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Project Mayhem Research: Multiple Anomalies Detected In Silver ETFs

Tyler Durden's picture




 

Project Mayhem has released its first working paper on statistical and factual anomalies in silver ETFs. The conclusion is distrubing:

During our research into the inventory lists of the iShares SLV and London-based ETFS physical silver funds, we discovered multiple anomalies which cannot be easily dismissed. These included the presence of internal duplicates, rough internal duplicates, weight duplicates, statistical clustering, and cross-reference duplicates. Taken together, these anomalies are cause for concern, and we suggest that more capable teams conduct further research into these issues, as they effect price discovery within the precious metals market, as these ETF shares are being used for settlement and possibly pricesuppression on the COMEX.

If these problems are caused by accounting errors, they are disturbing and perhaps profoundly incompetent, and we suggest both these funds should have their senior management replaced.

 

In our opinions, the only way for all of these anomalies to occur together as noted in this paper, is via systemic fraud or gross accounting error bordering on jaw-dropping incompetence.

Must read

 

 

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Tue, 07/28/2009 - 14:27 | 17110 Anonymous
Anonymous's picture

I'm shocked, shocked I tell you to think that there might be fraud in the investment community. What are you gonna tell me next? That the Fed is printing money?

Tue, 08/04/2009 - 20:43 | 25065 Anonymous
Anonymous's picture

If GOLD or SILVER is not physically in your hand...... then you don't own it. Paper Gold has been used to suppress the price but one day it all has to go up in flames.

Fri, 04/22/2011 - 02:17 | 1195429 Amschel
Amschel's picture

I have experience with this jazz.

I bought Bank Of Russia issued gold coins from Sberbank of Russia,only to find them rusting,and probably being smelted with Depleted Uranium  (its mass is pretty much identical to Au-gold).

Theres an article on zerohedge about this.Sold em back to the bank the same day I found out,and kept only one to send it for analasys to a lab,just for fun.

So to see duplicates from KRASNOYARSK_RUSSIA_... is nothing new,from my experience.

Bastards are well known for it,"Krasvestmet" might have played a role in this.

 

Fri, 04/22/2011 - 04:28 | 1195511 Amschel
Amschel's picture

 

I can make a list of phony numbers m'self as well,add a cute etf name, "Lucky Silver ETF",hold 50% of the fund in actual physical,for those pesky people who do not trust the ETF and want physical delivery,giving the naysayers proof that the fund has deliverable physicals,while the other 50% in phony paper.Same scheme over and over...

Bank-run economics.If everyone pulls out and takes delivery,theyll find only 50% is delivered,and the little guys get the paper,or are not qualified for delivery since they do not hold enough shares to be eligible for redemptions.So there will always be someone left that has to hold paper,and on the other side of the equation,the person lucky enough to get delivery disproves the naysayers and conspiracy theorists by taking actual physical delivery.Perpetuating the scam.

 

And if people get too clever,they will simply raise the required share limits for physical redemptions,which will be a sign that,well,its game-over.

Tue, 07/28/2009 - 14:32 | 17111 Project Mayhem
Project Mayhem's picture

this article sucks imo!  ;)

Tue, 07/28/2009 - 15:33 | 17206 Anonymous
Anonymous's picture

PM, could you post/link the source data? Thanks.

Tue, 07/28/2009 - 21:36 | 17691 Anonymous
Anonymous's picture

Excellent sleuthing. Facts not easily explained away.

We await the day of reckoning when the perps will exchange phantom silver bars for a cell with grey bars.

Wed, 07/29/2009 - 00:37 | 17878 Anonymous
Tue, 07/28/2009 - 14:28 | 17112 D.O.D.
D.O.D.'s picture

The Dark Years piece says it all, if you want to own precious metals, then hold it in your hands...guns gold and ammo baby...

thanks for all the info sir...

Tue, 07/28/2009 - 14:34 | 17120 D.O.D.
D.O.D.'s picture

actually to expand on this I would suggest to stop trading ETF's entirely, beyond decay, I've noticed price anomolies buying botht the long and short version, and ending up down on both EOD...something strange is afoot at the circle K....

Tue, 07/28/2009 - 20:08 | 17591 Anonymous
Anonymous's picture

We are in moral decay, and people are being robbed blind with no regulators interceding. Don't trust anybody is the best strategy now, as desperation is spreading. I completely agree on the ETF's, how do I sign up for a class action?

Thu, 07/30/2009 - 13:45 | 19590 Anonymous
Anonymous's picture

Yeah, we're being "robbed blind" by Wall Street and the investment community at large, and what we need is more "regulation" and govt. intervention - because we don't have enough of that already.

Tue, 07/28/2009 - 16:06 | 17253 andy55
andy55's picture

What's mind-bending is trying to figure out what will happen to metals prices if/when there's ever massive fraud uncovered with SLV or GLD...  You've got the people holding GLD or SLV trying to sell while they're buying it back in physical metal.   Given the premise, that GLD and SLV are bogus (to at least some degree), the physical buyback ultimately would push spot prices up.

It'll be interesting to see how this story unfolds, for sure!

Tue, 07/28/2009 - 16:50 | 17341 VegasBD
VegasBD's picture

When they eventually default investors will get paid in dollars (if they ahve any to pay out). No big deal. Little guy gets screwed again. Nothing to see here, move along.

Tue, 07/28/2009 - 14:35 | 17122 lizzy36
lizzy36's picture

I luv the way that @ 2:30 pm everyday, analysis of the market converges and brings us a strong buy signal.  Those Wall Street analysts are fucking geniuses (and so consistent).

Tue, 07/28/2009 - 14:44 | 17143 Anonymous
Anonymous's picture

Yet somehow it doesn't occur to these geniuses that by manipulating the market so blatently, they also pump distrust and wariness in the bulls, who are constantly eyeing the exits. They have undermined confidence, making a panic much easier to touch off.

Tue, 07/28/2009 - 22:16 | 17157 gammaman
gammaman's picture

SEC Regulation NMS Final Rules (523 pages
http://www.sec.gov/rules/final/34-51808.pdf

For the reasons discussed above in section V.A.1, the Commission is retaining the current consolidation model and adopting the consolidation requirements of Rule 603(b) as proposed and reproposed. All of the SROs currently participate in Plans that provide for the dissemination of consolidated information for the NMS stocks that they trade. The Plans were adopted in order to enable the SROs to comply with Exchange Act rules regarding the reporting of trades and distribution of quotations. With respect to trades, paragraph (b) of Exchange Act Rule 11Aa3-1 (redesignated as Rule 601(a)) requires each SRO to file transaction reporting plans that specify, among other things, how its transactions are to be consolidated with the transactions of other SROs. With respect to quotations, paragraph (b)(1) of Exchange Act Rule 11Ac1-1 (redesignated as Rule 602(a)(1)) requires an SRO to establish and maintain procedures for making its best quotes available to vendors.

 

To confirm by Exchange Act rule that both existing and any new SROs will be required to continue to participate in such joint-SRO plans, adopted Rule 603(b) requires SROs to act jointly pursuant to one or more NMS plans to disseminate consolidated information for NMS stocks. Such consolidated information must include an NBBO that is calculated in accordance with the definition set forth in adopted Rule 600(b)(42).* In addition, the NMS plans will be required to provide for the dissemination of all consolidated information for an individual NMS stock through a single processor. Thus, different processors would be permitted to disseminate information for different NMS stocks (e.g., SIAC for Network A stocks, and Nasdaq for Network C stocks), but all quotations and trades in a stock must disseminated through a single processor. As a result, information users, particularly retail investors, will be able to obtain data from a single source that reflects the best quotations and most recent trade price for a security, no matter where such quotations and trade are displayed in the NMS.

 

*Adopted Rule 600(b)(42) of Regulation NMS defines “national best bid and national best offer.”

NASDAQ's Reglation NMS FAQ
http://www.nasdaqtrader.com/content/marketregulation/regnms/regnms_faqs.pdf

Tue, 07/28/2009 - 14:57 | 17162 Gilgamesh
Gilgamesh's picture

Tyler, can I suggest that you publish a post around 2:30pm every day and title it something like one of these?:

 

"Stop Hedging!"

"Stop Shorting!"

"Stop Buying ETFs!"

"Stop Whatever You Are Doing and Buy SPY!"

 

I'm sure someone could be a bit more creative.

Tue, 07/28/2009 - 16:17 | 17268 aldousd
aldousd's picture

You could do what CNBC does and post "Analysts: Zero Hedge Stock Price could Triple!"

Tue, 07/28/2009 - 16:41 | 17319 Gilgamesh
Gilgamesh's picture

Followed by the next post "Pros Say: Prepare for Zero Hedge Correction"

Tue, 07/28/2009 - 14:38 | 17125 Anonymous
Anonymous's picture

As far as I know, you are the only blogger that is doing
this kind of original research. Calculated Risk comes up
with nice graphs that ordinary people can understand, but
that's not original research.

THANK YOU ZERO HEDGE.

Tue, 07/28/2009 - 14:43 | 17137 Anonymous
Anonymous's picture

Thank you Project Mayhem.
The same bars listed in inventory in NY and London???!!!
Good God.

