JPM gold vaultIn their biggest scoop of the year, and proving once again why they are the best finance journalists in the business, the Tyler Durden team at ZH has completed a detailed investigation and uncovered The Morgue’s secret gold & silver vault in London.

The apparent top-secret (well, until today) location of JP Morgan’s gold vault is 60 Victoria Embankment, London, which just so happened to be the City of London School from 1879 to 1986, and which JP Morgan has leased since 1991.

 

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It was known that JPM’s gold vaulting service was based on London, but the location was kept top-secret:

And speaking of JP Morgan, incidentally the subject of this post, what do we know about their London-based gold vault services? Once again, in their words:

J.P. Morgan recently integrated its gold vaulting service in London with its tri-party collateral agency service.

  • J.P. Morgan operates one of the two largest commercial gold vaults in London (one of only six in the City) and is a member of the London gold clearing system.
  • J.P. Morgan is also one of the few truly global providers of collateral management services. As collateral agent, J.P. Morgan works with two parties that have an established collateralized lending or financing arrangement.

 

 

ZH discovered the 60 Victoria Embankment, London address via a gold trade ticket issued by the Perth Mint in Australia:

We were quite stunned to find, in the deep recesses of the internet (and hosted by the Indonesian stock exchange of all place), a trade ticket from May 26, 2011, issued by the Perth Mint of Australia to Avocet Gold Mining (a West African gold miner), in which the Mint confirms its purchase of 2,126 ounces of gold at a price of $1,526 for a total transaction price of $3.246 million.

London Gold Silver JPM_0

 

The facade of the old School of London, JPM gold vault:

JPM gold vault

 

City of London School JP Morgan

 

ZH then details an exhaustive investigation into JPM’s history with the building, including its willingness to pay double the market value for the building when the Carlyle Group (of George Bush fame) put the building up for sale several years back- doubling the Carlyle Group’s investment in only a few months:

A cursory media search about the otherwise very nondescript looking building at 60 Victoria reveals that it had been fully leased by JP Morgan as long ago as 1991. What is more interesting, is that the property had previously been bundled as part of a high-profile commercial mortgage-backed securities, or CMBS, deal called White Tower 2006-3. The deal consolidated properties formerly owned by one-time London real estate mogul, Simon Halabi, one of the financial crisis most notable falls from Grace, who had an estimated net worth of $4.3 billion in 2007, and in April 2010 was declared bankrupt, and whose current whereabouts have since been unknown.

White Tower 2006-3, most infamous for being the first CMBS deal to be placed in liquidation after the start of the currency crisis, held a variety of properties near and dear to JPMorgan’s heart, first and foremost 60 Victoria Embankment, the 420,000 sq ft of office buildings fully let to JP Morgan Chase; but notably Alban Gate, the 382,000 sq ft office property located on London Wall
in the heart of the City and fully let to JP Morgan Chase. The latter also was JPM’s UK headquarters until last year.

What happened next is interesting: in July 2010 Carlyle bought the bulk of the “White Tower” asset portfolio from the defunct CMBS, paying some £173 million for the 60 Victoria Embankment location. Three very short months later, none other than long-time 60 Victoria resident JPMorgan bought the very same building from Carlyle for a whopping £350 million: a transaction which doubled Carlyle’s money in an unprecedented three months! At the time the now former CEO of JPM’s investment bank Jes Staley (and who currently works for BlueMountain - the same fund that made a killing by squeezing none other than JPMorgan’s London Whale traders), said, “These properties are long-term investments and represent our continued commitment to London as one of the world’s most important financial centres.” Frank Bisignano, chief administrative officer, added: “These properties are among the most attractive pieces of real estate in London. These buildings ensure that our employees will have the necessary technology, infrastructure and amenities to take our businesses forward.” Curiously, JPM showed zero love for its Alban Gate location, which it promptly departed to go to its new Canary Wharf HQ, and Carlyle was forced to pull the sale of this property a year later as it did not get enough satisfactory bids.

