Ted Butler's new article on JPM's "perfect" manipulation

http://goldsilverworlds.com/price/t...fect-silver-manipulation-cannot-last-forever/

Here is Ted Butler's new twist. Now he is saying JPM's market manipulation, and how they show how they are net buyers in down markets, is simply examples of how "perfect" their manipulation is. So now its not "blatant" manipulation that he has claimed for 20 years, but now that he has been shown why the US will not prosecute them, he now claims JPM has crafted a "perfect" manipulation scheme. Basically any proof JPM can show how they are NOT manipulators, is proof they ARE manipulators. Its a lot like me claiming my neighbor is a robot, and any human acts he may show me to prove he is not is proof he IS a robot.

Can anyone say Manbearpig?

 

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Well... I dunno... My research into the history and purpose of these markets is that they exist for the primary producers and consumers. Anyone who speculates takes a basic risk that someone else knows a lot more.

I find it hard to get excited and impossible to turn outraged. I hope J. P. Morgan does well, because losses hurt. ... Of course, Warren Buffett once said that he loves people who short Berkshire Hathaway because they are telling him where the floor is. If you think that JPM is wrong, put your money in the other direction.

 

That's the thing that has always bothered me. If some people, (like Ted Butler) are so darn sure JPM is manipulating the market, and know how they are doing it, why are they talking? I mean, if I knew FOR SURE how JPM is manipulating silver, how they are doing it, why would I personally simply not beat them to the punch and make a boatload of money? If anyone ever tells you they know FOR SURE how a market is being manipulated, the very first thing you have to ask is "why are they telling me this, and why aren't they a billionaire retired investor yet?". If someone will ever GUARANTEE ME they can tell me exactly how a market is being worked over, I am done working, because I just found a way to become a millionaire/billionaire overnight by frontrunning their trades.

The fact Mr. Butler is not a retired billionaire but has for 20 years tried to sell me his investment advice tells me the value of said advice.

 

From the normal Butler outlook.

Ok, he finally says something is illegal, but I can not find where there is any possible limit to buying/ selling futures, unless they are 'naked' contracts , and if they could even possible be considered such, Butler would have mentioned it. He uses JPM's 'Whale' fiasco ( by ONE man , not the whole company) in securities to show that JPM does the same with PM.

If I had a job dependent on people buying my subscription or ad space for promoting PM, I would try to mimic JPM's trades and make money just like them. His clients would probably be much happier financial. He presents the perfect formula ( It's been around for decades, not new) and JPM has the resources and intelligence service to implement it. I currently own no JPM, but maybe it would be more profitable than PM over the next decade

Ha, I was typing while Chris was posting.

 

Good point. Maybe I should be looking at JPM more as well. To me it simply sounds like they are intellilgent traders.

 

I'm not impressed with Butler or any of the others that cry manipulation at every turn, it's just to far fetched, however, do you guys honestly believe that JP Morgan is an upstanding company? Do you really believe they do morally sound business? Don't you think it's a little far-fetched to think the London whale is the only person in that company that used their mass to try to make a position that he couldn't lose with, even though in the end he did lose...in a big time way.

Like I posted, I think Butler is a little far fetched to cry manipulation with every cent silver drops and vindication with every cent it rises, but to somehow believe that JP Morgan is a saint of a company is just a little naive.

 

Do you have a candidate of a multibillion dollar company that qualifies for your idea of a morally sound business?

I am not sure where you get the "morals", "ethics", "saint" comments from my post. Morals and ethics vary significantly in the population. I said they were knowledgeable, experienced, resourceful, and knew how to trade legally in what Butler said "illegally" futures market. They will never be right all of the time, but they have a much better record than the bullion subscription writers. But if one's purpose is to make money , it is quite possible JPM will serve better than bullion stacking in the next 10 years.

 

Do I belie e they are as upstaning as most other trading firms? Probably. Do I think they are sai ts? Of course not. My only objective in this post was to point out the silliness of some pro-pm writers out there. I believe there is just as much bad writing demeaning pm as well, but those stories usually get brought up by others.

Again, my point has always been do not believe anti-pm popular press, nor pro-pm sellers of pm or "investment newsletters". Both have their own axe to grind. Think for yourself.

 

I understand that my post was directed in a not so positive manner, and do believe they are both harmful entities. One because he is misguided and in turn misguides many, the other because I believe they're crooked and a big part of what is wrong with this society.

My point about ethics is just that, good ethics are doing the right thing all the time, you cannot be morally upstanding part of the time. You either are or you're not, so they don't really get to choose or make it a comparison, it is black and white. You can't advise your clients to buy something you know is bad while you're selling that exact thing with the knowledge it is bad. Also, comparing them to other crappy entities is a waste. Who would advertise "We suck, but not as bad as our competition."? It's something nobody does unless it's parody.

My point is standing in the corner for either of these examples is a waste of time and energy. To me, one doesn't know any better so he keeps beating the drum, the other does deceitful things knowing full and well they're deceitful, and I don't know if either is worse than the other, I do know that neither is helpful to me.

 

I understand it's impossible to prove a negative, but with the obvious concentration of banking power and wealth in the hands of a few corporations, I tend to think the burden of proof is on those claiming that with such concentration of power, and motive to continuously expand profits, or, at least, personal compensation through short-term profits, no manipulation of markets is taking place, including the precious metals markets. It is already established that most trading is done with computer algorithms, which are designed to move markets. In fact, the very existence of HFT can be said to be the proof of market manipulation, in thinking about this as I type this post.

