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Water, Meet Blood - JP Morgan Admits To, Reduces Massive Silver Short Position, Proves Millions Of Conspiracy Theorists Correct

Tyler Durden's picture


In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of "tin foil hat" wearing, conspiratorially-oriented "gold bugs", has cut back on its US silver futures. "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that "the decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world's biggest financial company out of business. Lastly, this means that silver is about to really blast off as the push to really hurt JPM takes off in earnest.

From FT:

The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.

However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.

The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.

In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.

But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.

Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.

The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.

Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.

JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.

And while we revel in the knowledge that the short squeeze is causing massive pain for JPM, we are far more overjoyed that the days of Blythe Masters as head of JPM's commodities desk is coming to an end: any comparable massive admission of weakness by a trader is always and inevitably followed by some very high profile terminations.


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Mon, 12/13/2010 - 20:00 | 803024 Altan311
Altan311's picture


Mon, 12/13/2010 - 20:02 | 803028 ZeroPower
ZeroPower's picture

Not really.

Since JPM has been reducing their short position over the previous last weeks, that could possibly explain the various intra-day surges in price which were never seen before in silver. I hope this makes sense to you silver-bugs.

Mon, 12/13/2010 - 20:04 | 803034 Tyler Durden
Tyler Durden's picture

Please point us to the 8K or 13D that confirms this. Oh wait, speculation is what gets you branded a conspiracy theorist until proven correct, right?

Mon, 12/13/2010 - 20:17 | 803067 nope-1004
nope-1004's picture

Of course, the latter is pure and total bullshit:

Totally!  Nothing but a PR stunt by the bank to try to ease the onslaught.

They basically have released one heck of a confession, though.  Would make a good epitaph after they crumble to show the world how much these crooks lie.


Mon, 12/13/2010 - 21:41 | 803351 justbuygold
justbuygold's picture

Agreed,  a desperate PR stunt to make traders think that they have covered most of it and were the reason for the runup in price. Therefore they are imlying prices will now fall.   Trsut me , there is now way they cold have possibly covered 200 MM +  ounces of silver without a substatial drop in open interest.  Open interest is at a new record.    More lies from JPM  ....they must be REALLY REALLY desperate right now to try this stunt.

Tue, 12/14/2010 - 00:21 | 803724 SilverIsKing
SilverIsKing's picture

From Chris Powell - Help GATA Turn Up the Heat on JPM!

Tue, 12/14/2010 - 00:41 | 803762 Hansel
Hansel's picture

Mish's post from a few days ago:

Investors Hold Biggest Commodity Positions On Record; Viral Nonsense About Silver

Emails and videos regarding silver are going viral. There is no evidence to support the theory that JPM will be forced to cover silver futures no matter how high the price of silver goes.

Tue, 12/14/2010 - 00:51 | 803785 SilverIsKing
SilverIsKing's picture



  1. the act of delivering or distributing something (as goods or mail); his reluctant delivery of bad news; his manner of speaking was quite abrupt; her speech was barren of southernisms; I detected a slight accent in his speech;
  2. the event of giving birth; she had a difficult delivery;
  3. your characteristic style or manner of expressing yourself orally;
  4. the voluntary transfer of something (title or possession) from one party to another
  5. (baseball) the throwing of a baseball by a pitcher to a batter
  6. recovery or preservation from loss or danger; work is the deliverance of mankind; a surgeon's job is the saving of lives;
  7. the act of delivering a child

Tue, 12/14/2010 - 08:52 | 804204 jus_lite_reading
jus_lite_reading's picture

Ouch. Brutally honest. Brutally painful for the frauds...

Tue, 12/14/2010 - 07:22 | 804111 AUD
AUD's picture

Normally I don't have alot of time for Mish but in this case I think he's right.

JP Morgan may well have a large short position in silver futures but also being a large bank they may have a large amount of silver deposited with them & be hedging for their clients position. JP Morgan may not give a toss whether the $ price goes up or down, they are just providng a service for their clients.

And nobody has any fucking idea how much silver actually exists.

Tue, 12/14/2010 - 07:33 | 804161 AUD
AUD's picture

And I'll add, since when does ZeroHedge take reports in the Financial Times as gospel?


Tue, 12/14/2010 - 09:29 | 804255 tmosley
tmosley's picture

You just keep thinking that.  Makes it easier for those of us who see what is going on.

We use 40% more silver than we mine, and the only government that has any significant amount stockpiled any longer is China.

Tue, 12/14/2010 - 21:40 | 806775 Hephasteus
Hephasteus's picture

Wow you pay Mish for one fucking speach to Google and let him visit the white house and he just turns into unfixable type of retarded.

Tue, 12/14/2010 - 23:03 | 806959 GoinFawr
GoinFawr's picture

Is it just me or did I miss the part in Mish's piece (or any of his articles on this matter for that matter) where he referred to the ongoing legal action regarding Jape-E-Morgan, or commented on the actions' obvious relevance to the entire subject of silver price manipulation?

oh wait, I think I just found something, from

"If someone can prove JPMorgan is not hedged and is indeed getting killed in these markets, I reserve the right to change my opinion"

If there is more, and I missed it, please feel free to correct me, otherwise...

Tue, 12/14/2010 - 00:50 | 803780 Drag Racer
Tue, 12/14/2010 - 05:59 | 804056 Mentaliusanything
Mentaliusanything's picture

Thermonuclear ! Yes that would burn the bastards.
In the wild, an animal that fears death goes "frozen" and Fauns death.

Now is the time to, as they do in the Wild, grab the throat and clamp down hard, never relenting until they truly go limp. That will be the end. Never let go, until you feel the death rattle through the teeth. 

Get the blood rush and clamp down.   

Tue, 12/14/2010 - 00:32 | 803742 Dingleberry Jones
Dingleberry Jones's picture

Good stuff. Make a lot of sense.

