JPMorgan Accounts For 99.3% Of The COMEX Gold Sales In The Last Three Months

Tyler Durden's picture




 

Submitted by Mark McHugh from Across The Street

Jamie Dimon Has Issues

When just one firm accounts for 99.3% of the physical gold sales at the COMEX in the last three months it’s not what most of us on this side of the rainbow would consider “broad-based” selling.  Of course discovering this kind of relevant information requires an internet connection, 2nd grade math and reading skills, and the desire to do a teeny-weeny bit of reporting.  Sadly they’ve wandered so far down the rabbit hole that the concept of “physical demand” (i.e. people actually wanting to take possession of the stuff) is puzzling to them because the vast majority of the world’s so-called “gold-trading” takes place in the realm of make believe (which is their natural habitat).  It’s all fun and games until somebody loses their metal and “somebody” has lost one hell of a lot of metal in the last 90 days.

This is the CME Group’s COMEX metals issues and stops year-to-date report, which can be found here everyday for free.  It chronicles the physical delivery notices of various metals, including gold.  Let’s have a look:

“I” is for “Idiot”
That’s how I remember it, anyway. “I” actually stands for “issues,” meaning the firm parted with its metal (@ 100 troy ounces a shot), and “S” stands for “stops,” meaning the firm took delivery of gold. “C” is for customer accounts, “H” is house accounts.  The first thing you should notice is that most transaction net out to zero in a given month (blue boxes), meaning the firm’s gold holdings didn’t change. What they delivered one day they got back the next, or vice versa.  The green boxes show firms who received more than they delivered and the red boxes indicate firms who coughed up gold for Bernanke bucks (aka idiots). Note that Deutsche Bank’s massive take in February more than offsets its deliveries in December and April.

Notice one more thing before we move on: Despite Goldman’s much ballyhooed “Gold Sucks!” call a few weeks ago, the squid has not parted with any yellow metal whatsoever in 2013.  Hmmm.

Now for the main event:

J P Morgan has fumbled ownership of 1,966,000 Troy ounces of gold since February 1.  That’s 74% more gold than the US mint delivered through the US mint’s American Eagle program in all of 2012.  I mention this because there’s little doubt in my mind that the US government is one of JPM’s gold “customers.”  So (if I am correct) the same US government who just let the Morgue dump its gold on the COMEX floor will once again be suspending gold sales to peasants.

Maybe Jamie Dimon figures he’ll buy back all that gold on the cheap when the rest of the world realizes how smart he is.  Or maybe he’s once again displaying that his firm doesn’t have the slightest idea what “hedging” is and is teetering on the brink of collapse.  That would explain the April 11th meeting between President Obama and the Pig 5 bank CEOs, wouldn’t it?  And you just have to get a little misty that Lloyd Blankfein was nice enough to provide some hot-air cover for his competitor, don’t you?

One thing’s very clear: When it comes to selling physical gold, J P Morgan is acting alone.  The 130 contracts NOT delivered by JPM in the last three months (of which  110 were fromABN AMRO) are but a footnote.  If Jamie’s right, he’ll look like a genius in a few months, if not he should be able to recycle his quote regarding the infamous “London Whale” losses: “Just because we’re stupid, doesn’t mean everybody else was.”  Time will tell.

100 years ago John Pierpont Morgan famously testified to Congress, “Money is gold, and nothing else.” (Note: That is the exact quote, the full testimony can be found here).  One has to wonder what the big guy would think of his legacy’s disregard for sound money, $70 Trillion derivatives book, and "House of Cards" "Fortress" balance sheet.

One more very, very important thing.
Anybody who says there’s been gold selling in the GLD is a freaking moron (Bob Pistrami, I’m looking in your direction).   The GLD works much like a coat check.  Unless you think checking your coat constitutes a real transaction of some kind you shouldn’t think of changes in the GLD’s gold holdings as sales. They’re not. When you check your gold into the GLD you get shares (like a claim check). Where it gets wierd is you can sell these claim checks to nimrods who seem to think they’ve bought your coat, but aren’t actually allowed to wear it.

