Libor May Be Manipulated, But Silver Is Not, CFTC To Conclude

Tyler Durden's picture

In what may be the most amusing news of the day, according to the FT the CFTC will shortly drop its 4 year old investigation into silver manipulation, "after US regulators failed to find enough evidence to support a legal case, according to three people familiar with the situation." How about evidence to support an "illegal" case? Of course, that this is happening after the recent discovery that the world's most pervasive fixed income benchmark was manipulated for years, if not decades, can only be reason for laughter and wonder if the CFTC used the same assiduous diligence methods in pursuing the alleged perpetrators of precious metal manipulation as it did in letting the fraud at PFG slip through its fingers for two decades. We will probably never know, or at least not until an email mentioning bottles of Bollinger and silver price "fixing", (or "banging the close" for that matter) in the same sentence inexplicably turns up and makes a complete mockery of the CFTC yet again.

From the FT:

The Commodity Futures Trading Commission first announced that it was investigating “complaints of misconduct in the silver market” in September 2008, following a barrage of allegations of manipulation from a group of precious metals investors.

 

In 2010, Bart Chilton, a CFTC commissioner, said that he believed there had been “fraudulent efforts” to “deviously control” the silver price.

 

But after taking advice from two external consultancies, the first of which found irregularities on certain trading dates that it believed deserved more analysis, CFTC staff do not have sufficient evidence to bring a case, according to the people familiar with the situation.

 

The CFTC has analysed over 100,000 documents and interviewed dozens of witnesses since it began investigating the market in 2008, it said last year. The people familiar with the situation said the evidence included records from JPMorgan.

 

The conclusion of the investigation will come as a relief to JPMorgan. Although no company or individual was named in the CFTC investigation, the Wall Street bank has suffered a torrent of allegations from silver investors on the blogosphere.

The FT continues by referencing the inventor of CDS herself: Blythe Masters:

Blythe Masters, head of commodities at JPMorgan, in an April interview with CNBC conceded that there had been “a tremendous amount of speculation, particularly in the blogosphere, about this topic”, but maintained that the bank had no large bets on silver prices.

 

“We have no stake in whether prices rise or decline,” she said. JPMorgan declined to comment on the CFTC investigation.

What the FT did not mention is the end of that sentence pronounced in an interview on April 5 with CNBC which goes as follows:

"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.

Of course, the fact that a month later the firm's entire internal $350 billion hedge fund was found to be not only engaging in non-matched book trading, but suffered a humiliating $6 billion loss due to unmatched prop positions, should not influence all those who persist in perpetuating gross lies.

Which of course is why Masters' next sentence was the following:

"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."

Courtesy of Gary Gensler's CFTC, who recently has managed to build up lots of goodwill courtesy of his masterful handling of both MF Global as well as PFG, we will never know whether she was also lying about this as well.

Finally, and tangentially, in the Libor scandal where not even the regulators can mask up years of gross manipulation, we learn that UBS fired dozens of people embroiled in the still evolving Lieborgate scandal, prosecution immunity notwithstanding:

UBS AG (UBSN) has dismissed about two dozen traders and managers in connection with an investigation of manipulation of the London interbank offered rates, Der Sonntag reported.

 

The Swiss bank terminated the traders for possible involvement in a fraudulent ring across several banks and the managers for not exercising controls or for boycotting an internal investigation, the newspaper reported today, citing an unidentified person familiar with the proceedings. Dominique Gerster, a spokesman at UBS, declined to comment on the report.

So let's get this straight: bankers, for their own selfish and financial reasons formed cabals and manipulated, with the complicity of central bankers, a market worth $500 trillion notional. But they left the one market which has the embedded systemic risk of impairing the perception of fiat, and the viability of the status quo system, untouched? And this despite JPM's implicit admission of guilt when it reduced it massive silver short position back in December 2010.

One could almost make this up.

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PaperBear's picture

That's fine. I will keep exchanging my toilet paper for physical silver and we'll see if shortages begin.

The Shootist's picture

Maybe I'll get me some of them silver meeses from the RCM.

knukles's picture

They're telling the "truth!"

It's not "manipulated" because it's Official Open Market Management of Monetary Aggregates and Indica (gold and silver) by or on behalf of of the Anglo-American Banking Cartel via the Central Banks .

 

It's necessary
and good
for you and me
said the very
Powers that Be.

     -Fiatshave

When they do it it's official policy
When the banks do it without their official blessing
Or when they get caught
It's manipulation.

Eddie Bernays would be proud

Welcome to Dystopia

Cognitive Dissonance's picture

Here is the "money shot" from the CFTC.

".....CFTC staff do not have sufficient evidence to bring a case......"