Tue, 12/14/2010 - 08:16 | 804182 akenathon
akenathon's picture

I agree with you - no way they could have covered this like this - To me they have added even more short but by saying they covered they hope to see prices falling.

Now the time has come to srously slaughter them!!

Also for silver have half of the hedge funds which are long Gold/Silver ratio at those levels and failure to hold the 45 level would wipe out few billions from JPM and Hedge Funds in just one trading day as no one will sell any silver anymore...


Tue, 12/14/2010 - 08:36 | 804185 dehdhed
dehdhed's picture

maybe they've covered some but the more serious problem i think they're trying to avoid is the shortage of silver.   they've probably robbed allocated vaults, and if those holders discover that, they are up a shit-creek without a paddle.

in other words, they've probably covered/delivered with other people's silver and still need to replace that.   if the futures market collapses because there's a run on physical, they will get destroyed.  plus the whole reason and method of price supression goes up in smoke.   no futures market credibility means more transactions go directly to physical and bypasses the paper .. which spills over to gold too

they've got bigger problems than covering their paper shorts.  i sincerely feel sorry for anyone who hasn't any physical.

i'm gonna keep-a-stackin'

Tue, 12/14/2010 - 08:51 | 804202 jus_lite_reading
jus_lite_reading's picture

The end is near... for JPM and BofA- the two largest fraudulent operations on the planet. Worse than communist Chinese gov't propaganda. A million times worse than Water Gate.  Infinitely worse than Bernie Made-off's pon... see, it's the way the system was manipulated!


Tue, 12/14/2010 - 01:01 | 803804 Wackzingo
Wackzingo's picture

I hope it works and the price least temporarily because I want to buy more.

Tue, 12/14/2010 - 09:42 | 804192 dehdhed
dehdhed's picture

if all you want to buy is the paper, then in your case it already worked.   they want to distract from the truth about physical shortage.

instead of thinking about buying MORE paper for just a couple bucks cheaper, you should think in terms of when you can't buy physical ANY MORE.  at least not unless there is much higher prices.  there will be some who let go of it at higher prices, but there will be others standing in line to buy it.  it's that line of buyers they want to make sure nobody sees.

it's a sad truth, instead of advising it's citizens to buy gold and silver,  the citizens of the reserve currency, or any other failing currency,  get stuck holding the bag through lies and deception.

let's assume they stand to lose $100 billion covering paper shorts, that's easy if the fed has back-stopped their actions.  the problem arises if and when the paper ponzi scheme with futures and etf's goes up in smoke. they can't print more silver.   even if they could ramp the production, reserves just get depleted faster.  soon, the price of silver will be based  on both above ground supplies and in the ground reserves, and not just how fast traders can play hot potato with paper silver.

they've got to protect the paper market at all costs.

Tue, 12/14/2010 - 15:07 | 805526 Amish Rake Fighter
Amish Rake Fighter's picture


Tue, 12/21/2010 - 09:31 | 820569 Wackzingo
Wackzingo's picture

I was talking about physical silver.

Tue, 12/14/2010 - 06:10 | 804069 doggings
doggings's picture

Totally!  Nothing but a PR stunt by the bank to try to ease the onslaught.

I concur, here's the visual representation of events..

"Brave Sir Robin ran away.." :)

Mon, 12/13/2010 - 20:27 | 803069 Spalding_Smailes
Spalding_Smailes's picture

"When you expect things to happen - strangely enough - they do happen."
- J.P. Morgan

"A man always has two reasons for doing anything: a good reason and the real reason. " - J.P. Morgan

"Go as far as you can see; when you get there, you'll be able to see farther. " - J.P. Morgan
Mon, 12/13/2010 - 20:33 | 803128 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

My father owned a bank, so I own a bank. -John Pierpont Morgan

Mon, 12/13/2010 - 20:42 | 803165 Spalding_Smailes
Spalding_Smailes's picture

"I unfortunately have never in my life been to a wild party."

-Silvio Berlusconi

Mon, 12/13/2010 - 20:48 | 803188 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Fuck yo couch, 'Merica!

-Ben Bernanke

Mon, 12/13/2010 - 22:01 | 803417 Double down
Double down's picture

"Fuck your couch, Niggar"

Rick James


Mon, 12/13/2010 - 22:35 | 803488 MeTarzanUjane
MeTarzanUjane's picture

"Gold Bitchez!"


Mon, 12/13/2010 - 23:30 | 803628 Al Gorerhythm
Al Gorerhythm's picture

You are all idiots! 

Johnny Bravo.

Tue, 12/14/2010 - 00:10 | 803707 hedgeless_horseman
hedgeless_horseman's picture

"Hi ho Silver!"

-The Lone Ranger

Tue, 12/14/2010 - 00:14 | 803717 Andrew G
Andrew G's picture

"Let's get physical" - Olivia Newton John

Tue, 12/14/2010 - 00:38 | 803756 cowdiddly
cowdiddly's picture

"Somebodies been eating My Porridge" The Three Bears speaking of GOLDiLoCks

Tue, 12/14/2010 - 03:27 | 803970 MakeMineADouble
MakeMineADouble's picture

"Bite Me"



Tue, 12/14/2010 - 21:48 | 806818 Hephasteus
Hephasteus's picture

I'm in your first derivative fucking your second derivatives in the ear.

Max Keiser should say this.

Tue, 12/14/2010 - 00:59 | 803801 jez
jez's picture

hi ho silver lining

-- Jeff Beck


Mon, 12/13/2010 - 20:51 | 803195 FEDbuster
FEDbuster's picture

Which part of "To Big To Fail" don't you guys understand? As much as I would like to see Jamie Dimon hanging from a dog leash, it isn't going to happen. The Ben Bernank will find a way to bail out his bankster bosses no matter what kinda of shit the get caught up in.

Silver is just a pimple on an elephant's ass compared to derivatives.

