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A Single Trader, JP Morgan, Holds 90% Of LME Copper
When a week ago we reported that JP Morgan has denied it owned more than 90% of the copper positions on the LME, we suggested that this could very well mean that Blythe Master's firm could just as easily control 89.999% of the copper and still not misrepresent the truth per that non-commital press release. Turns out our unbridled cynicism was spot on as usual. The Wall Street Journal has just reported that in the copper market "a single trader has reported it owns 80% to 90% of the copper
sitting in London Metal Exchange warehouses, equal to about half of the
world's exchange-registered copper stockpile and worth about $3 billion." Oh and yes, while JP Morgan technically is not singled out, we will be delighted to issue a retraction the second JP Morgan approaches us with a refutation that it is not the trader in question. And while we are at it, we also will repeat our claim that it was indeed JP Morgan that reduced its massive silver position, as per the recent FT article: as above we will immediately issue a retraction and apologize should JPM's legal department contact us that we are wrong on this. Somehow we don't think that will be an issue. And so it is once again made clear that the biggest market manipulating cartel in the world is not only JPM's commodity trading operation, but the "regulators" at the CFTC, who are doing all they can do to delay implementing rules on position limit- a stalling tactic whose sole purpose is to make the life of Jamie Dimon as comfortable as possible while he corners the copper market (and offloads his PM shorts to some "foreign bank"), even if that means the complete collapse in faith in the commodity market. Presumably, this means that Mr. Gensler has received an outsized Christmas gift to assuage his conscience. As for the commodity market, well, just look at what has happened to the stock market now that everyone knows it is nothing but a house of cards scam where a few robots front run each other. We are confident to quite confident tomorrow's ICI report will confirm that 33rd consecutive outflow from domestic equity funds. It is a pity that the same fate will now happen to the commodities market, as everyone tells Gensler to shove his corrupt market, and moves to physical. Frankly, it couldn't happen to a nicer group of so-called regulators.
From the WSJ:
Copper soared to a new record of $4.2705 per pound on Tuesday in New York, and is up 28.3% this year. The LME's three-month copper contract closed at $9,353.50 a metric ton, up 1.6% on the day, a new record.
J.P. Morgan Chase & Co. recently had a large position in copper, though it is unclear whether the U.S. bank increased its holdings, or whether a new player has taken dominant position.
"Regardless of who owns it, the only thing of note here is that we are being told that one person has a substantial position," said David Threlkeld, president of Resolved Inc., a metals consultancy.
While commodities exchanges scrutinize all holdings to ensure a single player isn't trying to corner the market, and many of the positions are owned by big firms on behalf of clients, the large holdings do result in a concentration of ownership that could skew prices.
Please keep the bolded text in mind, as you read the following description of the idiocy spewed on TV tonight, via the Street:
"Everything that goes up is not a bubble," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday, as he reminded viewers that the laws of supply and demand have not been replaced by the law of gravity.
Cramer said he's had enough with the skeptics keeping investors from making real money in stocks, and especially in commodities. He said it's OK to be skeptical sometimes, but being skeptical about everything will only hurt your portfolio.
Case in point, the commodities. Cramer said the last big rally in commodities like copper and oil was indeed driven by a hedge fund frenzy, but this time is different. This time, he said, commodities are being driven higher by real demand, by the fact that the world is growing, and there's an inability to find new raw materials fast enough.
In other words: per Cramer, the story broken by the WSJ is just fabulation and JPM's 90% lock of the copper market is as indication of proper supply/demand dynamics. Because, in some parallel universe, JP Morgan controlling 90% of the market is real demand...
You read that right.
And this person is on TV, advising lemmings how to throw their money into a ponzi which nobody even pretends to hide.
That said, we are not worried about Cramer: following the next market crash, which is coming, after his termination from what is left of CNBC, he will make millions selling his latest book written in second grade friendly-English, titled "This time, I promise, it is different." With a subtitle:" Trust me - I was on TV...in spite of my atrocious Nielsens rating."
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It would be nice to think that, at some point in the near future, the dog will start wagging the tail again rather than the current other way round (futures dictating spot prices).
DavidC
This was in the UK news two weeks ago.
at 50% not 90%...this is new news.
As gringo28 pointed out in one of the previous threads, this is now about 2% of annual global copper consumption. Still obviously another attempt at market manipulation; indeed an interesting comment from London Banker over at FT Alphaville:
So someone has between 80 and 90 percent of LME copper, it's rumoured to be JPM, and JPM happens to hold the chair of the copper committee at LME. So no investigation there, then.