Tue, 07/28/2009 - 14:45 | 17146 Project Mayhem
Project Mayhem's picture

Yup.  Here's a sample.

Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2683

Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2684

Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2685

Tue, 07/28/2009 - 16:12 | 17163 gammaman
gammaman's picture

"Some bar manufacturers restart their numbering each year, but either prefix the number with letters to indicate the year, or stamp the year on the bar. This means that identical numbers on a listing, but with different weights, can mean that the person recording the bar number failed to include the year prefix. The only way to prove this is not the case and that the two numbers are actually the same bar is if the bar weight is the same, because the probability of exactly the same weight and exactly the same number across different years would have to be next to zero."

Tue, 07/28/2009 - 14:43 | 17138 Anonymous
Anonymous's picture

Uh? Really?

Tue, 07/28/2009 - 14:43 | 17140 Anonymous
Anonymous's picture

Certainly makes one wonder if the same issues may be present in gold etf's.

Tue, 07/28/2009 - 14:56 | 17160 D.O.D.
D.O.D.'s picture

I should think at this point the answer to that is obvious....

Tue, 07/28/2009 - 14:43 | 17141 Charley
Charley's picture

There is no doubt about this fraud. Suppression of gold and silver prices was indentified as late as 1988 as the means of keeping them out of circulation as an alternative medium of exchange, and maintianing low interest rates. Here is a paper written by none other than Larry Summers on the subject while a professor at Harvard University:

 

http://www.gata.org/files/gibson.pdf

 

GATA has noted that this discovery was used by Rubin as Goldman Sachs. They also showed that sometime after Rubin and Summers arrive in Washington to join the treasury, the Gibson Paradox apparently disappears.

Tyler, this effort to suppress gold and silver prices required a very liquid derivatives market, hence deregulation toward the end of the Clinton administration. There is an almost straight line from there to our present catastrophe...

Tue, 07/28/2009 - 14:47 | 17148 Anonymous
Anonymous's picture

you "get it" as they say.....hoping that more
see the light.

Tue, 07/28/2009 - 15:54 | 17230 nicholsong
nicholsong's picture

Thank you for a very enlightening post.

Tue, 07/28/2009 - 14:45 | 17144 Anonymous
Anonymous's picture

This article makes a reference to Mark Anthony's article on Seeking Alpha on July 14th, 2009. I cannot find this article. Nothing is listed under Mark Anthony around that time. Is the date correct?

Can you provide a link or copy if the article has been pulled?

Thanks.

Tue, 07/28/2009 - 15:14 | 17189 Miles Kendig
Miles Kendig's picture

Thanks..

Tue, 07/28/2009 - 20:16 | 17604 Anonymous
Anonymous's picture

Apocalypse Now-

READ THIS, ONE OF THE BEST I HAVE READ ABOUT THE SILVER/GOLD ETF's:

http://seekingalpha.com/article/149209-are-gld-and-slv-legitimate-invest...

YOU MUST READ IT, THEN RUN DON'T WALK!!!!!!!!

Tue, 07/28/2009 - 15:11 | 17181 Anonymous
Anonymous's picture

For the love of God could you stop referencing that guy Mark Anthony. He's a moonbat from the PAL and SWC Yahoo boards that used to go under 'Tellurium', plus about a thousand other I.D.'s. The guy would literally have conversations with himself under ten different handles.

Tue, 07/28/2009 - 15:57 | 17234 nicholsong
nicholsong's picture

Sometimes people ask me if I am talking to myself. I respond that I am, but it is the only way I can be sure I am having an intelligent conversation.

Tue, 07/28/2009 - 16:56 | 17354 ShankyS
ShankyS's picture

I blogged on Mark's article that day and the day after up came a big story about Canada's "imbalance" on some massive amt of gold stores in Canada. I imagine they swept that one under the rug as well. He was trying hard to avoid the conspiracy label but should have grown a set and stuck with it. 

Tue, 07/28/2009 - 17:30 | 17393 Anonymous
Anonymous's picture

Mark Anthony's article on July 14 which exposed red flags in SLV was an instablog entry, not a regular article. The link is here:
http://seekingalpha.com/instablog/121744-mark-anthony/13311-warnings-to-...
Enjoy!

Tue, 07/28/2009 - 17:31 | 17394 Anonymous
Anonymous's picture

Or try this TINYURL link:

http://tinyurl.com/nfwznq

It's good some one is picking this up and doing some serious research on it.

Tue, 07/28/2009 - 14:45 | 17145 Anonymous
Anonymous's picture

there is no such thing as gross incompetence especially where large sums of money are involved....the only explanation for the statistical abberations is fraud...plain old fashioned greed and fraud......perpetrated by the government on behalf of the ruling oligarchs whose current archon is david rockefeller and the other owners of 300 shares of federal reserve stock....

and anyone who thinks that bernie madoff swindled billions from multi-millionaires and billionaires is a prime candidate for purchasing shares in my wholly owned brooklyn bridge...

Tue, 07/28/2009 - 15:04 | 17171 Anonymous
Anonymous's picture

The appearance of incompetence is done by design.

This is a common tactic as it allows for the shrugging of shoulders by those who benefit from the so-called incompetence while the subordinates take the heat.

"Move along folks, there is nothing to see here. We have rooted out and terminated those responsible for the gross incompetence." he said, when simultaneously pressing the enter key transmitting the bank wire to Lichtenstein.

Tue, 07/28/2009 - 16:43 | 17324 Anonymous
Anonymous's picture

stop talking about the bush crime syndicate's
computer tricks that way....

Sun, 08/02/2009 - 12:28 | 22317 Anonymous
Anonymous's picture

This past October, 2008, I picked up an old paperback laying here at my father's house where I now live. It had been on the shelf since the late '70's, UNREAD... date:
Jan. 1976 and Feb. 1976 250,000 copies printed each time...
NAME OF BOOK: THE ROCKEFELLER FILE......written by Gary Allen.....ANYONE who were to read this book would have their JAW to pick up OFF THE FLOOR....written in 1976, it so describes EVERYTHING and I mean EVERYTHING that is currently going on NOW, and traces the ROOTS of our current troubles ALL THE WAY BACK to THE GRANDFATHER: WILLIAM ROCKEFELLER, who boasted to a crony: "I cheat my boys every chance I get. I want to make 'em sharp. I trade with the boys and skin 'em and I just beat "em every time I can. Iwant to make'em sharp." And he did...The sharpest of the "Doc's" progeny was John D., father to Winthrop, Nelson, John D. III (JAY) - in Congress now, and last but not least, DAVID, about 93 years old and working feverishly behind the scenes to get this NEW WORLD ORDER created, sooner than later! The book covers EVERYTHING HE/THEY started and have continued manipulating (unmonitored FOREVER) including the Education, Health, Environmental, Oil, Council on Foreign Relations, and last but not least: THE FORMATION OF THE FEDERAL RESERVE in the Federal Reserve Act passed on December 22, 1913, in Congress by a vote of 298 - 60 in the House and 43-25 in the Senate. I have had to reread it 3-4 times to absorb the enormity of what this ONE family alone has perpetrated on the country known as AMERICA and No ONE anywhere really talks about it, I suppose out of fear as there are 150 + descendants roaming around continuing OL'DADDY'S desire for the one-world government which if "you can control it," then you can control all others. In 1976, the author reported that was the "ROCKEFELLER'S" answer for more than 50 years....And here we are, in 2009, 33 years after that, in an even worse predicament because no one has been able to stop them and their minions. The takeover has grown so slowly and deliberatly, and only in the last few years with the quick speed now of the Internet, people have been able to talk about these things faster, but still don't know what's really happening or what to do about it all...The entire SCHEME has grown to "OUT OF SIGHT" proportions with NO END to it all, apparently...... HOW DID WE GET HERE??????...IT is UNFATHOMABLE!!!!......and hard to know what to do because so many in the government etc. are in on it and 1/2 probably don't even realize they've been USED, I.E. OBABMA...UNBELIEVABLE TO ME.....Some of these books are for sale on AMAZON....If you want to really wake up and SCREAM, go an buy one and ABSORB....Good Luck everyone.....

Tue, 08/04/2009 - 20:27 | 25051 Anonymous
Anonymous's picture

If only America would realize that 9/11 was an inside job....... We would start to question authority before we lose that right too.

Tue, 08/04/2009 - 20:36 | 25061 Cheeky Bastard
Cheeky Bastard's picture

while i might agree with you, i also would like to ask you not to publish that here because all the media monitoring this site gets, and this would only benefit their goal to discredit both Tyler, the readers and commenter's on this blog ..

Tue, 07/28/2009 - 14:47 | 17150 Veteran
Veteran's picture

Killer research!  Thanks

Tue, 07/28/2009 - 14:54 | 17156 Anonymous
Anonymous's picture

The word is "lieu".

Tue, 07/28/2009 - 14:57 | 17161 Anonymous
Anonymous's picture

The SLV might not be completely backed by physical silver?! No way! Get outta here!

