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Was AIG, In Addition To Being The Riskiest Company In The World, Also A Precious Metals Manipulator?

Tyler Durden's picture


A little under two years ago, there was a big debate in the precious metals community, in which two groups of individuals were arguing for and against possible silver market manipulation, via arbing the COMEX and the OTC. On one hand you had such distinguished economists/bloggers as Mish (here and here) and Jon Nadler of Kitco (here) claiming there is no such thing as a COMEX-OTC arb because markets are ultimately efficient, and the second a trade is effected in one market, it implicitly affects all other markets, making spread arbing, and thus "manipulation" impossible. On the other hand, you had C.Loeb making precisely the opposite argument (here). After a brief flare up, the debate died down, with a partial win acceded to Nadler, who ended the debate with the following rhetorical statement: "Also, by the way, why not NAME the sinister manipulative banks in question? Why not ask them outright as to the motives behind their positions (or better yet, who their clients were) and whether or not they acted in a "willfully nefarious" manner? Conclusion: One can take any database and make it suit their conspiracy argument. That, however, does not make for proof of any kind." In other words, Mr. Nadler was asking for a bank to confirm it was arbing the COMEX-OTC spread, which in turn would unwind his defense argument, and lend credence to the claim that some players, due to their massive scale or otherwise, succeed in manipulating the silver (or gold) market by profitably spreading the legs of the trade in two completely different markets and arbing this spread. For the longest time people looked exclusively at JPMorgan for clues. Boy, were they wrong... and are they about to be surprised that in addition to almost blowing up the world, AIG FP has admitted that it itself, as the defacto risk mastodon and suicide bomber under Joe Cassano, with "$426 billion in total on and off balance sheet risk equivalent delta," was precisely just this spread manipulator. But don't take our word for it. Take AIG's.

Presenting exhibit A: AIG production document FRBNY-TOWNS-R1-210712 (pp 34-35) - highlight ours.

Oh, so the arb does exist...

There are about 249,999 other pages we need to go through to find additional supporting and incriminating evidence to this formerly Strictly Confidential Internal Risk Analysis, but a very relevant question at this point for Mr Nadler is: now that you have your confirmatory smoking gun, does that change your thesis? And a much more critical question for the gentlemen at the COMEX: just how was the world's arguably biggest trader at the time, AIG-FP, arbing your market and the OTC, and just how much of this falls under the confines of "legal"? And, lastly, maybe the most critical question - who inherited these positions, who unwound them, and, if no unwind occurred, who is currently in possession of AIG-FP's "large exposure in the Comex vs OTC arbitrage trades"?


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Wed, 06/30/2010 - 23:51 | 445771 scofflaw
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Thu, 07/01/2010 - 00:45 | 445842 DoChenRollingBearing
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And where in the Hell is all this gold?  Inquiring minds want to know, sleazy dirtbag companies do not us to know.

As the Master, Gordon_Gekko (also fofoa) has said, time is short, buy physical gold now!

Thu, 07/01/2010 - 08:03 | 446009 russki standart
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Do not waste any time on asking Nadler to rethink his position. He has been a perma bear on gold for years despite managing Many who follow the gold market think he is akin to a one string ukelele, capable only of one tune. Personally, I think he is in bed with the gold suppression cabal. I pay no attention to this quisling except when I need additional confirmation for timing my entry into a trade.

Thu, 07/01/2010 - 11:21 | 446541 Amish Hacker
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I always assumed that Nadler was trying to steer investors into Kitco unallocated accounts, by trash-talking goldbugs and the need for physical AU. At the same time, he has begrudgingly admitted that a small gold position (say, 5%) might help portfolio returns. That way, when gold goes up, he can say he gave great advice; when it gets pounded, he says, "I told you so." 

I find his utterly predictable anti-gold comments and snarky, look-at-me writing style not worth reading.

Wed, 06/30/2010 - 23:59 | 445778 JLee2027
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Now I'm confused

Thu, 07/01/2010 - 00:01 | 445781 TheGoodDoctor
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So what the fuck is going on Tyler? Break it down so we can understand! Who did what with what precious metals. Man this gets weirder everyday.

Thu, 07/01/2010 - 00:02 | 445783 Nolsgrad
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get the fuck long Silver.