What nobody seems to appreciate is that every share of GLD is allowed to be sold TWICE (long and short, and it’s really important to understand that).  If you’re foolish enough to doubt me (and foolish enough to short gold), go short GLD shares and see if anyone knocks on your door demanding gold.  Saying the GLD is 100% backed by gold is a bold face lie because they’re can be twice as many shares in play as gold backing them, which means GLD shares may be only 50% backed by gold before any rules are broken.

When GLD (or any ETF for that matter) shares sold exceed the existing shares PLUS all the shortable (double-sold) shares, legitimate shares can not be found for settlement and that must be reported to the SEC’s “Fails to Deliver” list, which is published twice a month with about a four-week delay (here).

April 15, 2013 was this biggest volume day ever for GLD (93.7mm) and I’ll guarantee you right now that record fails to deliver will be reported on or around that date, which should have required more gold to be deposited with the GLD (but that didn’t happen).  So instead of the half-assed explanation Pistrami offered (here) of how he thinks the GLD works, he should have raised the question of whether or not there were enough legitimate shares of GLD to facilitate trading (I say no way in hell).

Gold continues to be pulled from the GLD (which really means people want their coats back) and still no one’s concerned about the number doubled-owned shares.  Worse yet, the responsibility for sorting this unholy mess out falls to SEC chief Mary Jo White who is celebrating her 16th day in office.

I can’t wait to see what happens next….

Notes for Nerds:  This piece is not intended to describe the inner workings of the COMEX or GLD in detail, so don’t bust my balls with minutiae, unless it is relevant to the discussion of JPM’s massive gold sales or the double-ownership of ETF shares. Double-owned ETF shares are huge problem with ETFs in general, but the misrepresentation (by omission) of this fact by ETFs supposedly backed by tangible assets like gold and silver seems more egregious to me.  

In addition to the YTD CME Group metals report, you can track the hilarity on a day-by-day basis here.

The February 1 to April 25 delivered gold contracts info referenced included only transactions between firms.   For that reason Morgan Stanley’s 307 contracts transferred from  house account to customer account was excluded from the calculations.

Total Net gold deliveries Feb 1 to April 25:

Vision Financial – 1 contract
R J O’Brien – 2
ADM Investor Services INC – 2
Marex – 5
Citigroup Global Markets – 10
ABN AMRO – 110
JP Morgan – 19,660

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Fri, 04/26/2013 - 14:31 | 3503335 kliguy38
kliguy38's picture

Is this manipulation??? I'm shocked I tell you SHOCKED

Fri, 04/26/2013 - 14:40 | 3503366 Big Slick
Big Slick's picture

You Real World fools and your insistance on Physical.  

Jamie Dimon will show you all.  

That's why he's richer than you. 

http://www.zerohedge.com/news/2013-02-27/jamie-dimon-thats-why-i-am-richer-you

Fri, 04/26/2013 - 14:43 | 3503390 ParkAveFlasher
ParkAveFlasher's picture

JPM is only doing in the Comex what the Fed and Treasury do with the entire money supply. 

Fri, 04/26/2013 - 14:45 | 3503404 The Juggernaut
The Juggernaut's picture

Fucking Goldman telling everyone to short whilst they hold... and possibly buy more?

Fri, 04/26/2013 - 14:48 | 3503427 Buckaroo Banzai
Buckaroo Banzai's picture

Awesome to see that they are still using daisy wheel printers at the CME. They must have to get in their hot tub time machine to get spare parts for the thing!

Fri, 04/26/2013 - 14:54 | 3503445 I think I need ...
I think I need to buy a gun's picture

gone squatchin

Fri, 04/26/2013 - 14:57 | 3503460 Divided States ...
Divided States of America's picture
Yup....this is also true: U.S. Federal Reserve Accounts For 99.3% Of The NYSE Equity Purchases In The Last Three Months
Fri, 04/26/2013 - 14:59 | 3503466 francis_sawyer
francis_sawyer's picture

Blythe sold all the gold to go all in on bitcoin...