See....they are essentially saying that they were looking for a case that could be prosecuted. In no way are they saying that there was no actual manipulation, just that what they found could not be prosecuted. Since the President and the intelligence czar have the right to exempt private and public companies from the law with regard to accounting or even "illegal" market manipulation in the name of national security, the CFTC could easily have found there was manipulation.....but they couldn't prosecute it.

It is how you define what is to be investigated that counts. Can't find what you're not looking for. Remember this? From Businessweek in May of 2006. The link is dead, but I saved the actual web page.

Intelligence Czar Can Waive SEC Rules

Now, the White House's top spymaster can cite national security to exempt businesses from reporting requirements.

President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.

 

AUTHORITY GRANTED. William McLucas, the Securities & Exchange Commission's former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies "to play fast and loose with their numbers." McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: "It could be that you have a bunch of books and records out there that no one knows about."

The memo Bush signed on May 5, which was published seven days later in the Federal Register, had the unrevealing title "Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives: Memorandum for the Director of National Intelligence." In the document, Bush addressed Negroponte, saying: "I hereby assign to you the function of the President under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended."

A trip to the statute books showed that the amended version of the 1934 act states that "with respect to matters concerning the national security of the United States," the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate "books, records, and accounts" and maintaining "a system of internal accounting controls sufficient" to ensure the propriety of financial transactions and the preparation of financial statements in compliance with "generally accepted accounting principles."

 

strannick's picture

Dear Commisioners;

Now that you have finally concluded your ridiculously lengthy 4 year study to determine if the silver market is an absurd sham or not, the question that seems to be on everyone's mind is not the obvious one, -whether or not the silver is manipulated- but rather if you reached your bogus conclusion via stupidity or corruption.

Also, since you seem to always lack sufficient evidence to ever prosecute manipulation, why does your idiotic agency exist at all? Of course the other reason given for your uselessness in ever finding manipulation was given by retiring CFTC Justice Painter, who said former CFTC Chairman Wendy Gramm told him never to prosecute a manipulation case.

ggensler@cftc.gov

bchilton@cftc.gov

somalia@cftc.gov

jsommers@cftc.gov

SilverIsKing's picture

So they haven't found enough to prosecute which we know is BS. Why don't they tell us what they did find out anyway? I'm interested in hearing all about their failed 4 year investigation. I'd also like to know how much they spent on said investigation. Did they talk to Andrew Maguire?

?crickets?

CrockettAlmanac.com's picture

Correct me if I'm wrong but didn't Dodd-Frank call for the CFTC to limit positions by a date which passed some years ago? What's up with that?

flacon's picture

oh that was for us... limits for us. The big banks get an exemption because they are too big to limit. 

Pinto Currency's picture

 

If JPM has no stake in whwhether the price of silver rises or falls, it seems you would not sell several hundred million ounces of silver in a couple of minutes cascading the price down as you take out all the trading stops time and tme again.

The rigging of gold and silver to force down interest trates are at the core of the world-wide debt bubble that is now collapsing.

strannick's picture

When I first heard that the CFTC found no silver manipulation after their 4 year old investigation, I assumed based on their peurile findings that they meant the investigation was done by a 4 year old

strannick's picture

I guess we now know why all those new Commercial (JPM) silver shorts got put on in the latest COT.

 Maybe the CFTC should use as silver-manipulation evidence the fact that shorts got hugely added prior to the publication of the CFTCs finding no manipulation. That way the CFTC could spend another 4 years investigating itself as to whether or not the CFTC is involved in information leakage/manipulation.

Also, Chilton the longhair should be petitioned by hippies everywhere to cut his hair sos to more accurately reflect his investment banker disposition. He should probably shave his head along the lines of Hank Paulson.

malikai's picture

Sorry, guys. Asking the beauraucrats to investigate a manipulation that is supporting the status quo kleptocracy is like asking your burglar if he can investigate your burglary.

This is not news to most of us, I hope.

Although I must say, they're not even trying to convince people anymore. I think they're getting lazy.

GetZeeGold's picture

 

 

 

 

It appears the FT might be full of BS. Top question of the day is why did they report it on a Sunday night?

 

Apparently someone with connections is currently getting their ass handed to them...it could be Harry Reid.

 

Maybe not....but it's out there now.

 

knukles's picture

There was a ONE SENTENCE exclusion pertaining to banks' positions in Gold and Silver in Frank-Dodd.

No necessity to limit or report

StychoKiller's picture

All this could be fixed with position limits in Au/Ag/Pt/Pd/Rh!

jmcadg's picture

Just dropped Gensler this ...

How do you sleep at night?

