"Phase Shift" - JP Morgan Downgrades All Commodities To "Sell"

Tyler Durden's picture

If the ECB will not take the hint, JPM will bring the mountain to Mohammed. Or something. In a note just released by JPM's Colun Fenton, the firm has downgraded the entire commodity complex to "underweight" (yes, that includes gold). The reasoning? It is all the Supercommittee's fault. It also likely has nothing to do with the fact that JPM was selling commodities to clients all through this run up, and is now in finally buying, in anticipation of ECB printing and Fed's LSAP. Full report attached.


  • The US Supercommittee’s failure changes risk outlook: the primary implication is damage to confidence in the US’ seriousness of purpose and the cost of that attitude. Markets must price risk of more credit rating cuts.
  • US public debt is $15Tn (100% of GDP) and growing: Since S&P cut the US sovereign credit rating four months ago, the US public debt has grown by $455Bn, an amount larger than Greece’s sovereign debt.
  • Industrial metals and softs are deteriorating rapidly: incremental damage in physical metal and crop prices has unfolded worldwide since
    Thursday, when it became clear the Supercommittee would likely fail.
  • Change in view: Policy failures in the US and Europe have darkened the 6M outlook, forcing us to downgrade commodities to underweight. We expect outright TR losses near-term and see greater value in bonds

Full report:


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knukles's picture

More nefarious that a whipsaw....
Call Armageddon, world comes to end, never again human (breeding like Viagra impaired rats and bunnies) consumption of raw materials.
Sell everything
Duck, panic.
Sell Everything....

(including silver... ah hem)

(Sos we can cover our shorts.  Which we don't have.  Really.  Honest.  Well, it'll be smaller after we cover some.)

And right before QEwhatever, too  :)
Propitious timing, I must say.

SWRichmond's picture

Not to mention, this will demonstrate that there is no inflation....

CPL's picture

While oil chews the legs from underneath them as vapourizing assets.

Turd Ferguson's picture

Until today, didn't these assholes have a $2500 target for gold?

Sean7k's picture

Since when did previous targets have anything to do with current recommendations? Have a great Thanksgivng Turd!

HoofHearted's picture

We recommend getting into bonds. Preferably the German type...like last night. Everyone loves bonds. Buy bonds. Be patriotic, no matter to which country you find allegiance. Do not seek out gold or silver. Pieces of paper are much better. Trust us. We are JP Morgan. Never mind what JP Morgan himself said about gold....

SGS's picture

And their Silver reco?  Cant find it.  Is silver still a commodity? LOL Go Blythe GO!  Cunt.

Quintus's picture

Indeed, but that was when they wanted to lure in some new Spec longs to rape during the traditional Pre-OpEx smackdown.

Now, presumably, they want everyone to sell to them so they can cover some more shorts.

There should be some sort of a regulator or something that would oversee the market and stop this sort of thing.  Maybe one day, we'll get one.

unky's picture

Since about the time when Gold breached the $1900 level they raised their target to $2500. Of course at that time, they alreadly knew it would go down to $1600 again...

knukles's picture

SW and Turd...
Cover for the Fed, no inflation.
And yep, they had a "big" target for all the commodities.

Desparation is the Morgan way.....

SuperCommittee may ass.  I mean, anybody with an ounce of sense knew full well that the Committe was not gonna come to any conclusions.  And was clearly telegraphed as such for weeks

Strawman Deluxe

Sean7k's picture

This wouldn't have anything to do with the current OI in silver and gold for December, the huge transfers from customers to the JPM dealer accounts yesterday or even the huge 2.7 million ounce silver withdrawl from the comex? Nah, didn't think so...

LongBalls's picture

Congratulations America. Well the smart ones anyway! Your starting to get it! Buy phyz. gold and silver at any price and aggressively on big dips! If your going to play a paper game then do it in oil. We are headed for the big one in the middle east. My guess is that the collapse will come as an excuse of the war and skyrocketing oil. We are now, at best, two months away.

Above all forget about this crap after today. Enjoy your families ZH brothers and sisters! After all, we pay attention to this crap because among many things, we love them.


TheMerryPrankster's picture

But apparently JPMorgan likes the London Metals exchange


(Reuters) - J.P. Morgan (JPM.N) has agreed to buy all of defunct U.S. brokerage MF Global's (MFGLQ.PK) shareholding in the London Metal Exchange following a competitive bidding process, KPMG, the administrators for MF Global's UK unit, said on Wednesday.

"We received a great deal of interest in the LME shares and are pleased to be in the final stages of concluding a sale," Richard Heis, joint special administrator of MF Global UK, said.

He did not give a price for the sale. Sources told Reuters on Tuesday that J.P. Morgan would pay 25 million pounds ($39 million) for the 4.7 percent stake in the LME, implying a total value of around 530 million pounds.

J.P. Morgan already has a 6.2 percent stake in the exchange, the world's largest metals market.

GeneMarchbanks's picture

'If the ECB will not take the hint, JPM will bring the mountain to Mohammed. Or something.'

So JPM won the coin toss with GS over who gets to issue the 'report' eh?

Gief Gold Plox's picture

What I want to know is what kind of a coin was it? It wasn't Traditional by any chance?

HoofHearted's picture

Then those bastards stole it from Kyle Bass!!!

Quintus's picture

Does anyone have a number for JPM's commodity desk?  This report has made me want to sell all my gold and silver immediately.  Maybe they would do me a favour and take it off my hands - I hear they are really nice people.

fockewulf190's picture

Toll free? JP Morgue doesn't do free.

