Blythe Masters On The Blogosphere, Silver Manipulation, Gold-Axed Clients And Doing The "Wrong" Thing

Tyler Durden's picture

In an article that is about three years overdue, "JPMorgan's practices bring scrutiny" the FT finally takes aim at that other "vampire squid", JP Morgan, which technically is incorrect: because if Goldman is a nimble and aggressive creature, with infinite tentacles in every governmental office, and unencumbered by massive liabilities, JPMorgan is just as connected, but unlike Goldman, it is a behemoth in every other possible capacity, and with its trillion in deposits, matched by tens of billions in bad loans, is a true Bank Holding Company. As such 'Jabba the Hutt' would be a far more appropriate allegory to describe the the firm, whose reach, scope and scale lead the FT to classify it as "Three times a pallbearer, never a corpse."

As some may recall, back in October 2009, Zero Hedge did an exhaustive expose on the relationship between JPMorgan and the then version of MF Global, Lehman Brothers, whose perfectly functioning division, its North American Brokerage, ended up being scooped up by Barclays for pennies on the dollar. In the meantime, however, JPMorgan, with the backing of the Fed, proceeded to demand as much extra collateral for Lehman repo positions on hold with JP Morgan and the Tri-Party repo system, of which JPM is one of only two custodians, simply because it could, and because this is the easiest way for the bank that is even closer to the Fed than Goldman Sachs, to procure liquidity during times of broad distress. Such as when the money market is about to freeze to death. Since then, the topic of just how much JPMorgan may have ripped off the Lehman estate has escalated, and is set to be an epic showdown in the form of a lawsuit which "accuses JPMorgan of using its “life and death power as the brokerage firm’s primary clearing bank” to put a “financial gun” to its head and demand excess collateral." And here is the kicker: "It claims JPMorgan abused its access to US government officials and then “accelerated Lehman’s free fall into bankruptcy”, hoovering up collateral to protect itself to the detriment of the firm and other eventual creditors."

And therein lies the rub: because of all TBTF banks, JPMorgan is literally at the nexus of the entire $16 trillion shadow banking system, the very system that the Fed, much more than traditional liabilities, knows and uses constantly to hypothecate and rehypothecate assets, in essence creating money out of nothing, and which in conjunction with the other Tri-Party repo dealer, Bank of New York, as well as State Street, provides the US financial system with over $30 trillion in shadow credit money in the form of custodial assets - liquidity the bulk of which is not accounted for in any conventional monetary textbook or in any modern theory of money as it is such a novel development, yet which is still 100% fungible, and is by far the biggest secret of the American monetary system. It can be seen as summarized in the following graphic, first created by Citi's Matt King back in the week before Lehman failed (full report can be read here, and should be by anyone who wishes to understand just what is truly going on behind the scenes in modern finance).

Keep in mind, these are the same custody assets which, as explained previously in the case of MF Global, can be rehypothecated in serial fashion, creating a virtually infinite amount of "money" as long as everyone who is in on the fraud agrees to maintain the ponzi. Of course, if and when someone demands delivery of an underlying assets, the whole thing falls apart, which is what happened with AIG, with Lehman, and to a smaller degree, MF Global.

So what does all of this have to do with Blythe Masters?


At the end of the day, and as the Lehman lawsuit alleges, JPMorgan has intimate access to US government officials, and particularly the Federal Reserve, who will in turn take advantage of all JPM facilities, including its trading desk, to preserve the sanctity and foundations of the $30+ trillion in custodial assets and rehypothecation system, which further means that any potential implication that fiat money is impaired has to be wiped out. As it so happens, soaring prices of gold and silver are the primary if not only means left to express rising doubts in the future viability of the dollar, but in the viability of the fiat system in the first place. Which means that the Fed is, without a doubt, one of the biggest "clients" of the Fed in a symbiotic crosshold, where what the Fed wants, JPM has to execute and vice versa.