Thu, 07/01/2010 - 01:56 | 445881 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture


Thu, 07/01/2010 - 02:56 | 445896 Hephasteus
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word and equation. LOL

Thu, 07/01/2010 - 08:40 | 446043 Arius
Arius's picture

why do you need the details for? first is difficult to get them otherwise how can one manipulate and steal?

but second, most importantly, nothing you or i can do about it...all we can is protect ourself while the window is still open...

Thu, 07/01/2010 - 00:02 | 445784 arm50
arm50's picture

sounds like a variance arb, no?

Thu, 07/01/2010 - 00:09 | 445791 Tyler Durden
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very much so. however, when you are that big, you don't play the arb. you create /are the arb.

Thu, 07/01/2010 - 00:23 | 445806 arm50
arm50's picture

agreed, i'd guess it is misspecified as an arb book, rather than a var book w/ crappy listed hedges.

Thu, 07/01/2010 - 00:52 | 445850 knukles
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Curious, not only as to whether positions have been "unwound or transferred" to another party, but more importantly, if transferred, under what aegis, for AIG-FP was not deemed a failed entity thereby closing out all positions in the traditional normal course of business.... unless paying off all of the swaps at 100% was ever until then considered "normal".  Which we know was not, any more than the abrogation of senior secured debt holders rights by the US Government in the disposition of GM and Chrysler.

As such, would it not be pertinent as to if the positions were transferred, were they assumed in the form of principal (hedge) or on behalf of another (spec) albeit narrowly defined and grossly oversimplified.  Were AIG-FP's positions done for themselves as a house account or on behalf of another client, such as a governmental entity as some believe the suspected positions (shorts) of HSBC and JPM?

Further, whether closed or remaining open, does the prohibition as to settled swap client's attempting to legally glean any future monetary relief from AIG-FP (or AIG for that matter) apply equally to the exchange and unlisted markets which comprised the precious metals book in question?

I simply wonder whether there is not reasonable information to be gleaned regarding the PM mysteries that may not be enlightened through discerning the very nature of the positions in question.



Thu, 07/01/2010 - 08:41 | 446047 anarchitect
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Another question is, if the arb is COMEX-OTC, is it necessarily silver?  Silver shows up in the spreadsheet in a couple of places, but there are a lot of base metals in there as well.

Thu, 07/01/2010 - 00:08 | 445789 CD
CD's picture

I love how he amounts of exposures for some counterparties listed on pages 92 on are blacked out -- but the list is in descending order of exposure, and amounts just a few thousand away are left exposed... As stupid question on the side -- why do some entities (RBS, GS, etc.) appear several times on the list -- why are the AIG exposures to these NOT summed up?

Thu, 07/01/2010 - 00:29 | 445815 IrrationalMan
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They are most likely seperate legal entities.  For example, most banks have set up Special Purpose Entities and other distinct Legal entities that play out differently for CSA (Collateralized Support Annex) and in the case of bankruptcy.

Thu, 07/01/2010 - 00:59 | 445858 CD
CD's picture

Logical enough, though the names are seemingly identical in most cases (GS has a couple of SIVs listed that I noticed). I was thinking accidental/deliberate extra space in Excel to break up positions that would otherwise have seemed too large if summed up.

Thu, 07/01/2010 - 00:10 | 445793 Nigaz
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Calling Nadler a "distinguished" anything is a joke.  Paid shill, yes.  The Liesman of the gold world, yes...

Thu, 07/01/2010 - 08:04 | 446010 cbaba
cbaba's picture

Yes, John Nadler is a paid Shiller.

His all postings are against gold or silver price manipulation, he always think gold will go down below to 3 digits.

Tyler, i am surprised to hear this guys name is coming up as an expert or whatsoever,he is Jim Cramer of the Gold market.

Thu, 07/01/2010 - 08:49 | 446060 Arius
Arius's picture

dont be hard on the guy..nadler - TGL -the famous Gartman, remind me of another distinguished high financer Mr. Fuld of 31 floor...he really believed on lehman and its great history hold the 500 million on stock until expired worthless...they might be stupid but they are hanging on.... i respect them for that...someone got to hold the other side of the trade...otherwise everyone would buy gold and WHERE the price would be then?  limited supply???

Thu, 07/01/2010 - 09:47 | 446185 e_goldstein
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i always thought he was better at his previous gig:


Thu, 07/01/2010 - 00:16 | 445797 Sands8oo
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Long story short - the "manipulation" of gold/silver has seemed to have been lacking evidence of a party in possession of huge sums of worthless derivatives (the shorts that continuously bombard the market during any sustained period of upward movement - just look at the intraday chart from two days ago to see what I'm talking about) - but now it seems AIG could be (or was) on the books for exactly that...


