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Thread: Feds probing JPMorgan trades in silver pit

  1. #1
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    Default Feds probing JPMorgan trades in silver pit

    http://www.nypost.com/p/news/busines...OJpB55M7Rh9vwM

    "Federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals market, The Post has learned.

    The probes are centering on whether or not JPMorgan, a top derivatives holder in precious metals, acted improperly to depress the price of silver, sources said.

    The Commodities Futures Trade Commission is looking into civil charges, and the Department of Justice's Antitrust Division is handling the criminal probe, according to sources, who did not wish to be identified due to the sensitive nature of the information.

    The probes are far-ranging, with federal officials looking into JPMorgan's precious metals trades on the London Bullion Market Association's (LBMA) exchange, which is a physical delivery market, and the New York Mercantile Exchange (Nymex) for future paper derivative trades.

    JPMorgan increased its silver derivative holdings by $6.76 billion, or about 220 million ounces, during the last three months of 2009, according to the Office of Comptroller of the Currency.

    Regulators are pulling trading tickets on JPMorgan's precious metals moves on all the exchanges as part of the probe, sources tell The Post.

    JPMorgan has not been charged with any wrongdoing.

    The DOJ and CFTC each declined to comment, as did JPMorgan.

    The investigations stem from a story in The Post, which reported on a whistleblower questioning JPMorgan's involvement in suppressing the price of silver by "shorting" the precious metal around the release of news announcements that should have sent the price upwards.

    It is alleged that in shorting silver, JPMorgan sells large blocks of silver option contracts or physical metal -- actions that would bring down the price of the metal -- closely following news that would otherwise move the metals higher.

    Last week, The Post got a telling e-mail the Justice Dept. sent to a concerned investor. "Thank you for your e-mail regarding allegations that JPMorgan Chase, and perhaps other traders, are manipulating the silver futures market," the e-mail read.

    Telling, indeed, as the concerned investor, in an e-mail to Justice's Anti-trust division, never mentioned any companies or traders. "

    Finally, huh?

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    Banned Melonie's Avatar
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    Default Re: Feds probing JPMorgan trades in silver pit

    ^^^ I'll believe it when I see it i.e. an actual in-depth investigation resulting in charges being brought.

    Obviously groups like GATA have been following the 'naked short selling' activities of JPM and other major players in precious metal futures markets for years ... so this really should come as no surprise to the Justice Dep't. The 'gold foil hat' crowd would probably tell you that 'rumors' of such an investigation are being prompted by a political need to villify Wall St. banks, while at the same time the US Congress just failed to pass a new bill reining in Wall St. banks' ability to 'wheel and deal' re proprietary stock / bond / futures / derivatives trading.

    As to the effect of this announcement on silver prices, I just posted a chart in another thread showing that gold has quietly risen to over US$1200 an ounce again. However, silver prices are still acting 'normally' i.e. swinging around in response to 'monetary' demand as well as 'industrial' demand ( or lack thereof ) as well as 'speculative' demand.



    IMHO Silver is too heavily tied to 'industrial' demand ( or lack thereof ) to ever really become the 'poor man's gold' i.e. a physical form of 'money' that is supposedly safe from the ravages of currency inflation / debasement. In reality, gold is now the only 'monetary' metal. This is the reason that gold has quietly been rising back to 'record' levels while silver has been vacillating.

    ~
    Last edited by Melonie; 05-09-2010 at 03:16 PM.

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    Default Re: Feds probing JPMorgan trades in silver pit

    I had thought the main industrial uses for silver were declining. If so, the next use of it is to bilk commodity investors out of their wealth, as was done by the Hunt brothers from Texas in the 70s.

    I guess the smell of money is just too addictive to these wise guys. They have lost all of their ethics and respect for others' needs. They are acting like experimental animals addicted with a coke habit.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Feds probing JPMorgan trades in silver pit

    I hate it how "shorting" has become a 4 letter word. The problem is when JPM were doing it. You never hear people saying "OMG so-and-so were _buying_ - how evil of them!"
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
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