US ends long-running silver probe

Baley

taking no action

The CFTC said the allegations "asserted that because the prices for retail silver products, such as coins and bullion, had increased, the price of silver futures contracts should have also experienced an increase."

Such allegations were not found to have merit. As has been said, silver futures concern large amounts of industrial grade silver, and are not expected to match the per-ounce prices of retail products marketed to the public. The latter have additional fabrication, advertising, handling, and seller profit costs built in, and it is those costs (prices) which reached a retail frenzy in 2011

ricko

Wippy dippy doo..... all that - with great expense - for a ho hum final report..... was just a boondoggle to begin with. Cheers, RickO

derryb

Funny how Bart Chilton of the CTFC disagrees with the findings.

Baley

So, I'm sitting in freshmen astrophysics at UCLA, and the prof says, the Sun is a main-sequence G2 type yellow star, which will be in the current life-supporting phase for another 4 to 6 billion years, and this coed, asks, concerned, "did you say Million or Billion?" and he says, "BILLION", and she goes, "WHEW!!"

And then this class cut-up raises his hand, and asks, "is it true that they've got a probe going to Uranus?" and that's when we lost it..

managed an A-, and some of the best memories of those days... I ended up dating the blonde for a few weeks

roadrunner

<< <i>taking no action

The CFTC said the allegations "asserted that because the prices for retail silver products, such as coins and bullion, had increased, the price of silver futures contracts should have also experienced an increase."

Such allegations were not found to have merit. As has been said, silver futures concern large amounts of industrial grade silver, and are not expected to match the per-ounce prices of retail products marketed to the public. The latter have additional fabrication, advertising, handling, and seller profit costs built in, and it is those costs (prices) which reached a retail frenzy in 2011 >>




I suspect if any of us here on the forum did our own investigation we would find major issues in the way silver has traded the past 10 years, in particular during 2008 when silver derivatives rose to $200 BILL notional....or about 15 yrs worth of silver production. The fact that the CFTC "found nothing actionable" doesn't mean there wasn't anything. Since when dp the SEC and CFTC have any teeth? It's almost like asking the PNG to police their member dealers. The SEC couldn't even police Bernie Madoff over a 15-20 year period despite evidence placed in their lap. Why do we think that the more lowly CFTC would do any better policing the giants at JPMorgan (ie USTreasury), Goldman Sachs, and HSBC? It's clearly in the interest of the USGovt to have these 2Big2Fail banks to "manage" as many of the commodity markets as is deemed necessary (ie lower perceived inflation and less competition for the USD and USTreasuries).

Baley

So... who got harmed?

roadrunner

Duplicate post.....deleted.

roadrunner

<< <i>So... who got harmed? >>

............are you serious? Might as well be asking who got harmed by the MBS fraud. No one, right?

All the little people and managed money funds that bought silver all along the way from 2001-2013 were harmed. That's like saying who gets harmed with USDollar and USTBond manipulation? Look no further than this board for dozens (or hundreds) of collectors and dealers that were harmed by BSC/JPM's silver manipulation actions in 2008.

Just the fact that the silver "investigation" took 5 years to find "nothing prosecutable" suggests there was something very wrong. 5 years? Can you imagine the Warren Commission taking 5 years to find that Oswald was the lone gunman? Send William K. Black in there (S&L investigator from the 1980's) and I assure you that within days or at most a few weeks he'd have major actionable evidence of wrong doing. Black successfully prosecuted thousands of wrongdoers from the S&L crisis. Many went to prison and were levied heavy fines. And that was only over a "few billion" dollars. Funny that the $10-$20 TRILL MBS and derivative's fraud from 2002-2010 has yet to see a single banker prosecuted, let alone sent to jail. They got big bad Bernie Madoff though ($65 BILL vs. $15 TRILL).

There are too many skeletons in the closet from 1995-2012. The govt can afford to prosecute any of these guys w/o drawing many of their own into the fire. The American people wouldn't react favorably to the amount of fraud that was hoisted upon them over the past 10-15 years. Many wouldn't even believe it to be possible if presented with irrefutable evidence.

cohodk

major issues in the way silver has traded the past 10 years

2003---$5
2013---$22

Thats a pretty damn good return which only the idiots who bought into the mania and hype (which happens with EVERY ASSET CLASS) have any beef. Interesting that the same people who find major issues with silver probably also find major issues with the stock bubble in 2000 and real estate bubble in 2007. PMs are not "special". They are just another asset class. Those who understand will profit, those that do not will look for conspiracy and manipulation. Been this way for centuries, actually forever.