A pressing question remains: why did JPM, a long-time tenant of 60 Victoria not submit its own bid for the location it knew it would end up purchasing outright in a few months from Carlyle anyway? Why overpay by £177 million in exchange for merely having one more middleman do a three-month transaction? We hope to find out.

Yet what is very clear is that there was something of far greater value to JPM at the 60 Victoria location than at its old headquarters.


Finally,  Google street view seems to confirm that 60 Victoria Embankment, London is in fact a vault location:

jpm gold vault Brinks

The full ZH piece is a MUST READ

 

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  1. Carlyle Group

    http://en.wikipedia.org/wiki/Carlyle_Group

    Carlyle invests primarily in the following industries: aerospace and defense, automotive, consumer and retail, energy and power, health care, real estate, technology and business services, telecommunications and media, and transportation.
    n September 2007, Mubadala Development Company, an investment vehicle for the government of Abu Dhabi of the United Arab Emirates, purchased a 7.5% stake for $1.35 billion.[9]
    In March 2008, Carlyle Capital Corporation, established in August 2006[27] for the purpose of making investments in U.S. mortgage-backed securities, defaulted on about US$ 16.6 billion of debt as the global credit crunch brought about by the subprime mortgage crisis worsened for leveraged investors.

     

    • Siouxwestern
       
      It is important because a private party, such as a bank, cannot ignore a Writ of Replevin – the sheriff standing at the door with a judge’s order to allow an inspection or a seizure. It can be delayed, for sure — but not ignored. The liability for the value of the goods shifts to the bailee (the holder of the goods; the warehouseman) once that writ is served.
      The article describes a lawsuit that seems a bit too cute by half – feuding parties with perhap billions of dollars of creditors, and — poof! — no one knows where their gold is. Of course there is fraud involved. Nobody knows nothin’…….
      My guess is that the swarms of attorneys who are pursuing their various creditor claims in those lawsuits, will begin asserting and delivering the equivalent of Writs of Replevin on JP Morgan regarding the specific gold at this specific facility, in order to sort out whether the specific gold is located there. (And all good gold bugs know the importance of allocated vs. unallocated gold). And if such creditors then seek to remove such gold as part of their recovey, JP Morgan will be required to give notice to all persons whose claims against such gold might be adversely impacted – that is, all the lessees, lienholders, etc. In fact, JP Morgan will likely have to notify all, if and when a writ is merely served.
      If the Replevin scenario played out a certain way, it would be a dream come true for gold bugs, indeed. Because 100 dollars of claims for every dollar of gold would then descend upon JP Morgan, and……
      That is why it is important.
       

    • Siouxwestern
      Here is the germane paragraph from the excellent ZH article:
       
       “The total value of the bullion exported in these operations approached $430m at current market prices, and it weighed 10.4 tonnes. The other distinguishing factor was the identity of the recipients, or “consignees” as they are known. According to documentation seen by The National, they were all companies associated with the al Gosaibi family of Saudi Arabia. The al Gosaibis have since fallen out spectacularly with their partner, Maan al Sanea of Saad Group, in the biggest corporate scandal to hit the Middle East, leaving about 120 banks worldwide with debts estimated at up to $22 billion and a decreasing likelihood of getting their money back.”
       Presumably, one or more attorneys for the “120 banks” who stand to lose up to $22 billion,  have been getting the run-around by various institutions, including JP Morgan, in trying to locate assets (that is, find out where precisely they are located). All a big game of hide-the-ball, facilitated by all kinds of ball-hiding techniques well-known to ZH readers (protector trusts, etc.)
       
       And – ahem – JP Morgan specializes in these servcies.
       
      But once a precise location, holding specific goods (“identified” goods, under US Uniform Commercial Code parlance), can be pointed to by a creditor (that is, pled to a court with specificity), the creditor will quickly seek a Writ of Attachment (basically, a judicial lien which freezes specific property) and/or a Writ of Replevin.  The Writ of Attachment might be even more dangerous here, for JPM.  
       