This brings us to the transcript of Blythe's interview on CNBC, in which a primary topic, ironically, was whether or not Jamie Dimon's firm manipulates the prices of precious metals, and particularly silver. What followed was the usual avalanche of platitudes that only a muppet can love:

  • "JPM's commodities business is not about betting on commodity prices but about assisting clients"... "it's about assisting clients in executing, managing, their risks and ensuring access to capital so they can make the kind of large long-term investments that are needed in the long run to expand the supply of commodities"...
  • "There's been a tremendous amount of speculation particularly in the blogosphere on this topic. I think the challenge is it represents a misunderstanding as the nature of our business. As i mentioned earlier, our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk management objectives. The challenge is that commentators don't see that. So to give you a specific example, we store significant amount of commodities, for example, silver, on behalf of customers we operate vaults in New York City, Singapore and in London. And often when customers have that metal stored in our facilities, they hedge it on a forward basis through JPMorgan who in turn hedges itself in the commodity markets. If you see only the hedges and our activity in the futures market, but you aren't aware of the underlying client position that we're hedging, that would suggest inaccurately that we're running a large directional position. In fact that's not the case at all.
  • "We have offsetting positions. We have no stake in whether prices rise or decline. Rather we're running a flat or relatively flat matched book.
  • "What is commonly out there is that JPMorgan is manipulating the metals market. It's not part of our business model. it would be wrong and we don't do it."

Ah yes, because JPMorgan never engages in "wrong" activites...

And while we admire JPM's naive statement that it can triple its commodities revenues to $2.8 billion in 2011, while everyone else was losing money in the space, without taking prop bets, we just don't buy it. Just as we didn't buy Goldman's explanation that its prop desk only accounted for 12% of that firm's revenue, as Goldman told us directly (coupled with our challenge of prop trading in 2009, a pursuit taken on by Paul Volcker a few weeks later, resulting in the Volcker Rule). Needless to say, once the firm did break out its prop trading, it became quite clear just how huge of a factor prop trading truly was for Goldman. Because taken at face value, it would mean that all else equal, JPMorgan transacted at least 3 times more in flow in 2011 than in 2010. Yet, everyone knows that trading volumes in 2011 slumped relative to 2010. So no, Blythe, we appreciate your explanation, but we would appreciate the truth even more.

And yet there is one simple explanation that would make Blythe's story 100% correct: would JPMorgan consider the Fed, whose interests in keeping the price of precious metals as low as possible, and are aligned with those of JPM for the reasons listed above, its client?

Because if so, then absolutely everything falls into place, as JPMorgan is merely the overt conduit by which the Fed, and specifically the New York Fed, conducts monetary policy in the commodities space, just as Brian Sack would conduct open market operations in the bond arena, and as the FRBNY uses, on occasion, Citadel, and its HFT expertise, to execute its discretionary stock trades (yes, we know about those too).

We would welcome Blythe's comments on any and all of the topics listed above.

In the meantime, for those who missed it, here's Blythe.

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Show her a silver coin!!!

DoChenRollingBearing's picture

Before I even read this, I predict 1000 comments...

GetZeeGold's picture



I looked directly into it's that bad?


greased up deaf guy's picture

she looks waaaaaaaaaaay too much like hillary clinton in that small photo for my liking. as if i needed a reason to despise her even more... but thanks for the cheap silver, babe.

Pladizow's picture

"We execute on behalf of our clients" - and their biggest client is the US Gov!!!!!!!!!!!!!

That cunt is full of SHITE!

Puppet interviewing the puppet master!

strannick's picture

Silver Manipulation.

First they ignore you, then they laugh at you, then they explain themselves on CNBC, then you win.

strannick's picture

JP Morgan, simply neutrally hedging silver on behalf of their clients. No proprietary trading involved at all.

She makes it sound all so altruistic. So that 3 billion is all in commisions? Wow. So in a 30 billion dollar market like silver, 10% goes to JPM sos they can introduce the miners to the buyers. How ludicrious.

MillionDollarBonus_'s picture

The COT report consistently does not reflect goldbugs' and silverbugs' conspiratorial view of the precious metals markets. During periods of weakness in the precious metals I constantly see accusations of outsized manipulative short orders. However, this simply does not show up in the commercials section of the COT report. Oh let me guess, there's ANOTHER layer to the conspiracy where the "bullion banks" cover before the COT cutoff ... Give me a break.

nope-1004's picture

Oh let me guess, there's ANOTHER layer to the conspiracy where the "bullion banks" cover before the COT cutoff.