Fri, 04/26/2013 - 14:59 | 3503473 idea_hamster
idea_hamster's picture

“Fortress balance sheet” indeed – more like Maginot Line balance sheet. 

Dimon’s loaded up on crap to fight the last war, and when the poo-flinging starts, JPM is going to get rolled over because Simple Jamie hollowed it out.

Fri, 04/26/2013 - 15:12 | 3503510 nope-1004
nope-1004's picture

 

 

J

 

         P

 

                       I

 

                                G

 

OINK!

 

 

An "unbelievable" theft is coming, if not already underway.  They won't admit failure, they'll just grab.


Fri, 04/26/2013 - 15:39 | 3503568 socalbeach
socalbeach's picture

Good read, relevant to this post, but somewhat technical.

 

GLD – The Central Bank Of The Bullion Banks

The ratio of the gold represented by GLD shares vs the amt of physical gold in the depository could be more than 2.  See Vic's comment that he made yesterday (April 25).

Fri, 04/26/2013 - 22:48 | 3504855 TwoShortPlanks
TwoShortPlanks's picture

When a large company/corporation starts to sink, the first thing that happens is the CEO, Directors and Executives start getting their skin out of the game.

When the game is up, they transfer wealth form the company and line their own pockets with it.

In JP Morgue's case, with such a huge Derivative position, perhaps they're pulling physical out of JP Morgue so they can line their own pockets with it?

Life Boat-anomics 101

Sat, 04/27/2013 - 01:52 | 3505044 Middle_Finger_Market
Middle_Finger_Market's picture

JPM goes down on May Day! 

Sat, 04/27/2013 - 06:20 | 3505200 GetZeeGold
GetZeeGold's picture

 

 

 

Maybe JPM could just borrow gold from the Germans.

Sat, 04/27/2013 - 08:59 | 3505277 Bendromeda Strain
Bendromeda Strain's picture

been there  DONE THAT

Sat, 04/27/2013 - 09:02 | 3505282 TwoShortPlanks
TwoShortPlanks's picture

You mean move it from one cage to the next in their vault? LOL

Fri, 04/26/2013 - 15:32 | 3503580 janus
janus's picture

love this piece...back to the tone of olde school ZH.

http://www.youtube.com/watch?v=_yYDzLUH1NE

that's the way you debate, bitchez!

janus

Fri, 04/26/2013 - 16:20 | 3503698 ebworthen
ebworthen's picture

Agreed.  Some snappy writing here.

Reminds me of Money McBags.

Fri, 04/26/2013 - 17:20 | 3503925 The Big Ching-aso
The Big Ching-aso's picture

Shine on you crazy golden Dimon.

Fri, 04/26/2013 - 18:20 | 3504098 nmewn
nmewn's picture

The commoners job has always been to relieve them (Wall Street & government) of as much gold as possible...they clearly can't be trusted with it ;-)

Fri, 04/26/2013 - 20:41 | 3504496 cifo
cifo's picture

I doubt it that they go down so easily.

Fri, 04/26/2013 - 21:22 | 3504618 LoneCapitalist
LoneCapitalist's picture

+1 for the Pink Floyd reference

Sat, 04/27/2013 - 04:00 | 3505123 MythicalFish
MythicalFish's picture

2mln Oz = $3bln

Why doesn't John Paulson just take delivery of that? (or at least the 80% of that via the ETF he holds)

Then, let's see JPM's fucking cards..

So he his either stupid, or in on this.

Or both.

Or he cannot get it (and his life) insured accordingly.

 

Fri, 04/26/2013 - 15:23 | 3503549 PontifexMaximus
PontifexMaximus's picture

Where did you get that?