 

More like crooks whose toxic assets from horrific trades are now off the books and kept in the Fed balance sheet with the help of the Fed, thus becoming a public and not merely private liability.

 

I skimmed the article and found this:

Ted Butler has cited high-frequency trading (HFT) and unlimited capital as contributors to market manipulation. He is not unusual in stressing this point. Many individuals have fled the markets due to this manipulation. Perhaps it's not technically illegal, though it ought to be.

I don't mean to sound condescending, but I think the demographics of this forum work against a proper understanding of market mechanics today. The markets are not moved by individual buyers and sellers establishing equilibrium (as taught in old economics textbooks); they are moved by computer programs from firms with unlimited capital. To believe these programs are not rigging markets is about as naive as believing Bitcoins cannot be stolen.

 

Btw, you do know the US will make hundreds of billions from the bailout of financial firms, right? Unlike Chrysler and GM which was just union charity, the US is making profits from the financial industry.

 

Convenient. Just throw out 14 centuries of common law, and assume guilty until proven innocent.

Regarding hft, its the exact same methodology employed before, simply computerized. The SEC has the code, and checks that it is legal, just like previous policies. A friend from my MBA program writes some of the code nowadays. What difference does it make if the trades happen quickly or slowly? We are not talking frontrunning or other illegal activities here.

Regarding "abandoning the market", go ahead. I have written extensively how small time pm investors are not the consumers of the pm market, and frankly they could care less what we think of their market. Come up with your own buy price any way you wish, we have never paid them a dime. You think their markets are manipulated, put you money down and call their bluff. Again, if what this author says is true, why isn't he a billionaire?

 

As convenient as throwing out 14 centuries of common law may be, it seems they find it just as convenient to settle without admitting guilt to millions and even billions of dollars of fines without admitting any wrongdoing as a better way. So we're now back to the goose and gander....

 

Really, First off HFT's objective is not to move markets, its purpose is to take advantage of small inneficiences, such as when MF's are forcedcto re-balace funds. The HFT's can be ahead of the curve and scrape up some pennies. Now, somtime things happen, the flash crash was a great example of this as the algo's did take over. As quickly as the
algo's took the market done, the savy traders saw what was going and jumped in to bring the market back to equilibrium. Net effect if the algo's = 0. This was the most extreme example of HFT we know of.

Now similar things happen all the time on a smaller level, but very very quickly normal supply and demand take over and markets continue to work as always. As futher proof of the algo's net effect, is why are the markets trading at 16x earnings. This is a very realistic multiple in today economic climate. Why didn't the algo's take that all out of wack?

The bottom line is HFT can and does move the markets for short periods of time. This is more of a side effect, then its pupose, and the aberrations are quickly corrected by fundamentals . Net effect of Algo's = 0

 

I guessed I missed the news article where some paid millions, or billions, in penalties relating to a pm market. Please enlighten me.

 

Every market is manipulated, the only questions are to what extent and by whom and why.

Anyone ever heard of the plunge protection team? Or the libor scandal?

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

On 27 June 2012, Barclays Bank was fined $200 million by the Commodity Futures Trading Commission,[5] $160 million by the United States Department of Justice[6] and £59.5 million by the Financial Services Authority[7] for attempted manipulation of the Libor and Euribor rates.[45] The United States Department of Justice and Barclays officially agreed that "the manipulation of the submissions affected the fixed rates on some occasions"

If there is money to be made by manipulation, then it will be manipulated.

United States Of America Attorney general Eric Holder already admitted he can't prosecute the mega-banks. So why wouldn't they manipulate the markets for profit?

Even if they are caught like was the case in Libor, they just have to pay a fine that is a fraction of what they made with their manipulation.

A lot of people can't connect the dots or don't want to admit the truth that they are getting conned. It's just human nature, and unfortunately that is why con artists have always existed throughout history, the public is always stupid enough or uninformed enough to believe them.

Unfortunately the most successful con artists are now running the mega banks and central banks of nearly every country in this world. There are whistleblowers out there but they are ignored by the mainstream media because they are owned by the people doing the manipulation.

Andrew Jackson referring to the central bank of the United States:
Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. –Andrew Jackson

"The few who understand the system, will either be so interested from it's profits or so dependant on it's favors, that there will be no opposition from that class." — Rothschild Brothers of London, 1863

"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild

 

Exactly. It has already been proved that banks manipulate markets. The question here is if the PM market specifically is manipulated. By reading the posts here, one would think Libor and other scandals never even occurred, because of course the banks are beyond such ignoble actions.

 

I admit I was not clear in the post you responded to. What I meant to say is that my working assumption is that the markets, all markets, are manipulated. My intent was not to make any affirmations on actual illegality committed, since I am not a lawyer, but rather to point out that more rigorous laws (or their enforcement) are needed.

Regarding the abandonment of the market by retail and other traders, I should point out it's not just PM investors who have done so. I saw an interview some months ago of Mark Cuban, a billionaire software pioneer, complaining about market manipulation by HFT and the lack of transparency it has brought to the markets. My point is that it is not just Ted Butler grousing, though he does so specifically regarding silver. At the very least, there should be an acknowledgement, in my view, that Mr. Butler is not unusual in his views of market manipulation.