LOL.... you just answered your own question.  Nice to see you are at least reading Turd, Harvey, SGT, ZH, brotherjohn to get the facts.


Pinto Currency's picture


I missed the part where she explains why it is necessary to sell several hundred million oz. of silver futures in a few minutes and just what effect that might have on prices.

No we don't manipulate silver, that would be wrong, God says No!


boogerbently's picture

It's THEIR world....

we are ALLOWED to play in it.

Pretend you were picked to play running back for the Steelers for a game.

How would you do?

JPM Hater001's picture

We represent the lollipop kids- the lollipop kids- the lollipop kids

A Nanny Moose's picture

Look out for that house above!!!

Jendrzejczyk's picture

JFC, I'm a pedantic ahole.

Munchkin boys sing "We Represent the Lollipop Guild,"

Damned unions are everywhere.


MeelionDollerBogus's picture

I'd rather have this bottle in front of me than a frontal lobotomy!

The Big Ching-aso's picture




Is she be able to see her reflection in a silver mirror?

dogbreath's picture

vampires can't see their reflection

SGS's picture

I have a feeling Blythe is secretly craving vagina

Titus's picture

God, if there ever was a need to create a giant silver phallus and beat someone with it, it exists in that video.

tocointhephrase's picture

I love Brother John, a true legend!

SWCroaker's picture

Shut your trap.

You don't listen to reason, you pick crackpots with limited understanding to pick on, and then act as if you've by extension disproved without a doubt ALL possibilty of manipulation. 

It's weak, and it gets very old.  You're a transparent troll, but it is interesting to note which topics you up the effort for, and which you choose to simply spew idiocy.


You won't listen to me, so how about about this from T. Butler:

"The exact methodology being deployed that enables the dominant commercial traders to pull this scam off repetitively, aside from outright collusion, is High Frequency Trading (HFT). HFT is the collusive bundling of advanced computer hardware and software that is so advanced and powerful that it has achieved the power to move prices sharply with little actual trading required in setting prices. The way HFT works is that the collusive trading programs suddenly flash great numbers of contracts for sale. But before much actual selling occurs, all the other traders in the market see the great volumes of contracts apparently offered for sale and these other traders withdraw buy orders and start entering their own sell orders to get ahead of the great wave of HFT sell orders offered. Then a not so funny thing happens. Most of the time, very few of the HFT orders originally offered for sale get filled or executed. Instead, they are quickly cancelled. There's even an operative term for this practice that's perfect – spoofing.

Most of the HFT orders are never filled, nor are they ever intended to be filled. These spoof orders are intended to scare others into selling so that the dominant commercial traders can buy gold and silver contracts. And make no mistake, this phony HFT activity has been successful, to the great shame of the regulators at the CFTC, who know that this manipulative trading is against commodity law. The proof that it is manipulative trading lies in the data published by the CFTC. That data shows the big dominant commercial traders are always the big net buyers on the big down days. It is not possible for that to be coincidence; it as close to cause and effect as is possible."


Just shut up.

MeelionDollerBogus's picture

Dude, you missed your reply-threading. I'm not MillionDollarFuckface_

I deliberate made the LOL icon so that illiterates could see I'm a different account.

Man... you're on zh? really?

This is what I'm really up - charting the manipulation to help prove it - & goldprice model on flickr

sit DOON laddie an calm ye haerses


CompassionateFascist's picture

He didn't miss. Responding to MDBonus, not U.

Banksters's picture

Million dollar bonus,  

I don't know who is a bigger fucktard, you, trav, or robottrader.



MeelionDollerBogus's picture

I think MDB is actualy Joe Wiesenthal from BusinessInsider

Crisismode's picture

Are you discounting the possibility that "they" are one person with three different logins?



LongBalls's picture

I'll help you out. It's MDB.

MeelionDollerBogus's picture

and yet at least 10 to 1 there are contracts on the OI which exceed supply at any given date, aren't there? This adds up to more silver or gold on the COT than actually can ever be mined, doesn't it?

Yes, it does, and that makes it fraud.

Vint Slugs's picture

"This adds up to more silver or gold on the COT than actually can ever be mined, doesn't it?  Yes, it does, and that makes it fraud."

That's /sarc, right?  You're just trying to mimic MDB, right?