Mon, 12/13/2010 - 20:59 | 803225 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Which part of 'the dollar is a made up piece of paper with no intrinsic value' don't you understand?

And derivatives are hedged based on the suppression of silver prices!

Mon, 12/13/2010 - 21:15 | 803270 Spalding_Smailes
Spalding_Smailes's picture
"Eurozone would not survive its first economic crisis." - Milton Friedman
Mon, 12/13/2010 - 21:22 | 803294 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I will promise you this, the first thing I will do as President will be to end this war [in Afgahnistan].  You can take that to the bank!

Barrack Insane Obama

Mon, 12/13/2010 - 21:23 | 803298 Spalding_Smailes
Spalding_Smailes's picture

Lol'.... I give up.

Mon, 12/13/2010 - 21:25 | 803303 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Lets do it again sometime.

Mon, 12/13/2010 - 21:38 | 803339 Spalding_Smailes
Spalding_Smailes's picture

Time to circle the wagons. Short S&P - insurance/bet = cheap. VXZ

Mon, 12/13/2010 - 21:41 | 803353 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Big monie standing behind the dollar at the top of the stairs....woops, the dollar fell down the stairs.

Mon, 12/13/2010 - 22:32 | 803479 velobabe
velobabe's picture

you guyz   R O C K

h a r d

Mon, 12/13/2010 - 21:48 | 803378 Rahm
Rahm's picture

Immmmm not a crook

Mon, 12/13/2010 - 22:11 | 803437 El Hosel
El Hosel's picture

   "The people need to know their President is not a crook", that he is is not surrounded by crooks in his administration, looking out for the interests of other crooks, who are looking out for the interests of other far bigger crooks..... Too bad

Mon, 12/13/2010 - 22:20 | 803458 breezer1
breezer1's picture

BIO, i like it. BIO is on a leash. a sock puppet. rumor is he was physically threatened by the bushes in front of staff about a year ago. 

lets all remember what one of the greatest warmongers of our times said," its all about perception" , Henry Kissinger. 

jpm is managing perception. the reality is the physical. where is your physical?

Tue, 12/14/2010 - 05:24 | 804030 goldfish1
goldfish1's picture

I will promise you this, the first thing I will do as President will be to end this war [in Afgahnistan]. -BO

Richard Holbrooke, aged 69 , the man in Afghan, dies Tuesday 14 December 2010. Black swan?


Tue, 12/14/2010 - 07:18 | 804108 ReeferMac
ReeferMac's picture

Terrible accident. Never should have written those memo's....

Mon, 12/13/2010 - 21:01 | 803232 tmosley
tmosley's picture

Benny could print 500 quintillion dollars, but he can't produce enough silver to cover those shorts.

Sorry mate, silver can't be conjured, and it's all gone.

Mon, 12/13/2010 - 23:02 | 803539 A Nanny Moose
A Nanny Moose's picture

The shorts, the shorts. The shorts are on fire!

We don't need no water, let the...oh nevermind

Mon, 12/13/2010 - 23:41 | 803645 GoinFawr
GoinFawr's picture

...'er burn, burn...

Tue, 12/14/2010 - 05:01 | 804019 fiftybagger
fiftybagger's picture

Getting more silver, in fact silver coming out your ears, is really quite easy.  Simply let the price rise.  FYI, I won't part with an ounce of mine under 200 bucks, and that's just ten percent.  I'll let another ten percent go at 500.  The rest awaits the next currency...

Mon, 12/13/2010 - 23:19 | 803591 Cleanclog
Cleanclog's picture

  • The BIS estimates that the value of derivatives has grown to $1.4 Quadrillion (A Billion times a Billion) or 60 times the GDP of the entire world - WHAT?

Tue, 12/14/2010 - 00:01 | 803680 GoinFawr
GoinFawr's picture

1 quadrillion = 1,000,000,000,000,000

1 quadrillion = 1.0x10^15

1 quadrillion = (1,000,000)x(1,000,000,000)

1 quadrillion = a million times a billion, not a billion^2

I can do metric to imperial conversions too, if you like.

(TD, your superscript feature seems to function only in the editor)

But who cares what the BIS claims; seriously. And can any of that 'value' be transmorgified into physical silver? I'd wager JPM sure hopes so...

Tue, 12/14/2010 - 00:15 | 803718 blunderdog
blunderdog's picture

I've always liked you, brah.

Can you please convert freefall rate of acceleration into chains per fortnight squared? I prefer engineer's chains, you know they're like more scientific, but whatever.

(I've always wanted to know that.)

Tue, 12/14/2010 - 01:19 | 803829 trav7777
trav7777's picture

9.8 is freefall, a chain is 66', there are 3600*24*14 seconds in a fortnight...u can handle the rest

Tue, 12/14/2010 - 01:42 | 803854 Milestones
Milestones's picture

LOVED IT!!!      Milestones

Tue, 12/14/2010 - 02:11 | 803895 blunderdog
blunderdog's picture

Those are surveyor's chains! (Since we're being so damn literal, bitchez.)

But ok, ok.  I get 103,458.

To do it right for engineer's chains, you need to know whether they're the 50 or 100ft kind.

(That shit matters, yo.)

Tue, 12/14/2010 - 03:46 | 803966 GoinFawr
GoinFawr's picture

Wicked. I'm glad that's cleared up.

Entirely OT: blunderdog, what is your avatar an image of? I've magnified it, shrunk it to a pinpoint, flipped it, inverted the colour, etc.,  but damned if I can make out exactly what is going on.... something about 'no briefcases to the head'? Li'l help?

Tue, 12/14/2010 - 11:28 | 804595 blunderdog
blunderdog's picture

You got it.  "Don't bash the baby with your briefcase."  What amuses me--this is an ACTUAL sign!

I like also that because it's shrunk so small, it looks a bit like "don't abandon your baby because you're late for the bus."

