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JPM Corners Copper Market, LME Says Not To Worry, All Is Good
Not content with holding the biggest paper short position in silver, JP Morgan is now intent on cornering the copper market, as the monopolist firm stretches its FRBNY-facilitated muscles in an attempt to stem the massive losses incurred via its silver short. As the Telegraph reports, following up on a story of a "rogue" purchaser who bought up $1.5 billion in copper on the LME, "the American investment bank JP Morgan is the mystery trader that grabbed more than half the copper on the London Metal Exchange." This is a huge copper purchase, and represents between 50% and 80% of the 350,000 tonnes in reserves, confirming that JPM is now the dominant manipulator in yet another commodity market. The purchase also pushed the price for immediate delivery to $8,700, the highest since October 2008. It is unclear how China, which is the biggest non-speculative end user, will react to this development, nor whether the CFTC will (ever) take any action against such blatant market manipulation. One thing is certain: the LME will do absolutely nothing: "Diarmuid O'Hegarty, head of compliance, said: "The LME has noted recent
comments about the current circumstances in the copper market. Such
circumstances are not unusual and the exchange is exercising its well
established procedures for maintaining an orderly market." He added that large trades were not a cause for concern because the market's
rules dictate that holders have to lend out a proportion of their stock to
ensure a smooth supply of the metal." And who would possibly assume that JPM may not follow the rules...
As to the reason why JPM is manipulating this latest market: simple -ETF frontrunning:
Traders said JP Morgan's name had been circulating the market all day as the most likely buyer, especially since it is about to launch a physically-backed "exchange-traded fund" (ETF) in copper imminently.
One metals broker dealing on the LME said: "The story is that they're positioning themselves in front of the ETF. There's been a lot of speculation it's them."
Traders noted that there was no physical shortage of copper in the markets but that fears of a squeeze have persisted ever since a raft of investment banks announced their intention to launch ETFs this autumn.
Last month metal traders wrote to the Financial Services Authority (FSA) claiming that licensing the funds, which are also likely to be launched by BlackRock, Goldman Sachs and Deutsche Bank, may amount to "approving the next financial bubble".
It is estimated that if the copper funds are fully subscribed they would be looking to buy more than half the total stocks in LME warehouses.
Traders' concerns are based on the ETF model that will require the investments to be backed by physical metals, such as copper, lead, aluminium and nickel, rather than paper assets offered by futures contracts.
Daniel Major, a metals analyst at RBS, said: "There isn't a huge buffer available for the market. The supply situation can quite easily tighten in copper."
It's all good, though: the LME is on top of it: "The LME moved to quash claims that a rogue speculator was attempting to corner the copper market." See, it's not rogue. It's just JPM. Ergo all is good.
As for the CFTC, we now know why they are so intent on delaying the size limit discussion: after all, any regulation will be forward looking - better let JPM accumulate all commodities it can and distribute these via hidden channels to affiliated subs before the ever so busy Gary Gensler corrupt cronies decide to raise their finger on what is increasingly an ever more blatant market manipulation scheme. At least in this case, JPM will push the price higher unlike what it is doing courtesy of its gold and silver manipulation. However, the PM market (especially Asian accounts) will soon make sure Blythe Masters is looking for a job within 3 months as we predicted a few weeks ago.
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China should take a long silver/short copper position to teach these fuckers a lesson.
That would already be a lock wouldn't it...?
They must be laughing up their sleeves.
Some Chinese pig farmers standing ready to sell into this.
China has JPM standing on a block of ice with a rope around its neck. Silver anyone?
Check out today's article in the Telegraph on JP Morgan's colossal long position in copper.
http://www.telegraph.co.uk/finance/newsbysector/industry/8180304/JP-Morg...
It's very difficult to successfully corner a market for long, especially one as diverse as copper. Inventories have risen globally throughout 2010, only tightening on LME as JPM locked up more and more LME copper in LME warehouses. Demand ex-JPM has fallen globally, with China in particular importing much, much less in recent months.
