The Crimes of JP Morgan Chase Bank
Marshall Swing
We have all seen the news of the fall of JP Morgan from grace this week in more than two ways. We have witnessed the beginnings of the fall of the largest commercial bank on the planet, which also happens to have $89 trillion in notional derivatives as bets against failure of interest rate swaps, sovereign countries, and the largest multi-national companies on the planet, among others. They have admitted to the loss of over $2 billion and today it seems we are being prepared for deeper subsequent losses reported in the near future. Rumors abound on this one bet of up to $100 billion at stake.
Jamie Dimon, CEO of JPM will not discuss the trades that have pilfered JPM's coffers this past quarter. The reason given is the House of Morgan has at least $100 billion in their Chief Investment Office (CIO) venture and rumor has it that they have lost to the hedge funds and stand to lose far more. Their stock has fallen 12%. There are other stories of massive problems and lawsuits already filed. - Too big to fail again?
The same story over and over as Congress failed to act in the interests of the American people once again, since the housing and debt crisis of 2008, to regulate and break up these gargantuan banks. They do these things to us all in the name of profit for themselves and nothing more.
What many people are not aware of outside of precious metals commodity trading circles is JP Morgan's well known total dominance in the gold and silver sectors.
I have made it my main purpose, for the last 5 years, to follow open interest positions on the Commodities Exchange, Inc, also known as the COMEX. COMEX open interest is reported each week from Tuesday afternoon, at closing, to the following Tuesday afternoon, at closing, in New York.
Last year, I acquired a historical database that goes back for decades for which I have built an enterprise warehouse model on top of it for analysis of trading by the various traders and their patterns.
What I saw last week, in gold, stunned me.
For those of you unfamiliar with the lingo, the open interest is expressed in contracts, one long for one short, unlike stocks. In stocks yiou can have shorts but they are a small subset of the trading picture. In all futures markets as In gold, there are 100 ounces per contract and in silver 5000 ounces per contract, a 50 to 1 ratio. JP Morgan, and also HSBC bank, are well known as the dominant producer/merchant commercials. See the tables below for the most recent report. The numbers below represent a $54 billion market, for the commercials on the COMEX in gold and roughly $8 billion in silver. What is not as well known is the price link to the unregulated Over the Counter (OTC) market in London where these products trade at a minimum of 100 times face value as opposed on the COMEX. One source reported 300 times in recent years. Those are very large numbers and as said it is an unregulated market.
Managed money, also known as hedge funds. mutual funds, and large institutions, successfully traded away (short covered) 13,652 short contracts at the same time the producer/merchant commercials unloaded over 24,000 of these shorts. There exists only that means that a subset of those contracts were owned on both sides by the commercials. What this also means is that the large speculators picked up over 7,400 shorts as opposite the longs of the commercials and over 6,000 shorts opposite other large speculators and small speculators. The latter would seem to be self defeating proposition because this has rarely, if ever happened in this manner.
24,000 contracts represents 2.4 million ounces. There is a crime against speculators in that of those 2.4 million ounces only 1.4 million ounces in physical silver exists in the COMEX warehouses. But this story is far, far worse because that is only one trading week. Multiply that number by 52 weeks and it comes to 124,800,000 ounces of paper gold. The 1.4 million ounces of physical gold is today worth a mere $2.17 billion. Now to tell you the final picture. Remember I told you those numbers were what traded last week. The far greater number is what is being held by these banks. They have 312,492 short contracts or 31,249,200 ounces short which represents $51,561,180,000. That is 29,849,200 ounces of gold that does not exist and they could not get those ounces if they had to pay $10,000,000 an ounce for them. It is simply a criminal casino betting establishment for them.
In silver, the situation is much more manipulated. If all the speculator longs stood for delivery of physical silver there would be a default on the part of these banks because they have no actual silver. Now you can see the problem?
My experience tells me there is a rotten egg in the hen house and the fox has left this reporting period behind.
The implication I am drawing is that JP Morgan is illegally manipulating the gold market downward in an effort to reduce their short positions and I believe they may have a large speculator helping them do it. For months now the price of gold has been falling and it is well known the commercial banks are causing this manipulation. It has long been theorized they have "help" in their manipulations amongst themselves and that is illegal, by law.
We know well the ravages of the commercial banks on the speculators in this industry and these facts are reported widely inside the industry. What effect does this have on the average American? Since gold and silver price have been manipulated downward, for decades, by the commercial bank enterprises, it makes it impossible for the average American to get a fair price if they go to their coin shop to cash in some silver or gold jewelry.
This is just one in a long list of ways how "the Man" sticks it to the working man and woman, their parents, and grandparents.
It is up to us to bend the ears of our elected representatives, most of us are ignorant on so many Wall Street unfair practices. The voice of the many will and can be heard. The pen is mightier than the sword. I am a son of blue collar grandparents and working class parents and I am angry.
Thank God for working class Americans who unite against tyranny.
If you want the telephone numbers, fax numbers, and email addresses of your elected representatives go here: http://congress.org/congressorg/dbq/officials/ and put in your zip code and press the GO button.
The numbers on gold are below...
___________________________________________________________________________________
Marshall Swing has written a number of articles for SafeHaven and you may check them out here. He blogs here.
___________________________________________________________________________________
Top image: First Street Research Group
Article published here: SafeHaven
URL: http://www.a-w-i-p.com/index.php/2012/05/16/the-crimes-of-jp-morgan-chase-bank