Tue, 07/28/2009 - 15:02 | 17165 Project Mayhem
Project Mayhem's picture

I know... I couldn't believe my eyes.  I mean, I really thought I could trust JPM, especially after all we'd been through together. Apparently Jamie Dimon doesn't care about all the hookers and blow we'd shared -- Staying up all night, trading yen on the TCE, laughing and yelling at the computer screen... not caring because we were the kings!!    I was shocked -- *shocked* -- to find these anomalies, let me tell you...

Tue, 07/28/2009 - 15:08 | 17175 Gilgamesh
Gilgamesh's picture

The next thing you know, there'll be an 'inventory discrepancy' at Fort Knox.

Tue, 07/28/2009 - 15:37 | 17209 glenlloyd
glenlloyd's picture

probably is but we'll never know, they won't allow an audit, and the last one was done when...half a century ago?

Tue, 07/28/2009 - 16:24 | 17279 Anonymous
Anonymous's picture

aaand,... it's gone

Tue, 07/28/2009 - 16:58 | 17357 ShankyS
ShankyS's picture

We only work with customers that have actual money in the bank. Next. 

 

LOL

Tue, 07/28/2009 - 16:48 | 17337 Anonymous
Anonymous's picture

there is almost no gold in fort knox....
i don't say this facetiously....

treasury refuses to perform a physical audit
"because it would be too expensive" at a few
million usd. with trillion dollar deficits and
budgets, every little million counts dontcha
know.

for you cfos out there, you can tell your ceo
that you are not going to permit IT or financial
audits because they would be too expensive...

given the massive gold leases, shorting, and
london gold pool from the 1960s, there is very
little chance of much gold remaining...

Tue, 08/04/2009 - 20:30 | 25055 Anonymous
Anonymous's picture

Read the Protocols of the Elders of Zion..... the goal of the money changers is to acquire all the worlds gold by convincing us that it is a "barbaric relic". They convinced us that paper is worth more than Gold. When they make that paper worthless then the golden rule will apply all over the world. RULE : Whoever has all the GOLD rules the world.

Tue, 07/28/2009 - 15:07 | 17174 Anonymous
Anonymous's picture

Screw all these worthless paper fleecing wonders, I'll buy my silver in physical bullion thank you very mech.

Tue, 07/28/2009 - 15:10 | 17179 Anonymous
Anonymous's picture

Well folks. Why has there been NO arrests in America and idiot Britain for all this fraud and why has the the British Government done NOTHING to stop all this. Thay are just standing around with their thumbs up their arses, isn't that right Mr. Darling !!!
Get them arrested and charged with Grand Fraud and the yanks as well.
Oh just a minute Mr. Darling. I think Treason would suit you and your friend next door !!!

Tue, 07/28/2009 - 15:52 | 17229 Anonymous
Anonymous's picture

After sometime everybody gets used to the corruption and that's the New Normal.

Tue, 07/28/2009 - 17:00 | 17364 ShankyS
ShankyS's picture

Haven't you heard - the jails are at capacity. They can't take any more prisoners. 

Tue, 07/28/2009 - 15:12 | 17185 Anonymous
Anonymous's picture

And what will happen? This post will be forwarded to the SEC, where they will put it in the circular file, -- while silver-bugs will shake their fists in their home offices.

Stop playing the game people.

Stop trading.

We will all eventually reach this conclusion, but the sooner we do, the better.

Tue, 07/28/2009 - 16:02 | 17245 nicholsong
nicholsong's picture

I agree: Stop trading.  Stop the mechanism that is skimming and directing--some might say confiscating--your funds.

"I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break into pieces."

---Étienne de la Boétie, circa 1550

Wed, 07/29/2009 - 20:29 | 18798 Anonymous
Anonymous's picture

agreed x2
stop trading,
start farming.

Tue, 07/28/2009 - 15:14 | 17190 Anonymous
Anonymous's picture

The fact that people still debate whether the SLV and the GLD are used to rig the price is astonishing. These same people probably also still believe no one set foot on the moon too. Just the fact that the COMEX says it can use GLD shares in lieu of physical gold to settle contracts better be a smack to the brain cells that the markets are rigged. Over subscribed gold and silver...really debated anymore? C'mon, maybe by simpletons and Alice in Wonderland believer types.

Tue, 07/28/2009 - 15:24 | 17200 Anonymous
Anonymous's picture

“The third quarter is looking great. We will hit our numbers. We are continuing to have strong growth in our business and, at this time I think we're well positioned for a very strong fourth quarter.”

Kenneth Lay quote

Tue, 07/28/2009 - 16:25 | 17283 Anonymous
Anonymous's picture

aaand... it's gone

Tue, 07/28/2009 - 15:15 | 17191 Stuart
Stuart's picture

The fact that people still debate whether the SLV and the GLD are used to rig the price is astonishing. These same people probably also still believe no one set foot on the moon too. Just the fact that the COMEX says it can use GLD shares in lieu of physical gold to settle contracts better be a smack to the brain cells that the markets are rigged. Over subscribed gold and silver...really debated anymore? C'mon, maybe by simpletons and Alice in Wonderland believer types.

Tue, 07/28/2009 - 16:50 | 17346 Anonymous
Anonymous's picture

very good point....i wish just 10% of comex gold
buyers would take physical posession of their
gold. if they did they would see an immediate
50-100% appreciation of their assets....

Tue, 07/28/2009 - 15:18 | 17194 Anonymous
Anonymous's picture

Silver and gold etf's are volatility vehicles and not something you're gonna will to your kids. Precious metal storage is a red herring, you could fit a million bucks worth of gold in a shoebox.

Tue, 07/28/2009 - 15:23 | 17199 Anonymous
Anonymous's picture

If only it weren't so mind numbingly predictable. I've been warning my friends about this for ages. History tells you everything you need to know about counterparty risk.

Mark it zero, please. Along with the parasitic hosts.

Tue, 07/28/2009 - 15:39 | 17210 Anonymous
Anonymous's picture

Surviving the end of civilization: Ex-Morgan Stanley broker

http://finance.yahoo.com/retirement/article/107414/surviving-the-end-of-...

Tue, 07/28/2009 - 16:00 | 17239 andy55
andy55's picture

 

A good and fun piece -- thanks for sharing.  I added The Denial_of_Death to my must-read list (everyone should have one imho).

Tue, 07/28/2009 - 15:54 | 17231 ptoemmes
ptoemmes's picture

Tugging at the Silver Oligarchs Cape...

 

Hey you, yes you, over here you silver POS.  I got your ETF right here and I'm about to shove it up your a$$

 

Pete

Tue, 07/28/2009 - 16:00 | 17238 Fish Gone Bad
Fish Gone Bad's picture

The only way to play the market, is to just stop playing the market.  Eventually the robots will consume themselves.

Tue, 07/28/2009 - 16:45 | 17333 Gilgamesh
Gilgamesh's picture

Nice game of chess, anyone?

Tue, 07/28/2009 - 16:00 | 17241 Anonymous
Anonymous's picture

Great research!
Even the published data for the silver ETF are not correct, who is going to believe that the silver is there?
The Silver ETF of Zuricher Kantonalbank (ZKB) publishes a bar list too. Did you try the same test on this list?
The list contains weight and certificate #.
Go to “Barrenliste” and click on download PDF in the following page:
http://www.zkb.ch/de/startseite/privatkunden/anlagen_und_boerse/fonds/ex...
A minor observation: “Norddeutsche” is spelled with double “d” in the LBMA list http://www.lbma.org.uk/delivery/silvlist (as well as in German) and in your list with a single “d” That could be meaningless, but if you copied it from the ETF’s list it would be strange. The LMBA has the correct spelling.
Gunther

Tue, 07/28/2009 - 21:50 | 17705 Project Mayhem
Project Mayhem's picture

Thanks. I looked for other ETF lists but did not notice ZKB also published a list.  I will download and include it in any future data runs.

Also, the names of the bars have been standardized via a data map.  So it won't matter if a manufacturer is mispelled... they all get converted to a standard representation anyway, via manufacturer_map.txt.

 

 

Tue, 07/28/2009 - 16:02 | 17248 Anonymous
Anonymous's picture

I ordered a new shiny tin hat that I found on eBay. I used the "Buy it Now" feature.

I hope the dude knows how to pack and ship it correctly or I'm going to give him some bad feedback. I want it shiny and unwrinkled just like in the photos.

Waiting....

Tue, 07/28/2009 - 16:53 | 17349 Anonymous
Anonymous's picture

i doubt you ever get it.....you were probably
pre-empted by a gs bot station

Wed, 07/29/2009 - 00:33 | 17874 Anonymous
Anonymous's picture

Invest instead in a gold or silver shiny hat, but make sure you take physical delivery - otherwise you should trade in the hat for a dunce cap.

Tue, 07/28/2009 - 16:05 | 17251 Anonymous
Anonymous's picture

Your otherwise valuable research is spoiled when the introductory blurb talks about "....scam artists and criminals at the Federal Reserve and US Treasury Department"

Regardless of the quality of the rest of the article, you will have lost a good deal of your audience as you will be discounted as a kook and a conspiracy theorist!