JPM is taking a huge risk here, especially if the FSA decides not to authorise the ETFs. It's worth remembering that after the Hunt Brothers were busted for trying to corner silver, that the silver price crashed by 80 percent in two months.
yet copper is the most fragile hard asset in case of a credit bust..they would be ganbanged via silver/copper cross..
"with China in particular importing...less" Yep. In fact, I read somewhere a few months ago they'd been just stock-piling cathodes of Cu for a while
copper, silver, gold, all manipulated
Etfs backed by paper are bad
now, Etfs backed by metal are bad
How is an honest speculator, like myself, supposed
to know if we are entering deflation or inflation
If the historic benchmarks are being manipulated.
And, another thing Tyler,
You act as if market manipulation by the FED
And TBTF banks is recent, since the mortgage crash.
I think it goes back to at least the dot com bubble of 1999
When the modification of Glass Steaggal gave the Fed and TBTF legal cover.
Just because you didn't know about it doesn't mean it wasn't happening.
And your naive solution is to buy precious metals which you admit are manipulated.
Adam Smith in the wealth of nations and moral sentiments mention the invisible hand which punishes bad markets. And no doubt brought down communist Russia also works against crooked capitalism.
This invisible hand slap down of not only evil bankers but also evil unions evil governments
"See, its not rogue"
Rogues generally have, if not ethics, at least principles, thus ruling out JPM.
CRASH JP MORGAN! BUY COPPER. Quick alert Max.
Oh oh! Big moves on the grand chessboard now.
First Koreas, now this.
Can you say China Baiting while making a killing doing it?
I just did!
ORI
http://aadivaahan.wordpress.com
PS: I have a fascinating e-mail to send to anyone who is interested in a totally crazy insight into their lives. But you really have to want said insight and know me well enough by now to trust enough to try it. Pretty damn awesome insight into one-self. If you find such things airy-fairy and useless, don't write. For the rest, my e-mail ID is on my design website: http://squareandc.net just scroll to the end of the landing page.
Not an attempt to gather mail id's. You can make up a temp on on g-mail or yahoo. Just use your ZH handle to identify.
You will thank me. :-)
email sent.
;-)
For the junkers, thank you, you furry creatures.
ORI
and $1.5b in copper is - drum roll pleeeeeaaase - 1% of annual global consumption. ka-thud. so much for that conspiracy theory....
clearly you dont have any idea how marginal demand affects commodity prices. if your point is that JPM hasnt cornered the market, fine, we agree. if you think that a small increase in marginal demand cant lead to huge price moves, your flat wrong.
Interesting. I thought fibre optics were used to support HFT. JPM must not have upgraded their old copper switches yet.
Clearly, they actually *needed delivery* on all that metal.
More chicanery? Copper mines spit out silver and other metals too.
Can JPM control silver prices indirectly with copper price manipulation?
Very interesting observation, but I think the amount of silver gleaned from much higher copper prices would be of minimal impact due to the long delays involved in ramping up mining operations. If true though, that is a sure sign that their backs are up against a wall in silver...
Copper
http://99ercharts.blogspot.com/2010/12/copper_04.html
http://99ercharts.blogspot.com/
JPM is in no danger.
Whatever exotic trading scheme they concoct will be 100% supported and sanctioned by the Fed, CFTC, U.S. Treasury Dept., etc.
Because the Bilderburgers, 90% of all Bessemer Trust clients, half of the Washington elites, and many foreign governments are JPM customers.
Therefore, it is in plutocrats' best interest to allow JPM to do whatever is necessary to "hedge" any outsized futures position which they may be stuck with.
Like I said, price action of JPM itself will tell the story.
If JPM falls out of bed and breaks below the 50-day, then I'll change my opinion.
My cynical side agrees. My idealistic side is just sitting at the bar, morose, pounding shot after shot.
Until an example is made, the wholesale pillaging will continue. Move the goalposts, re-write laws, get special 'exemptions'. So many tricks that can be used to justify nearly anything. Wish it wasn't so, but here in the sewer we sit.
You there ! Bartender -- freshen this fellow's drink. There is a weekend to lose ! Just put it on the tab. My credit is quite recognized at this establishment.