Best questions are at the end of the article - "who inherited these positions, who unwound them, and, if no unwind occurred, who is currently in possession of AIG-FP's 'large exposure in the Comex vs OTC arbitrage trades'? "


My guess is, at this point, those positions have ballooned to FAR FAR GREATER size than they once were with the continued un-adulterated manipulation of the precious metals markets... This little bit below from the FINREG bill should clue everyone in to the fact that the Federal Reserve DEPENDS on banks to intervene on its behalf (or in coordination with it) to 'manage' currency values, interest rates, and the value of gold and silver:


banks can "continue to handle foreign exchange, interest rate, and gold and silver swaps and to hedge their own risks. Activity in cleared and uncleared commodities, agricultural, energy, and equities swaps, and credit would have to move to an affiliate within two years."



Thu, 07/01/2010 - 00:20 | 445804 Gordon_Gekko
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Anybody who "denies" PM Manipulation is either an idiot or complicit in their manipulation. Period. END.

Thu, 07/01/2010 - 06:09 | 445952 drwells
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Looks like the total notional value of these things is actually lower than in recent years, depending on how accurate/comprehensive these BIS data are:


Thu, 07/01/2010 - 09:17 | 446127 Commander Cody
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I think you answered the question since it is obvious that the Fed/Treasury are manipulating the PM market.  There were/are many reasons to have bailed out AIG and continue to maintain control so as to not rock the boat and destroy the free lunch.  Cassano was a tool of the system and will never be convicted of anything, and Benmosche's arrogance is a clear indicator of his part in this fraud.

Thu, 07/01/2010 - 00:18 | 445801 anarchitect
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What is Barrick Gold doing on page 92, in the middle of a list of mostly banks and pension funds, to the tune of $288M?

Thu, 07/01/2010 - 00:42 | 445833 Sands8oo
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I think we all know what Barrick is doing there - total instrument of the system - buy shares of ABX and support downward gold price manipulation


Its that simple

Thu, 07/01/2010 - 08:55 | 446076 anarchitect
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That was true until recently, when Barrick supposedly lifted its hedges. I haven't looked at the composition of Barrick's board lately, but it was infested with swill last time I saw it. Question is, did some of Barrick's hedges simply get offloaded to AIG?

An interesting theory is that AIG and Enron were massive money laundering operations, and not on behalf of what would would normally be called organized crime. Derivatives are well-suited to this kind of fraud because the winnings and losses cancel out, which would allow a pre-arranged loser to transfer money to the winners.

Thu, 07/01/2010 - 02:59 | 445898 Hephasteus
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It's doing whatever the hell the FED tells it to. Don't you remember. The FED gave gold herpes for 30 years. If they fed doesn't buy the gold the stupid consumers won't know what to do with it.

Mon, 07/05/2010 - 19:23 | 453566 Vendetta
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Don't know but they have been unwinding their hedges against themselves to the tune of $10 billion.  This article just mentions $3 billion.

I reckon since the banksters bought out the management of the company, they had the rigging rig good and it would great sailing in an ocean of fiat forever.

Thu, 07/01/2010 - 00:22 | 445805 Gordon_Gekko
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Mish is an IDIOT.

Thu, 07/01/2010 - 12:02 | 446677 weinerdog43
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I'm afraid I have to agree.  I used to read him regularly.  Now, I don't even bother.  He is very much like Karl D....extremely wedded to his own ideas regardless of the facts on the ground.  Too bad.  Someone who can admit they were wrong about something increases my opinion of them for having the courage to say so. 

Thu, 07/01/2010 - 00:24 | 445807 Nolsgrad
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you guys complicate the shit out of things. Look, easy fun. Take GLD*10/SLV, now take a 5 day simple moving average. Whenever the spread on the average gets over X(being the magic number) short one vs. the other


Instant money maker. Or at least it has been for the past 2 years.

Thu, 07/01/2010 - 00:27 | 445809 Bringin It
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Brilliant TD

Thu, 07/01/2010 - 00:35 | 445821 Gordon_Gekko
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Nobody gives a fuck about the stock market anymore.

Thu, 07/01/2010 - 00:51 | 445852 DoChenRollingBearing
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I made a trade Weds. (yesterday) for the first time in MONTHS!  I sold my SLV (cost basis approx. $13.75) in one of my accounts.