The fact that it's true is something different entirely!

Tue, 07/28/2009 - 16:57 | 17356 Anonymous
Anonymous's picture

i am sorry but being a conspiracy theorist is
neither a pejorative nor a critical analytical
point....losing those folks is good riddance.

not being a conspiracy theorist where trillions
of usd and nuclear power are involved is being
an imbecile......anyone who has read machiavelli
to say nothing of power politics - if no where
else than the pta - in not so naive to assume
that people do not conspire....

where competing interests collide conspiracies
will flourish.....

Tue, 07/28/2009 - 16:13 | 17258 Anonymous
Anonymous's picture

Good piece, thanks for sharing.

BTW, where did you obtain the raw inventory lists? Would love to run my own scrips on that & other stuff.

Wed, 07/29/2009 - 12:48 | 17711 Project Mayhem
Project Mayhem's picture

http://www.etfsecurities.com/msl/bar_list.zip

https://ebts.jpmorgan.com/ebtsWebMod/ebts_downloads/BONYBARLIST.PDF

 

I converted the latter to HTML using pdf2html.  The former I simply cut and pasted into a flat file.  There is also another bar list from a European fund which I did not use yet, which is available here:

 

http://www.zkb.ch/de/startseite/privatkunden/anlagen_und_boerse/fonds/ex...

Tue, 07/28/2009 - 16:15 | 17260 Bubby BankenStein
Bubby BankenStein's picture

Settlement of Gold / Silver futures with Gold / Silver ETF'''''s!

You show me your's & I'll show you mine.  This is a derivatve circular jerk that is likely to end badly.

If you want PM for a long term hedge, you need control of the physical.

Tue, 07/28/2009 - 16:44 | 17328 Anonymous
Anonymous's picture

tyler-

wtf, seriously.

anything remotely connected to mark anthony is just batshit crazy.

you desperately need a good editor.

Tue, 07/28/2009 - 16:57 | 17355 dnarby
dnarby's picture

...In Russia, silver ingot duplicates YOU!

Tue, 07/28/2009 - 17:26 | 17389 whacked
whacked's picture

Hmmm have the same feeling I had when COMEX accepted USD rather than the real McCoy... nothing will change.

 

Same bar numbers same weight, then you have a problem.

 

In the meantime just usual hot air.

 

Note to oneself .. Great Wall and Russian bar smelters ... need to loan them some money to buy a new stamp ...

Tue, 07/28/2009 - 18:15 | 17449 Anonymous
Anonymous's picture

TUESDAY, JULY 14, 2009

No Transparency Or Honesty In US/UK Gold Markets
by Eric deCarbonnel

GATA reports that commodity exchanges can dump gold debts on ETFs.

GATA board member Adrian Douglas discloses in the report below, titled "The Alchemists," that the New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs). This essentially allows the gold shorts (and the exchanges themselves, which guarantee futures contracts) to transfer their obligations to third parties that may not have the metal they claim to have and that, in any case, are operated by the investment banks running major short positions in gold.

full article at: http://www.marketskeptics.com/2009/07/no-transparency-or-honesty-in-usuk...

Tue, 07/28/2009 - 18:15 | 17451 ChristopherWhite
ChristopherWhite's picture

I tried to post the link to this article on Yahoo message boards for CDE and HL and my post was immediately deleted and I was unable to post again.  Nice work!

Tue, 07/28/2009 - 18:19 | 17458 Anonymous
Anonymous's picture

If this keeps up,seems I would think anyone with gold or silver is going to think about setting their own price regardless of what etf is.

Tue, 07/28/2009 - 18:23 | 17462 Anonymous
Anonymous's picture

Revolution!

Tue, 07/28/2009 - 19:07 | 17503 Jim_Rockford
Jim_Rockford's picture

Silver certs that are not backed by real silver?  WallStreetPro is not going to like this .... can't wait to see the video.

Tue, 07/28/2009 - 19:20 | 17524 KidDynamite
KidDynamite's picture

question for the author:

is a standard silver bar 1000oz?  or "950-1000 oz" ? in other words - why would they be normally distributed around this range? shouldn't they be massively concentrated at one size (ie, 1000 oz?)

 

Tue, 07/28/2009 - 21:58 | 17712 Project Mayhem
Project Mayhem's picture

I haven't had the opportunity to calculate the average and median values for bar weight, but they seem centered slightly under 1000oz.  That is, there are many more bars less than 1000oz than more than 1000oz.  This would be something to check in the future.

Tue, 07/28/2009 - 23:12 | 17813 KidDynamite
KidDynamite's picture

i guess what i was trying to ask is, "if there is a standardized weight for a bar of silver, why would it be surprising that there are a lot of "weight duplicates" ? "

Tue, 07/28/2009 - 23:28 | 17832 Arm
Arm's picture

Because in real life it is impossible to cast at exactly the same exact weight.  Each bar is a unique special snowflake

Wed, 07/29/2009 - 00:08 | 17848 Project Mayhem
Project Mayhem's picture

Statistically, when a bar is casted, they will rarely be *exactly* 1000 ounces.  Some are a bit more, some are a bit less (some even as low as 700-800oz!).   So there is a rather wide distribution of bar weights. Now, keep in mind that weight is measured to at least four significant figures, ie. 849.3oz.   To find the same manufacturer with an identical bar weights is not unusual, but beyond some expected statistical occurance it is. 

I do not know yet whether my findings of inventory reductions of 82% and 50% fall within the expected Gaussian probability distribution for inventories of approx 200,000 bars and 20,000 bars for the iShares SLV ETF and the ETFS funds, respectively.  I suspect they do not (ie. they fall outside expected statistics).  I decided to release my findings now rather than wait another several weeks to calculate probability distributions, as this would take some time to make sure I did the calculations properly (my background is in computer science, not statistics).  However, this is something I plan on determining in the future.  That is, once you calculate the average, median, standard deviations, variance etc of the bar weights of a given manufacturer, you may be able to determine the specific probabilities of getting a specific weight (to four significant figures), and thus you can use laws of combinatorics to determine whether we are seeing higher than expected numbers of bars with identical weights.  If these exceed what would be predicted by the Gaussian bell curve, one explanation which may be considered is bar "cloning".

    Again, I want to reiterate that weight duplicates were not the only anomaly, but I am taking this in the context of multiple strange data occurences.  This is why I suggest this is a subject of future research by statisticians.  If there are explanations for all these anomalies, I would love to hear JP Morgan's statements.

Tue, 07/28/2009 - 20:15 | 17602 Anonymous
Anonymous's picture

Ted Butler on further dilution and devaluation of SLV and other PM ETFs via shorting (let alone naked shorting).

"Of all the tens of thousands of different common stock and other traded securities that are regulated by the US Securities and Exchange Commission (SEC), these three metal ETFs are very unique and distinct from the rest. Out of tens of thousands of different securities, only SLV, GLD, and IAU call for a rigid metal backing, 10 ounces of silver behind each share of SLV, one-tenth of an ounce of gold behind each share of either GLD or IAU. Investors buy shares of these ETFs because they are assured that this specific metal backing exists. Investors buy shares knowing that the sponsors and custodians guarantee the metal to be there.

But what happens when someone buys shares in these ETFs and the seller is selling those shares short? Does the short seller deposit metal to back up the buyer’s purchase? No. The short seller just sells the shares short without depositing metal, perhaps borrowing other shares first, perhaps not. The buyer doesn’t know who he is buying from, he gets a confirmation of his purchase from his broker, pays for it and assumes, according the representations in the prospectus, that he is buying new shares issued by the sponsor who has deposited metal, or from an existing shareholder who has decided to liquidate his shares. It never occurs to the buyer that he is buying from a short seller who is not depositing metal. In essence, the short seller is circumventing what is promised in the prospectus. That party is short-circuiting and destroying the promise clearly laid out in the prospectus that real metal backs every share sold."

full article at:http://news.silverseek.com/TedButler/1213640342.php

Tue, 07/28/2009 - 22:10 | 17726 Anonymous
Anonymous's picture

What is the record dates of the lists that went through the Perl program? I hand picked some perfect duplicate against July 24th list and found that they no longer exist.

Wed, 07/29/2009 - 00:09 | 17737 Project Mayhem
Project Mayhem's picture

I am using the July 24 2009 list from JP Morgan from their iShares SLV fund.  Perfect internal duplicates were only detected in iShares SLV.  I just double-checked and these do exist in my version of this list. For example, see page 509 of 7137.  One of the duplicates listed in Appendix A are present there.

Britannia Refined Metals U.K 2283 9990 966.8 966.8
Britannia Refined Metals U.K 2283 9990 966.8 966.8

https://ebts.jpmorgan.com/ebtsWebMod/ebts_downloads/BONYBARLIST.PDF

 

Tue, 07/28/2009 - 22:27 | 17753 glenlloyd
glenlloyd's picture

the findings don't surprise me at all....but I'm glad to see someone working on this topic, it would be even more interesting to see what the gold situation is.

it would also be interesting to compare the old bar data with the "corrected" bar data.