Tue, 12/14/2010 - 00:43 | 803767 Ludwig Van
Ludwig Van's picture


Many recent physical Comex delivery contracts have been illicitly settled in cash-plus-premium.


Tue, 12/14/2010 - 01:21 | 803833 GoinFawr
GoinFawr's picture

Aside from rumour of such settlements being illicit, what's to stop the receiver from turning around and applying that 'cash plus premium' sum to ever increasing demands for delivery? Also: how exactly do I get in on that action? Sounds like a lock to me.

Tue, 12/14/2010 - 07:11 | 804106 benburnyanki
benburnyanki's picture

OK repeat after me:

This is my rifle,

This is my gun,

This ones for JPM & GS Banksters,

This ones for fun.

Convert this:

One MOA = 1 Minute of Arc = 1 inch groups at 100 Yards

Learn somethin' that can bring home da bacon,

fogetabout buy bacon makin' betties and leave them to sell their asses to Mr. Bang Dae Ho since they cost 3 silver ounces for 5 minutes anyway. Shit you can buy lots of BB's wit 3 silvers.

Midnight Rambler: "I got one mo silver dollar..."

Hell you never would have guessed Ben BurnYankees Godfather Rothschild funded Hitler to Bar-B-Que Jews for six long years via Swiss B.I.S. and Bank o' England and Chase? Now did ya?

Old Vietnamese Saying:

When Beaucoup Lamb Jump Off Cliff,
Someone Have Beaucoup Bar-B-Que!

Ben Burnyankee say: "We wacked Jesus & JFK for Bank Bustin' and walked, and have a 40 foot container of Gringo Bar-B-Q sauce"

Mon, 12/13/2010 - 20:55 | 803213 Careless Whisper
Careless Whisper's picture

while jp gets a headache, we're gonna partaay on the way to $500 silver.

silver mix dedicated to marla.........



Mon, 12/13/2010 - 21:19 | 803286 Bolweevil
Bolweevil's picture


Mon, 12/13/2010 - 22:49 | 803512 velobabe
velobabe's picture

dYn o MitE †

Mon, 12/13/2010 - 20:25 | 803104 BrianOFlanagan
BrianOFlanagan's picture

actually, commercial net short positions have been declining steadily over the past 2 month and now are 25% below the peak.  

Mon, 12/13/2010 - 20:53 | 803209 unununium
unununium's picture

one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

So conservatively, they are 1/3 done covering.  Then they have to start getting long.

Mon, 12/13/2010 - 23:05 | 803547 Mike2756
Mike2756's picture

Was the surge from $28 to $31 it? If so, how much did they lose?

Mon, 12/13/2010 - 23:16 | 803583 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Is this a rhetorical question?  Are you Kidding me?  $100 silver by June, maybe earlier.

Tue, 12/14/2010 - 18:08 | 806128 dehdhed
dehdhed's picture

actually, commercial net short positions have been declining steadily over the past 2 month and now are 25% below the peak.

that figure is based on total open interest which has been exploding to the upside.

also net shorts as a percentage of total open interest usually bottoms near a bottom in price and increases or maxes out near a top.  

net shorts have been declining like you say, but what's weird is that would be indicative of a bottom.  they should be peaking right about now if this were a top.

my guess is the shorts who aren't naked shorts just don't have any physical to sell.  maybe it's already been contracted.   ceo of slw couple weeks ago said sophisticated buyers were approaching the company for supply but the wait is up to 3 months .. something like that.   so those commercials don't need to short in the futures, they're already hedged going forward, they know the price is going up.

people really need to consider getting physical while prices are still undervaluing the metal, before it's too late imho


Mon, 12/13/2010 - 20:46 | 803179 Terminus C
Terminus C's picture

I am not sure the war is over yet.  Battle won but not the war.  Could this be a tactical retreat?


Make announcement, back off for a few weeks/months, silver sputters and they enter back in slowly when attention is elsewhere.


I am not saying this what they are doing but it is certainly a possibility.

Mon, 12/13/2010 - 20:59 | 803224 dussasr
dussasr's picture

Or just pass the baton... If the market is easily manipulated then surely another party will step up to fill the void. 

Mon, 12/13/2010 - 21:20 | 803290 chopper read
chopper read's picture

...announce they'll be reducing their short positions, then pile on more short positions.  

Mon, 12/13/2010 - 21:27 | 803309 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

No way, they have been losing billions holding up the FIAT house of cards.  John Piepont Morgan saying it will no longer do the dirty work of the US gov, because they hate losing monie.

I hate losing monie more than anything.

-John Pierpont Morgan

Mon, 12/13/2010 - 22:25 | 803470 chopper read
chopper read's picture

do they have a choice?   Bankruptcy vs. sell more.  any chance they go for broke?

Tue, 12/14/2010 - 00:20 | 803720 NumberNone
NumberNone's picture

No idea if there is any correlation but JPM is getting nightly felatio from one Jim Cramer about what a powerhouse they are in the banking industry and what tremendous upside they have.  Circle the wagons time? 

Tue, 12/14/2010 - 03:23 | 803959 chopper read
chopper read's picture

i hear you.  no paper ponzi, no CNBC.  Jim Cramer is so deeply engulfed in cosmopolitan elitism that he is entirely unable to see the deep, deep immorality of the current system.  personally, i find it very easy to see that this man is in the wilderness with no philosophical foundation in liberty.  I pity him, more than anything, but do not excuse his Joseph Goebbels-like collusive actions.  he would be well-served to reverse course and join the fight against the International Banking Cartel who would gladly sacrifice him (in Margaret Stewart and Bernie Madoff fashion) if they could continue the cartel.  of course, they have done much worse in the past. 

Tue, 12/14/2010 - 02:19 | 803900 Bob Sponge
Bob Sponge's picture

Didn't JPM recently announce they were closing their commdities trading desk or division?  So, yes, it would not surprise me if this announcement was a lie.