I have been a bleacher seats observer of the markets for months now, except for buying physical Gold!  And other PMs and ammo...

Physical mes amis...

Thu, 07/01/2010 - 00:39 | 445826 Thoreau
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Congrats! 1st time you haven't been junked.

Thu, 07/01/2010 - 00:35 | 445820 FaithEqualsZero
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who is currently in possession of AIG-FP's "large exposure in the Comex vs OTC arbitrage trades

Who indeed! 3 guesses and the first 2 don't count

Thu, 07/01/2010 - 00:36 | 445822 Gordon_Gekko
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Thu, 07/01/2010 - 00:38 | 445825 Sands8oo
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Thu, 07/01/2010 - 00:43 | 445839 Thoreau
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I'm no PM bug; but Nadler is the John Homes of gold tools.

Thu, 07/01/2010 - 00:47 | 445843 Caviar Emptor
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I deplore yet totally get the government backed sniping at gold. Consistent with the language in that declassified White House document from 1969 which discusses an intervention to reduce the gold price. They have to maintain a myth so it takes lots of cash to do so. In the current economic environment I bet they've had to double or triple their efforts to keep gold from running to $2000. If they didn't then they'd have a run on the currency. Shills will be shills. 

Thu, 07/01/2010 - 01:14 | 445851 sergeyvz
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AIG has a long history of dealing in silver since 1989, including a position as a LBMA market maker in gold and silver before its withdrawal from LBMA on May 28, 2004.

See for example Ted Butler's archives:
The Weight of Evidence, Dec 2003

See also:
Withdrawal of AIG from LBMA on May 28, 2004
ZeroHedge: Did Gordon Brown Sell UK's Gold To Keep AIG And Rothschild Solvent?

Thu, 07/01/2010 - 06:09 | 445951 Bendromeda Strain
Bendromeda Strain's picture

Huh... right after Rothschild's exit. Funny, that.

Thu, 07/01/2010 - 06:49 | 445971 bozzy
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Great post - do I sense that the regular crushing of the PM markets is starting to come unzipped?

The problem at present is that it seems to be profitable, in that apart from the shorting of any strength and then covering in the cowed and depressed price conditions which follow the initial sweep, there is an opportunity to write calls in the certain knowledge that you have the power to bring the price below strike, and so the calls expire worthless.

AIG, JPM - these are schoolyard bullyboys, guaranteed by the administration. There is no market when a participant has a purse which is effectively larger than the market itself. 

Thu, 07/01/2010 - 00:52 | 445853 Joe Sixpack
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Thu, 07/01/2010 - 00:57 | 445856 DoChenRollingBearing
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Fcuk 'em all!

As money comes in, part of it goes to buying Au, Pt and Pb.  For the moment, I am comfortable with my Ag and small "spec money" in Palladium, which has an interesting supply / demand angle.

One man's opinion!

Thu, 07/01/2010 - 01:05 | 445860 bigdumbnugly
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great job tyler.  great find.  documentation and the naming of names.

but though the answer as to who was and who now is now the grand exaulted poobah of PM price manipulation is laid bare, the bigger question is:   what now?

no way the head of the snake willingly eats its own tail.  i don't see this taken down through the normal legislative means.  everyone is implicit. 

what happens here?



Thu, 07/01/2010 - 06:11 | 445954 Bendromeda Strain
Bendromeda Strain's picture

COMEX breaks > force majeure

Thu, 07/01/2010 - 01:33 | 445871 MsCreant
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who inherited these positions, who unwound them, and, if no unwind occurred, who is currently in possession of AIG-FP's "large exposure in the Comex vs OTC arbitrage trades"?

What if the Fed has them? Hmmm? Or the treasury? I know we own lots of Citibank. I thought we owned AIG too. If I have this wrong, pardon me.

Thu, 07/01/2010 - 02:07 | 445884 agrotera
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Althought it is unlikely that the massive crimes that have been legislated as legal by our captured legislators will ever stop, i cannot give up hope...and i am so grateful for all at ZH for your continued heroic truthtelling.


Mon, 07/05/2010 - 19:32 | 453573 Vendetta
Vendetta's picture

Indeed.  ZH has graduated to my top site lists as the propagandist writers in the PM market came out like bees out of a disturbed hive since March 2008 to infiltrate most of the sites I used to visit... only a couple sites have been unwavering in their diligence.

Thu, 07/01/2010 - 02:21 | 445888 akenathon
akenathon's picture

Now we have additional proofs...