Ethics Gradient's picture

+44 20 7777 4336

Let me know how you get on.

midgetrannyporn's picture

So kind of them to share.

Quinvarius's picture

JPM is in a panic over Sprott's $1.5 billion filing to buy silver.  They don't have it.  They are short.  So they are trying anything now.  Sprott can more than clean out all the registered silver at the COMEX.  But he will likely choke off supply to the COMEX and avoid being involved in a CME default/collapse.

Carlyle Groupie's picture

He really should have tea with the Hunt Bros and discuss.

Quintus's picture

The hunt brothers got hung up by the short and curlies because they played in the paper metal sandpit where the cartel makes the rules to suit themselves.

Sprott buys physical metal, mostly from the producers.  The only way the cartel can hurt him is to jack up the price of silver to the stratosphere so he has to pay more for it.  

I don't think they'll be doing that in a hurry.


fockewulf190's picture

All they are going to accomplish is a fire sale for phyzz. Bring it...I've been saving my fiat for just this opportunity.

Former Sheeple's picture

Q - They are massively short/Sprott 1.5 B presents a problem, so smash down seems likely. Anyone have thoughts about Friday (thin market, everyone gone, easy to manipulate - sheeple stampede to the exit on the price drop???)

thunderchief's picture

December is a Delivery month for gold and silver at the comex. 

They will have to bribe a lot of folks not to roll their contracts over and settle for paper. 

Paper that may not even be in your trading account one morning.  Go ask Mr. Celente.

Tramp Stamper's picture

Sprott warehouse raid immenent

TheMerryPrankster's picture

plant some kiddy porn and do it for the children, would our government really do something like that? Or would it be better to plant some drugs and just confisicate the whole operation in the name of the drug war.

Or plant some chemicals and call it a terrorist opeeration and waterboard Sprott?

The government has a truly impressive array of legal weapons to destroy its targets.

LongBalls's picture

If Sprott does indeed follow through, the long awaited separation of the paper v's physical price will be in gear.

Chupacabra-322's picture

Absolutely!!!  More Jedi mind tricks.  They advise report/advise one thing I completely do the opposite.

hungarianboy's picture

To me the chart looks bearish. Would you buy or rather wait till new trend develops???

Muddy1's picture

absolutely, BTFD, hold the physical in your hand, 

look at the box below the second chart "Similar Articles You Might Enjoy", the first article is these same clowns at JPM predicting $2,500 gold

Chupacabra-322's picture

You remember Andrew MaGuire?  I do, oldie but a goodie.

Andrew McGuire, whistle-blower on market manipulation, injured in hit-and-run accident

Gold is Money
Sat, 27 Mar 2010 19:04 CD

Interesting turn of events.... TPTB are not happy. Its either they silence him now, or else things would get out of hand if this hits the mainstream media. Just imagine him being interviewed on all the independent newspapers. the only way he can save his life now is go viral with his message with the help of the gold bugs.

Le Metropole Members,

On March 25th at the CFTC Public Hearing on Precious Metals GATA made a dramatic revelation of a whistleblower source, Andrew Maguire, who has first hand evidence of gold and silver market manipulation by JPMorganChase and who has even tipped off the CFTC in advance of manipulative attacks on gold and silver. Just as in the Madoff case the regulator has done nothing to stop such manipulation.

On March 26th while out shopping with his wife, Mr. Maguire's car was hit by a car careening out of a side road. The driver of the vehicle then tried to escape. When a pedestrian eye-witness attempted to block the driver's escape he accelerated at him and would have hit him had the pedestrian not jumped out of the way. The car then hit two other cars in escaping. The driver was apprehended by the police after police helicopters were called in and following a high speed chase.

Andrew and his wife were hospitalized with minor injuries. They were discharged from hospital today and should make a full recovery.



mayhem_korner's picture



Did they include the part about how they're 100 million oz. short silver?

Manufactured fire drill.

Eally Ucked's picture

Bonds represent much better value! I'm buying a whole bunch of them, diversifying across Europe, Japan and US.

Bold Eagle's picture

Exactly my thinking! Failure of the world politicans to fix the debt problems will do wonders for those bonds!

Master_Blaster's picture

Maybe I'm not the brightest, didn't they just state the debt numbers and the growing debt numbers/risk and then recommend buying the debt?

ffart's picture

Stop asking questions! FOUR LEGS GOOD TWO LEGS BAD.

Sean7k's picture

Well, I see a load up the truck moment approaching.

Thanks, JPM. With friends like you, who needs equities? 

Oh yeah, you might want to include the shorting of bank stocks as well, since we know all that debt plays hell with your valuations. 

The big question is: can JPM continue to keep the price of silver equal to its' stock price? Time to throw down...

eddiebe's picture

If nothing else this will be a bit of atest to see how stupid Joe and his advisors really are this time around.

DormRoom's picture

2008 bitches.. correlation of 1 implies liquidity preference towards USD.  And let's not forget about a Chinese hard landing. Thus all commodity prices implode until more printing presses are ordered.  Margin calls yall. Good luck surviving the commodity complex deleverage-unwind.

fuu's picture

Let's get physical, physical. I wanna get physical, let's get into physical.

magpie's picture

Even with full scale deflation / European debtsplosions, with the capital flight out of China i don't see commodities falling too much.

i-dog's picture

Particularly now that Australia has just passed a "super tax" on mining profits through their lower house ... in addition to their recent "carbon tax" on primary and energy producers!

Tax, tax, tax! Spend, spend, spend! "The road to prudent economic management"!