       The gist of receiving either writ, for JP Morgan is: “Hey, turn over this specific XXX to the court, so the court can give it to the proper owner; and don’t you dare move it until the court says OK, otherwise you [JPM] are personally liable to the creditors for conversion of their prooerty.”
       
       The laws applicable to bailees (like JP Morgan) are opaque but generally result that a bailee will (i) implead (ie, turn over) the property to the court, because in theory the bailee has no ownership in the property, he is just the storage clerk, and (ii) give notice of the wri to anyone who appears in the bailee’s records as having some legal interest in the property. Those folks getting notice thus have the chance to run into court and fight off the claiming creditors.
       
       All diehard gold bugs suspect, of course, that JP Morgan isn’t a simple bailee; rather, through leases, derivatives, futures and [etc], JP Morgan has geared the bejezus out of the bullion, regarless of who the legal owner(s) are, regardless of whether the gold is supposedly allocated or unallocated (think MF Global), regardless of ….pretty much any assumption one might have. Borderline lawless, but certainly not the orderly quartering of gold that one is told to believe.
       
       So the thought that JP Morgan might have to send its legal team in to court, not to be chummy with the two Saudi groups who appear to be hiding the gold, but rather to do battle with barbarians at the gate – the 120 banks looking for assets – is juicy. And a true headache for JP Morgan, because if or when it happens, JP Morgan no longer controls the situation. And its complicated status as “not simply a bailee” would be in court documents, for all to see. The 120 bank creditors don’t give a whit about JPM’s or the Saudi’s claims of “privacy.” 
       
       NB to any attorney reading this: Be sure to deliver your writ to Brinks, who will then be on notice that they cannot be moving gold OUT of the building, willy-nilly.
       
       This really is a keen development, if only for commercial attorneys and creditor geeks. But in today’s taughtly-levered world, pretty much anything can be the flap of the butterfly’s wings which set loose the upset of a system.
       
       
       
      Sioux
       

    • With a paradigm change. Which is nice, while it’s not necessary to chase the peak to sell. You’ll be glad to save some for your offspring, while you can’t modestly spend all the wealth your decent stash will offer you. Not in your lifetime.

  2. duckvision – nice stuff above, but is all this not predicated on ‘law of order’? At the risk of sounding like a jerk here, “The laws applicable…” and all the rest of the ladedas above presupposes there is going to be some kind of accountability here. When have TPTB ever been held legally accountable by those in position in congress and elsewhere to do so for any of the financial misdeeds they have played upon the public trust? Just sayin’ and thanks for your perspective…..

    • BigTom-First off, that wasn’t my post.  It was from a person called Siouxwestern from zerohedge.  I just copied it because Luigi mentioned the posts.  I read it and found it very interesting as well.  All the credit should go to Siouxwestern.  IMO, the powers will not be held accountable for anything legally until the physical gold is gone.  Any attempt to go after them in the courts will fail.  Look at the Libor scandal.  A few fines and payouts in the millions for trillions of dollars worth of manipulations and rigging of the markets.  Nothing really was done.  It was just a PR stunt move to make it look like the governments went after the banks.  The rule of law is gone or there is two sets of books.  One for the people and one for the elites.  We have been seeing some in fighting because the markets are very weak and everyone is trying to position themselves if the world goes to hell.  I think this is a example of this with the gold in the vaults or lack of gold in the vaults.  The cat is out of the bag.  It’s easy to see that the western vaults are drying up and the leasing, rehypothecation, and unallocated gold is owed to multiple parties.  People are starting to realize this and getting in line now before it’s all gone.  As Siouxwestern pointed out, this could become a very big deal if JP Morgan gets audited because they have to show the actual bar that goes to it’s owner.  The problem is that a single bar was promised to 100 different people at the same time.  I’m sure they will just rewrite the rules to be that every bar in the vaults will be unallocated.  The Swiss just ramped up their charges to hold gold in their vaults.  Allocated gold in the Swiss banks just became very expensive to do.  They are trying to make people change their holdings from allocated to unallocated by charging huge fees. 