Buy Silver when Gold/Silver support at 64 is broken. They are trying to defend that like nuts. I sense you have an amount of stop lossses on that area which might bring Silver much higher

Thu, 07/01/2010 - 03:26 | 445901 palmereldritch
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The Opiumstan Wars redux ...introducing Binlaudanum, formerly known as Soma



Just wondering if  the arb has anything to do with opium? [...does that make sense? Perhaps this is an under-examined, albeit shadowy, factor in the financial metrics.  Given the company's murky history, it may have precedence.] 

You have your good years and your bad years in this game.  They'd buy insurance on the trade but really, who can you trust?  

Some speculative puzzle pieces for an ancient piracy that may reside in a modern day conspiracy :

History of AIG

"In 1919 Cornelius Vander Starr founded AIG in Shanghai, then known as "American Asiatic Underwriters" (later "American International Underwriters"). His first employee, and office boy, was Sir Edwin ("Jimmy") Manton, who eventually became Chairman of A.I.U. and Executive Vice-President of A.I.G. Eventually, he hired Maurice "Hank" Greenberg's father as his driver, saw exceptional promise in the young man, paid for his education, and hired him as a trainee. It has been reported that he worked for the Office of Strategic Services during World War II while in China.[4]. One interesting point is that, after the war, he hired O.S.S. captain Duncan Lee, a lawyer, who was the long-term General Counsel of A.I.G. AIG left China in early 1949, as Mao Zedong led the advance of the Communist People's Liberation Army on Shanghai,[5][6] and Starr moved the company headquarters to its current home in New York City.[7] AIG was once the world's largest insurance company, and the sixth-largest company in the United States according to the 2007 Forbes Global 2000 list."

Putting the 'high' in Shanghai

History of Hank's+Man+in+America.(insurance+executive+Maurice+Greenberg+lobbies...-a079087192

"Maurice R. "Hank" Greenberg leads a charmed and busy life. As chairman and CEO of one of the world's largest insurance and financial conglomerates, American International Group (AIG), Greenberg sits atop a very profitable and powerful empire. He dines with presidents and potentates and sups with the likes of Federal Reserve Chairman Alan Greenspan, global "wise man" Henry Kissinger, and chairman-of-the-world emeritus David Rockefeller. The New York-based magnate appears equally at home with the commissars of Communism, counting China's premier, Zhu Rongji, and president, Jiang Zemin, as longtime friends. Greenberg, however, wields far more power in a role far less publicly visible than those mentioned above. As vice-chairman of the Council on Foreign Relations (CFR), he enjoys the cachet of being the Number 2 man (behind CFR chairman Peter G. Peterson) in what the Washington Post's Richard Harwood has called "the nearest thing we have to a ruling establishment in the United States." In a similar vein, author/columnist Richard Rovere (a CFR member) once aptly described the Council as "a sort of Presidium for that part of the Establishment that guides our destiny as a nation." The elite membership of the CFR presidium does indeed constitute the "ruling establishment" of the United States, and CFR chiefs like Greenberg take seriously their self-appointed role to guide "our destiny as a nation." 


"As a man who guides "our destiny as a nation," Greenberg's role in events that have undermined our security and sovereignty is frightening. He is generally recognized as the leading voice of the "Red China Lobby" in the U.S. business and financial communities. The multi-billionaire chairman of AIG, working closely with Henry Kissinger and other CFR-Trilateral Commission heavyweights -- both inside and outside of government -- has helped craft the disastrous policies that have built the People's Republic of China into a modern economic power, transferred critical military technology to the People's Liberation Army, and enabled Beijing's agents to subvert our political system and compromise our national security."


Hamid Karz(h)ai's Biography

"In 1987 he was appointed director of the political department. Hamid Karzai became responsible for foreign relations at the office of the president of AIG in Peshawar. When the AIG moved to Kabul in 1992, Hamid Karzai became deputy foreign minister of Afghanistan. He left Kabul in 1994 for Kandahar, due to the internal strife among the various factions."

Their man in the 'stan

"Economically the internal war economy, based largely on cross border smuggling and narcotics, expanded rapidly. 

Between 1992 and 1995, Afghanistan produced between 2200 MT and 2400 MT of opium per year, rivaling Burma as the world’s largest producer of raw opium.  However, in 2000 it had fallen to 3600 MT, linked either to poor weather conditions or a decree issued in August 1999 by Taliban leader Mullah Omar to reduce cultivation by one third. The second edict passed on 27 July 2000 declared the cultivation of opium poppy as ‘unIslamic’ or haram and the ban was enforced rigidly, bringing down production to 74 MT. 