Just the fact that the silver "investigation" took 5 years to find "nothing prosecutable" suggests there was something very wrong

Sounds to me like a very thorough and exhaustive investigation.


The American people wouldn't react favorably to the amount of fraud that was hoisted upon them over the past 10-15 years.

Especially if they look at the spending of the Govt on worthless programs. And of the egregious benefits packages bestowed upon civil servants. And of incessant desire to keep people alive an additional 3 months.

TwoSides2aCoin

Through collective bargaining agreements, this task is now assigned to TSA workers who, due to sequestering, are required to re-use rubber gloves.

LochNESS

Baley, I took astronomy and botany in college to avoid chemistry and biology (took enough of that in high school). Anyway, on the first day of astronomy, the professor explained it was not an astrology class and proceeded to define astrology in case anyone was confused. At least a dozen people promptly got up and walked out. I loved learning about black holes and such, and also managed an A. Unfortunately I have forgotten about half of it. Were it not for the Science channel I probably would've forgotten the other half, too.

roadrunner

CFTC works for the Federal Govt - it's as simple as that

Sorry, not buying the "thorough" 5 year investigation angle. It took them 15-20 years to "throughly" investigate Bernie Madoff....while never finding anything.
These are our tax dollars at work. Or should I say, tax dollars wasted. The investigation of the 2008 market crash is still going on as well....5 years now. No one
has yet to be found culpable...other than Bernie. That's the most amazing single fact of the "regulation" of our financial "markets." They already prosecuted Martha Stewart
for insider trading so I guess they can't use her again.

jmski52

The investigation of the 2008 market crash is still going on as well....5 years now. No one has yet to be found culpable...other than Bernie. That's the most amazing single fact of the "regulation" of our financial "markets."

All anyone has to do is to listen to one interview with Bill Black to begin to understand the problem with lack of enforcement and lack of prosecution. Of course, the alternative to knowing the facts is to pretend that there's nothing there.

roadrunner

<< <i>The investigation of the 2008 market crash is still going on as well....5 years now. No one has yet to be found culpable...other than Bernie. That's the most amazing single fact of the "regulation" of our financial "markets."

All anyone has to do is to listen to one interview with Bill Black to begin to understand the problem with lack of enforcement and lack of prosecution. Of course, the alternative to knowing the facts is to pretend that there's nothing there. >>



Yes, listening to any of the 20-30 minute Bill Black utube interviews on financial regulation are eye openers. Here's a former banking regulator and University Professor who for some reason is spouting all these "untruths" about the current regulatory environment.

cohodk

Of course, the alternative to knowing the facts is to pretend that there's nothing there.

Or the alternative to facts is to declare manipulation or conspiracy.

derryb

Markets aren't manipulated.

If just one of them were then any of them are open game.

roadrunner

Lemme see:

Mortgage Backed Security manipulation
Electrical rate rigging
Libor rigging
Interest rate rigging
Currency rigging


Precious metals' rigging? Nope...no rigging there cuz the CFTC says so.


One has to wonder if the Chairman of the CFTC's (Gary Gensler) various ties might have influenced his decision making just a wee bit:

Gensler was Undersecretary of the Treasury and Assistant Secretary of the Treasury in the United States under Rubin and Summers during the key deregulation years of 1997-2001. He played a key role in exempting otc derivatives from regulatory oversight. He joined Goldman Sachs in 1978 and spent 18 years there. He became a partner at the age of 30, youngest in Goldman Sachs history at the time. He later became head of the company’s fixed income and currency trading operations in Tokyo by the mid-’90s, and eventually the company’s co-head of finance. Yeah, that's the guy I'd want to lead an investigation on the possible manipulation of the silver futures market by the 2Big2Fail banks.

Here's Jesse's (of Cafe Amercain) take on the investigation being closed:

It is the credibility trap in action. The manipulation of the silver market has the de facto sanction of the government and the regulators who have turned a blind eye to it for so many years that to admit it now would be awkward and embarrassing. The TBTF banks hold so much power because they can threaten systemic destruction, and also ‘know where the bodies are buried’ so to speak.

It is ironic that the US system has now devolved into a serious of threats of destruction and power standoffs, in the both the political and financial systems. That is a symptom of lawlessness. I think that if reform does come it will come slowly, as those in political power try to operate behind the scenes to repair things without risking themselves, and upsetting their personally lucrative arrangements and careers. Transparency is not possible because too many still in power are complicit, and speed is not desirable for them because let’s face it, the system is working for them as it is.....

jmski52

It is ironic that the US system has now devolved into a serious of threats of destruction and power standoffs, in the both the political and financial systems. That is a symptom of lawlessness. I think that if reform does come it will come slowly, as those in political power try to operate behind the scenes to repair things without risking themselves, and upsetting their personally lucrative arrangements and careers. Transparency is not possible because too many still in power are complicit, and speed is not desirable for them because let’s face it, the system is working for them as it is.....