Fri, 04/26/2013 - 22:02 | 3504740 MajorWoody
MajorWoody's picture

Someday this war is gonna end

http://youtu.be/mTLqp-KKuo4

most definitely in this decade

Fri, 04/26/2013 - 23:19 | 3504906 StychoKiller
StychoKiller's picture

[quote] Gold continues to be pulled from the GLD (which really means people want their coats back) and still no one’s concerned about the number doubled-owned shares. [/quote]

Yo essé, joo bling ain't here!  ¿Joo chek yer ride?

Sat, 04/27/2013 - 11:54 | 3505469 caconhma
caconhma's picture

I wish people writing these "smart" papers would spend more time explaining to common people how to read these tables and diagrams!!!

Fri, 04/26/2013 - 21:42 | 3504681 Papasmurf
Papasmurf's picture

If they had laser printers, they would run out of ink, printing out porn. 

Fri, 04/26/2013 - 23:38 | 3504932 FEDbuster
FEDbuster's picture

Wonder if they watch porn on green crt monitors? Freaky!

Fri, 04/26/2013 - 15:02 | 3503475 RebelDevil
RebelDevil's picture

Would it even be possible to short, and acculmulate more physical at the end? I bet Jamie and Lloyd had a phonecall before the smash btw.

Fri, 04/26/2013 - 16:11 | 3503677 Jack Napier
Jack Napier's picture

Something like that. They and Brian Moynihan met with the Conspirator in Chief in the WH on Thursday 4/11.

This same day Congress proposed a bill to repeal the Stop Trading on Congressional Knowledge (STOCK) Act, which would then allow them to perform insider trading without disclosure.

At the Sunday market open Merrill Lynch (Moynihan/BoA) sold 5 million oz of paper gold to begin the takedown.

First thing Monday morning the Chief signed the repealing of the STOCK Act into law as markets were tanking.

Meanwhile physical outflows of gold from the exchanges are at all time record levels and accelerating, with those this April matching that of Q1 2013 which was the largest quarterly outflow ever.

Yes, they are selling the paper and buying the phyz. Kickbacks all around.

Fri, 04/26/2013 - 18:09 | 3504050 Alea Iactaest
Alea Iactaest's picture

Stupid post. Nevermind.

Fri, 04/26/2013 - 19:46 | 3504321 MeelionDollerBogus
MeelionDollerBogus's picture

+1 for comment & for the icon

Fri, 04/26/2013 - 21:40 | 3504673 FreeNewEnergy
FreeNewEnergy's picture

Sounds treasonous to me, but who the hell am I, just a citizen, not a banker, nor a president, though the people who have engaged in these nefarious acts should consider that treason - as best I can recall - in these United States, is punishable by death.

Did I just say that?

Well, yes, yes I did.

Fri, 04/26/2013 - 23:23 | 3504914 delacroix
delacroix's picture

so now congress is shorting pm's ?

Fri, 04/26/2013 - 15:05 | 3503488 boogerbently
boogerbently's picture

On the other hand, they said to short gold on Wed. and the biggest dump in gold price happened the following Fri and Mon.

Which alma mater does EVERYONE in the govt. even remotely related to our money hail from.

JPM or GS....

Fri, 04/26/2013 - 16:16 | 3503682 HardAssets
HardAssets's picture

"Fucking Goldman telling everyone to short whilst they hold... and possibly buy more?"

 

Its called a 'contrarian indicator'

Fri, 04/26/2013 - 17:46 | 3504017 QuantumCat
QuantumCat's picture

Ask yourself, why would JPM sell such a large position?  I know most here think it is simple execution of Fed/Government policy to keep the price of gold down, but think about it from a strategic point of view... what are the other possibilities?  Under what circumstance would it be good to liquidate gold? One possibility...

Perhaps JPM knows something we don't... we know they have inside information from the Fed and the government, and we know they exploit it.  Consider, just as the Fed has the power print money (at lease bank reserves), they also have the power to manage the rate of QE or even reverse it (deleveraging the balance sheet).  The Fed may be annoyed that people are borrowing money to buy gold instead of iPhones.  They can easily crush that hedge (borrowing money to buy gold) and get the little guy to cough his gold up right before the printing press kicks back in. After all, people generally don't like to have their property or businesses seized, and gold is obviously one of the more liquid assets.  I think this is exactly why paper demand for gold collapsed so hard and so fast versus the demand in the real market where people generally pay with unleveraged dollars.  The Fed can punish people who borrow to buy gold. So perhaps, JPM knows the pain train is coming.  So why not dump it and buy it back at lower prices?  Never underestimate just how much the system is rigged against us.

