CFTC to Investigate Silver Manipulation

This from the Wall Street Journal:

With silver prices falling this past summer, silver bugs world-wide set out to prove that their metal was in short supply and market manipulation was at work. They bombarded federal regulators with hundreds of emails crying foul play and demanded answers.

Though such pleas proved futile in the past, this time the rousing chorus grabbed regulators’ attention. On Wednesday, the Commodity Futures Trading Commission confirmed that there’s an investigation into the silver market.

“We take the threat of manipulation in the futures and options markets very seriously and employ a number of measures to prevent, identify and prosecute it,” said Stephen Obie, acting director of the agency’s division of enforcement.

Silver investors have argued that a handful of U.S. banks have been controlling a large portion of silver’s short positions — or bets that prices will decline — on Comex division of the New York Mercantile Exchange. Official data from the CFTC showed that two U.S. banks had increased short positions in the silver futures market between July and August by 450% and controlled 25% of the total open interest.

“The proof that this selloff was criminal lies in public data,” wrote Theodore Butler of Cape Elizabeth, Maine, in August in a silver newsletter. “The concentrated sale of such quantities in such a short time” caused silver’s fall, wrote Mr. Butler, who for many years has been vocal about purported silver-market manipulation. In September he reiterated to readers that they should email the CFTC.
[more…]

Update 11/4/2008: Ted Butler has commented that he doubts this investigation will bear fruit. He says no investigation is needed; all the CFTC has to do is look at their own public reports to see evidence of manipulation.

And then I discovered this startling nugget of info: guess who’s on the President’s “Plunge Protection Team”–the very same team that’s behind the bank(s) that are used to manipulate the markets?

Here’s the PPT member list from Wikipedia:
 
PPT Exposed
 
See that last entry? The Chairman of the CFTC is part of the manipulation team. DUH! Guess this “investigation” is “being handled.” Yep, **now** you’re getting an idea of how corrupt the system is!

Let’s join Jim Sinclair and Bob Coleman and BUST COMEX gold and silver!
Sinclair Sez “Help Me Bust Comex”
This Guy Plans 2 Kill “Paper” Silver
Warning: COMEX May Default on December Gold
◊◊◊◊ Now: Gold @ $876.00, Silver @ $13.22, USDX @ 77.48 ◊◊◊◊
◊◊◊◊ Now: DJIA 11,143.13

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14 Responses

  1. It will end when unemployment starts forcing people into taking retirement funds to pay mortgages and eat, oh, ya, and we have the collapse of the business realestate market collapse on the horizon

  2. The New York Post reports-

    “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”.

    Read more: http://www.nypost.com/p/news/business/feds_probing_jpmorgan_trades_in_gZzMvWBqOJpB55M7Rh9vwM

  3. Update considering the last data:

    Dear Sir or Madame,

    As of August 5, 2008, one or two U.S. banks were short 33,805 contracts.
    33,805 contracts are the equivalent of 20-25% of the annual world mine production.
    According to the February Bank Participation report, two or three U.S. banks held a record net short position equal to 15% of total world annual production of gold, a staggering and unprecedented number, exceeded only by the absurd percentage in silver (currently 20%).
    a) How much gold or silver should one bank sell (naked) short, for you to think about a manipulation of the market and begin spontaneously an investigation?

    On December 2, as silver closed at $9.57, exactly 2 U.S. banks held a net short positioning of 24,555 contracts. The CFTC reports that as of the same date all traders classed as commercial held a net short positioning of 24,894 contracts. So, the 2 U.S. banks, with one particular Fed member bank probably holding almost all of it, held a sickening 98.64% of all the collective commercial net short positioning on the COMEX silver futures market.
    According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, two large reporting U.S. banks held zero long and 27,189 short futures positions in COMEX silver futures as of February 3. All commercial traders as a group held a net short silver position of 33,173 contracts that same day; so just two banks held 81.96% of all the COMEX commercial net short positioning for silver.
    b) Is this not a infringement against the CFTC’s anti-concentration rules?

    As of the close of business Jan 20, a new multi-year record was set in the percentage of the silver futures market held by the 4 largest short traders, at 48%. And when all spreads are removed from both the non-commercial and commercial categories, as is proper, the true net short position of the 4 largest traders runs over 66% of the entire COMEX futures market, the largest silver market in the world. In other words, 4 traders hold two-thirds of all the true short positions on the COMEX.
    c) How big should be the concentration on the short side of the Comex, for you to stop inquiring and intervene?

    According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, just three U.S. banks held a collective net short position in the COMEX gold market of 111,190 contracts while all commercial traders as a group reported a net short positioning of 177,589 contracts. So, three U.S. banks represent a shockingly large 60.57% of all the commercial net short positioning on the COMEX for gold.
    As the February BP report indicates, one or two U.S. banks held a 29% share of the COMEX silver market and two or three U.S banks held a 32.1% share of COMEX gold futures.
    As large as the current gold and silver percentages of the market held by one, two or three U.S. banks may be, those percentages are grossly understated because spread positions are included in open interest totals. Remove all spread positions (non-commercial and commercial) and the share of the market held by one or two U.S. banks in silver rises to 41.5%, and not 29%. In gold, the share of the market held by two or three US banks is really 45%, not 32.1%.
    d) How big should be the concentration in the net share of a market of the Comex for you to suspect a manipulation and begin spontaneously, that means without the pressure of investors or of the Congress, an investigation?