Tue, 07/28/2009 - 22:31 | 17760 Anonymous
Anonymous's picture

So is there a *safe* silver ETF to buy into? Physical silver starts to take up a lot of room after a while....

Wed, 07/29/2009 - 00:02 | 17849 Anonymous
Anonymous's picture

fits perfectly in a GUN safe!

Wed, 07/29/2009 - 04:38 | 17951 Fabio
Fabio's picture

Hi from Germany,

first of all (1. post here): you guys rock!

Now to the topic:

The only Silver-ETF I trust is the one from Zurich Kantonalbank (ISIN for EUR-Tranche is CH0047533556). I`ve called them today, because their list has some oddities as well. They have some barrs with "0,000" as "weight":

http://www.zkb.ch/etc/ml/repository/textdokumente/sparen_anlegen/barrenliste_etf_silber_pdf.File.pdf

As soon as I get the answer as to what that means, I`ll post it here.

 

Cheerio

 

Fabio

Wed, 07/29/2009 - 05:08 | 17955 Fabio
Fabio's picture

Got a call from ZKB:

 

The barrs with O-weight are those which have already been physically delivered. ZKB makes it an explicit right to get the metalls delivered in their prospectus. They may drop the entries from the next report or separate those barrs in another list, because it might confuse people.

They ponder whether to publish a press release in reaction to the ZH-article.

Wed, 07/29/2009 - 12:57 | 18293 Anonymous
Anonymous's picture

I'm shocked, shocked I tell you to think that there might be fraud in the investment community. What are you gonna tell me next? That the Fed is printing money?

The market is 100% rigged against the individual investor.
The entire PM market is controlled by GS, JPM, WFC, Crimex, & the corrupt Fed.

Wed, 07/29/2009 - 16:20 | 18564 Anonymous
Anonymous's picture

from start to finish, this is bullshit. giving credence to this questions the other occurrences where this blog actually has been right.

that no other reader questions the veracity of the claims made (or looks at the data) is sad.

some points:

"rough internal duplicate" -- the cutting off of parts of the serial number leads to duplicated serial numbers. leaving out all letters of a car licence plate gives duplicates. this is a very stupid reasoning.

"weight duplicate" -- of the list of ca. 19'000 bars, most of them are centered around weights of 920 to 1050 (ca. 16'000). with weights given in increases of .1, this leaves 10* (1050-920) = 1300 "slots" for the weights. four suppliers have more than 1300 bars. these bars with no free slot must necessarily become "weight duplicates". in total, at least 7500 bars must become weight duplicates like this.

leaving out these categories, there's nothing really left to see.

something interesting though i found looking at the histogram of all weights: there seem to be two categories of weights, one with target weight of 970 oz., the other one 1030 oz. i'm sure there's an interesting story behind that, i'll leave others to find it :)

Wed, 07/29/2009 - 18:26 | 18643 Project Mayhem
Project Mayhem's picture

I asked for independent confirmation from the online community specifically for this reason.  I did not ask for ad hominem attacks or misrepresentation of the facts.

 

some points:

 

"rough internal duplicate"  -  You write this is equivilent to cutting off car licence plate prefixes , resulting in duplicates.  This analogy is false.  Clearly you do not understand.  A proper analogy would be equivilent to cutting off one letter off two different car license plates, yet both the remaining truncated plate ids AND the weights of the cars are identical.  This suggests we are talking about the same car. 

 

"weight duplicate" - Your understanding here is correct.  We have not had the opportunity to run the histograms or calculate weight statistics which is why we asked for independent confirmation.  This was an experimental data run.  First of all, you should probably be breaking the histograms down by brand to obtain accurate results for predictions of the combinatorics.  You calculate 7500 bars must necessarily become weight duplicates, but we are talking approx 10,000 bars become weight duplicates for the ETFS fund.  How many standard deviations away is this?  Furthermore  to calculate this properly, you must use a probability distribution -- and that cutting off the bell curve at 920-1050 oz is not a proper representation of reality.  While you are correct that in this region there are 1300 'slots' available, the question involves how many collisions are expected vs how many appear in the data?  This question has not been answered, and to answer it properly requires high level statistics, not simply rough approximations.   We concede that it is possible there is no weight duplicate anomaly, but to know requires analysis of a Gaussian probability distribution.  If you conduct such research please email it to us, we will include your analysis in our follow-up paper.

http://en.wikipedia.org/wiki/Probability_distribution

 

Leaving out these categories... you have not addressed the 80 bars which appear on both the London and U.S. inventory lists ('cross reference duplicates'), nor the mere presence of duplication within the lists ('internal duplicates').  These 80 bars published in Appendix C are a major red flag. These are multimillion / multibillion dollar funds.  If these funds cannot maintain accurate, duplicate-free lists which add up to their published totals (we might note that iShares is approx 193,000 ounces short of the published total), they should not be trusted with your money.

 

Appendix C:  Bars claimed by both iShares and ETFS

KRASNOYARSK_RUSSIA_2295
KRASNOYARSK_RUSSIA_2483
KRASNOYARSK_RUSSIA_2484
KRASNOYARSK_RUSSIA_2485
KRASNOYARSK_RUSSIA_2531
KRASNOYARSK_RUSSIA_2532
KRASNOYARSK_RUSSIA_2533
KRASNOYARSK_RUSSIA_2534
KRASNOYARSK_RUSSIA_2535
KRASNOYARSK_RUSSIA_2541
KRASNOYARSK_RUSSIA_2542
KRASNOYARSK_RUSSIA_2551
KRASNOYARSK_RUSSIA_2552
KRASNOYARSK_RUSSIA_2553
KRASNOYARSK_RUSSIA_2554
KRASNOYARSK_RUSSIA_2555
KRASNOYARSK_RUSSIA_2561
KRASNOYARSK_RUSSIA_2562
KRASNOYARSK_RUSSIA_2563
KRASNOYARSK_RUSSIA_2564
KRASNOYARSK_RUSSIA_2565
KRASNOYARSK_RUSSIA_2571
KRASNOYARSK_RUSSIA_2572
KRASNOYARSK_RUSSIA_2573
KRASNOYARSK_RUSSIA_2574
KRASNOYARSK_RUSSIA_2601
KRASNOYARSK_RUSSIA_2602
KRASNOYARSK_RUSSIA_2603
KRASNOYARSK_RUSSIA_2604
KRASNOYARSK_RUSSIA_2605
KRASNOYARSK_RUSSIA_2611
KRASNOYARSK_RUSSIA_2612
KRASNOYARSK_RUSSIA_2613
KRASNOYARSK_RUSSIA_2614
KRASNOYARSK_RUSSIA_2615
KRASNOYARSK_RUSSIA_2621
KRASNOYARSK_RUSSIA_2622
KRASNOYARSK_RUSSIA_2623
KRASNOYARSK_RUSSIA_2624
KRASNOYARSK_RUSSIA_2631
KRASNOYARSK_RUSSIA_2632
KRASNOYARSK_RUSSIA_2633
KRASNOYARSK_RUSSIA_2634
KRASNOYARSK_RUSSIA_2635
KRASNOYARSK_RUSSIA_2651
KRASNOYARSK_RUSSIA_2652
KRASNOYARSK_RUSSIA_2653
KRASNOYARSK_RUSSIA_2654
KRASNOYARSK_RUSSIA_2655
KRASNOYARSK_RUSSIA_2661
KRASNOYARSK_RUSSIA_2662
KRASNOYARSK_RUSSIA_2663
KRASNOYARSK_RUSSIA_2664
KRASNOYARSK_RUSSIA_2665
KRASNOYARSK_RUSSIA_2671
KRASNOYARSK_RUSSIA_2672
KRASNOYARSK_RUSSIA_2673
KRASNOYARSK_RUSSIA_2674
KRASNOYARSK_RUSSIA_2675
KRASNOYARSK_RUSSIA_2681
KRASNOYARSK_RUSSIA_2682
KRASNOYARSK_RUSSIA_2683
KRASNOYARSK_RUSSIA_2684
KRASNOYARSK_RUSSIA_2685
MET_MEX_PENOLES_MEXICO_21866
MET_MEX_PENOLES_MEXICO_21932
MET_MEX_PENOLES_MEXICO_21934
NORDEUTSCHE_GERMANY_2607
NORDEUTSCHE_GERMANY_2608
NORDEUTSCHE_GERMANY_2609
NORDEUTSCHE_GERMANY_2610
NORDEUTSCHE_GERMANY_2611
NOVOSIBRISK_REFINERY_RUSSIA_1395
NOVOSIBRISK_REFINERY_RUSSIA_354
NOVOSIBRISK_REFINERY_RUSSIA_355
NOVOSIBRISK_REFINERY_RUSSIA_356
NOVOSIBRISK_REFINERY_RUSSIA_357
NOVOSIBRISK_REFINERY_RUSSIA_358
NOVOSIBRISK_REFINERY_RUSSIA_359
NOVOSIBRISK_REFINERY_RUSSIA_360

Thu, 07/30/2009 - 15:27 | 19750 Anonymous
Anonymous's picture

As someone with an engineering, computer science and statistic background, I'd like to make a few comments:

* Somebody really needed to do this
* It was a fair first shot (although not completely conclusive due to further analysis needed and a few foibles on the data collection front)
* I look forward to a more extensive analysis by whomever has time to do it.