Post Taliban (2001–present) 

As the Taliban regime was collapsing in November 2001, farmers were planting their fields once more with poppies. The ban of the previous year had increased rural destitution, pushing poor farmers into greater indebtedness. During this period lenders monetized loans that would have been repaid in opium, but this conversion was based on the then current cash value of the amount of opium on which the advance was originally obtained. With a significant increase in the prices of opium in the 2000/1 growing season, this monetization of advances had the effect of charging interest at 1000–15,000 per cent (UNDCP 2001, 8)."


Nopium circa 2001 (Cash crisis)

"Also reported by Democratic Underground, AIG’s Kroll “provided protection services,” among other things, to high level Americans at home and abroad. Kroll had military teams in their company and merged with Armor Holdings on August 23, 2001, adding Defence Systems Limited, another private military corporation, to their operation, and an ex-KGB team called Alpha Firm earlier acquired by Defense Systems Limited. These four teams could have been used on 9/11, part of a “corporatizing” of black ops in tandem with military teams.

According to whistleblower Richard Grove, who worked as a senior manager for SilverStream Software on Marsh and AIG accounts, Kroll also managed the Enron fraud once Kenneth Lay stepped down.

Greenberg’s cousin, Alan “Ace” Greenberg, was former CEO of Bear Sterns, where the Bush family, Cheney family George Schultz, James Baker, et al, did business. It is the leading brokerage firm of the great and all-powerful Bush Familia.

According to Michel Chossudovsky in Financial Bonanza behind the 9/11 Tragedy, “On October 17, 2000, eleven months before 9/11, Blackstone Real Estate Advisors, of The Blackstone Group, L.P, purchased, from Teachers Insurance and Annuity Association, the participating mortgage secured by World Trade Center, Building 7.1.” [Blackstone in 2000 also purchased a 50 percent stake in Universal Studios, producers of the myth-perpetuating Flight 93.]"

“April 26, 2001 the Port Authority leased the WTC for 99 years to Silverstein Properties and Westfield America Inc.

“The transaction was authorised by Port Authority Chairman Lewis M. Eisenberg. This transfer from the New York and New Jersey Port Authority was tantamount to the privatisation of the WTC Complex. The official press release described it as ‘the richest real estate prize in New York City history.’ The retail space underneath the complex was leased to Westfield America Inc.

“On 24 July 2001, 6 weeks prior to 9/11 Silverstein took control of the lease of the WTC following the Port Authority decision on April 26.

“Silverstein and Frank Lowy, CEO of Westefield Inc. took control of the 10.6 million-square-foot WTC complex.

"Lowy leased the shopping concourse called the Mall at the WTC, which comprised about 427,000 square feet of retail space.”

“Explicitly included in the agreement was that Silverstein and Westfield ‘were given the right to rebuild the structures if they were destroyed.'’

“In this transaction, Silverstein signed a rental contract for the WTC over 99 years amounting to 3.2 billion dollars in installments to be made to the Port Authority: 800 million covered fees including a down payment of the order of 100 million dollars. Of this amount, Silverstein put in 14 million dollars of his own money. The annual payment on the lease was of the order of 115 million dollars.

“In the wake of the WTC attacks, Silverstein is suing for some $7.1 billion in insurance money, double the amount of the value of the 99 year lease.” In fact, some $5 billion was actually returned, given the multiple court-case protests of the insurers.

“The mortgaging of the WTC was handled by The Blackstone Group, headed by Peter J. Peterson, current head of the Council on Foreign Relations (CFR). The Blackstone Group also bought a piece of Kroll in 1993 at the very same time AIG took over majority control. Henry Kissinger sits on the board of the Blackstone Group.”

“It’s a strange world.” ~ Jeffrey Beaumont


Thu, 07/01/2010 - 11:36 | 446594 Snidley Whipsnae
Snidley Whipsnae's picture

Your link to 'tales of old China' re: Shanghai, was an interesting read. Thanks

Thu, 07/01/2010 - 03:19 | 445902 Manipulism
Manipulism's picture

Can anybody explain the lease rate spikes in march,april and may?

Thu, 07/01/2010 - 03:41 | 445908 old naughty
old naughty's picture

TD, 100% golden.

Thu, 07/01/2010 - 04:16 | 445921 drwells
drwells's picture

I don't know why this "debate" ever existed.