      http://www.financialsense.com/contributors/julian-phillips/swiss-bank-clients-unallocated-to-allocated-gold-accounts

  3. ZH (best in the business) is like infowars.com (also best in the business) .. it’s propaganda and programming.
     
    So, ZH finds this letter on the internet and with a few more stones cleverly and so intuitively unturned, now knows the location of JPM’s PMs or whats left of them??  yeah, right. No way this could be bogus, or the letter a fake, because ZH is SO reliable, that could not possibly happen, and so there’s absolutely no need to even consider it. Just because they are slick does not mean they are 100% reliable. They are anonymous for heaven’s sake – could there be any ulterior motive for that?
     
    ZH is persistent in interpreting PM moves according to what JPM and the US Gov would have us believe (eg. such BS as the public routinely sells PMs just prior to statements by Bernanke, etc), but that is not what SD readers believe, is it? Because, we KNOW better. And now the Doc reprints this entire story without any opinion or critical comment, except that the Tyler Durden team are wonderful, and this story is proof of that??
     
    If the Tyler Durden team are so wonderful Doc, why do they consistently put out misinformation about PM moves, which regularly differ from your opinion, and that of other non-anonymous experts (eg. James Turk, Eric Sprott, etc)??

    • Hi Chief :)
      Thank you for your perspective. You are on the right track. Keep piecing together the puzzle of the sites you mentioned. They both have ulterior motives, especially “infowars” Jones. I have listened to very little from either of these sites. infowars in my opinion, is as much hype and misinformation as any of the myriad of sites that have popped up the last few years. They are capitalizing on fear and also creating a well supported line of revenue, which is fine…unless it is manipulation which with infowars, that is exactly what it has become.
      ZH is another site filled with too many ego’s. I trust little from the few times I have went there. I have seen a disturbing shift in many of sites like you mentioned, a shift in how “good” they have become at manipulating members emotions, etc. infowars is likely “king” of this type of marketing. Remember Chief…everything is a business model, and marketing includes stories about what members WANT to hear, not necessarily what is best for the members. Ultimately, the goal is creating sales. it is really that shallow unfortunately.
      I have said the metals sector needs NO hype to support it. The facts and end result due to current policy is all one needs to pay attention to. The rest is “noise” and a lot of that noise comes from sites such as ZH and infowars and of those two, infowars in my opinion is dangerous. Few ever think that many sites are actually created by those who do NOT have your best interests at heart. They DO want your money, and some have made a fortune via fear and hype. I cannot support that type of business model, no matter how “good” some think they are.
      Indeed we live in dangerous times…but most here do not need reminded of this every 10 minutes, nor do we need to know about ultra secret vaults of JPM. It does not change the long term results of current policy, it is just more noise and puffing of ego’s, in my opinion.
      Thanks Chief for your thoughts.
      Jim

    • Chief-I appreciate people who question any source.  ZH has a slanted view of the markets. They do go a little over the top with the doom and gloom.  I do agree with that.  ZH has writers and links articles that they want up for their agenda or how they see the world.  But name a source that has covered the Libor scandal, subprime, derivative markets, London whale story, Fed operations, LTRO in Europe and other very important stories better?  IMO, there isn’t a better source to find out information to better understand the inner working of the financial markets. 
       
      You said they are anonymous.  That isn’t true.  Bob English is a contributing editor for Zero Hedge.

      http://en.wikipedia.org/wiki/Zero_Hedge

      The news portion of the site is written by a group of editors who collectively write under the pseudonymTyler Durden
      Despite speculation that “Tyler Durden” is a pseudonym of Daniel Ivandjiiski,[2][3] who was penalized for insider trading in New York in September 2008,[4] Ivandjiiski denies being a founder of Zero Hedge. Rather, he says he is one of several writers contributing to the site under the pseudonym.[4] In an interview, “Durden” said there were four editors at Zero Hedge[1] but another editor says there are up to 40.[note 1][2] Editors have experience in various areas of finance and operations, differing from journalists who become experts about finance as they write about it, but have no practical work experience in the sector.[1] The online newspaper publishes anonymously to protect the editors from retaliation for dissident speech.[1] Durden maintains this protects its integrity, objectivity and independence, as well. Durden cites the First Amendment to the United States Constitution and a 1995 U.S. Supreme Court case, McIntyre v. Ohio Elections Commission,[1] which upheld anonymity as a right of free speech.
       