I would add that a short archive (perhaps several prior revisions) of these bar lists should have been sourced or collected before announcing anything, to help validate temporal differences between bars potentially shifting from one list to another, and to counter any 'revisionist' approach attempted by list keepers. That's probably blown out of the water now, but it should still be done anyway.

Suggested:

- histogram variance scoring
- gaussian scoring
- typographical mse scoring between entries
- weight-summed error for all fields

..and of course, do the same with GLD and its counterparts

good luck.

Wed, 07/29/2009 - 16:59 | 18623 Anonymous
Anonymous's picture

Is CEF also pulling these tricks????

Wed, 07/29/2009 - 18:32 | 18698 Anonymous
Anonymous's picture

It was nice of them to do this work on behalf of JPMorgan as they clearly need to research those 69 "perfect duplicates" or otherwise credit SLV with 69 different bars if they cannot locate the discrepancy amongst the over 285,000 bars of silver they have in storage. The same may be the issue with some of the "rough internal duplicates" but since they didn't bother to list those, the findings are not very helpful. The other "internal duplicates" and "cross-duplicates" that have the same serial number and manufacturer are most likely separate bars given that some refiners aren't very strict about the number of times they assign the same serial numbers to different bars. Also, there are timing differences between the inventory records of SLV and ETFS. Beyond that, the claim these "analysts" make of having uncovered fraud or gross incompetence is pretty silly given the extremely small number of probable duplicates among 285,000 bars at SLV and basically no duplicates at ETFS. On the other hand, the claim that "weight duplicates" will "contract" 82% of SLV inventory and 50% of ETFS inventory is total misuse of statistics and utter bullshit. The London good delivery bar weight standard is between 750-1100 ounces but most bars are actually between 950-1050 ounces, which means there are about 1000 weight possibilities give or take. Thus, any manufacturer with more than a few hundred bars on the inventory list will have a vast number of "weight duplicates". Actually, the proper way to examine this is to take a standard deviation of the bar weight distribution for each manufacturer, double it (for normal distribution), multiply by ten (to convert weights to individual gradients), and then divide by the number of bars listed for that manufacturer. If the result is less than 1, it is extremely likely that more than 50% of the bars from that manufacturer will have a "weight duplicate". Indeed, this is the case for most of the manufacturers and the majority of the bars on the SLV and EFTS inventory lists.

Wed, 07/29/2009 - 20:41 | 18753 Project Mayhem
Project Mayhem's picture

First of all, please keep your snarky ad hominem comments to yourself.  The goal here is analysis of these funds in the context of massive financial system fraud which seems to grow by the day.  We have done the best we could do considering our area of expertise is computer science , not statistics. 

 

To our knowledge, this is the first public analysis of the silver ETFs using data mining.  So we can not expect the results to be perfect, nor do we expect everyone to agree with our methods or conclusions.  To some people, the fact that 80 bars with the same manufacturer and serial number are listed across two funds in two different countries is enough for them to pull their money out of these ETFs and never purchase them again.  Other people do not seem to care that there is duplication between iShares and ETFS across multiple brands.  As human actors with free will this is their decision whether to trust these funds in the context of such information.  Our goal here was simply to attempt the first public analysis of the inventory of these funds.

 

As mentioned previously, the analysis of 'weight duplicates', was an experimental afterthought for which we specifically asked for additional analysis by third parties.  We included this data run because it was easy to do (that is construct new primary keys and check for collisions) given the setup of our software.  Obviously there will be duplication as there are a finite number of 'positions' from which the primary key can be formed. The question is how many collisions are expected in a normal distribution vs. how many do we see per manufacturer? Perhaps we should not have included these questions , considering the amount of obnoxious commentary it has generated from statisticians.  But alas,  this was the original intent, to generate discussion and analysis of the inventory of these funds.  In any case, the 'weight duplicates' should not be the focus here, -- unless those with the ability want to post a full analysis using a Gaussian distribution and statistics broken down by bar manufacturer --  if you would like to detail these specific calculations and email them to us , we will gladly include them and credit you in our planned follow-up paper.  [project.mayhem.research@gmail.com]

 

 

As for your questions "Anonymous Wed, 07/29/2009 - 18:32"  , regarding the 'rough internal duplicates', the following are the bars which match with rough duplication enabled, where we remove alphabetical identifiers from the serial number, if present.  This process generally removes prefixes and suffixes, which tend to be alphabetical.  This form of searching increases the number of 'perfect internal duplicate' matches from 69 bars to 198 bars. 

 

Let me give you an example of how this works.  In our iShares bar list we find the following entry.

 

Britannia Refined Metals U.K 858 9990 949.3 949.3

(pg 400)

 

No duplication here, just one entry.

 

But once we analyze the list minus alphabetical prefix modifiers, we find an identical bar with an 'X' alphabetical prefix, but same serial number, and same weight. 

Here is the second entry, which generates a primary key collision when 'rough match' is enabled.

 

Britannia Refined Metals U.K X858 9990 949.3 949.3

(pg 1068)

 

 

There are 198 such bars total.  Do these results exceed what is to be expected using proper statistical calculations, broken down by manufacturer (as this is part of the primary key)?    This question remains unanswered at the present time.

 

Here is the list of perfect duplicate matches with 'rough match' enabled (the removal of alphabetical prefixes or suffixes).  To obtain the specific list, any bar which is on the following list, but not listed in Appendix A is a 'rough internal duplicate'.

 

---@---:~/silver$ cat SLV_perfect2.txt
ASARCO_INC_AMARILLO_146230_997_8
BRITANNIA_REFINED_METALS_UK_1655_951_2
BRITANNIA_REFINED_METALS_UK_1804_1007_9
BRITANNIA_REFINED_METALS_UK_2283_966_8
BRITANNIA_REFINED_METALS_UK_2318_946_4
BRITANNIA_REFINED_METALS_UK_3491_995_8
BRITANNIA_REFINED_METALS_UK_5351_929_0
BRITANNIA_REFINED_METALS_UK_5394_978_9
BRITANNIA_REFINED_METALS_UK_5447_964_9
BRITANNIA_REFINED_METALS_UK_5764_962_9
BRITANNIA_REFINED_METALS_UK_6996_960_7
BRITANNIA_REFINED_METALS_UK_8021_906_5
BRITANNIA_REFINED_METALS_UK_7723_926_4
BRITANNIA_REFINED_METALS_UK_1999_1016_9
BRITANNIA_REFINED_METALS_UK_2014_989_7
BRITANNIA_REFINED_METALS_UK_2015_922_3
BRITANNIA_REFINED_METALS_UK_2018_972_7
BRITANNIA_REFINED_METALS_UK_2020_1026_7
BRITANNIA_REFINED_METALS_UK_2029_977_3
BRITANNIA_REFINED_METALS_UK_10613_956_3
BRITANNIA_REFINED_METALS_UK_11430_1034_0
BRITANNIA_REFINED_METALS_UK_11436_1001_8
BRITANNIA_REFINED_METALS_UK_858_949_3
COMINCO_LTD_TADANAC_CANADA_1_1038_6
COMINCO_LTD_TADANAC_CANADA_2_1055_5
COMINCO_LTD_TADANAC_CANADA_3_1050_7
COMINCO_LTD_TADANAC_CANADA_4_1053_7
COMINCO_LTD_TADANAC_CANADA_4_1064_7
COMINCO_LTD_TADANAC_CANADA_7_1043_7
COMINCO_LTD_TADANAC_CANADA_9_1042_7
COMINCO_LTD_TADANAC_CANADA_10_1063_7
COMINCO_LTD_TADANAC_CANADA_13_1059_8
COMINCO_LTD_TADANAC_CANADA_15_1051_2
COMINCO_LTD_TADANAC_CANADA_15_1052_3
COMINCO_LTD_TADANAC_CANADA_15_1067_1
COMINCO_LTD_TADANAC_CANADA_17_1056_0
COMINCO_LTD_TADANAC_CANADA_22_1056_7
COMINCO_LTD_TADANAC_CANADA_23_1066_6
EMPRESA_MINERA_PERU_544_1050_4
EMPRESA_MINERA_PERU_873_1027_4
HENAN_YUGUANG_GOLD_AND_LEAD_CO_LTD_177_968_8
HENAN_YUGUANG_GOLD_AND_LEAD_CO_LTD_188_1001_1
HENAN_YUGUANG_GOLD_AND_LEAD_CO_LTD_161_947_9
HENAN_YUGUANG_GOLD_AND_LEAD_CO_LTD_200809026_969_1
HENAN_YUGUANG_GOLD_AND_LEAD_CO_LTD_183_968_6
HOBOKEN_BELGIUM_4316_963_4
INDUSTRIAL_MINERA_MEXICO_150_1098_4
INDUSTRIAL_MINERA_MEXICO_593_1028_2
INDUSTRIAL_MINERA_MEXICO_201_1078_0
INDUSTRIAL_MINERA_MEXICO_301_1055_1
INDUSTRIAL_MINERA_MEXICO_500_1046_0
INNER_MONGOLIA_QIANKUN_GOLD_&_SILVER_62_1056_9
INNER_MONGOLIA_QIANKUN_GOLD_&_SILVER_607230_987_8
JOHNSON_MATTHEY_UK_19950_982_3
KGHM_POLAND_3107_1011_7
KGHM_POLAND_3152_1009_8
KGHM_POLAND_3188_1025_7
KGHM_POLAND_5447_1022_6
MET_MEX_PENOLES_MEXICO_36860_1053_2
MET_MEX_PENOLES_MEXICO_15336_1056_2
METALOR_REF_CORP_USA_22_934_5
METALOR_REF_CORP_USA_23_937_0
METALOR_REF_CORP_USA_33_921_0
METALOR_REF_CORP_USA_35_956_4
NIPPON_MINING_JAPAN_9383_940_8
RUSSIAN_STATE_REFINERIES_1118_947_3
RUSSIAN_STATE_REFINERIES_1337_939_1
RUSSIAN_STATE_REFINERIES_1126_952_4
RUSSIAN_STATE_REFINERIES_13411_959_9
RUSSIAN_STATE_REFINERIES_1423_956_2
RUSSIAN_STATE_REFINERIES_1453_947_8
RUSSIAN_STATE_REFINERIES_16311_948_8
RUSSIAN_STATE_REFINERIES_1641_937_8
RUSSIAN_STATE_REFINERIES_1643_965_0
RUSSIAN_STATE_REFINERIES_1668_954_4
RUSSIAN_STATE_REFINERIES_1941_952_2
RUSSIAN_STATE_REFINERIES_19411_947_6
RUSSIAN_STATE_REFINERIES_20210_951_5
RUSSIAN_STATE_REFINERIES_2033_946_9
RUSSIAN_STATE_REFINERIES_2044_976_8
RUSSIAN_STATE_REFINERIES_2134_962_7
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Note the primary keys listed above have alphabetical prefixes and suffixes removed.  --^ 