Mon, 12/13/2010 - 21:41 | 803349 UGrev
UGrev's picture

Feign death and maybe they'll go away.. 


ahhh.. but we've watched Zombieland one too many times and we always follow up with the double-tap. Buy more silver, bitches! Watch that bitch, Blythe, completely unravel!

Mon, 12/13/2010 - 22:14 | 803446 BrosMacManus
BrosMacManus's picture

Blythe, to me, doesn't look like the unraveling type. More like a slit your throat and watch you gurgle type....

Mon, 12/13/2010 - 21:47 | 803375 molotov
molotov's picture

cheers tyler! cocktail anyone?

Mon, 12/13/2010 - 22:41 | 803498 MeTarzanUjane
MeTarzanUjane's picture

Christ sakes, you guys drink so much you could run the Emerald Isle...

Tue, 12/14/2010 - 02:51 | 803945 RockyRacoon
RockyRacoon's picture

Be sure you  extinguish all open flame first!

Mon, 12/13/2010 - 22:05 | 803427 Bring the Gold
Bring the Gold's picture

Gratz to all silver longs and silver miner stockholders. I'm loving it!

Tyler your point about Conspiracy Theorists is so dead on I love it!

Tue, 12/14/2010 - 01:37 | 803851 Founders Keeper
Founders Keeper's picture

[Tyler your point about Conspiracy Theorists is so dead on I love it!]---Bring the Gold

I'm not ready to give-up my tin foil hat yet---I just got it.

Mon, 12/13/2010 - 23:01 | 803537 Arius
Arius's picture

to paraphrase a big man: this is not the end, nor the long JPM...the smart money is already planning w/ you...

Tue, 12/14/2010 - 03:44 | 803984 jeff montanye
jeff montanye's picture

el alamein bitchez?

Mon, 12/13/2010 - 23:27 | 803614 Al Gorerhythm
Al Gorerhythm's picture

How much physical silver has been removed from SLV to date? Would this physical be used to cover shorts in other markets and will the SLV share holders become SLV bag holders?

Tue, 12/14/2010 - 05:11 | 804023 fiftybagger
fiftybagger's picture

Hahahahaha, you think there's physical silver in JPM's phony SLV?  Bwahahahahaha.  Have you seen the list of serial numbers of the bars?  Duplicates and phonies all over the place.  This is just the volume of the music being turned down 1 percent.  Wait until the music stops and peeps start looking for chairs, there's only 1 for every 100:

Mon, 12/13/2010 - 23:38 | 803653 geminiRX
geminiRX's picture

Perhaps this marks the beginning of the "mania phase" you posted yesterday:-)

Tue, 12/14/2010 - 02:02 | 803879 americhinaman
americhinaman's picture

i'm new to this forum, but it's been impossible not to note the optimism for silver on ZH.  while i'm sympathetic to the argument that monetary debasement leads to the need for alternative stores of value (real assets, which historically include precious metals), i think the JPM stories perpetuated here have made a heroic assumption that i can't find any evidence of.

i've done a lot of research on the ETFs and ETNs from a previous job at a big wall street bank.  from the ishares docs, i see that JPM is both the custodian of the silver in the trust AND an "authorized participant" (which means they are a market maker who can create or redeem units of SLV shares in exchange for the silver represented by such shares).  this puts them in a unique situation where they can effectively arb the various silver markets... between SLV, SI- futures, and spot silver.

i can tell you for certain, that the desk-level traders who run the arb are not authorized to accumulate naked short (or long) positions.  if there is a naked short, it would come from the top... a head of trading or above.  but based on the evidence, i cannot conclude that they have such a short.  what i see is that JPM is running a 3-legged arb involving:

1) physical silver

2) SI futures

3) SLV shares

as needed, they take positions in zero-coupon treasuries with maturities matching futures expiry, to manage leverage and cash with the above.

my conclusion is that JPM probably does have a massive position in the futures market... which causes headlines which might annoy the NYMEX or the CFTC.  but JPM's unique position as the custodian of one of the largest physical silver stockpiles in the world (i.e. they could easily manage physical deliveries with little marginal cost) AND as one of the AP's that regularly create/redeem SLV for silver, means that they are in a unique position to run arbitrage positions using silver futures against their other silver holdings.  without further evidence, i would guess that JPM is indeed running a massive arbitrage between the 3 silver exposures listed above and NOT a naked short.

i would be curious if you can find evidence in the financial statements, suggesting that they do not have offsetting long positions as i assume.  if not, i would be very careful buying into what i see as a phantom short squeeze.

Tue, 12/14/2010 - 02:27 | 803922 blunderdog
blunderdog's picture

Well of course you know you've probably got something there, and the question for lil people would be whether JPM is benefiting more from a slightly suppressed or slightly inflated spot price.  What do you think?

That's the bet the *physical* buyers are placing, and most of the rabid bulls here appear to be physical buyers.  Leverage that only if you can afford to, right?

For those holding physical, any gain at all is good enough, especially against depreciating fiat. 

It would be nice to have all the information, of course. 

Any JPM insiders feel like leaking that shit?  Come on, it's ZH, you've got plausible deniability, I'm sure.