Cynical or not, you have to admit Robot cocnsistently pulls meaning from context, and simplifies it for everyone to understand.
My mother used to have a saying, god bless her soul; "You/we are where we are supposed to be".
If it is a sewer where we sit at least you know it, which is a start.
you assume everything is and will always be fine - are you familiar with the black swan theory?
JPM Chart looks very bullish. Wave 3 of 3 in uptrend, if anyone wants the wave count. ABC12 and start of wave 3 tend to look like consolidations in a range. You can look at the weekly chart and see a textbook saucer bottom, also.
I've been long since Wed. when it broke the declining wedge.
:)
Geez, why junk a very valid view point? Because we all hate the plutocrat fucks? Right now until something changes it is what it is, and we should dispassionately assess it as such.
Now, what might change things? At some point, the other sharks smell blood ala Lehman and turn on their own, the wolfpack sees one of their own down, and realize hey that sucker is not only a competitior, but full of blubber as well. Nummy.
On JPM all should now be watching the Emperor of China. Is it thumbs up or thumbs down.
+1
I hope there is no surprise expressed by this move by JPM.
Par for the effin course, eh?
Are they hedging silver or do they know some country is about to get assaulted ? Those big spikes in crude, rbob and now the copper story, make me wonder what's going on here.
Yes, exactly. Crude and gasoline were trading very poorly last week, then suddenly they spiked up and are threatening to break out of a huge trading range.
Transport companies will be buying USO, UGA, etc. en masse on any breakout of this range to hedge against runaway prices.
If that happens, then the "Weimar Inflation" is upon us, and virtually every risk asset will be going to the moon, including gold, stocks, and many currencies.
Why, sir: here we all are -- Saturday night -- and not a single animated gif from your private stock of buxom maidens ?
Oh my... did I just hear Robot say that Gold could be going up?
I was thinking the same thing. They obviously know something. They are not buying 1.5B for the hell of it.
hahah - effectively hedged. You seriously thought you could take them down buying silver mua ha ha
+1....hmmmm....may be...
That's what you are supposed to think.
It's trying to be a distraction from the massive silver short squeeze. You might be forgetting how stupid the sheeple really are.
i have about 10 rolls of wheat pennies that are going to the MOOON, alice.....
All cents through 1981 had the same 95% copper composition as the wheaties. Happy to join you for the lunar voyage!!
I remember my old man pulling pre-65 silver junk coins, and saying "these will always be worth more" in the 60's-70's My last was a "war" nickle I got in change two years ago, the clerk said that it looked old...I sad no problemo and walked away happy as a clam. I do not save pre 82 US pennys or nickles, but, if I get them in change they go into the bag. The old man is smiling! He was sharp and ahead of his day!
+1
Interesting you should mention this, as I received a 1943-P silver nickel in change just last week. Nothing to retire on, but it will never see circulation again.
My Grandfather kept bags of silver dollars in the bottom of a chest freezer. I guess he would get a few from the bank every week. He had a nice little stash when he died from what I understand. Too bad his bitch sister stole it all before my Uncle could get to the house. He also had a shitload of Rolls Royce stock, that was worthless.
That's what happens when Ben throws around trillions. At x leverage in commodities will make 30x leverage in mortgages seem like a firecracker.
Long copper to offset silver shorts? Hmmmm..
This is old news but nickels (75% copper/25% nickel) are currently worth 124% of face value.
Composition of the coin is allegedly set to change in 2011.
Coinstar - Hoarding nickels?
Soon people will sell the copper pipes in their house to buy food, or the copper pipes in someone elses house. Would be a real shock to come home and find your tv still there and all of your copper pipes gone.
We are in the middle of a war folks. A war not between armies but a war for the procurement of natural resources. Gold, silver, copper, oil etc... fought between governments and multinational corporations that will leave "we the people" as collateral damage. They are the cats, we are the ball of yarn. A few shadowy multi billionaires trying to control the behavior of the people by dictating how we live like Maurice Strong, Al Gore, the de Rothschilds family using their wealth or political influence to rule the world through the control of how natural resources are doled out and used by the commoners using fear and intimidation. It's the one world currency that is the next shoe to drop. Regular folks are in deep trouble and most don't even know it.