 

 

Does this exceed what is to be expected?    You tell me.

 

Wed, 07/29/2009 - 18:33 | 18699 Anonymous
Anonymous's picture

It was nice of them to do this work on behalf of JPMorgan as they clearly need to research those 69 "perfect duplicates" or otherwise credit SLV with 69 different bars if they cannot locate the discrepancy amongst the over 285,000 bars of silver they have in storage. The same may be the issue with some of the "rough internal duplicates" but since they didn't bother to list those, the findings are not very helpful. The other "internal duplicates" and "cross-duplicates" that have the same serial number and manufacturer are most likely separate bars given that some refiners aren't very strict about the number of times they assign the same serial numbers to different bars. Also, there are timing differences between the inventory records of SLV and ETFS. Beyond that, the claim these "analysts" make of having uncovered fraud or gross incompetence is pretty silly given the extremely small number of probable duplicates among 285,000 bars at SLV and basically no duplicates at ETFS. On the other hand, the claim that "weight duplicates" will "contract" 82% of SLV inventory and 50% of ETFS inventory is total misuse of statistics and utter bulls@@t. The London good delivery bar weight standard is between 750-1100 ounces but most bars are actually between 950-1050 ounces, which means there are about 1000 weight possibilities give or take. Thus, any manufacturer with more than a few hundred bars on the inventory list will have a vast number of "weight duplicates". Actually, the proper way to examine this is to take a standard deviation of the bar weight distribution for each manufacturer, double it (for normal distribution), multiply by ten (to convert weights to individual gradients), and then divide by the number of bars listed for that manufacturer. If the result is less than 1, it is extremely likely that more than 50% of the bars from that manufacturer will have a "weight duplicate". Indeed, this is the case for most of the manufacturers and the majority of the bars on the SLV and EFTS inventory lists.

Wed, 07/29/2009 - 19:12 | 18730 Anonymous
Anonymous's picture

I've always looked at EFT's as an easy way for the Wall St. political crooks to take away the public's money. If your an average investor take your money out of ETF's and either put it into bullion (best choice) or quality mining stocks.

Wed, 07/29/2009 - 20:17 | 18782 Anonymous
Anonymous's picture

It's that damn Jérôme Kerviel again!

Thu, 07/30/2009 - 06:28 | 19074 Anonymous
Anonymous's picture

I've posted a 2300 word analysis of Project Mayhem Research's analysis at http://goldchat.blogspot.com/2009/07/multiple-anomalies-detected-in-silv...

From someone who works in the precious metals industry, I think further work needed before a conclusive case can be made for duplicates/double counting/cloning.

Thu, 07/30/2009 - 14:51 | 19701 Project Mayhem
Project Mayhem's picture

Nice work -- thanks. 

 

I will include your comments in the future runs which will include the German ETF.

Thu, 07/30/2009 - 15:04 | 19722 lins216
lins216's picture

Great work, bonus:  anon comment with actual substance less snark!

 

Thu, 07/30/2009 - 08:46 | 19126 Anonymous
Anonymous's picture

Jason Hommel of the Silver Stock Report has been saying for years what now is getting some credibilty. This guy is nuttier than a fruitcake but does have numbers and the names of those commiting these crimes to back up his claims about this conspiracy. Anyone interested in silver should definitely read his newsletters. Too bad in his unbelievably misguided religious mind he concludes it is the work of the devil himself along with other conspirators that he attacks with biblical vehemence. If you can overlook this, in his amazing summations he reminds one of a genius who can remember all of the musical notes of a complete opera after hearing it only once. It wouldn't be surprising if this probe was started by his newsletters. Doesn't matter, as long as the counterfeit reserves of silver are unveiled and we get to sell the silver we possess at a large profit, the result of supply and demand as the standard. Thank you Jason.

Thu, 07/30/2009 - 17:20 | 19916 Anonymous
Anonymous's picture

Here is a rebuttal with some merit.

Tyler Durden of Zero Hedge has posted an analysis of SLV's bar list by "Project Mayhem Research" (PMR for short) that concludes:

During our research into the inventory lists of the iShares SLV and London-based ETFS physical silver funds, we discovered multiple anomalies which cannot be easily dismissed. These included the presence of internal duplicates, rough internal duplicates, weight duplicates, statistical clustering, and cross-reference duplicates.

It would probably have helped perceptions of impartiality if PMR hadn’t made references to "world silver price management and a functional oligopoly for the elite" and “one might expect Western governments and megabanks to be openly hostile towards silver” in their introduction, but I suppose in these times it is best if one is transparent about one’s biases. In that spirit, I should point out that as an employee of the Perth Mint, the gold and silver ETFs are competitors of our Depository facility so it would be in my/our commercial interests for SLV or GLD to be revealed as a scam.

Unfortunately, I operate under the ethic of reciprocity, otherwise known as "do unto others as you would have others do unto you" so I'll have to be fair and factual in my analysis of this analysis. This may mean that, shock horror, I say some things in defence of SLV.

At this time I would also like to issue a warning that what follows is some technical nit picking probably only of interest to myself, PMR and a few other nerds, done on the basis that the PMR analysis is a working paper. If this sounds a bit too boring, and you are of a conspiracy bent, may I suggest this article to reinforce your prejudices. For those who think gold and silver “enthusiasts” are nutters, you’ll find this article more to your liking.

Firstly, it is worth noting the London Bullion Market Association’s (LBMA) delivery standards for 1000oz silver bars, as this is the standard to which the bars on the lists have been produced:

Minimum weight: 750 troy ounces
Maximum weight: 1100 troy ounces
Minimum purity: 99.9%
Weight rounding: rounded down to the nearest 0.10 of a troy ounce
Marks:
* Brand
* Serial Number
* Year of Manufacture
* Purity
* Weight (optional on the bar but not on the bar list of course)

PMR makes reference to a choice of “primary key”, in other words, how does one uniquely identify a bar? I think it would be obvious to most that Brand and Serial Number together are needed, as we cannot assume that each manufacturer uses a totally unique numbering range or system.

However, it is crucial to note that many manufacturers restart serial numbers each year. By way of explanation, I quote from a letter dated 8 Dec 2004 from Johnson Matthey to the World Gold Council:

I am writing to confirm the marking protocol for Johnson Matthey Good Delivery Gold bars produced in the UK. Prior to 2002 all bars were stamped with a two letter code and number, i.e:– BT 12345 for a bar produced in 1999, CT 12345 for a bar produced in 2000. Therefore, some bars will have the same numbers but with different Pre-Fixes. Both the letter AND number combination need to be taken into account to identify the bar. After 2002 we moved to a year stamp i.e. 2003 and a number sequence.........

http://goldchat.blogspot.com/2009/07/multiple-anomalies-detected-in-silv...

Thu, 07/30/2009 - 23:51 | 20332 Bron Suchecki
Bron Suchecki's picture

Interesting that Project Mayhem (comment #19701) sees my work as constructive but comment #19961 sees it as a rebuttal.