Even if they cornered market on silver or copper, these still can be useful. Maybe I should try a copper/gold ratio also!
using Gold silver ratio to predict equity moves?
http://oahutrading.blogspot.com/
Pump and dump bitchez
They are going to make my ammo even more expensive.. damnit!
On the US Dollar weakness,(relative to most other currencies) commodity prices including Oil has been on the rise,since Commodities become cheaper for outside USD investors.
Miners like Rio Tinto and BHP etc have been stepping up production at record speed.
What I am asking is this:
http://noir.bloomberg.com/apps/quote?ticker=BDIY:IND
Increased prices will increase copper production thus silver production -- most mined silver is a by product. In Arizona 90% of silver mined is a by product, 80% of silver mined is a by product of coppper mining. Don't know off hand what the worldwide numbers are for silver as a by product of copper.
Think rare earths, tantalum hafnium carbide (Ta4HfC5), and then think of China's recent imports of copper (hoarding), but not as in the old Ph.D. in forward-looking economics kind of way, but rather that copper could simply be in the midst of a major repricing event, your "Eureka" moment if you will - for it may, one day soon, represent the required "fuel" for free, continuous, on-site, emission-free carbon-less power, otherwise known as Alternators with Hydromagnetic Engines.
http://patents.ic.gc.ca/opic-cipo/cpd/eng/patent/1085918/summary.html
Flotor (TM) power is an efficient form of next generation renewable hydromagnetic energy (patented #1085918 & trademarked) but generally dismissed by Wall Street's limited funding of non-fossil & bio-fueled alternative energy advocates as a perpetual motion energy machine that defies the laws of physics.
Einstein was once quoted saying, "If at first, the idea is not considered truly absurd, then there is no chance for it in succeeding."
In short, the inventor discovered that by wrapping copper wire around an electrically-charged steel sphere, that it can induce electron formation through applying counter-natural magnetism forces by way of a spinning magnet flysphere, which spins like a suspended "counter-magnetic" beach ball inside an enclosed box, within a special encapsulated liquid volume enclosure of plasma that is filled with sand-like (rare earth) particles which react with a "pin wheel pulsation effect" once in motion, and thus creates an electrical discharge current from the "steel & copper beach ball" on outwards, which can then be gathered and converted to direct current (DC) electrical supply, for near-endless, free energy.
"Free" power engines, once you get your spinning magnet working, and all you basically need for a magnet drive train is copper wire (disclosures: long HKU-tsx) & carbon steel (X-N)(FCX-N) for hydromagnetism to work and to provide clean, on-site, continuous, and emission-free nex/gen hydromagnetic electricity. Requests for technical and investor prototype information development, along with any other media inquiries, are available through contacting ManagingDirector@Northover.ca.
But golly, Tyler, Cramer says it's not true.
Cramer: This Rally in Copper is Real Published: Tuesday, 21 Dec 2010 | 7:33 PM ET"Enough with the skepticism," Cramer said Monday. "The skepticism is killing you. It's keeping you on the sidelines. It's keeping you out of incredible rallies."
Being as many are quick to call anything positive a bubble, Cramer was surprised he didn't hear that about the current run in copper. After all, he noted copper once became a bubble that burst in 2008, leading to a greater economic collapse. On Tuesday, copper revisited its May 2008 highs.
The last big run-up in commodities was in 2007 and 2008, Cramer noted. It was a move driven by hedge fund buyers, who by using margin, borrowed money to trade commodities for a profit — just like with stocks or bonds. But this time, however, the move in raw materials is exactly what it looks like — a product of constrained supply and rapidly increasing demand. There are no traders trying to corner the market.
"This move is just what it appears to be," Cramer said.
Each round of 7.62mm M59 NATO ball ammunition contains approximately 12 grams of copper. The M134 minigun fires at between 3000 and 6000 rounds per minute. This means the minigun consumes between .6 and 1.2 kilograms of copper per second when it is firing. The US army does not collect and reload used cases.
JPM is hedging against war.
just a thought ... copper is the premium alloy material for gold , silver and nickel coinage , jewlery and industrial uses . It ,copper, is all taken out of these metals in the refining process , then traded and shipped as "pure" and then put back in for the end usage. large quantities are required !