"Regular folks are in deep trouble and most don't even know it."
Not sure I exactly agree with how you got to this conclusion... but it is absolutely true nonetheless.
Wonder how much my copper tea pot is worth?
deleted
junked for being worst comment. lol
Interesting that in days gone buy people would give wedding gifts like sterling silver flatware, copper tea kettles, brass candle sticks. Manybe because the metal itself had lasting value. Just looking around the house you could find a treasure trove of value.
It might even be possible to go to garage sales and buy things in metals just for their metal value and sell them as scrap metal. Interesting thought. May be a good springtime endevor.
I think you might want to get started before spring! My local paper lists more than 25 garage sales in a 15 mile radius today. About half list household items, china and of course I don't know what that describes. 2 actually do list silver items. So, good idea. Let us know how it transpires.
Picked up a fat sterling silver spoon for .25 cents a couple of years ago...weighs a couple of oz at least... a buy like that will make for a great day.
What your saying is
Copper is manipulated buy copper
Ditto gold ditto silver ditto gas
If you are not the manipulator you are the manipulatee
It comes down to who gets the inflated $$$ first
I agree with The Mad Hatter! China needs to go long silver/short copper and give these bastards a spiritual experience!
The very idea of a copper ETF is completely and utterly BOGUS. I don't mean I don't believe the story that JPMC front-running for this 'Copper ETF'. However, what on earth is the point of a base metal ETF?? Why would anyone invest in a base metal ETF unless there was an acute shortage of it in which case it would no longer be a base metal but a quasi precious metal - theorectically, at least . Also, this could all be done with derivatives. Why back the EFT with physical copper??? The idea is crazier than Rasputin after 10 bottles of vodka. Barmy, dopey and insane. It seems JPMC are using this copper market cornering as a GARGANTUAN BLACKMAIL PLOY since they have lost control of the silver market. Wake up, people, they're playing hardball.
And, this is the clincher. There is an actual, acute shortage of silver yet JPMC, for whatever reason, is mammothly short silver. Why therefore, are they not now mammothly long silver? That question is posed rhetorically as I know the answer, as do all of you here on ZH. I submit they cannot possibly justify this copper malarkey 'as a hedge'.
JPM's copper corner: "The story is that they're positioning themselves in front of the ETF." Bang dae ho !
I could have sworn JPM just said they were closing up a lot of commodities trading to comply with the Volcker rule.
http://seekingalpha.com/article/223675-jpmorgan-shuts-prop-trading-unit-as-banks-maneuver-around-the-volcker-rule?source=feed
Oh yeah. They did actually say that just before they cornered the copper market.
i used to haul copper from the mines and they can make it faster than it can get hauled away. everywhere i would deliver had warehouses full of it.
i have a hard time believing $1.5 billion can corner the market
maybe homes are worthless, but if it's sold as parts, example, copper piping, the value of these homes would be above market value, no?
Now I will have to post a guard on my house less the plumbing disappear.
How many houses built in the last 20 years have copper pipes? It's all PVC and CPVC, and that PEX shit. Only the real expensive houses have copper and cast iron.
http://www.transplantathlete.com/uploaded_images/pexmanifold-774175.jpg
Silver goes up when economy goes down. Copper goes down when economy goes down. They must have hired the same rocket scientists that engineered the sub-prime mortgage CDOs.
since they're short silver, their position, would be a lose/lose , unless the world miraculously recovers, soon. bank holiday? Is this a twisted way, to pour money into losing trades to slow the collapse. after all it's not their money. is the fed buying commodities now? ( I've got a kitchen sink, I want to sell )
<posted wrong place>.
Is there a lot of money to be made in etf management? Most are 50 bps fee. I don't see how all of this accumulation is worth it for JPM, especially since there is already an extant copper etf. Something doesn't add up here--all this cost of acquisition (salaries, trading costs, storage) before an etf launch.