Tue, 12/14/2010 - 03:01 | 803952 americhinaman
americhinaman's picture

JPM most certainly has contracts to receive physical silver from suppliers, in addition to a stockpile of silver, and most importantly (via their AP status) they can freely redeem their long SLV shares for physical silver held in custody.  to continue on my educated guess, they have probably accumulated an arbitrage position effectively long physical silver against short futures.  investment demand for silver has been enormous over the past couple years, and most investors simply do not have the mechanism to find or take delivery of physical silver.  instead they have purchased easily available and liquid futures; and this demand has likely driven the futures prices up to a level at which JPM could enter an arb of long physical (plus contracts for delivery plus SLV shares) and short futures to lock in the arb.

given that investors do not have the capacity to stand for physical delivery (even the big dog PM holders soros, paulson, and einhorn do not have protected vaults, armored cars, armed guard, etc.), a physical squeeze is very unlikely.  the evidence for this is simple... the SI futures curve is very "well-behaved", i.e. forwards trade at very precise contango defined by a range between zero-coupon treasury rates and interbank swap rates.  unless the forward curve breaks down into backwardation, anyone can easily roll forward any futures position at a close-to-fair price.  the absence of backwardation means that there is no physical squeeze.

putting it all together - this means is that anyone buying physical silver right now is actually helping JPM close the arb at a profit.  with the hysteria that has been drummed up, JPM has recently posted their media announcement that they are buying back futures... which to me suggests they also sold down physical and/or SLV to lock in some profits.  it is very ironic (and very sad, because i am sympathetic to this cause) that in trying to achieve the stated goals of hurting JPM's bottom line, most of you are actually helping JPM profit on their arb position.

Tue, 12/14/2010 - 03:23 | 803963 traderjoe
traderjoe's picture

Coming from the member here for one week, 3 days. Sorry, but a lot of trolls and shills have joined as of late. Hell, you could be one of professional troll Harry's many Avatars. 

No physical squeeze? Call all of your local coin dealers. See if they have the same stocks that they used to even a couple of months ago. In my top 25 metro area, only 2 out of 10 dealers have any silver inventory (as of one week ago). Check Apmex and see that they only have about 100 - 100 ounce bars for immediate delivery. Stocks are tightening. Call it what you want...

Tue, 12/14/2010 - 05:15 | 804025 americhinaman
americhinaman's picture

i don't know what a troll or shill is, and i'm not going to bother looking them up... though the need to resort to insults probably says more about you than anyone else.  i'll respond one time only for the sake of stopping you all from helping JPM even more; after this you can do or say as you like.

most of the arguments of an impending short squeeze refer to the short futures which JPM holds, so i thought it was obvious that i was referring to a short-squeeze CAUSED BY FAILURE TO DELIVER PHYSICAL AGAINST SHORT FUTURES.  the problem with this thesis is that there are very few investors (long or short) who are able to take or make physical delivery (of those able to make delivery, JPM is now one of the biggest).  i can see that a larger proportion of futures buyers are taking physical delivery than in the past, but it is infeasible that ALL of the long futures holders are going to because they don't have the security/logistics.  as always, most futures investors will roll their positions forward.  evidence of a physical squeeze CAUSED BY FAILURE TO DELIVER PHYSICAL AGAINST SHORT FUTURES will be evident if the futures curve goes into backwardation, or at least if the curve breaks out from what currently is a very tight arbitrage relationship based on a combination of the riskfree and interbank rates curves.  there is no evidence of this right now.

JPM's futures position suggests they are long physical silver against short futures.  if i'm correct (and having worked with a delta-1 and etf creation trading desks in the past, i am quite certain i am correct), this means they do not care what happens to silver prices overall.  they only care about the relative price of physical silver compared to futures (plus a forward rate adjustment).  on top of this arbitrage position, they may have taken a more moderate naked long physical or short futures position; though the pnl on such a naked position would belong to a head of trading or higher.

bottom line, the act of investors buying physical silver will tend to increase the profitability of JPM's arb trade.  if that's what you'd like to do, feel free to do so.  don't be surprised if you learn that JPM's delta-1 and precious metals trading desks pay record bonuses this year... everyone buying physical silver right now is contributing to their bonus pool.

Tue, 12/14/2010 - 06:37 | 804086 bigkahuna
bigkahuna's picture

I guess we're all gonna see.

Tue, 12/14/2010 - 06:41 | 804089 Unholy Dalliance
Unholy Dalliance's picture

If you don't know what 'trolls' or a 'shills' are, why do you assume they are perjorative terms i.e. demeaning or insulting?

Tue, 12/14/2010 - 09:06 | 804214 gmak
gmak's picture

Thank you for your reasoned and well-thought out comment. However, there is no sense spitting into the wind that blows when conspiracy-theorists gather to jawbone.

As you state, and I agree, there is unlikely to be a desk (anywhere) with such an unbalanced naked position. Much easier to lock in a spread.


Thanks again.

Tue, 12/14/2010 - 11:25 | 804582 Burnsy
Burnsy's picture

Second that. I agree that is the most likely scenario. (Unfortunately. Would love to see JPM topple and silver go to 40, stat).

Tue, 12/14/2010 - 11:36 | 804627 Bring the Gold
Bring the Gold's picture

You're looking at this as though it's a profit motive, instead of a control motive.

If it was a profit motive, JPM would have gone long back in 03/2009 at the latest.

No it's a control method to take out the "battery" in the fiat fire alarm.

Also I'm glad to see you "shill/troll/ivory tower knownothings" jawboning. No use leading ya'll to water, you won't drink because clearly belief in hydrogen/oxygen bonds is a conspiracy and therefore the water right in front of your eyes doesn't exist.

Tue, 12/14/2010 - 11:42 | 804651 GoinFawr
GoinFawr's picture

"...there is unlikely to be a desk (anywhere) with such an unbalanced naked position."

I believe that lies at the heart of the theory, no? This isn't just any ol' desk we're talking about, you know.

Tue, 12/14/2010 - 11:43 | 804660 blunderdog
blunderdog's picture

I don't make my investments based on imperfectly-informed speculation about how to harm other investors.  I tend to think in terms of my own gain.  Maybe you're doing it wrong.

It would sure be interesting if the silver market went into backwardation, tho.  Heh.

Tue, 12/14/2010 - 03:26 | 803969 blunderdog
blunderdog's picture

Huh.  Seemed like a simple enough question.  Let's try that again:

Is JPM benefiting more from a slightly suppressed or slightly inflated spot price?

What do you think?

