Goodbye Blythe Masters: JPM Sells Its Physical Commodities Business To Mercuria For $3.5 Billion

Tyler Durden's picture

While it has been public for a long time that i) JPM is eager to sell its physical commodities business and ii) the most likely buyer was little known Swiss-based Mercuria, there was nothing definitive released by JPM. Until moments ago, when Jamie Dimon formally announced that JPM is officially parting ways with the physical commodities business. But while contrary to previous expectations, following the sale JPM will still provide commercial gold vaulting operations around the world, it almost certainly means farewell to Blythe Masters.

From the release:

JPMorgan Chase & Co. (JPM) announced today that it has reached a definitive agreement to sell its physical commodities business to Mercuria Energy Group Limited, a global energy and commodities trading company, for $3.5 billion. The all cash transaction is expected to close in the third quarter of 2014, subject to regulatory approvals.


J.P. Morgan will work closely with Mercuria to ensure a smooth transition of commodities assets, transactions, physical trading operations and employees to Mercuria at the close of the transaction.


“Our goal from the outset was to find a buyer that was interested in preserving the value of J.P. Morgan’s physical business,” said Blythe Masters, head of J.P. Morgan’s global commodities business. “Mercuria is a global leader in the commodities markets and an excellent long-term home for these businesses.”


Following the sale, J.P. Morgan will continue to provide traditional banking activities in the commodities markets, including financial products and the vaulting and trading of precious metals – businesses that the firm has been a leader in for years. The firm will also continue to make markets, provide liquidity and risk management, and offer advice to global companies and institutions around the world.

For those curious who Mercuria is (yes, Goldman is involved) and missed our previous profile of the little known commodities behemoth, here it is again:

Meet The Mysterious Firm That Is About To Leave Blythe Masters Without A Job

It was about a month ago when it was revealed that the infamous JPMorgan physical commodities group, plagued by both perpetual accusations of precious metal manipulation and legal charges most recently with FERC for $410 million that it had manipulated electricity markets, was in exclusive talks to be sold to Geneva-based Marcuria Group. It was also revealed that Blythe Masters, JPMorgan’s commodities chief, "probably won’t join Mercuria as part of the deal." Of course, we all learned the very next day that Ms. Masters - an affirmed commodities market manipulator - and soon to be out of a job, had shockingly intended to join the CFTC trading commission as an advisor, a decisions which was promptly reversed following an epic outcry on the internet. This is all great news, but one thing remained unclear: just who is this mysterious Swiss-based company that is about to leave Blythe without a job?

Today, courtesy of Bloomberg we have the answer: Mercuria is a massive independent trading behemoth, with revenue surpassing a stunning $100 billion last year, which was started less than ten years ago by Marco Dunand and Daniel Jaeggi, who each own 15% of the firm's equity. And it probably should come as no surprise that the company where the two traders honed their trading skill is, drumroll, Goldman Sachs.

Dunand and Jaeggi first met studying economics at the University of Geneva in the late 1970s. Their friendship was galvanized a few years later working for grain trader Cargill Inc. and sharing an apartment while on a training course in Minneapolis. Mercuria’s corporate strategy and culture have reflected the professional paths of its founders, who spent the bulk of their early careers at investment banks.



They left Cargill in 1987 for Goldman Sachs’s J. Aron unit in London. They stayed until 1994, then joined Phibro for a five-year stint when it was controlled by Salomon Brothers.


That experience defined the trading strategies of Dunand and Jaeggi who moved from Phibro to start Sempra’s European and Asian trading business in 1999 before founding Mercuria in 2004.


Without a commanding position in any region or commodity, the firm has sought out bottlenecks and imbalances in niche markets and positioned itself to make money trading derivatives using insights gained from its physical trading. In its early days it profited by opening a trade route shipping Russian crude to China from Gdansk, Poland.


Mercuria also differs in tone. At its headquarters on Geneva’s poshest shopping street, traders and executives wear open-collared shirts, sweaters and jeans, a sharp contrast to the shirt-and-tie policies at more established firms.

Not surprisingly, some of the key hires in the past couple of years as the firm expanded at a breakneck pace and added some 570 people, bringing its total headcount to 1,200, were from Goldman: "The hires include Houston-based Shameek Konar, a former managing director with Goldman Sachs Group Inc. who is chief investment officer overseeing Mercuria’s corporate development, including the JPMorgan negotiations. Victoria Attwood Scott, Mercuria’s head of compliance, also joined from Goldman Sachs." We find it not at all surprising that the Goldman diaspora is once again showing JPMorgan just how it's done.

So just how big is Mercuria now? Well, it is almost one of the biggest independent commodities traders in the world:

Mercuria traded 182 million metric tons of oil or oil equivalent in 2012, according to its website. Vitol, the largest independent oil trader, handled 261 million and Trafigura traded 102.8 million tons of oil and petroleum products. Brent crude rose 3.5 percent that year in a fourth annual advance. It slipped 0.3 percent in 2013 and is down 2.6 percent this year at about $108 a barrel.


