Water, Meet Blood - JP Morgan Admits To, Reduces Massive Silver Short Position, Proves Millions Of Conspiracy Theorists Correct

Tyler Durden's picture

In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of "tin foil hat" wearing, conspiratorially-oriented "gold bugs", has cut back on its US silver futures. "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that "the decision by JPMorgan was an attempt to deflect public criticism of the bank’s dealings in silver, a person familiar with the matter said. The person added that the bank’s position in silver would from now on be “materially smaller” than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world's biggest financial company out of business. Lastly, this means that silver is about to really blast off as the push to really hurt JPM takes off in earnest.

From FT:

The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.

However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.

The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.

In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.

But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.

Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.

The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.

Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.

JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.

And while we revel in the knowledge that the short squeeze is causing massive pain for JPM, we are far more overjoyed that the days of Blythe Masters as head of JPM's commodities desk is coming to an end: any comparable massive admission of weakness by a trader is always and inevitably followed by some very high profile terminations.

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Altan311's picture


ZeroPower's picture

Not really.

Since JPM has been reducing their short position over the previous last weeks, that could possibly explain the various intra-day surges in price which were never seen before in silver. I hope this makes sense to you silver-bugs.

Tyler Durden's picture

Please point us to the 8K or 13D that confirms this. Oh wait, speculation is what gets you branded a conspiracy theorist until proven correct, right?

nope-1004's picture

Of course, the latter is pure and total bullshit:

Totally!  Nothing but a PR stunt by the bank to try to ease the onslaught.

They basically have released one heck of a confession, though.  Would make a good epitaph after they crumble to show the world how much these crooks lie.


justbuygold's picture

Agreed,  a desperate PR stunt to make traders think that they have covered most of it and were the reason for the runup in price. Therefore they are imlying prices will now fall.   Trsut me , there is now way they cold have possibly covered 200 MM +  ounces of silver without a substatial drop in open interest.  Open interest is at a new record.    More lies from JPM  ....they must be REALLY REALLY desperate right now to try this stunt.

Hansel's picture

Mish's post from a few days ago:

Investors Hold Biggest Commodity Positions On Record; Viral Nonsense About Silver

Emails and videos regarding silver are going viral. There is no evidence to support the theory that JPM will be forced to cover silver futures no matter how high the price of silver goes.

SilverIsKing's picture



  1. the act of delivering or distributing something (as goods or mail); his reluctant delivery of bad news; his manner of speaking was quite abrupt; her speech was barren of southernisms; I detected a slight accent in his speech;
  2. the event of giving birth; she had a difficult delivery;
  3. your characteristic style or manner of expressing yourself orally;
  4. the voluntary transfer of something (title or possession) from one party to another
  5. (baseball) the throwing of a baseball by a pitcher to a batter
  6. recovery or preservation from loss or danger; work is the deliverance of mankind; a surgeon's job is the saving of lives;
  7. the act of delivering a child

jus_lite_reading's picture

Ouch. Brutally honest. Brutally painful for the frauds...

AUD's picture

Normally I don't have alot of time for Mish but in this case I think he's right.

JP Morgan may well have a large short position in silver futures but also being a large bank they may have a large amount of silver deposited with them & be hedging for their clients position. JP Morgan may not give a toss whether the $ price goes up or down, they are just providng a service for their clients.

And nobody has any fucking idea how much silver actually exists.

AUD's picture

And I'll add, since when does ZeroHedge take reports in the Financial Times as gospel?


tmosley's picture

You just keep thinking that.  Makes it easier for those of us who see what is going on.

We use 40% more silver than we mine, and the only government that has any significant amount stockpiled any longer is China.

Hephasteus's picture

Wow you pay Mish for one fucking speach to Google and let him visit the white house and he just turns into unfixable type of retarded.

GoinFawr's picture

Is it just me or did I miss the part in Mish's piece (or any of his articles on this matter for that matter) where he referred to the ongoing legal action regarding Jape-E-Morgan, or commented on the actions' obvious relevance to the entire subject of silver price manipulation?

oh wait, I think I just found something, from http://globaleconomicanalysis.blogspot.com/2010/12/still-more-hype-regarding-silver-just.html

"If someone can prove JPMorgan is not hedged and is indeed getting killed in these markets, I reserve the right to change my opinion"

If there is more, and I missed it, please feel free to correct me, otherwise...

Mentaliusanything's picture

Thermonuclear ! Yes that would burn the bastards.
In the wild, an animal that fears death goes "frozen" and Fauns death.

Now is the time to, as they do in the Wild, grab the throat and clamp down hard, never relenting until they truly go limp. That will be the end. Never let go, until you feel the death rattle through the teeth. 

Get the blood rush and clamp down.   