Tue, 12/14/2010 - 04:11 | 803997 GoinFawr
GoinFawr's picture

Yah c'mon, be a hero

Tue, 12/14/2010 - 04:01 | 803993 EscapeKey
EscapeKey's picture

From the SLV prospectus:

"As an owner of iShares, you will not have the protections normally associated with ownership of shares in an investment company"

"Neither the Securities and Exchange Commission (SEC) nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete."

Trade what you believe, but SLV could essentially sit on a 100% unallocated position, and you wouldn't know about it.

The commercial short position is about 250 Moz, of which JPM are supposedly on the hook for about 80-90%, so that's the amount of physical they're supposed to have kicking about.

Regardless, say the new conspiracy theory is that JPM sit on physical long equal to their paper short position. Silver breaks out to, say, $100/oz. We experience a FTD, the paper positions are liquidated at $100/oz, and the price of physical shoots to $200/oz. JPM win, we win, everyone else loses. Given that JPM are a stakeholder in FRB, they were hardly likely to declare bankruptcy anyway, more likely the recipient of another covert bailout.

Tue, 12/14/2010 - 06:47 | 804093 Unholy Dalliance
Unholy Dalliance's picture

And, surely, if JPMC have access to that kind of physical - even if they obtain it by leasing from SLV, they would then be able to flood the market with it in order to drive the price of silver down. Look what happened on 2 occasions recently when silver declined in price. It recovered within days.

No - this argument that JPMC isn't in trouble with silver just doesn't hold up to scrutiny. This is what 'Mr Gold' - Jim Sinclair - has to say about it all today. I believe him first rather than this Americannywanny twerp. JPMC is this the best you can do?!?!?

Dear CIGAs,

Gold is trading at $1405.

How many of you recall the classic film, "Monty Python and the Holy Grail?"

Well, for those that do gold looks like King Arthur at dawn in Africa. The knight whose duty it was to protect the bridge from other knights crossing encounter a determined King Arthur. King Arthur approaches the bridge and is challenged by the bridge keeper to halt and not cross. A fight ensues and the knight protecting the bridge is reduced to a slaughtered stump with no arms or legs. King Arthur crosses while the bridge keeper yells at him to return as the bridge keeper threatens to bite the king to death as he no longer has arms, legs or weapons to fight with

The shorts in all things gold represents the bridge keeper. Of course, the gold guys are King Arthur.

The dopey short of all things gold cannot stop the climb of the gold price to $1650 and beyond. They are such ego maniacs that they will, like the bridge keeper, be slaughtered stumps yelling "come back, I will bite you!" 

Tue, 12/14/2010 - 05:32 | 804034 fiftybagger
fiftybagger's picture

"they have probably accumulated an arbitrage position effectively long physical silver against short futures"




Now you are pissing me off.  You think their whole motive here is to arb silver?  You have got to be kidding me.  They were MASSIVELY short silver BEFORE the SLV even existed.  Why is a bank selling silver?  BANKS DON'T MINE SILVER!!!  The silver market is tiny, and the SLV is only 7 billion dollars.  Think about that for a minute.  ONLY 7 BILLION FREAKIN' DOLLARS!!!  That's pocket change to these guys.  THEY ARE PRINTING TRILLIONS!!!


OK Blythe, time for bed.  You've got a very busy day ahead of you tomorrow trolling all the silver boards ;-)

Tue, 12/14/2010 - 02:28 | 803927 Eternal Student
Eternal Student's picture

+1.  The phantom short squeeze is a very good point to be concerned about. Especially since the main action seems to be coming from big players. What happens if they switch sides?

Tue, 12/14/2010 - 11:49 | 804682 GoinFawr
GoinFawr's picture

250 plus mil folks with 30 bux each and a shared focus can become a pretty fair sized player in a number of markets, last time I checked

Tue, 12/14/2010 - 20:35 | 806593 Eternal Student
Eternal Student's picture

Agreed. But 249.9 Million of those are too busy watching Dancing with the Stars and other nonsense.

Tue, 12/14/2010 - 05:21 | 804029 fiftybagger
fiftybagger's picture

" but JPM's unique position as the custodian of one of the largest physical silver stockpiles in the world (i.e. they could easily manage physical deliveries with little marginal cost) AND as one of the AP's that regularly create/redeem SLV for silver, means that they are in a unique position to run arbitrage positions using silver futures against their other silver holdings.  without further evidence, i would guess that JPM is indeed running a massive arbitrage between the 3 silver exposures listed above and NOT a naked short."




And junked


SLV Net Assets:6.94B.  That's 7 billion dollars that those crooks have diverted away from silver.  250 million ounces of silver INVESTMENT demanding delivery would BLOW THIS WHOLE THING WIDE OPEN.  Go back to trolling the SLV message board on yahoo Blythe ;-)

Tue, 12/14/2010 - 06:00 | 804059 Sudden Debt
Sudden Debt's picture

They are on the hook fro 114 BILLION dollar!

And if silver would be priced correctly, it could jump to 140 $!

Tue, 12/14/2010 - 10:39 | 804445 kentfinance
kentfinance's picture

Pure PR. They are nowhere near out of it. Early dip today is headfake. Market can now taste the blood rather than smell it. My guess is the top twists of from here.

Tue, 12/14/2010 - 11:31 | 804610 kentfinance
kentfinance's picture

Pure PR. They are nowhere near out of it. Early dip today is headfake. Market can now taste the blood rather than smell it. My guess is the top twists of from here.

Tue, 12/14/2010 - 08:24 | 804183 sculptor
sculptor's picture

JPM, bailed out  and funded by fed funds

bought up over half the world's copper production and stored it in london wharehouses....I've watched copper quadruple , rob my profit margin(i use tons of copper each year) and line JPM's pocket....its govt funded speculation, banks borrow at 1% or less and usethe money to drive prices of commodities up and drive profits of small USA manufacturing down

great plan

Tue, 12/14/2010 - 13:17 | 805037 NotApplicable
NotApplicable's picture

You should probably switch to zinc.

