silver train leaving the station?

[jpetr48]

Re: silver train leaving the station?

Largo Winch,
Thanks for the recommendation.
PALL is a superstar. I check it on my charts and there is not much upside until we have a decent pullback with stock market. Though not the best looking girl/guy at the dance, PPLT platinum and like equities have a greater reward/risk ratio.
Joe

[Adeptus]

Re: silver train leaving the station?

Nice work on possible causes Adeptus. I think managed money are the Goldman Sachs and UBSs of the world. The bullish sentiment is very strong. Seeking Alpha had 5 articles today on the front page and the FT had an article on silver (not front page yet). For entertainment, go to the yahoo message board for slv. Someone named Wynter Bentor is posting messages giving very reliable signals ahead of time. They declared their last posting on Wednesday of this past week. This person is training a group of sharks to hunt after blood.

Thanks, found her messages here:
http://search.messages.yahoo.com/sea...thor&within=tm

I just spent all Saturday reading up on silver, and now all this plus 5x Seeking alpha articles. There goes my Sunday, oh well, at least I should feel a bit more confident come Monday I managed to enter the market at $13, and then recently again at $30 just before this recent 7% spike. I can still make a couple more sizeable entries, but I'm also a bit skeptical about this whole Hedge Fund/Wynter Benton trying to crash the COMEX for a 20-30% profit for non-delivery. Historically, price always dips around Options expiration dates. Could Wynter Bentor possibly be one of (warning: swearing) Blythe's Monkeys suckering in all the retail investments for another massive raid?

Speculation is fine but I'd rather know who is at the other end of the table or wait until the shorts shake the leaves off the trees. Let's try to make the complex simple and if we cant, buyer beware.

Agreed.

[jpetr48]

Re: silver train leaving the station?

Whatever is being fixed in these markets is two steps ahead of where we are now.
Two suggested goals: 1) buy on dips, hold, repeat - don't sell with volatility high 2) position for junior miners in next correction and junior oil producers - these guys are not buy and hold. I am using software and research service as cover.

I doubt Wynter is one of Blythe's monkeys. She and JP have enough of PR and hounds on her door step. No big company wants the headlines JP has received from this silver shakeout.

A CS Lewis fan will be posting all of Wynter's postings with his forensic take at http://screwtapefiles.blogspot.com/

[oddlots]

Re: silver train leaving the station?

I have no way of truly knowing. BTW, can anybody find a definition of who exactly "managed money" might be?

My money is conspicuously "unmanaged" at the moment so I'm stumped.

The use of that phrase by anyone claiming competence seems very suspect to me (and I don't mean it's use by you adeptus.)

Just sayin.

[chedir007]

Re: silver train leaving the station?

Just came back from the "Silver Summit" Investment conference held in Glendale, AZ (Feb 18/19th) - a free event hosted by Cambridge House or something. First time ever I attended such an event. At a macro level, did not learn anything earth shatteringly new but it was good to get confirmation from live/breathing speakers of all the things one gets to read anyway from certain effective internet sources (iTulip, King World News, JesseCafeAmericain etc).


Some takeaways:


1) A lot of talk/questions about Silver "backwardation" and according to speakers, how this is truly an abnormal/unprecedented for Silver. Apparently a sign that paper markets are loosing control. Some nuances obviously exist (Antal Fekete mentioned that although his friend Jim Turk is saying "silver is in backwardation", he says we are not effectively there "yet" but the trend is definitely going there); overall, high optimism for silver (what else at a Silver Summit?)

Antal also mentioned the silver miners (having learnt from their gold miner cousins' mistakes in past years) are strategically mining and selling the "tougher to reach" ores now and keeping the easier stuff for later. This point made me perk up: I have avoided investing too much in gold miners (EJ has mentioned in past how poorly run companies in general this sector can be) - but could silver miners be different from gold miners in terms of effectivity in running a business? No further details were given on this topic at the talk - but as David Morgan pointed out recently, silver miners are still lagging (e.g. SIL) the recent explosion in silver prices.