The ending in Orwell's Animal Farm puts this succinctly:

"But they had not gone twenty yards when they stopped short. An uproar of
voices was coming from the farmhouse. They rushed back and looked through
the window again. Yes, a violent quarrel was in progress. There were shoutings,
bangings on the table, sharp suspicious glances, furious denials. The source of
the trouble appeared to be that Napoleon and Mr. Pilkington had each played
an ace of spades simultaneously.

Twelve voices were shouting in anger, and they were all alike. No question,
now, what had happened to the faces of the pigs. The creatures outside looked
from pig to man, and from man to pig, and from pig to man again; but already
it was impossible to say which was which."

cohodk

So I guess everything is always manipulated. I think this is called normalcy. Bottom line is PMs are worth 4-5x more today than a decade ago. PMs should be ecstatic rather than lamentful.

VanHalen

<< <i>So I guess everything is always manipulated. I think this is called normalcy. Bottom line is PMs are worth 4-5x more today than a decade ago. PMs should be ecstatic rather than lamentful. >>



It has been normalcy for 5 years at least. We have to accept it because most of us will not be able to change it. In the "It's Quiet here" thread someone said PMs are too high to buy and too low to sell. I think a lot of us feel the same but we still will have a nice +/- 10% range to trade in. Try to make it fun, life's temporary anyway.

jmski52

So I guess everything is always manipulated. I think this is called normalcy.

The difference between then and now is that the government regulators weren't complicit then. Obviously, you didn't google Bill Black so I can't really help you much.

jmski52

In the "It's Quiet here" thread someone said PMs are too high to buy and too low to sell. I think a lot of us feel the same

I try not to give the market too much power over my mix of investments. We've been conditioned to always be buying something, but sometimes it's interesting to "do nothing" and see what happens.

(What happens is that cash starts to pile up, which isn't really a bad thing.)

cohodk

<< <i>So I guess everything is always manipulated. I think this is called normalcy.

The difference between then and now is that the government regulators weren't complicit then. Obviously, you didn't google Bill Black so I can't really help you much. >>



I don't value any one persons opinion greater than another. I have no way of confirming Black's comments. And thank you, but I don't need any help.

My idea of normalcy seems to have been skipped over. Govt regulators behave and act today just as they did 20, 50, 100, 200 years ago. There has always been and always will be corruption and collusion. This is normalcy.

For some reason PM manics seem to know the "correct" value of metals better than the market. This is the epitome of arrogance and is why fervent bulls in any asset class get their a$ses handed to them.

derryb

FWIW Bill Black was a federal regulator that held many, many wrongdoers accountable during the LTCM. Of course this was before the current "hands off" approach by regulatory agency. Black is one of the mose knowledgeable, outspoken critics on lack of accountability.

jmski52

FWIW Bill Black was a federal regulator that held many, many wrongdoers accountable during the LTCM. Of course this was before the current "hands off" approach by regulatory agency. Black is one of the mose knowledgeable, outspoken critics on lack of accountability.

Now you've gone & done it. You've made it too easy to see that it's not the same as it was 20 years ago, but I'm sure we'll get another rationalization that regulators still act the same now as they did then. If you are winning bets mainly because of QE, you become invincible.

Bill Black is one of the prosecutors who prosecuted a couple thousand of those cases of financial malfeasance. Yeah, he does know what he's talking about.

derryb

"It can't be true, I read it on the internet."

derryb

<< <i>Govt regulators behave and act today just as they did 20, 50, 100, 200 years ago. There gas always been and always will be corruption and collusion. This is normalcy. >>


The Office of Thrift Supervision, in the aftermath of the 1980's S&L crisis, brought over 3,000 administration enforcements actions (lawsuits) against identified perpetrators. Bill Black was the the leading prosecutor in many of these cases. Unless there was little wrong doing leading up to and following the 2008 financial crisis I believe it is very much safe to say that Govt. regulators no longer act as they are paid to act and Wall St. as a whole has been given a "hands off" blessing. This is a result of the revolving door between Wall St. employment and government "service."