1. If your currency is revealed for the green toilet paper it is by the price of gold, then OF COURSE you're going to suppress the price of gold. You'd be a dumbass not to. If you shoot someone in the back of the head do you (a) get rid of the gun or (b) drive to the police station and wave it at the cops?

2. They already tried suppressing it in the 1970s. London gold pool much?

3. Here's the BIS admitting it:

"The intermediate objectives of central bank cooperation are more varied. ... And last, the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."

4. Christ, Greenspan himself admitted it 12 years ago.

"...central banks stand ready to lease gold in increasing quantities should the price rise."

Oh well, there were about five billion dumbfucks who thought there wasn't a housing bubble either. Just makes it easier for the rest of us, I guess.


Thu, 07/01/2010 - 06:05 | 445948 drwells
drwells's picture

Also, forgive me if you linked to this and I didn't see it, but it looks like ZH has brought this up before:

Thu, 07/01/2010 - 05:10 | 445937 FranSix
FranSix's picture

So in other words, when gold was unavailable as for leasing, they found some other metal to substitute in the scheme like copper.  Trouble is, Gold and Copper aren't indexed to one another. (bear in mind that the biggest gold miners are also primary producers of copper)

We've had a couple of really big price peaks in the commodities, notably Nickel, Uranium, Oil.  These too?



Thu, 07/01/2010 - 07:36 | 445993 FischerBlack
FischerBlack's picture

"That which can be destroyed by the truth should be."

-- P.C. Hodgell

Thu, 07/01/2010 - 07:59 | 446005 overmedicatedun...
overmedicatedundersexed's picture

let me get this strait. many on ZH say buy into what seems ,a proven manipulated market with a bias to the down side...??

Run by the deepest pockets around no less.

We are providing the other side of the trade if we do.

How will these deep pockets ever be broken Ala

"Long Term Capital"??

explain if you can.

Thu, 07/01/2010 - 08:28 | 446029 crmckim
crmckim's picture

I don't think you can ever beat the market makers by going long, it'd suicide everyday. But if a vast majority started taking delivery and got out of their positions, then the manipulators will start having trouble because there will be less and less on the up side of the trade.

 Those who just buy physical help by not throwing their capital into the frying pan to get burnt.

Thu, 07/01/2010 - 08:29 | 446030 tmosley
tmosley's picture

In real life, rock beats paper.  By taking posession of physical metal, you force these guys to go to greater and greater degrees of leverage until there is an errant breeze one day and their whole scheme collapses.  Suddenly, the wider market finds that there is 100fold less metal than they thought in the world, so there is a scramble.  Those who have the gold get to make the rules.  The guys who HAD the gold made rules that made it possible for us to take it away at low, low prices.  That probably won't happen again.

Fri, 07/02/2010 - 00:20 | 448436 strannick
strannick's picture

'Those who had the gold, made the rules..that made it possible for us to take gold away at low low prices'


Thu, 07/01/2010 - 08:37 | 446039 Gargamel
Gargamel's picture

Precious metals are manipulated.    The big banks and government have motive and the the means to do it.   The question now is how to profit from it and how to put a hurt on the thieves that are doing this.

I personally believe that the GLD is bogus and at some point that will blow up.  Advisors don't want their clients to go into real physical gold as isn't as liquid as paper gold.(although may prove to have a little more value).  I wonder if there will be a time when the price on the comex will be ridiculously low compared to the price of real physical gold.    I am loading up while the charade continues.

Thu, 07/01/2010 - 10:14 | 446220 Grand Supercycle
Grand Supercycle's picture


EURUSD buying support detected for some time now, has returned again and the daily chart is now neutral to bullish.

Thu, 07/01/2010 - 13:10 | 446872 tony bonn
tony bonn's picture

nadler bears a lot of eery similarities to a douchebag....

Thu, 07/01/2010 - 21:11 | 448059 fiftybagger
fiftybagger's picture


Fri, 07/02/2010 - 00:22 | 448441 strannick
strannick's picture

Poetic, yet simultaneously prosaic...

Mon, 07/05/2010 - 19:48 | 453584 Vendetta
Vendetta's picture

he always sounded like Charlie Brown's teacher to me. I read and listened to his stuff years ago till I learned something about the PM market from others.

Thu, 07/01/2010 - 14:13 | 447022 Duffminster
Duffminster's picture

I don't believe AIG is manipluating the market today but I wouldn't doubt they were in the game before the Lehman collapse. 