MeelionDollerBogus's picture


MDB is an implied /sarc

I'm on the fence about whether or not I'm mocking him or correcting him, depending on the day.


Confused's picture

Come on. We all heard it say that it would be "wrong." 


Which suggests they aren't manipulating the silver market.



nope-1004's picture

Bythe, you lie.  Can see it in your face and your reactions.  Can see it by the carefully chosen words you use to answer questions.  You are a liar dressed like an airline stewardess.


Oh regional Indian's picture so poised. I'm impressed. Delivery excellent, Commodity Centre carefully and accurately placed in the golden mean section, Blythe, blythely sneaking from left field....

Brilliant. These symboligists, programmers know their stuff. Her flashing earrings. All to ds-tract while she delivers...]

What? Us..... never......



IEVI's picture

Except her emotions betray carefully when she says

"IT WOULD BE WRONG AND WE DON'T DO IT"  her head is nodding yes

classic tell she is lying


Diplodicus Rex's picture

An air stewardess in a very, very bad wig.

Jendrzejczyk's picture

No wig. Just a lamb shear on a mutton. As an older "gentleman", I appreciate the effort. Not many hair-doos can make an older man look better.

Vint Slugs's picture

These new age women, you know the Komen for the Cure fundraiser type, they don't need to wash, let alone cut and style, their hair.

beachdude's picture

At 4:25 of the video ..."that's not part of our business model, it would be wrong, and we don't do it."


She hasn't mastered the poker face.

LongSoupLine's picture

Yep...that is correct. Note how she purses her lips as well as looks down to the right? Those are natural (ie - instinctive) human traits when someone is lying. Sorry Blythe, you've been snagged.

Sizzurp's picture

The the underlying message she was putting out there: 

- Suppressing operations in commodity markets, ie price fixing, are very important for economic growth.

- It's not JPM doing the manipulation, it's our clients telling us what to do to meet their own financial objectives.

- We can't have CFTC put on position limits because it might threaten liquidity, our clients ability to hedge, or our ability to control prices.


Blythe, you are a piece of work.  Nobody buys your propaganda. Not only that, I thought you looked terrible !! LOL



JW n FL's picture



Comay Mierda

then they hit you with a car walking out of a store


"The bank hath benefit on the interest on all monies which it creates out of nothing." - Bank of England charter 1694

"the centralization of wealth in the hands of the state by means of a national bank with an exclusive monopoly" - Karl Marx, Communist Manifesto

    Great little chatroom! these 2 are keepers! as well!

Article I, Section 8, Clause 5, of the United States Constitution says

"Congress shall have the power to coin money and regulate the value thereof and of any foreign coins".

But that is not the case.

The United States government has no power to issue money, control the flow of money, or to even distribute it - that belongs to a private corporation registered in the State of Delaware - the Federal Reserve Bank.


The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.

As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government."

The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

CompassionateFascist's picture

It's the Rothschild and Warburg International Bank. And now so entangled with the Jewish end of the Street and the entire Z.O.G. that it's impossible to tell them apart.

Optimusprime's picture

You are correct, of course.  And until knowledge of this becomes more widespread, and people begin to take a long-term strategic view to altering the situation, we remain manipulated serfs.


Thinking back on the thread that discussed student loans and the overall situation in higher education, I wonder how many students are taught how to notice this reality?

nope-1004's picture

The worst part about this evil woman, who partnered the invention of the CDS and now manipulates PM's daily, is that she is someones' mother.

I don't really care if my PM's become worthless one day.  This lady could win that game - kudos to you Blythe.

But your legacy will not be JPM, it will be those young influential ones in your own house who, one day, will probably wake up to the truth and never associate with you again.


SeverinSlade's picture

More than likely, her offspring will become just as evil as her.  They will think that mommy was doing god's work.  And they will be right.  After all, Satanists/Lucifarians don't say there is no God.  They merely say that everyone else is worshipping the wrong one.

nope-1004's picture

Depends if they are greedy like her.  If they happen to open their hearts to humanity and understand the global damage she is doing, they may choose another path.

But if they're greedy like her, other people are just pawns in the global domination game.

And the fact that she always has to dress like an airline stewardess is just plain weird to me.