      Is ZH wrong sometimes?  Absolutely but at least they raise questions and is a website to hold information about many important topics.  I appreciate that.  I also agree that the website is a little elitist about how they express the information.  They won’t wait around for you to play catch up or take lessons about the stories.  They jump right in with some technical information.  It’s up to the viewer to understand and research the info.  The best part for me personally is looking up the people, companies, hedge funds, trades, and trying to figure what the hell they are talking about.  I have learned a great deal because of ZH.  IMO, they are very relevant and should be taken seriously.  I also respect your opinion about ZH.  If it’s not your cup of tea, well that’s fine. 

  4. I’m sorry, but i just don’t get the point to this. So you found a property to where JP Morgan work from. That’s it. If you walk past the premises, which I have done, you can see JP Morgan Plaque on the side door!..hey if you walk around London enough you can come across loads of properties to which JP Morgan own. The reason why they got this place, well apart from its in the City of London and within walking distance of Black Friars tube station, I have no idea :)
     
    And what ties this property to gold, oh a delivery contract. This means nothing. It could be temporary storage. JP Morgan could be acting as middle men. Yes they take delivery to this address before shipping it to some place else, maybe the big massive vault at the Bank of England maybe.
     
    Why on earth would JP Morgan store their gold at this place, the insurance alone would make the whole operation a stupid idea. There is more money in paper contracts than taking physical and it is far easier to get rid of the evidence if anything goes wrong.  
     
    So just to recap, the genius in this that they have found a contract, tied it to an address that JP Morgan own, which so happens to be a big building, and two armoured vans outside. Amazing investigative journalism. Really is.
     
    Oh and as for the Bollards, they are everywhere around the City of London. I mean everywhere, in this case its to stop people trying to take a short cut down the side out to the front.
     
    By the way you ever seen the Bank of England. The place was created to store gold. Its not some converted warehouse. The place was designed. From the ground up. To Hold Gold.
     
    You guys crack me up…get the tin foil off your heads…yes JP Morgan are dodgy and doing stuff that should not be allowed, but please…they do not leave a big red arrow on google maps saying “GOLD HERE!”

    Hey do yourself a favour, type into google maps the address. When the little arrow pops up, click on it and take a look at street level. have a good look around and see the plaque yourselves.

    Oh look they even got a website…with the address on, guess what they deal with..ffs must try harder boys, this is like the hardy boys!

    http://www.securitieslendingtimes.com/serviceproviders/providerspage.php?provider_id=26

     

    • The property is linked to the Carlyle Group.  That right there should raise some questions.  I linked a video about the Carlyle Group if you don’t know about them.  One of the reasons why it’s important to have a JP Morgan vault exposed because it’s in London.  London is the wild west of the financial world.  Max Keiser has talked about why many banks have subsidiaries in London.  They can get around the laws in the US and be under very little or no law in the UK.  Also, the story could become big if JP Morgan is forced to be audited because of the creditor will quickly seek a Writ of Attachment (basically, a judicial lien which freezes specific property) and/or a Writ of Replevin.  It also shows that many different parties are willing to fight in the courts to get their property because of a future meltdown in the markets.  As Siouxwestern stated, this could be the biggest corporate scandal to hit the Middle East, leaving about 120 banks worldwide with debts estimated at up to $22 billion and a decreasing likelihood of getting their money back.  That is a big deal.  All of this is linked to the JP Morgan vault and the ability to deliver the gold. 