 

Fri, 04/26/2013 - 19:16 | 3504243 BoNeSxxx
BoNeSxxx's picture

That is exactly what I have been asking myself.  +1

They just may know something we don't even see as a possibility - say, a massive release of physical from some unknown source (not saying there is one but, if we knew about it, it wouldn't be a surprise now would it?).

The Debeers diamond cartel has long stashed excess diamonds in some cave... if all the inventory was unleashed at once, diamonds would be worth next to nothing (or so goes the story).

Again, it's all speculation but something doesn't smell right... maybe it's the detritus of the Morgue's rotting corpse - maybe not.

Fri, 04/26/2013 - 19:38 | 3504301 fonzannoon
fonzannoon's picture

JPM may be the gov but Goldman is the big club. I would imagine Goldman would be doing the same.

Look at where prices are right now. No one is selling and everyone is trying to buy.

Go ahead and end QE. Send the stock market to hell, risk the bond market collapsing. They won't get the reaction they want out of physical. There will probably be even less.

 

Fri, 04/26/2013 - 23:23 | 3504913 CompassionateFascist
CompassionateFascist's picture

The "cave" has a name: Israel.

Sat, 04/27/2013 - 01:58 | 3505057 Dealyer Turdin
Dealyer Turdin's picture

Diamonds are the windshield (inner earth)after the earth got macked.  What if many of the people in lines buying gold are mules?  What if they're counting on a cyber attack to cook the books after the shuffle?  I bet the TSA is more about scanning for gold than weapons...  you know, the small things.  Good points up there.

Sat, 04/27/2013 - 09:10 | 3505286 Bendromeda Strain
Bendromeda Strain's picture

I bet the TSA is more about scanning for gold than weapons...

I have often felt the same way. They need a naked photo because the magnetometer doesn't capture the preciousss...

Sat, 04/27/2013 - 22:47 | 3506846 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Maybe it is simpler than everyone thinks. Might simply be that JPM backstops the Mint for gold and silver used in coins they sell. The draw down is related more to demand on coins from the mint than from actual Comex paper gold being redeemed? We know they don't use their own gold at Fort Knox to mint those coins so the gold and silver has to come from somewhere. Either way the discount on physical gold no matter if it Comex -> JPM -> paper shares redeemed in physical or other conduits like JPM- -> Mint -> retail buyers is the main driver here.

Fri, 04/26/2013 - 16:05 | 3503398 Abraxas
Abraxas's picture

They did it for us. They wanted to save us from self-harm. Thank you JP and GS for looking after us.

Fri, 04/26/2013 - 14:58 | 3503469 Jekyll_n_Hyde_Island
Jekyll_n_Hyde_Island's picture

ParkAveFlasher: "You're all class, Jaime.  Somebody piss in his bisque already."

 

  Fan-fucking-tastic.

Fri, 04/26/2013 - 16:36 | 3503770 spine001
spine001's picture

Hahahaha... Being richer has nothing to do with being smarter, otherwise have Jamie play chess with Kasparov...

No it is all to do with being ruthless!

It also helps when authorities are dumb or sobornable and they allow you to take risks with other people's money becoming a win win situation for you. Specially when you are in a situation of moral hazard: making decisions with more information that the regular Joe that affect the regular Joe.

Until next time.

Engineer

Sat, 04/27/2013 - 09:17 | 3505291 Bendromeda Strain
Bendromeda Strain's picture

+1 for reminding us of the subornative nature of the authorities (+0 for inventing a word!)

Fri, 04/26/2013 - 14:42 | 3503383 knukles
knukles's picture

:)

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