Market Pulse

Market Pulse - Market Pulse

jpmorgan

Comments or Questions EMAIL Chris@: MarketShorter@gmail.com

Let the games begin... JP MORGAN VS. SILVER

2010-11-14

JP Morgan’s short position on silver futures should go down as either one of the most shortsighted or nefarious business moves in its history. As reported on PRN News Wire, “NIA exposed in 'Meltup' that JP Morgan was short 30,000 silver contracts representing 150 million ounces of silver. This is one of the largest concentrated short positions in the history of all commodities, representing 31% of all open COMEX silver contracts.”1 In March, JPM was accused of profiting off silver by illegal manipulating the futures. Since late August; however, silver prices have spiked. JPM now faces two lawsuits one of which involves accusations of racketeering in order to suppress silver futures. Last week the CME group raised the minimum margin requirements on silver purchases from $5,000 to 6,500. The CME has at least temporarily stopped the bank's bleeding.  With all that has been going on behind the scenes, one wonders if JPM had any influence in this virtual bail out?

Hagens Berman Sobol Shapiro LLP announced today that JP Morgan and HSBC face charges of manipulating the market for silver futures and options in violation of federal commodities and racketeering laws in a new lawsuit filed Tuesday in the U.S. District Court for the Southern District of New York.2

What does this mean for traders? The general consensus is that metals will not relent until there is a plausible horizon for the end of the currency crisis and the global depression. In our view, gold and silver still have very high ceilings, perhaps continuing their bull run for the next year or two. As we approach the 1500 mark, I am certain gold will break the 2000/ounce mark by this time next year or even sooner... CONT.

Market Pulse - Market Pulse

 The FED’s printing sprees should create better opportunities for shorting. It’s becoming more apparent that the US is likely caught in a long term, Japanese style stagnation. With QE2 now officially underway, we should become accustomed to these periodical jump-starts in order to revive the morbid economy.

The upward shock we saw today should create ebbs in securities. These should obviously occur during the time between bouts of QE, as the economy falls back into its liquidity trap. The printed money will temporarily ignite stocks on Wall Street, but should find its way into foreign markets and commodities where the prospects and returns look better-- essentially, creating micro-bubbles.

Stock

1 GLD 119.26
+1.02 (0.86%)    
2 INX CA$0.45
0.000 (0.00%)    

Latest Comments