You are the laughing stock of the finance and precious metals world. But more importantly, if you are genuinely happy playing your part in destroying the lives of the many, to please the few, you need to look deep inside yourself. Sadly you'll no doubt find no soul. This is tragic, pathetic and a blatant sop to JP Morgan. I honestly can't see how you can feel good knowing you are dismissing the truth. Well my friend, the truth will out and the time will come when you have to pay the piper. But if you had any decency about you, you would cut your puppet strings and side with truth. Good luck.

 

strannick's picture

Nice one. Bomb them every chance you get, and tell others to do the same.

ggensler@cftc.gov

bchilton@cftc.gov

somalia@cftc.gov

jsommers@cftc.gov

akak's picture

CFTC to JP Morgan: "You didn't build that manipulated silver market, somebody else did."

 

(PS: And we don't care who.)

Fecklesslackey's picture

Thank you ... I have saved this in a Word file in my Documents Folder with the filename "Cock Suckers". I will always be able to find it now

Cognitive Dissonance's picture

Here is the actual article page. I suggest many people save this one.

 

 


MAY 23, 2006

Click here to find out more!

NEWS

By Dawn Kopecki

Intelligence Czar Can Waive SEC Rules

Now, the White House's top spymaster can cite national security to exempt businesses from reporting requirements

President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.


Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act. Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn't be immediately determined whether any company has received a waiver under this provision.

The timing of Bush's move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration's top intelligence official.

FEW ANSWERS. White House spokeswoman Dana M. Perino said the timing of the May 5 Presidential memo had no significance. "There was nothing specific that prompted this memo," Perino said.

In addition to refusing to explain why Bush decided to delegate this authority to Negroponte, the White House declined to say whether Bush or any other President has ever exercised the authority and allowed a company to avoid standard securities disclosure and accounting requirements. The White House wouldn't comment on whether Negroponte has granted such a waiver, and BusinessWeek so far hasn't identified any companies affected by the provision. Negroponte's office did not respond to requests for comment.

Securities-law experts said they were unfamiliar with the May 5 memo and the underlying Presidential authority at issue. John C. Coffee, a securities-law professor at Columbia University, speculated that defense contractors might want to use such an exemption to mask secret assignments for the Pentagon or CIA. "What you might hide is investments: You've spent umpteen million dollars that comes out of your working capital to build a plant in Iraq," which the government wants to keep secret. "That's the kind of scenario that would be plausible," Coffee said.

AUTHORITY GRANTED. William McLucas, the Securities & Exchange Commission's former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies "to play fast and loose with their numbers." McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: "It could be that you have a bunch of books and records out there that no one knows about."

The memo Bush signed on May 5, which was published seven days later in the Federal Register, had the unrevealing title "Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives: Memorandum for the Director of National Intelligence." In the document, Bush addressed Negroponte, saying: "I hereby assign to you the function of the President under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended."

A trip to the statute books showed that the amended version of the 1934 act states that "with respect to matters concerning the national security of the United States," the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate "books, records, and accounts" and maintaining "a system of internal accounting controls sufficient" to ensure the propriety of financial transactions and the preparation of financial statements in compliance with "generally accepted accounting principles."

Manthong's picture


"It could be that you have a bunch of books and records out there that no one knows about."

Likely MOST of the books and records controlling this pathetic excuse for an economy and market are hidden from scrutiny.

Not surprisingly, a search of the Business Week online archives for May 2006 does not show this article.

http://www.businessweek.com/archive/2006-05/news/day1.html

If not for the over 400,000 Google hits a search of the title produces, one might think it was propaganda from conspiracy nuts

Infowars and Godlike has the text, too.

http://www.godlikeproductions.com/forum1/message239827/pg1

http://www.infowars.com/articles/ps/intel_czar_can_waive_sec_rules.htm

But it’s hard to believe that this could get any traction seeing as how a fraudulent layered graphics file birth document published by the highest office in the land does not matter to anyone of significance.

Thanks for the heads up, CD.

malikai's picture

So, not only do you collect the shiny metals, you also collect golden nuggets of lulz.

But don't you understand? They need to do that to protect us from the terrorists!

Lumberjack's picture

"Since the President and the intelligence czar have the right to exempt private and public companies from the law with regard to accounting or even "illegal" market manipulation in the name of national security."

 

ABSOLUTELY RIGHT THE FUCK ON.

 

Think Enron or what has happened since.

Troll Magnet's picture

Le sigh,

I'm just going to turn off the noise and buy more silver this week because it just feels right to be able to exchange pieces of paper for shiny metals.

Al Gorerhythm's picture

They're telling the truth as they define it. Honest money is still honest money. The paper dollar is the manipulation and the gold and silver (and everything linked to LIBOR thereby masking the paper pricing formula) markets have therefore been manipulated since the dollar inception. This is as in your face as you can get but then again, so was the establishment of the central bank banking system.