With the Hearings on Derivatives taking Place today and with the likes of Brooksley Born and CTFC Chairman Gensler and Goldman Testifying, the PPT and affiliated operatives are at work Hammering Silver as the Big Lever on Gold and Playing the Summers game of keeping Gold down to manage perceptions.  

The truth is that the news today could not be more Gold Positive with risk of a double dip accelerating, sovereign defaults a foregone conclusion, housing and CRE in the dirt, and the dollar dropping hard.  Without massive US and UK government sanctioned behind the scenes approval and directives to the hand full of primary derivatives dealers who have the paper presense to push markets around this much, Gold would be up at least $100 today. 

For those who understand the formula today represents a major gift from the PPT and eventually, Someone smart enough to get their heads out of the Black Box and with Deep Enough Pockets will use the Bullion Bank tactics in an Aikido manner to make a massive profit in my opinion.

The Formula

1. Silver is a Huge Lever on Gold because

    a. Silver and Gold are tightly coupled

    b.  Silver is a tiny market and far more rare than Gold

2.  Silver physical off take from the COMEX and other paper markets is a large lever to paper prices

3.   Whenever the monsterous government sanctioned silver manipulator starts doing its thing, don't panic, take delivery of physical silver and hold it as long as necessary.

Keep in mind: Silver is at under 1/6th of inflation adjusted high and gold under 1/2 of its inflation adjusted hight.  No other major exchange traded commodity I know of didn't approach or surpass its previous inflation adjusted highes during the last commodities run up.  It is not just a coincidence that the two monetary or money metals, silver and gold, are the only two that are deeply supressed.  

It is this deep and weakening supression effort that makes these two forms of real money potentially explosive in my opinion.

With silver, its not just hard cash/money, its one the most useful and increasingly rare elements, finding new uses in all types of technology at a pace no other element can claim.  It is essential to so many technoligical manufacturing processes.   So, in the long term, I believe that owning physical silver is a no lose situation, despite the fact that it can be used to lever up or lever down gold, the way the giant US and UK bullion banks do to implement the Summers policies on the managment of perceptual economics and to hide the weakness of the US economy and dollar.  

Reasons to Old Gold:


- Gold is a currency with no liabilities attached.
- Gold is competition to paper currency.
- Gold is not a commodity.
- Gold is a barometer of fear.
- Gold is a barometer of confidence in Government.
- Gold is insurance.
- Insurance is not something to trade.
- Gold is money when money fails.
- Hyperinflation is a currency event, not an economic event.
- Hyperinflation is a currency event described as a loss of confidence in the currency.
- Gold in your hand eliminates counter-party risk.
- Gold is the high ground when the global tsunami hits.
- Gold removes financial agents between you and your assets.




Thu, 07/01/2010 - 21:28 | 447997 fiftybagger
fiftybagger's picture

Once upon a time there was a very stern bear who terrorized and frightened all the people.

One day in March he was found dead, his heart pierced by 21 silver bullets.
And all his friends were summoned together that weekend to divide his estate.

And diamondback addressed a very somber crowd:

"we must find the perpetrator lest we all be slain" 

but no one could find the shooter no matter how hard they tried.

Then vampire squid addressed the crowd:

"since we cannot find the shooter, we must all agree to create a
shortage so that no one can get any silver bullets, and thereby save our own lives"

So from that day forward silver bullets became very rare.  And to prevent
the people from noticing; diamondback, sqid, and greenhanky, agreed to keep
the price low in the catalogues, but to tell all people who ordered silver bullets
that they were out of stock.

But soon the people started to trade silver bullets themselves because they could
never get them from the catalogues, and the price began to rise in their fleabay
markets, to prices higher than they ever were listed at in the catalogues.

To be continued.....


10 And the disciples came, and said unto him, Why speakest thou unto them in parables? 11 He answered and said unto them, Because it is given unto you to know the mysteries of the kingdom of heaven, but to them it is not given. 12 For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath. 13 Therefore speak I to them in parables: because they seeing see not; and hearing they hear not, neither do they understand.


Matthew 13
King James Version

Mon, 07/05/2010 - 15:26 | 453315 non-anon
non-anon's picture

CIA Blackbox fund?

Sat, 08/21/2010 - 11:13 | 534712 herry
herry's picture

Certainly a lot of details like that to take into consideration. Thanks windows vps | cheap vps | cheap hosting | forex vps

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