    • This was marked for the Al Gosaibi Trading Services account at Standard Bank at the JPMorgan Chase building in London.
      So while there is plenty of evidence that the gold shipments took place, there is huge uncertainty about who initiated them, who owns the bullion, and even where the gold is now.
      Creditor banks, which asked to remain anonymous, have told The National that their inquiries to Standard Bank in London have not so far produced any positive indication of ownership of the bullion, or even confirmation that it is still in Standard’s vaults.
      Is this a big deal?  Reports of gold coming out of the vaults but nobody know where the gold is and who owns it.  How are you missing this point of the story?

    • @DuckVision,
       
      A contract to act as recipient to a gold delivery does not account as proof that this is where the gold is stored. If you check out the JP Morgan site they state that this particular division act as security agents. I would say that in this particular case, JP Morgan charged the recipient of the gold the facility of  secure transport and temporal storage facility.

      And here lies the problem with sticky tape connections. You have to have the complete paper trail before you can make wild accusations. So far this story has One piece of a paper trail that would require at lease 6 documents.

      The evidence that this is the place where JP Morgan stash their loot is just pathetic.

      A building that JP Morgan Own, A contract for receipt of delivery and a couple of security vans parked by the back door of the building. That’s the evidence. Well I am sorry but this does not make me “wake up and smell the coffee”, it just makes me think, this is desperate.

      It is not against any law in any country to take receipt of someone else’s property.

      As I said, I have walked past this building many times walking about the City of London. This is nothing secret or scary. Maybe if you live in America, this would seem like the place where its all at, but trust me, its boring.

      If I was going to store gold in this country, it would not be in the City of London, and if I was going too, it would have to be at the Old Lady of Thread needle street. You seen that place? its bomb proof. Big bomb proof.

      I have read about the Carlyle Group. So what? Just because there was a dodgy transaction to the ownership of 60 Victoria Bankment does not mean jack to me. I don’t care about Mortgaged backed securities. I don’t care about all those stupid people who took loans out that they couldn’t afford to pay. I don’t care about getting the money back from Carlyle Group. It has no interest in my world what so ever. I am aware of the situation.

      I do care about the price of Silver going up. I do care about the price of Gold going up. I do care about buying opportunities to purchase these precious metals at the lowest cost to me and sell them to people at a higher price. Shucks. I am a pure capitalist.

      I Don’t think it matters one jot to where JP Morgan stash their loot. As long as I got mine thats all that matters.

      Wake me up when you got something that means something. And if there is going to be some investigative journalism make sure its complete and accurate instead of some tin pot conspiracy crap.

      Yes Credit Default Swaps are evil, yes usury is evil. Can I do anything about them. No. So let the world blow up. Just think yourself lucky that you live in the land of the free and can arm yourself with guns. In the United Kingdom, I am not even allowed to own a knife with a 6 inch blade. :)

      Duckvision, if you read the document, the document is a request for payment. The Perth Mint are selling, JP are acting as middlemen.

    • This particular transaction came from that location of 60 Victoria Embankment, London.  That is not in dispute.  What is in dispute is a huge uncertainty about who initiated them, who owns the bullion, and even where the gold is now.

  5. Even if gold is there it has to be tied back to certain accounts and that will be impossible to prove unless someone has a sheet of serial numbers. Now if someone gave JPM a pallet of gold to store and has that sheet and the gold is not there…

  6. Duckvision:
    “IMO, the powers will not be held accountable for anything legally until the physical gold is gone.  Any attempt to go after them in the courts will fail.  Look at the Libor scandal.  A few fines and payouts in the millions for trillions of dollars worth of manipulations and rigging of the markets.  Nothing really was done.  It was just a PR stunt move to make it look like the governments went after the banks.  The rule of law is gone or there is two sets of books.  One for the people and one for the elites.”
    I agree with your sentiments. Banksters, though facing some legal heat over Libor, don’t seem to be worried and ‘Fraud as Business Model’ continues to be lucrative.
    I have a question for the board, different from the main argument on this thread, about Libor crimes:  Does anyone know of a specific class-action lawsuit over Libor that provides any umbrella protection to credit card debtors, against the big three American banks involved — JPM, Citi, Bank of America?
    Would surely appreciate any info.
    Rob

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