It took Ted Butler a fair while to wake up to their ruses but for GATA to believe in Gensler and his butt monkey offsider, Chilton, is beyond comprehension, particulrly after their compilation of so much material that exposes government regulators and politicians for what they truely are; namely, bought and paid for shills.

Calls for Chilton to back up his stance with action, in the form of him going public with a whistlebowing expose`and resigning his pampered position, is like asking a pedophile to stop molesting little boys. He gets his fix just like the others. His sugar daddy is his boss: Wall Street.

You're part of it Chilton and the mask of the "good guy" that you wear in  public is just a deceptive facade. This announcement exposes you for what you are.  Waterboy.

Manthong's picture

Read his WIKI BIO
“From 2001 to 2005, he was a senior advisor to Senator Tom Daschle

                      'nuff said.

Kaiser Sousa's picture

sent ur critique to Chilton....he didn't seem to take it so well...
hope u don't mind....I quoted u anonymously....

radwon's picture

Your silvers are safe with us.

Top_Kill's picture

PLEASE TAKE SILVER TO $18 on this so I can load the vault on last time!!!

bigkahuna's picture

Manipulate away. When it all catches up people will literally shit their pants.

Anne Ominous's picture

Long Dong Silver was actually a Vietnamese stacker...

vast-dom's picture

the only function of markets is manipulation these days. from the fed to all financial institutions to regulatory agencies. only way any scandal goes public is if something really blows up. SILVER and GOLD are nothing but manipulated.

bank guy in Brussels's picture

Truth re CFTC and other such 'Commissions' -

« Government Commissions invariably cover for government corruption ...

the Security and Exchange Commission covers for financial corruption, the Medical Commissions cover for Medical Doctors, the State Bar Associations cover for attorneys, and Judicial Commissions invariably cover for all judicial corruption, no matter what the corruption may be. ...

If you want corruption to flourish, create a commission over it, and you will be assured that corruption will abound. »

- Rev. Ron Branson, 'Jail 4 Judges', USA

JohnKozac's picture

"Whenever you want nothing to be done about the matter, appoint a committee," they say.

Anyone who has an IQ above 75, and reads economic news is losing faith in the system.

XitSam's picture

Even my econ professor friend that didn't see much of a problem before is now saying the housing market will be depressed for 20 to 30 years.

Son of Loki's picture

Shiller's analysis shows house prices will drop another 20%. My guess is that when interest rates regress to the mean (which is inevitable), downward momentum will be accelerated and they may fall 50% to 60% instead of the mere 20% more.  So many areas are still in Bubble territory at $250 psf (or more) compared to rental value and/or median income.

JLee2027's picture

At least 50%. Maybe 80% at the bottom. There is an oversupply problem, and everyone is broke, etc.

Al Gorerhythm's picture

By the tone of your post , your friend sounds like an over-educated true believer. Maybe he is waking up. Ask him (if he holds tenure in the public system) if he will resign his position, if you think he is aware?

Like Chilton, he will choke on the bile of his own hypocrisy before he gives up his teat for another, even for his children and theirs.

XitSam's picture

You know, I'll bet they weren't even offered a bribe. Just doing what is in their job description.

Meanwile, the final report is already written for the Treasury's "audit" of the NYFed. 

vast-dom's picture

http://www.youtube.com/watch?v=3TQZ-2iMUR0&feature=player_embedded#!

 

thx bank guy. 

 

what was net result of LIBOR? Zilch. Or maybe even MORE manipulation as misdirect of compliance with law

SHEEPFUKKER's picture

So nearly every other market in the world has been proven to be manipulated but silver is not.  Oh, o.k. Bart. Thanks for your last 4 years of expert forensics on the matter. 

smlbizman's picture

....and getting a fucking hair cut....you look like an asshole....no investigation required on that...

AL_SWEARENGEN's picture

These Cocksuckerz over at the CFTC dont want to be blamed for igniting the fire that would consume the global fiat ponzi currency scheme.  What a joke.  The FT article didn't even care to mention ANYTHING about how vast JPM's outsized position on the short side of Silver is.. Figures.

wisefool's picture

God dammned hooplehead thingies think  the army will stay shen the shiny is gone from the black hills. I have killed road agents who like dessert.

Haole's picture

Your first sentence is bang on I believe Al.  If I'm not mistaken Steve De Angelo and his research have indicated some miners are actually selling their production at what is almost turning out to be a loss now.   Some of these silver mining company execs could be considered complicit whores in this entire fiasco too. The devil's metal it is and I can only hope that bodies will rain out of windows and down flights of stairs when the evil is finally exorcised, it it ever comes to pass in my lifetime. 

RacerX's picture

Good to see you posting, Mr. Turd!