To: carranza2 who wrote (155096 ) 3/23/2020 4:31:37 PM From: sense 1 RecommendationRecommended By
Respond to I don’t understand folks who are salivating at the prospect of JPM defaulting on delivery. I think I recall the rules changing to allow a cash payment in lieu of physical. Yeah, that's obviously true in relation to whatever portion of the trade is tied in with the ETF's and the "little guys"... who aren't ever going to have the SEC / CFTC looking out for them by writing rules that require fiduciaries... not be criminals. But, is that all there is to the trade ? There have been a couple of squirrely things going on in silver over the years... some of which have not been fully resolved... the whole calutron situation (Google: "Oak Ridge Silver" if you don't know about that)... and JPM's probable role in acting as ??? agent for the U.S. government in recycling that pile... or not ? The bigger (as in massive) potential physical liability for JPM... might be to the Treasury... if they were to become demanding. Or, given the scope of time... its possible those sorts of liabilities have been "managed" already... leaving JPM actually acquiring a big pile of physical on their own (or some other client's) account ? The "price suppression" trade... is also not atypical to see when someone with the market power and the will wants to acquire something... and then, the suppression lasts... until it doesn't... The recent "price suppression" trade seems very obviously tied to Europe... which means very little in banking as far as who is behind it... but that fact did expose the connection between the trade and the dollar shortage / Repo crisis... now apparently resolving... which also links it to the money market funds as providing a source of cash funding that trade ? And that structure makes it appear unlikely that it was retail investors in Europe repatriating paper silver for cash ? Not unusual to see Funds trade below target with some discount to asset value when redemptions spike ? But that's not what this is. Accelerated markets generating stresses will very often result in some inadvertent exposure of relationships between things, in trades that are stressed... and seeing those things can expose the "plans" behind them.... I'm not sure that JPM is the bad actor, or the primary bad actor in this story now... but if they are... it's probably the U.S. government making demands on them, the Treasury, and the Judge, and not retail, who they'll have to worry about. The odd pattern in the recent trade... does makes it appear that the recent downdraft in paper silver was tied in to some open ended derivative risks... in Europe... and not some issue controlled by the conversion to cash option that would apply to retail ? JPM might also have been acting only as agent... for the U.S. government... or trading for a customer, like China ? I think there is also a REASON that we suddenly see paper prices diverging from metals... just now... as Mr. Murphy is having his say in his still quiet way... so that the price manipulation in the paper trade... which appears to have ended quietly, four trading days ago... just doesn't work anymore if you're trying to use that trade to accumulate metal at the paper price ? Ooops ? The brokers seem to know something. Much of banking is still conducted entirely outside public view... transaction banks are black holes by law... so until we get transparency (never) on those, and on what the BIS allows in "off books" transactions... and how that might tie into sleights of hand practiced in the metals trade... and in deals being done between banks using metals as money... that got swept into a black hole ? The really big problem... one that will require a short squeeze in physical that can't be settled in paper without the entire global banking system imploding... will be if they've been using the same sleight of hand they've long practiced against retail investors... against each other... substituting slips of paper for weights of metal... in "off books" transactions, even internal to the bank, that have been using (encumbering, hypothecating, lending, trading, etc.) those "metals" they have listed as unencumbered tier one assets that are the core of the fixed capital reserve of the bank. That wouldn't be cricket as far as the rules... but the rules as written (wink, wink) sure seem well designed, if not to encourage it... to make it easy enough to hide it... unless... or until... you lose the trade... and still have the need to replace some secret swap done with that paper slip by delivering a pile of metal... even if you have to deliver it to yourself ? My guess is... the massive fraud conducted in the fake paper silver trade over the years... might well be what lurks at the dark failed derivative heart of the Deutsche Bank debacle... JPM might have been the counter party in that trade that created some new black hole... but they might also have had it come back home to them recently in some "reverse dividend" issued to them... requiring they help fix the Deutsche Bank problem... before it takes down the whole banking system. Mine is all pure speculation, of course... but, since speculating wildly... I'd guess it might have happened the same day Jamie Dimon had his heart attack... when he got the ass end of his trade handed back to him as a tar baby. .
