, may 26.  this contract is for the seller to deliver to the buyer on or before may 26. if before, it is at the choice of the buyer.  s/he says: i want it, tomorrow.  s/he gets it tomorrow. 

    either contracting party who opened such a contract can close his end by just making the trade, as with any security.

    however, at or near the end of the contract, the shorts who haven't covered do get to deliver what they sold.  if they are still short.  somebody is long, and buying the silver.  many are just gambling.  others want to buy/sell silver. 

    the bullion banksters have been known to go after one another, or to try to "take down" another category of trader.  whatever that means.  hopefully, someone who knows will clue us in.

    Wed, 05/04/2011 - 22:50 | 1241816 SWCroaker
    SWCroaker's picture

    Futures markets were *originally* created to serve producers and consumers, not speculators.  Producers (farmers, miners) would initially sell short (sell something they hadn't yet harvested/mined); lets them lock in a price and plan finances accordingly.  The *normal* progression would be to have time pass, have the crop/ore come in, and the producer would indicate his desire to deliver the goods and clear his contract.

    Make sense as to why shorts initiate delievey? 

    Problem was that was then, this is now, and speculators trade paper in a 100:1 ratio to legitimate producers/consumers. 

    My $0.02 into the dialogue.

    Thu, 05/05/2011 - 07:31 | 1242332 hamurobby
    hamurobby's picture

    Yes that is why the futures markets were created.

    I however disagree with the "problem". The 100x more speculators take into account the prevailing bountiful or lacking commodity available for delivery. There is conviction in the small/medium size spec traders who bet (gamble) their money in futures trading. There is a whole lot of "research" on the underlying commodities availability by these speculators which tends to educate other specs and they then collectively set a price for delivery. They actually support the legitimacy of the futures markets by creating a huge unlimited market, instead of a small and easier to manipulate pricing mechanism. This keeps farmers or miners, banks or manufacturers, from colluding to corner markets.

     

    Wed, 05/04/2011 - 20:05 | 1241257 tmosley
    tmosley's picture

    That's fine, but why are they spreading it out, then?  Hell, they announced two hikes at the same time.  There is NO reason to do that.  They should have raised it all at once in response to the volatility.  Once a week is enough.  This is just stupid.

    But pretend not to see it, because you have an agenda.

    Wed, 05/04/2011 - 20:08 | 1241269 mogul rider
    mogul rider's picture

    Because there aren't any leveraged fish trading those commodities. Duh

    Wed, 05/04/2011 - 20:43 | 1241377 Zero Govt
    Zero Govt's picture

    Math Man

    usually i don't mind your contrarian jibs here to keep peoples feet on the ground... but thinking 5 margin hikes in 8 days is normal business practice appears to add considerable weight to your doubters here that you've got your naive head stuck a long way up your rectum  

    Thu, 05/05/2011 - 07:23 | 1241400 Zero Govt
    Zero Govt's picture

    Mogul Rider

    which "leveraged fish" are you talking about, JP Morgan?

    Wed, 05/04/2011 - 20:52 | 1241434 Math Man
    Math Man's picture

    The margin hikes are completely justified given the recent volatility.  They are only to protect the exchanges.

     

    Wed, 05/04/2011 - 23:55 | 1241466 Zero Govt
    Zero Govt's picture

    Bollocks... this week has been an absolute shambles... nobody would conduct business like this (with paying customers) anywhere else on Planet Business ...it's just another nail in the coffin for these corrupt market authorities/riggers... CME have produced an absolute clown show and are now a laughing stock ..in terms of brand management it's train wreck moment ....private investors stung by this fleecing will be lost forever (as has happened in the stock exchanges) 

    Wed, 05/04/2011 - 21:59 | 1241670 Rick64
    Rick64's picture

     Now they can see into the future and know there will be increased volatility right, since the next margin hike is scheduled for the 9th.

    Wed, 05/04/2011 - 22:38 | 1241789 Teamtc321
    Teamtc321's picture

    Question Meth, when oil broke from 147 to say 60, do you know of any margin hikes then?

    Thu, 05/05/2011 - 07:43 | 1242357 hamurobby
    hamurobby's picture

    The break down in prices will not usually bring a margin hike, however to expect a reduction in margin/maint requirements due to price collapse should not be expected until the price volatility subsides dramatically. Say for example silver moves from $50 to $25, and they immediately drop margins. Then there is an actual shortage and the frn price skyrockets to $75 and then drops back to $55 the very next day at the open of trade and then trade up in five minutes to $90. So many speculators could be wiped out on margin calls that it could bankrupt the trading facility. They (cme) actually settle broken trades with the "winners" and go after the losers for the capital at a later date. This is why margin/maint accounts are moved higher in a normal rising price/volatility environment.

    Wed, 05/04/2011 - 19:22 | 1241066 Id fight Gandhi
    Id fight Gandhi's picture

    And what about the other ones like ES that never get touched. May 6th coming up, big down day last year shows you nothing paper and digital is safe.

    Wed, 05/04/2011 - 19:21 | 1241073 NidStyles
    NidStyles's picture

    You seem so sure of yourself. Beg's the question, how much money have you made off of being so right? Oh that's right....

    Wed, 05/04/2011 - 19:23 | 1241075 george
    george's picture

    I'm newer to this. I remember being upset about the federal reserve and the government allowing the housing bubble to go on for so long.

    Then I remembered being upset when the CME raised margin requirements for silver. 

    I guess I am just a greedy guy looking out for my best interests, but in the grand scheme of things, these margin increases are probably a good thing.

     

    Wed, 05/04/2011 - 20:04 | 1241255 Rynak
    Rynak's picture

    go fuck yourself with a screwstick and die in a corner, hypocrite. And meanwhile, get junked into oblivion, asshole.

    Wed, 05/04/2011 - 20:16 | 1241286 homersimpson
    homersimpson's picture

    Methman is trying to overtake Robotrader for the most annoying monday morning QB..

    Wed, 05/04/2011 - 20:27 | 1241332 XPolemic
    XPolemic's picture

    Wow, thats exactly what I said yesterday, you plagarist motherfucker.

    Wed, 05/04/2011 - 20:28 | 1241339 DosZap
    DosZap's picture

    CYA?, nah, crooks the lot of them.

    Wed, 05/04/2011 - 21:05 | 1241480 Tail Dogging The Wag
    Tail Dogging The Wag's picture

    Just admit that you work for the CME and they pay you with Bernanke post-it-notes.

    Do NOT follow this link or you will be banned from the site!