JP Morgan Dimon MastersIn December 2012, I received a phone call from the Government Accountability Office (GAO), and that led to me providing documentation about the silver manipulation and the CFTC that led to a number of conference calls with the GAO. The GAO’s mission is to make sure that all federal agencies are conducting their missions appropriately.
I kept my contact with the GAO private so as not to jeopardize any action by the agency, although I must tell you that I was quite excited about the situation
. In time I was informed by the GAO that as the one government agency that reports directly to Congress that it needed to be directed by Congress to look into the matter. In May 2013, I sought to stimulate action by writing publicly about the matter and asking readers to write to their elected officials to urge the GAO to pursue the matter. A good number did just that.
Several months passed and, once again, I grew weary about any follow up by the GAO.  I had heard nothing and assumed the matter was dead.
As it turns out, I was dead wrong. 

Do you know this man?

You should… he is now in charge of the CFTC, the government agency that “regulates” gold and silver futures trading, now that our buddy Gary Gensler has retired. 
His name is Tim Massad and he will do absolutely nothing to enforce the rule of law or ensure fairly traded markets.

mafiaCriminal enterprises the world over are tied together by a particular conduct so endemic to organized crime that it might accurately be referred to as Mafiosi Best Practices.  It is based on the very common-sense principle that one should never, ever leave a paper trail of one’s criminal activity.  Any document, from notes at a meeting to a list of goods, is a tangible piece of evidence that could be used against you at some future date.  The Sicilian Mafia, renowned for their “code of silence”, had an old saying which sums this up perfectly: Never write when you can speak, and never speak when silence will do.
What does this have to do with Gold and Silver?  Perhaps a great deal. 

Jamie DimonThe CFTC has announced Wednesday evening that it has settled with JP Morgan for $100 charges that the bank violated prohibition on manipulative conduct in connection with the London Whale swaps trades which saw the firm lose nearly $9 billion.
In the settlement, JP Morgan admitted that its traders (no mention of Mr. Dimon, who assuredly approved his traders actions removing IG9 swaps delta hedging interest rates) acted recklessly, and agreed to the $100 million penalty.


H. Darr Beiser USAT

The WSJ is reporting that Goldmanite Gary Gensler has declined an invitation from President Obama to serve a second term as CFTC Chairman, and will leave the CFTC by the end of the year.
Apparently Goldman no longer needs their man at the CFTC now that the agency’s 5 year “investigation” into silver market manipulation has been put to rest.

Jamie Dimon

We know market rigging occurs every day. We may not be able to see it, as it’s hidden in vast arrays of high frequency trading at the nanosecond level. The manipulators can conceal their work through offshore accounts.  Proxy traders conceal their actions, but we still know it goes on.
Why do these excesses and criminal actions get punished only lightly, with no jail time and little more than a miniscule fine?
Because it is in the interest of the government to disclose only enough to the viewing public so that it is possible for a prosecutor to wage his little war against JPM, while, in the full knowledge that the real story is infinitely deeper.
It’s like prosecuting the Mafia. A don or two goes down but the enterprise continues to thrive. Every one prospers; banks, criminals, attorneys and the government. Its a win-win for all except the marks who suffered predations by these people.
But the one market that can never be prosecuted is the market in which the government is running the fraud. The government is in the precious metals market. That market belongs directly to the government. That market must be suppressed because if it is not, the government is screwed.
Legal beagles, attorneys general, and private lawyers cannot get a handle on this manipulation; they cannot be allowed to find the bodies and levy fines because the government cannot allow it.
The government is the market, manipulates the market and this game MUST continue.

cftcBecause of the recent furious decline in value of real and paper silver, and the belief by many that manipulation is the major (if not only) cause, I have been asked what might be done to force the non-regulating regulator, the CFTC, to begin regulating in regard to the existing concentration.

After studying the silver futures market since the days of C.V. Myers—and focusing on it intensely for the past several years—my opinion is that if there has been, and currently is, a concentration in the silver market, it would constitute not only manipulation but consequently the disruption of market integrity, and the prevention of fair competition among silver investors, speculators, hedgers and others. Certainly, the esteemed Ted Butler has made an overwhelming case that there has been, and currently is, such a concentration/manipulation.

In light of the CFTC’s foot-dragging in concluding its unreasonably delayed investigation and/or required report concerning concentration /manipulation, I have been considering how to break the self-created CFTC log-jam that has caused incalculable financial losses as a result of the uncertainty engendered by the apparently languishing investigation.

As I will fully develop below, a lawsuit is feasible that will force either the Director of Investigations and/or the Commission itself to disgorge the Report of the CFTC’s four-year-plus investigation into concentration in the silver futures market. The hope would be that the investigation’s conclusions, either way, will allow investors, speculators, hedgers and others to make rational decisions, unlike currently when the concentration skewers free market choices and decisions.
Below is only the outline for a lawsuit, not the Petition itself.