With more trading companies trying to gain an edge by owning businesses that produce, store or process commodities, Mercuria followed suit. It now has stakes in a coal mine in Indonesia, oil and gas fields in Argentina, oil storage in China and a biodiesel plant in Germany. In June, it invested $50 million in a Romanian gas producer.


The JPMorgan unit employs about 600 and represents a range of assets assembled over decades by firms including Bear Stearns Cos. and RBS Sempra, which the bank bought during an acquisition binge beginning in 2008.


They include gas and power trading on both sides of the Atlantic, physical assets spanning 40 locations in North America, an oil-trading book with a supply and offtake contract with the largest refinery on the U.S. East Coast, 6 million barrels of storage leases in the Canadian oil sands, and Henry Bath & Sons Ltd., a 220-year-old metal-warehouse operator based in Liverpool, England.

In other words, the old boys' club is about to get reassembled, only this time even further away from the supervision of the clueless, corrupt and incompetent US regulators. And with the physical commodity monopoly of the big banks finally being unwound, long overdue following its exposure here and elsewhere over two years ago, it only makes sense that former traders from JPM and Goldman reincarnate just the same monopoly in a jurisdiction as far away from the US and Fed "supervision" as possible. Which also means that anyone hoping that the great physical commodity warehousing scam is about to end, should not hold their breath.

As for the main question of what happens to everyone's favorite commodity manipulator, "It hasn’t been determined whether Blythe Masters, who has led the JPMorgan unit since 2006 and orchestrated the buying spree, would join Mercuria, a senior executive at Mercuria said." Which means the answer is a resounding no: after all who needs the excess baggage of having a manipulator on board who got caught (because in the commodity space everyone manipulates, the trick, however, is not to get caught).

Finally, with "trading" of physical commodities, which of course include gold and silver, set to be handed over from midtown Manhattan to sleep Geneva, what, if any, is the endgame?

The talks with JPMorgan forced Mercuria to put another deal on hold. Mercuria was nearing the sale of an equity stake of 10 percent to 20 percent to Chinese sovereign wealth fund State Development & Investment Co., according to two people familiar with the matter. The discussions with SDIC were halted once Mercuria neared the JPMorgan business, one of the people said.

But they will be promptly resumed once JPM's physical commodities unit has been sold, giving China a foothold into this most important of spaces. Because recall what other link there is between China and JPM?

One may almost see the connection here.

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BeetleBailey's picture

JPM to The Squid....MOAR crap.

The 8th Air Force needs to be re-commissioned, to bomb the DAYLIGHTS out of the wankin banks

GetZeeGold's picture



I hope Blythe is not feeling suicidal as's been going around.

Mark Carney's picture

Those guys would be so much cooler if they popped their collars.


P.S. Blythe, Im sure I can find you an opening here at BOE.....I believe we just opened somehting up in our ForEx dept (I think you know what to do).

Arius's picture

who is Blythe again, remind me?

stop this character assassination, it is a waste of energy ... these are small time crooks, mercenaries not worthy of your attention.  The fact that they choose wall street as thier field of operations doesnt change that fact.  They are not by any means a decision maker.

It is like getting mad at the gun, instead of the person who pulls the trigger ... well, Blythe is still the same, she is not even a gun, just a small time crook ...

rqb1's picture

dude, she is not small time. 

Arius's picture

really?  compare to whom?  you and me from our basement apartments?  of course not.

but if you want to blame someone for prices on commodities, do you really believe is the leitnant fighting in stalingrand the one to blame for starting WW II ?


HungryPorkChop's picture


"When derivatives played a role in the 2008 financial crisis, Masters was described by the UK newspaper The Guardian as "the woman who invented financial weapons of mass destruction"."

MsCreant's picture

Maybe they are not suicides, but accidents. All the golden parachutes being handed out are actually tungston...

Ferrari's picture

Nicely played Madame. Very nicely played.

BLOTTO's picture

I hope she isn't as well...thats getting off too fucking easy.


One needs to rot to feel the burn...

Wile-E-Coyote's picture

I heard she is refusing to attend any meeting higher than the ground floor.

MeMongo's picture

Definition of blythe ; without thought or regard, heedless, a blythe indifference to others feelings. Well it sure seems someone picked this bitch perfectly with regard to her job title!

TruthInSunshine's picture

As I slam my last espresso of the morning and rush out the door, I wish a hearty go fuck yourself to Blythe** Masters, and wish her an excruciatingly painful death by a 100 self-inflicted pneumatic nail gun wounds in the not-to-distant future.