    Best regards
    MN

  4. Dear Sir or Madame,

    I live in Germany and apologize for my english.
    I’m trying since months now to get an answer from the CFTC to some questions, but I got none till now.

    I wrote to the following recipients:
    Silverinquiry@cftc.gov, Wlukken@cftc.gov, Mdunn@cftc.gov, BChilton@CFTC.gov, Jsommers@cftc.gov, Alavik@cftc.gov, Sobie@cftc.gov

    Each question can be answered with a simple number.
    I don’t ask for an answer from a commissioner. It’d be enough from a member of their staff.

    Mr. Chris Powell of GATA informed me, that the CFTC has answered many questions about this issue posed by US citizens.
    Maybe the CFTC think that the manipulation of the silver prise is an US issue.
    I think, not only US citizens have a right to know what is going on at the Comex.

    That is the reason why I’m begging someone of you to pose these questions to the CFTC, and then, in the case of an answer, to be informed about it.

    I thank you in advance for your help.
    Best regards
    Marco Nussbaum
    goldsilber68@hotmail.de

    Following my mail to the CFTC:

    Dear Sir or Madame,

    a) According to the Bank Participation report in Futures Markets for August, as of July 1, 2008, two U.S. banks were short 6,199 contracts of COMEX silver (30,995,000 ounces). As of August 5, 2008, two U.S. banks were short 33,805 contracts of COMEX silver (169,025,000 ounces), an increase of more than five-fold.
    That’s equal to 20% or more of the annual world mine production or the entire COMEX warehouse stockpile, the second largest inventory in the world.

    Could you please tell me how many contracts the largest trader held short in COMEX silver futures on 8/5? I am not interested in its identity. I’d like only to know which was its share of the total short side of the COMEX silver futures market.

    b) The Commitment of Traders Report for positions held as of 7/25 shows, that in terms of the percentage of the total COMEX silver futures market, the 8 largest traders hold 81% of the entire short side, once all spreads are netted out.

    You should not find a major market with a larger concentration by U.S. banks than the 28% held by the one or two in silver, long or short on 8/5. And the 28% concentration listed in the Bank Participation report in Futures Markets is not adjusted to remove spreads, which gooses the percentage of real concentration even higher, to more than 36%.
    This means: one (maybe two) U.S. bank held a net 36% share of the entire COMEX silver market. The same one or two U.S. banks hold 82% of the total commercial net short position.
    This was not enough for you to begin an investigation. You began an investigation only in september because of the growing complaining of investors.

    How big should be the net share of the short side of the Comex silver futures market for you to suspect a manipulation and begin spontaneously an investigation?

    c) As of August 5, 2008, one or two U.S. banks were short 33,805 contracts.
    33,805 contracts are the equivalent of 20-25% of the annual world mine production.

    How much silver should one bank sell short (maybe naked short), for you to think about a manipulation of the market?

    d) On December 2, as silver closed at $9.57, exactly 2 U.S. banks held a net short positioning of 24,555 contracts. The CFTC reports that as of the same date all traders classed as commercial held a net short positioning of 24,894 contracts. So, the 2 U.S. banks, with one particular Fed member bank probably holding almost all of it, held a sickening 98.64% of all the collective commercial net short positioning on the COMEX, division of NYMEX in New York.

    Is this not a infringement against the CFTC’s anti-concentration rules?

    e) As of the close of business Jan 20, a new multi-year record was set in the percentage of the market held by the 4 largest short traders, at 48%. And when all spreads are removed from both the non-commercial and commercial categories, as is proper, the true net short position of the 4 largest traders runs over 66% of the entire COMEX futures market, the largest silver market in the world. In other words, 4 traders hold two-thirds of all the true short positions on the COMEX.

    How big should be the concentration on the short side of the Comex, for you to stop inquiring and intervene?

    Best regards
    Marco Nussbaum
    Germany

  5. I agree with Stan. Nothing will be done at this time. Just how long can this charade be continued?

  6. Sherlock:
    Thanks for making my day!

  7. Choko laden:
    Yep, criminal 2 the core, I’m afraid.
    BTW bin Laden couldn’t blow up G20: he’s dead.
    No, really.
    https://meltdown2011.wordpress.com/index.php?s=osama

  8. ? WHO
    killed the COMEX………? ?

    It was the……BUTLER

    Ted Butler

  9. NOW mines all over the world are closing, due to this Paper Fraud
    BUT GM must be saved…..
    Well, NOT buy me, I will NEVER buy ANY American Products AGAIN….
    THAT system is rooten to the CORE…I am FED up

    Isn’t it strange, that Bin laden doesnt blow up the G20 leaders

    or some bankers…..

    WHO are the REAL TERRORists.

    The same devils, that are in charge and ALREADY have the SOLUTIONS.

  10. Stan, I think you’re right on. Thanks for reading!

  11. The banks are manlipulating silver but the cftc will find nothing wrong because
    it’s like investigating your big brother. The people that went long with silver are big losers and the banks that shorted silver are big winers and now have your money and there isn”t anything that will be done. thank you very much.

    stan

  12. […] – Sober Prediction for Nov. 2009  – Warning: COMEX May Default on December Gold  **updated** – CFTC to Investigate Silver Manipulation  – Y the Gold & Silver Takedown?  **worth reading** – Quit DOW Now! **if U only read 1 […]

  13. […] CFTC to Investigate Silver Manipulation **updated** – 3 Reasons Y Gold Is Down **new** – Roubini Sez “Panic May Force […]

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