CFTC Commissioner Jill Sommers, who is famous for voting in favor of TBTF bankers interests nearly 100% of the time has just announced her resignation from the CFTC.

In other news, The Vampire Squid and The Morgue are duking it out vying for an alumni to replace Sommers.

Full statement below:

cftcThe CFTC has announced that live reporting of Swap transactions and swap dealer registration began on December 31st 2012.
Our banker friends had lobbied extensively to delay or cancel the implementation of these requirements of the Frank/Dodd legislation, whining that they would be too costly to enact.  In reality, the cockroaches did not wish to have the light of day shining in the corner where they congregate.

Jamie & Lloyd cannot be pleased.  Wasn’t lobbying the regulatory agencies part of Blythe’s new job description?

A California attorney has dissected the recent ruling by 90 year old judge Robert P. Patterson Jr. dismissing the class-action lawsuit alleging manipulation of the silver market.
He concludes that the entire purpose of the delay in the CFTC’s nearly 5 year investigation of silver manipulation is so that the courts can rule that the government agency in charge of investigating market manipulation has not ruled that any market rigging has occurred, and thus the courts cannot become involved in civil litigation.

Now that the class action suit has been dismissed, he states to expect an announcement by the CFTC regarding the wrap up of their silver investigation- pending the appeal of the District Judge’s ruling.


silverCOTBy SD Contributor Marshall Swing:

Gold & Silver COT Report 12/28/12

Commercial longs rose a huge 3,955 on the week and covered an even larger 4,676 shorts to end the week with 48.07% of all open interest, an imperceptible decrease of -0.02% in their share since last week, and now stand as a group at 233,540,000 ounces net short, which is a massive decrease of over 43,000,000 net short ounces from the previous week!

Historically, with silver now at $30 and the commercial net short position at about 233 million ounces, the last time their net short position was similar was the closing of September 11 yet price was about $33.50  Couple that information with the massive long buying by the commercials and I feel safe to say the bottom is in for the short term

While we have posted this previously, we thought it apropos to re-post the CFTC’s Mission Statement at the end of a week that saw the most blatant and egregious market manipulation of gold and silver since the May 2011 take-down.

CFTC’s full Mission Statement (in polished granite) below:

When the $1 QUADRILLION plus derivatives market fails, the inventor of the financial weapon of mass destruction known as the derivatives market- Blythe Masters could quite literally surpass Lenin and Mao Tse-tung as the person responsible for the greatest loss of human life in history.
The Columbia Business School recently conducted an interactive debate entitled “Financial Innovation: A Risky Business?with the aforementioned Blythe Masters of JPMorgan, along with Barny Frank, Gary Gensler, and a panel of experts debating the merits of financial innovation.

The one thing we can say with certainty after watching the 65 minute discussion/debate: (other than that there is a reason that Joe-6 Pack has no comprehension of what is facing the derivatives and entire financial market when the first domino fails) is don’t expect the CFTC led by Goldman alum Gensler to take ANY action against Blythe’s commodities division at JPM over alleged silver manipulation.

Full nausea inducing discussion on the merits of financial innovation below:

The CFTC has filed a civil injunctive enforcement action in US District Court against 12 commodities firms for allegedly selling phantom precious metals to clients.  The CFTC complaint states that:  The defendants claim to sell physical metals, including gold, silver, platinum, palladium, and copper, to retail customers in retail commodity transactions. Under the defendants’ retail commodity transactions investment contract, customers allegedly make a down payment on certain quantities of physical metals, usually 25 percent of the total purchase price. Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository.

The complaint further alleges that these statements were false, and that the defendants do not purchase any physical metals, arrange loans for their customers to purchase physical metals, or arrange for storage of physical metals for any customers participating in their retail commodity transactions. Instead, all the transactions are just paper transactions.

Sounds remarkably like the COMEX.

The Consumer Fraud Advisory further cautioned consumers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.

Ah, it is remarkably like the COMEX, except the 12 firms charged are not a part of the good ole boys club.

The CFTC voted 3-2 Thursday to move forward with an appeal of a federal district judge’s September ruling vacating the position limits rule mandated by Dodd-Frank and approved by the CFTC.

Anyone believe Mr. Dimon and Mr. Blankfein do not have appeals judges in their pocket as well?

Bloomberg writes today that authorities are scrutinizing other benchmarks and markets for signs of manipulation in the wake of the LIBOR scandal.
Don’t worry, Goldman’s own Gary Gensler is on the hunt…just as soon as he gets around to completing the going-on-5-year silver investigation supposedly being conducted by the CFTC, which was supposed to have been concluded by September.


The same lack of oversight that enabled traders to manipulate the London interbank offered rate plagues other benchmarks around the globe, according to a group of international securities regulators.