Dingleberry Jones's picture

Good stuff. Make a lot of sense.

akenathon's picture

I agree with you - no way they could have covered this like this - To me they have added even more short but by saying they covered they hope to see prices falling.

Now the time has come to srously slaughter them!!

Also for silver bugs...you have half of the hedge funds which are long Gold/Silver ratio at those levels and failure to hold the 45 level would wipe out few billions from JPM and Hedge Funds in just one trading day as no one will sell any silver anymore...


dehdhed's picture

maybe they've covered some but the more serious problem i think they're trying to avoid is the shortage of silver.   they've probably robbed allocated vaults, and if those holders discover that, they are up a shit-creek without a paddle.

in other words, they've probably covered/delivered with other people's silver and still need to replace that.   if the futures market collapses because there's a run on physical, they will get destroyed.  plus the whole reason and method of price supression goes up in smoke.   no futures market credibility means more transactions go directly to physical and bypasses the paper .. which spills over to gold too

they've got bigger problems than covering their paper shorts.  i sincerely feel sorry for anyone who hasn't any physical.

i'm gonna keep-a-stackin'

jus_lite_reading's picture

The end is near... for JPM and BofA- the two largest fraudulent operations on the planet. Worse than communist Chinese gov't propaganda. A million times worse than Water Gate.  Infinitely worse than Bernie Made-off's pon... see, it's the way the system was manipulated!


Wackzingo's picture

I hope it works and the price drops...at least temporarily because I want to buy more.

dehdhed's picture

if all you want to buy is the paper, then in your case it already worked.   they want to distract from the truth about physical shortage.

instead of thinking about buying MORE paper for just a couple bucks cheaper, you should think in terms of when you can't buy physical ANY MORE.  at least not unless there is much higher prices.  there will be some who let go of it at higher prices, but there will be others standing in line to buy it.  it's that line of buyers they want to make sure nobody sees.

it's a sad truth, instead of advising it's citizens to buy gold and silver,  the citizens of the reserve currency, or any other failing currency,  get stuck holding the bag through lies and deception.

let's assume they stand to lose $100 billion covering paper shorts, that's easy if the fed has back-stopped their actions.  the problem arises if and when the paper ponzi scheme with futures and etf's goes up in smoke. they can't print more silver.   even if they could ramp the production, reserves just get depleted faster.  soon, the price of silver will be based  on both above ground supplies and in the ground reserves, and not just how fast traders can play hot potato with paper silver.

they've got to protect the paper market at all costs.

doggings's picture

Totally!  Nothing but a PR stunt by the bank to try to ease the onslaught.

I concur, here's the visual representation of events..

"Brave Sir Robin ran away.." :)


Spalding_Smailes's picture

"When you expect things to happen - strangely enough - they do happen."
- J.P. Morgan

"A man always has two reasons for doing anything: a good reason and the real reason. " - J.P. Morgan

"Go as far as you can see; when you get there, you'll be able to see farther. " - J.P. Morgan
Mr Lennon Hendrix's picture

My father owned a bank, so I own a bank. -John Pierpont Morgan

Spalding_Smailes's picture

"I unfortunately have never in my life been to a wild party."

-Silvio Berlusconi

Mr Lennon Hendrix's picture

Fuck yo couch, 'Merica!

-Ben Bernanke

Double down's picture

"Fuck your couch, Niggar"

Rick James


Al Gorerhythm's picture

You are all idiots! 

Johnny Bravo.

Andrew G's picture

"Let's get physical" - Olivia Newton John

cowdiddly's picture

"Somebodies been eating My Porridge" The Three Bears speaking of GOLDiLoCks

Hephasteus's picture

I'm in your first derivative fucking your second derivatives in the ear.

Max Keiser should say this.

FEDbuster's picture

Which part of "To Big To Fail" don't you guys understand? As much as I would like to see Jamie Dimon hanging from a dog leash, it isn't going to happen. The Ben Bernank will find a way to bail out his bankster bosses no matter what kinda of shit the get caught up in.

Silver is just a pimple on an elephant's ass compared to derivatives.

Mr Lennon Hendrix's picture

Which part of 'the dollar is a made up piece of paper with no intrinsic value' don't you understand?

And derivatives are hedged based on the suppression of silver prices!

Spalding_Smailes's picture
"Eurozone would not survive its first economic crisis." - Milton Friedman
Mr Lennon Hendrix's picture

I will promise you this, the first thing I will do as President will be to end this war [in Afgahnistan].  You can take that to the bank!

Barrack Insane Obama

Spalding_Smailes's picture

Time to circle the wagons. Short S&P - insurance/bet = cheap. VXZ

Mr Lennon Hendrix's picture

Big monie standing behind the dollar at the top of the stairs....woops, the dollar fell down the stairs.