I would suggest Project Mayhem also download the bar listings from http://goldmoney.com/certificates-and-reports.html (the beauty of GoldMoney is that they have all their past bar lists so you can build a history), http://www.bullionvault.com/audit.do (note that GoldMoney and Bullion Vault both store with Via Mat, but I'd doubt you'd find any duplications) and http://www.bmsinc.ca/bmgbullionfund/

The point of this is that it will increase the sample size, leading to increased accuracy around weight distributions as well as helping to confirm bar serialisation protocols.

Sat, 08/01/2009 - 13:19 | 21863 Project Mayhem
Project Mayhem's picture

Thanks.  I have provided a link to your story as well for those who have emailed me with questions.  One other interesting link those who follow the precious metals markets may want to check out are the 24h gold and silver price trackers.  These track retail coin premiums on a daily basis based on sale data from ebay worldwide.

 

This applet tracks daily gold coin prices on ebay
http://www.24hgold.com/english/buy_sell_gold_coins.aspx?co_id=0

This applet tracks daily silver coin prices on ebay
http://www.24hgold.com/english/buy_sell_silver_coins.aspx?co_id=0

 

 

Sun, 08/02/2009 - 08:27 | 22268 Anonymous
Anonymous's picture

If what you say is even half true every Indian will be counted as millionaire. Because Gold and Silver are only trusted investment for Indiand for centuries
unfortunately our Reserve bank is piling up US dollars as if Bernake and company has either run out of currency paper or printing ink or printing presses.

Mon, 08/03/2009 - 12:28 | 23074 Anonymous
Anonymous's picture

I think the weight problem is a variation on the Birthday paradox. See http://en.wikipedia.org/wiki/Birthday_problem under the heading collision counting.

Assuming that bars all have a weight between 900.0 and 1100.0, that would mean there are 2000 different possible weights (900.1, 900.2, 900.3 etc.) on the list. I don't account for the gaussian curve here (which would obviously concentrate the numbers more around 1000) but accounting for that would probably even increase the chance of a collision (ie a duplicate) since more concentration would probably lead to more duplicates.

Anyway, with 285479 bars on the SLV list and 2000 different weight possibilities, the chance that another bar has a duplicate weight is approximately 99.3% for each individual bar. A number very different from the 82% you find (I don't know where the discrepancy comes from, perhaps you only reduced the number of bars with one for each duplicate, even if the number of duplicates with that particular weight was higher than 2?). Anyway, it seems obvious that weight duplicates are not to be considered a rare finding.

Wed, 08/05/2009 - 18:12 | 26432 Anonymous
Anonymous's picture

Now is time that Lone Ranger stop shooting his silver bullets.
Each one will cost a fortune tomorrow.

Tue, 10/06/2009 - 10:01 | 89920 Anonymous
Anonymous's picture

These Project Mayhem guys appear to be a big fat fraud. i have been swapping emails with them about so called gold etfs in switzerland issued by ZKB & JB. Basically once i focused on these products (that really are awful!!) they stopped communicating. The only thing i can deduce from that is that they are from one of those companies trying to rubbish their competition!! Its not on and its just scaremongering buts its back fired now as its made me and many people look at their rubbish!

Basically see the emails I sent.

guys do you pick and choose what you look at?

2009/9/4 Derek Cliff
- Hide quoted text -

Hi Project Mayhem

Did you have any views on this. The bar lists of both JB & ZKB have no bar numbers only internal numbers and no brand (see attached). How do you validate the metal exists!

What are the next steps? thanks

2009/8/20 Derek Cliff

JB product looks even worse!!!

JB have no bar list, no independent audit, they roll up 8 funds and declare single AUM, they are the only AP??

I have looked at outflows and there has only been one week of outflows!!!!! in the life of both products thats impossible.

look at the function list at the back. JB fund manager, JB custodian, JB market maker/AP, all roles JB.

25% credit risk, 10% loans against assets?

ZKB is interesting as well - what does this mean? § 15 Risk diversification
The fund management company may hold up to 20% of the fund's total assets as liquid assets in sight
and time deposits with the same bank.
No auidt of metal just company. no LBMA good delivery gtee from what I can see.

Here is the bar list www.zkb.ch/etc/ml/repo...

2009/8/20 Project Mayhem

Can you send me a link to their bar list? Sorry for the delay in the reply I have been very busy !

thanks Derek

On Fri, Aug 7, 2009 at 12:07 PM, Derek Cliff wrote:

Dear Project Mayhem
I saw your recent reports as to the Silver ETFs. I wanted to ask you to consider looking further at some products I find very alarming and believe that investors are being ripped off by using them. These are ZKB precious metal etfs. It has $4bn of gold alleged. I believe these products use the name ETF but are complete rubbish and ripping people off.
A few things I have gleamed but may or may not be right:
ZKB
· The entire board and Chairman I believe were fired a few years ago in a huge scandal around insider dealing
· The product only produces a quarterly bar list. Everyone else does it daily. I think this is to cover up the fact they don’t have the metal or at least timing differences. There is limited supplies of gold and other metals in Zurich and they get add assets at $100s of millions and therefore where are they getting it from and where. Given they sell and issue the shares on a T+3 basis these ETFs can not be backed at the time.
· ZKB are the only market maker. They don’t allow anyone else to market make. This means their pricing cant be arbed!!! The quick looks I have done shows they price at 0.5% to 1 % above Nav. On $3bn that’s massive rip off!! At least
· ZKB does all the roles – issuer, market maker, custodian etc. everyone Else's etf has third parties doing this. what are they hiding or what can they hide? What happens if some senior guys get together and coordinate this. There is no third parties to act as a check and balance
· There is no gold audit. I cant believe this how do we know it exists.
· They also keep saying their vault is full. Doesn’t say much for security.
Have you looked at this one? If not you guys have the resources to do so so please do.
Regards
drkcliff

Tue, 10/06/2009 - 10:06 | 89928 Anonymous
Anonymous's picture

These Project Mayhem guys appear to be a big fat fraud. i have been swapping emails with them about so called gold etfs in switzerland issued by ZKB & JB. Basically once i focused on these products (that really are awful!!) they stopped communicating. The only thing i can deduce from that is that they are from one of those companies trying to rubbish their competition!! Its not on and its just scaremongering buts its back fired now as its made me and many people look at their rubbish!

Basically see the emails I sent.

guys do you pick and choose what you look at?

2009/9/4 Derek Cliff
- Hide quoted text -

Hi Project Mayhem

Did you have any views on this. The bar lists of both JB & ZKB have no bar numbers only internal numbers and no brand (see attached). How do you validate the metal exists!

What are the next steps? thanks

2009/8/20 Derek Cliff

JB product looks even worse!!!

JB have no bar list, no independent audit, they roll up 8 funds and declare single AUM, they are the only AP??

I have looked at outflows and there has only been one week of outflows!!!!! in the life of both products thats impossible.

look at the function list at the back. JB fund manager, JB custodian, JB market maker/AP, all roles JB.

25% credit risk, 10% loans against assets?

ZKB is interesting as well - what does this mean? § 15 Risk diversification
The fund management company may hold up to 20% of the fund's total assets as liquid assets in sight
and time deposits with the same bank.
No auidt of metal just company. no LBMA good delivery gtee from what I can see.

Here is the bar list www.zkb.ch/etc/ml/repo...

2009/8/20 Project Mayhem

Can you send me a link to their bar list? Sorry for the delay in the reply I have been very busy !

thanks Derek

On Fri, Aug 7, 2009 at 12:07 PM, Derek Cliff wrote:

Dear Project Mayhem
I saw your recent reports as to the Silver ETFs. I wanted to ask you to consider looking further at some products I find very alarming and believe that investors are being ripped off by using them. These are ZKB precious metal etfs. It has $4bn of gold alleged. I believe these products use the name ETF but are complete rubbish and ripping people off.
A few things I have gleamed but may or may not be right:
ZKB
· The entire board and Chairman I believe were fired a few years ago in a huge scandal around insider dealing
· The product only produces a quarterly bar list. Everyone else does it daily. I think this is to cover up the fact they don’t have the metal or at least timing differences. There is limited supplies of gold and other metals in Zurich and they get add assets at $100s of millions and therefore where are they getting it from and where. Given they sell and issue the shares on a T+3 basis these ETFs can not be backed at the time.
· ZKB are the only market maker. They don’t allow anyone else to market make. This means their pricing cant be arbed!!! The quick looks I have done shows they price at 0.5% to 1 % above Nav. On $3bn that’s massive rip off!! At least
· ZKB does all the roles – issuer, market maker, custodian etc. everyone Else's etf has third parties doing this. what are they hiding or what can they hide? What happens if some senior guys get together and coordinate this. There is no third parties to act as a check and balance
· There is no gold audit. I cant believe this how do we know it exists.
· They also keep saying their vault is full. Doesn’t say much for security.
Have you looked at this one? If not you guys have the resources to do so so please do.
Regards
drkcliff

Wed, 11/03/2010 - 04:36 | 695268 Susancai
Susancai's picture

It's glad to know Project Mayhem's first working paper is available. free advertising |job|tempurpedic mattress

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