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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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?

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.

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.

 

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.

Project Mayhem's picture

this article sucks imo!  ;)

Anonymous's picture

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

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.

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...

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....

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?

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.

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!

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.

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).

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.

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

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.

aldousd's picture

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

Gilgamesh's picture

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

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.

Anonymous's picture

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

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

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."

Anonymous's picture

Uh? Really?

Anonymous's picture

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

D.O.D.'s picture

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

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...

Anonymous's picture

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

nicholsong's picture

Thank you for a very enlightening post.

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.

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!!!!!!!!

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.

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.

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. 

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!

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.

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...

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.

Anonymous's picture

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

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.....

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.

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 ..

Veteran's picture

Killer research!  Thanks

Anonymous's picture

The word is "lieu".

Anonymous's picture

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

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...