Tue, 12/14/2010 - 08:24 | 804184 sculptor
sculptor's picture

JPM, bailed out  and funded by fed funds

bought up over half the world's copper production and stored it in london wharehouses....I've watched copper quadruple , rob my profit margin(i use tons of copper each year) and line JPM's pocket....its govt funded speculation, banks borrow at 1% or less and usethe money to drive prices of commodities up and drive profits of small USA manufacturing down

great plan

Mon, 12/13/2010 - 20:03 | 803029 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This was the first word that came to my mind too.

Mon, 12/13/2010 - 20:04 | 803033 Sean7k
Sean7k's picture

I'll believe it when I see it. Last week had Blythe's cunt prints all over the market. 

Mon, 12/13/2010 - 22:04 | 803421 Bring the Gold
Bring the Gold's picture

Wow, that's a pretty repugnant statement...and image. Yuck, I'm going to go wash my eyes and brain with some engine cleaner.

Mon, 12/13/2010 - 20:33 | 803125 hero HNL
hero HNL's picture

My first post at ZeroHedge: I always knew something was fishy with silver. It's worse than crude oil.

Mon, 12/13/2010 - 20:37 | 803146 MsCreant
MsCreant's picture


Mon, 12/13/2010 - 21:22 | 803297 Bolweevil
Bolweevil's picture

Lurk no more hero. Bienvenido.

Mon, 12/13/2010 - 23:41 | 803658 Al Gorerhythm
Al Gorerhythm's picture

You can take that frozen pea out from under your mattress,MsC. You should be able to sleep soundly on a sack of spuds from here on.

Tue, 12/14/2010 - 11:43 | 804655 RockyRacoon
RockyRacoon's picture

Yo, that.  Black-n-blue becomes a normal state after some time here.

Mon, 12/13/2010 - 21:37 | 803337 Founders Keeper
Founders Keeper's picture

Welcome, hero HNL.


Mon, 12/13/2010 - 22:39 | 803496 laughing_swordfish
laughing_swordfish's picture

Wilkommen auf Zero Hedge

Tue, 12/14/2010 - 03:33 | 803972 Hook Line and S...
Hook Line and Sphincter's picture

Fishy? Yes. Especially if you get your colloidal from my semi-secret skene gland source. Regardless, bienvenidos a Seto Cero. 

Hook, Line, and Sphincter

Mon, 12/13/2010 - 20:33 | 803127 wowser22
wowser22's picture

You fuckers must have a serious brain fart if you think this is over and done with.  The goberment will just find another suitable conduit to prosecute their shorts.   if you think this is over, think again

Mon, 12/13/2010 - 21:21 | 803293 Hephasteus
Hephasteus's picture

There ya go. People will all bow down to the will of persitant stupidity. Just keep going there energizer bunny.

Mon, 12/13/2010 - 23:23 | 803607 e_goldstein
e_goldstein's picture

and buy the fucking dip.

Mon, 12/13/2010 - 22:22 | 803438 Bring the Gold
Bring the Gold's picture

Hand it over to what group of NAKED shorts is that exactly? Unless China still has their ancient hoard, NOBODY can cover those short positions. Yeah they can and will paper it over possibly causing COMEX contracts to drop to zero and physical to go to the Oort cloud and beyond. Nobody can keep it down though. Especially not now. 

The only way silver can tank is if the market tanks in a big way, although as it's monetary nature is further revealed it could also really get the rocket sauce from a Market crash. I'd say the PTB is pretty snookered on silver.

WTG silverbugs! A silver stake in the heart of one vampire (JPM), lets finish them off and then it's time for calamari!

Mon, 12/13/2010 - 20:39 | 803154 midtowng
midtowng's picture

Too early to declare victory. This is merely the enemy (i.e. JPM) admitting that its forces are over-extended, and that if it doesn't pull them back they will be cut off and overwhelmed.

   We still need to cut them off and overwhelm them.

Mon, 12/13/2010 - 20:53 | 803207 Selah
Selah's picture


Yup, much too early to declare victory, but never too soon to declare DELIVERY!!!


Tue, 12/14/2010 - 07:23 | 804157 Bilderbugger
Bilderbugger's picture

How can some investor demand physical delivery of physical ETF'S ?.

And why aren't they do it because everybody knows that the paper silvermarket is multiple times bigger then the fysical silvermarket. (100x)?

Tue, 12/14/2010 - 09:05 | 804215 ATM
ATM's picture

WTF, did you die and your head fall on the enter key?

Tue, 12/14/2010 - 11:45 | 804670 RockyRacoon
RockyRacoon's picture

Ole Bilderbugger musta stuck that finger a little too far up the nostril.

Wed, 12/15/2010 - 00:47 | 807151 chopper read
chopper read's picture

good one, ATM!!

Mon, 12/13/2010 - 21:01 | 803233 Fred Hayek
Fred Hayek's picture

Like the 6th army in fricking Stalingrad.  Blythe Von Paulus.

Mon, 12/13/2010 - 23:10 | 803564 ArrestBobRubin
ArrestBobRubin's picture

Nice. And next up for the Shorts: the battle of Kursk.

Comparable in that awesome German armor wound up being defeated in the end by brave and ferocious Russian foot soldiers sporting Molotive cocktails. They worked great when thrown into the engine intake vents.

Metal buyers around the world are our infantry. Silver Eagles, Keisers, bars and rounds are our Molotov cocktails. Max Keiser, Jim Rickards, James Turk, Bob Chapman, John Embry and Mike Kreiger are our heavy artillery. And JP Morgan and HSBC are the Nazi armor...

You know what to do next.

Tue, 12/14/2010 - 21:33 | 806754 Hephasteus
Hephasteus's picture

LOL out of stock.

Do they sell those at best buy?


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