**With a name like Blythe, you just know her parents were the completely anal-retentive, uppity east coast elite-effete types (or stiff upper lip, butt cheek clenching Brits), who harbored deep & twisted hatred towards each other, and engaged in all manner of moral & sexual depravity-bordering-on-brutality (there are undoubtedly a lot of perverted skeletons in her family's closet - think 'Girl With The Dragon Tattoo').

NoDebt's picture

You deduced all that just from her first name?  Impressive.

prains's picture

it's a gift, some can play the piano without knowing the notes

Ban KKiller's picture

Don't be shy...MOAR espresso!

Confundido's picture

Miners are f...ed. They better sell to the Glencores out there than be enslaved by the traders.

GetZeeGold's picture



Word is the miners are doing a lot of business off the books in the form of dore bars to China.


Can't say I blame them.....who the hell wants to pay taxes?

fonzannoon's picture

"Which also means that anyone hoping that the great physical commodity warehousing scam is about to end, should not hold their breath."

that says it all

Confundido's picture

unless the repo market collapses...but we're years, if not decades away from that...

MsCreant's picture

Let them wear sweaters. Because it is unique, dammit. 

The whole post is re-vaulting.

NoDebt's picture

"You'll never work in this town again, Blythe!!"


Kaiser Sousa's picture

i really do believe that it doesnt matter anymore...

Gold and Silver will free themselves shortly...the MoneyChangers by their own sociopathic greed have hastened the destruction of their grandest scheme..the debt based currency paradigm...

keep stackin....

Zero Debt's picture

Does this transfer provide any public disclosures of their live positions and valuations?

Quinvarius's picture

I guess they can stop buring the bodies now.  No one is left to prove they never made a dime and only dug themselves into a giant hole for the Fed to bail out.  The last task they had was to dump all that sugar they were storing at that Cargil facility for a loss after they were forced to take delivery of it during some idiotic attempt to corner sugar.  Looks like they finished that in Feb.

PlusTic's picture

why compete, when you can manipulate? 

J S Bach's picture

I hope the good folks at Mercuria have an ample supply of parachutes for their employees.

Skin666's picture

Good luck to Blythe 'Klepto' Masters in her new job at the CFTC... Oh wait...



Freewheelin Franklin's picture

So, does this mean Blythe will be walking South Broad Street in Philly? Let me see if I can find my gold card. 

Ralph Spoilsport's picture

If you see a Bentley parked in the middle of the street, she's open for business.

PlusTic's picture

send blythe to super-max prison as a group conjugal visit provider   ;)

beavertails's picture

Here's a nail gun and a ticket to the heli-pad Bitch.

youngman's picture

Am I the only one who does not believe that JPM is out of the commodites business for good......I doubt that....they will just change the name to what they are doing...when you need synethitic derivitives to play witth...commodites are much more fun to play with...and I think they still will..

tenpanhandle's picture

Notice post says they're getting out of the "physical commoities" business and does not mention anything about commodity derivtives.

sudzee's picture

JPM timing is great. Ukraine was the last country with gold to steal. PM's now has a Putin Put in place.

fijisailor's picture

You're forgetting Venezuela

sudzee's picture

Venezuala's gold went to Cuba and was loaded on a military ship heading for Russia.

fijisailor's picture

No.  My wife says that Maduro cronies have already cashed it all out for funny money USDs.

falak pema's picture

Your wife knows moar about venezuelan gold than Maduro himself. Whats "Blythe" in Fiji lingo? 

Masters is "sailor" like in sailor and lula! 

jmcadg's picture

Forgive me for not fully understanding - but does this mean they are now holding the Bear Stearns Silver Bag?

tenpanhandle's picture

Remember, JPM went on a silver buying binge recently.  Maybe to fill that empty bag you mention before sale and disclosure.

Quinvarius's picture

Every 4-5 years most buy side is forced to change custodians by law or governance process.  What that means is JPMs fed backed resign of terror could probably only last 4-5 years.  After that, they don't have the Fed's trading accounts to front run and have to deal with their book--Which no doubt is stupid by the end of their term .  Just a little fact on why they keep changing the guard on PM manipulation, and the previous "axe" always dies.  Maybe it does not apply to the Fed/Treasury.  But it is basic to the industry, and I suspect that one way or another, it does happen.

Bangin7GramRocks's picture

Typical criminal behavior. When the heat gets too hot, you move on to something else. I'm sure the business press will be raving about her next financial "innovation" within a year. 

Tortuga's picture

I don't see it being a definite goodbye to Ms Masters. She's for sure got her drop dead money, pun intended. She made the banksters trillions with her twisted inventions, her lack of ethic and morality, so I could visualize her staying there, if for nothing else, cause she's not the only one that knows where numerous skeletons are buried and the others may want to keep her close and on 1st floors, not under construction with nail guns laying about.

sudzee's picture

JPM, a FED owner, doesn't want to be villified as PM paper collapses.

Kina's picture

Will JPM also wonder if Blythe can fly.