"Our system Is so flawed that fraud Is mathematically guaranteed." -- Bill Black




<< <i>I don't value any one persons opinion greater than another. I have no way of confirming Black's comments. >>


My suggestion would be to turn off the evening news and go to the library (or use the one at your fingertips) and do some research. A solid opinion can only be formed after careful consideration of the opinions of those that have much more knowledge on the subject at hand. Bill Black's opinion and expertise can easily be confirmed by anyone who cares to confirm it. An investment in knowledge pays the best dividends

roadrunner

<< <i>I don't value any one persons opinion greater than another. I have no way of confirming Black's comments. And thank you, but I don't need any help.

You should value his opinion over others as he was a regulator for the govt in the midst of the bigging banking crisis up unti that time. He sent thousands of people to jail and/or
fined them. How many people has Gary Gensler sent to jail? How about any govt banking regulator in the past 5 years. How many people have they sent to jail? Clearly, govt
regulators do not act like they did in the 1980's when the S&L crisis occcured. On top of that 5 senators took a lot of heat for their role in it. How many congressmen or senators
have taken heat like that for the 2008 crisis? The only normalcy is that regulation has been consistently removed since the 1930's. The level of corruption and collusion is on a far
grander scale today than at any time in the past 80 years. That's normalcy I guess. It's the "new" normal. When it comes to people I can believe, I'll go with guys that were on the
front line working FOR the government. When they have issues with how things are today, that's worth listening to (ie Bill Black, David Stockman, Paul Volcker, and others).

My idea of normalcy is to have the regulators do their job. Not seeing much of that anywhere. But then again, the bankers are doing God's work.

cohodk

So I guess what you are saying is that there have never been outspoken critics of our Govt or regulatory agencies?

You guys will always believe in conspiracies and manipulation theories. Im sorry.

jmski52

lol, the metals were just bumbling along with no particular direction this morning while I'm having a cup of coffee, and BOOM - the next thing I know, Gold Down $33 and Silver Down $0.80.

It can't possibly be anything but normal market action. duh.

derryb

the NEW normal. accepted as regular normal by some.

cohodk

<< <i>lol, the metals were just bumbling along with no particular direction this morning while I'm having a cup of coffee, and BOOM - the next thing I know, Gold Down $33 and Silver Down $0.80.

It can't possibly be anything but normal market action. duh. >>



the NEW normal. accepted as regular normal by some.


Why not? Havent they had hundreds of 3% daily moves of the last 40 years? Seems like quite normal trading to me. Why are you always looking for something nefarious?

I think you are just really confused as to why political chaos and potential "default" are not having a positive effect on PMs prices as has always been preached.

derryb

I think you are just really confused on what i mean by "new normal." Possibly confused in other areas as well.

cohodk

<< <i>I think you are just really confused on what i mean by "new normal." Possibly confused in other areas as well. >>



Very typical response. Thanks for reinforcing my theories on investor behavior.

VanHalen

<< <i>lol, the metals were just bumbling along with no particular direction this morning while I'm having a cup of coffee, and BOOM - the next thing I know, Gold Down $33 and Silver Down $0.80.

It can't possibly be anything but normal market action. duh. >>



Government shuts down and bam! Don't want people getting scared and piling into PMs. No better way to insure it than a big hit...........

Gold down 3.5% in one hour this morning. Gimme a break.

OperationButter

Reason for the decline, no regulators working...

mariner67

Anyone jumping into USLV right now?

jmski52

Why not? Havent they had hundreds of 3% daily moves of the last 40 years? Seems like quite normal trading to me. Why are you always looking for something nefarious?

I think you are just really confused as to why political chaos and potential "default" are not having a positive effect on PMs prices as has always been preached.


I think you are confusing two separate phenomena. Tell me from your charts, who actually sold - all together and at once? Who do YOU think it was? Normal trading, pffftt! The banks can slam metals any time they want, and nobody cares. That's your new normal. No biggie, most coherent people know what's valuable.

The second question deserves some thought. Political chaos? There's no political chaos I can see. I don't see politicians being thrown out of office in droves. I see 95% retention. There is no political chaos, which is why our politicians feel so comfortable in making their inside deals, over and over.

Potential "default"? Default on what? They were selling bonds just this morning (to each other and to those of us dumb enough to buy gov't debt). There's been no default, other than the continuous one from money dilution. As I heard pointed out, there's about $200 million/day in tax revenue coming in, and it has NO trouble getting spent.

If anything, when this "shutdown" becomes a "start back up", you can pretty much surmise that QE will ramp up to about $100 BILLION per month. It's not a question of "if'. But these are just the "fundamentals" and don't really dictate what happens in the markets.


Very typical response. Thanks for reinforcing my theories on investor behavior.

You're entirely welcome.