You know you're in trouble when you war with the poorest of the poor.
IF EVERYONE TURNS IN THEIR PENNIES JPMorgue IS HOSED!
Pennies are copper clad aluminum, now.
Even though debasing the coinage is absolutely against the frickin law according to the constitution. They still do it without any fear.
IF THE WEALTHY RIP OFF THEIR RAIN GUTTERS/PEOPLE RIP OUT THEIR PLUMBING/AND THE CHINESE AND FCX DUMP THEIR COPPER
Save the world, nuke JPM (and GoldmanShafts).
JPM simply understands they can scam the entire world as long as they can borrow infinite quantities of fiat from the FederalReserve at 0%, then buy up just about any and every real commodity on earth via futures contract leverage. The magnitude of the positions totally guarantees prices will rise, and they will realize huge gains.
This is the whole point of fiat, fake, fraud, fiction, fantasy money... to let the predators-that-be who control it steal the entire planet from producers.
Quite a system.
When you follow the rabbit-hole it always ends at fiat currency. It is the root of all present evil because violates all laws of nature. Humans can never be given the power to create something from nothing. It guarantees the moral decay and corruption which permeates our current system.
I am not sure if i am seeing this right but, it looks to me that Asia is telling the FED, "oh, you want a lower dollar, I'll give it to you by buying gold and silver and then you can't QE as much as you want and hurt us. Then the gov't strikes back and says corner the market on say copper so you can pressure China's growth." They use JPM to do it. Or perhaps JPM has to just make up a huge loss on silver and is long copper and wants to set up an ETF to push up the price. Not sure which one, just two possiblities
I have another idea, lets keep buying silver and short the tar out of copper and really screw the bastards
I suspect JPM will juice the price of copper into the $4.25 range or so and then sell into this ETF induced strength for a quick 20% profit.
On another, and totally unrelated topic some of the Wikileaks documents disclosed the Chinese having numerous hackers on the govt payroll. When the Chinese govt sanctioned Sinochem to take a run at acquiring PotashCorp,the PCS computer systems were hacked into over the next week by some entity on a data collection mission. All evidence pointed to you know who.
Isn't a big ramp in copper hoarding by governments an indication that a big war is in the cards?
We’re running out of sheep to shear and lambs to slaughter. Quick, let’s start up another commodity ETF to draw them in. Which commodity? Who cares, just give me another index we can trade and manipulate.
NYT Mag spinning Jamie as least hated. What praise? The author is a friend of his parents and is trying to humanize him. Reeks of deperation as the NYT wrote glowing articles about Sandy, just before his fall.
Silver is byproduct of Copper Mining. Fact http://en.wikipedia.org/wiki/Silver_mining_in_Arizona
JP Morgan stuck Short massive ammount of Silver Fact/Assumption
Cash Silver for prompt delivery extremely tight.
Copper plentiful Supply
Seems perfectly reasonable to me that an entity having trouble acquiring enough supply for commitments to deliver might want to hedge themselves in this manner.
Longer term play is brilliant. Get sucker retail money,(ETF,s) into Copper , Retail Investers 80 to 90 % Buyers, spurs more Copper Mining and thus extra Silver Supply promptly dumped into market that you so desperatley need, get chumps to take your Copper through ETF's buy time to get Supply of Silver.
Tells me Silver aint done yet
If silver is already in short supply, then why hasn't mining already ramped up? They should be ramping up copper mining already if it yields so much silver.
They can't ramp up nothing, job-wise / mine-wise ... it would defeat their purpose in crushing / controlling the economy.
This copper story is a prelude to yet another speculative bubble (if there are any takers).
Real - Non fiat money in almost any sense, leads to death of the ponzi.
Your deduction does make a lot of sense.
What happened to the last major bank that tried to corner copper? Knickerbacker Trust (1907) ring any bells ? But then again, there was no FRBNY to have your CEO on the Board of then.
80% of the worlds silver comes from mining byproducts of zine and COPPER! Hello, Hello JPM, the pigs!