Ted Butler also gave some talks and it was interesting to hear he doesn't think Silver will be monetized since there is not enough to go around and its industrial usage.


2) Michael Berry (of Morning Notes) gave an interesting talk on "Critical metals" and next investment opportunities- including Manganese (critical for making steel), and graphine (for nanotechnologies of the future). It was stunning to hear how much USA currently depends on China and other countries for such elements besides REEs.

[dropthatcash]

JPM silver story is a complete farce!!!

19 February 2011

Silver Bankers May Be Sitting on Big Derivatives Losses and the Fed May Be Funding Them

My question is simple. What are bankers like J.P. Morgan and HSBC doing playing in such size in this market? What is the economic and productive benefit? Perhaps there is a good answer. The taxpaying public certainly deserves to know. The CFTC says they have looked into this, but the detailed results of their findings remain less than forthcoming.

IF this is legitimate hedging then all well and good, but then there is no justification for secrecy. If these are trading positions held by the bank, or by the bank as agent for speculators, then there may be a greater reason for secrecy, but the magnitude of the shorts is far out of bounds in size. Ten years of production is not a short position, but the entire market and then some.

The CFTC certainly appears to be acting poorly as the market regulator for the people. Given the regulatory failures of the past ten years that lead to the financial crisis, it would be useful if the Congress were to make very pointed inquiries regarding this situation. But given the performance of the Congress, and their affinity for the deep pockets and big contributions of the financial sector, that may be too much to hope for.

The comment and analysis below is from Harvey Organ's most recent commentary.

"The huge rise in silver price has caught the silver bankers totally offside on the silver banking. The BIS data released in November (www.goldexsextant.com) shows that the G 10 bankers have collectively sold forwards and swaps to the tune of 4 billion oz and short naked calls for another 3 billion oz. The total, 7 billion oz represents 10 years of production. If you just do the forwards, then it is 7 years of annual silver production.

Let us say the average cost of acquiring these derivatives and forwards equate to $15.00 for silver. Thus collectively the entire G10 bankers are feeling massive pain (losses) to the tune of:

7 billion oz of silver( 32.30-12.00) = 7 billion x $17.30 = 121.1 billion dollars of losses.

This is in a market of only 14 billion dollars. It begs the question to what economic need was this done.This is still off balance sheet.

If you include only the forwards or swaps (the lending of actual metal to which nothing has come back yet) then the losses are:

4 billion x 17.30 or 69 billion dollars.

Regardless how you look at it, the bankers are in serious trouble with this huge rise in silver prices. I hope you understand the severity of the situation."

This situation merely highlights Obama's failure as a reformer, and the general failure of both parties to act in positions of trust for the American people, rather than the special interests that provide them money and sincecures after they leave office.

As I noted on my own silver chart, I am no longer will to forecast anything but intermediate targets for silver, given what appears to be widespread imbalances and crisis-inducing leverage in the market, especially given the strong demands on the bullion market from the sovereign and individual buyers in the BRIC countries.

It is never pretty when a fraud collapses, and this one in particular is difficult because it seems to encompass those stewards of the market upon whom one generally relies for information and some measure of confidence in the data.

The market will clear when it clears, and seems to be defying 50% margin requirements increases and well placed disinformation campaigns in the process.

http://jessescrossroadscafe.blogspot...ng-on-big.html

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

[metalman]

Re: JPM silver story is a complete farce!!!

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

nice... 31 yrs. what's your take on trading a 'peak cheap oil cycle'?

[jiimbergin]

Re: JPM silver story is a complete farce!!!

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

Jesse has been trading and investing as long or longer than you and has a signifcant following here at itulip. No where in this post is there a suggestion that anyone should go out and buy silver right now.

[Spartacus]

Re: JPM silver story is a complete farce!!!

Sounds like you think all of the above numbers will come out of JPM's books.

the BIS numbers above I believe aggregate derivatives from the entities BIS tracks. JPM's exposure is obviously a very small fraction.

massive unbacked-by-metal shorting has basically been confirmed by Bart Chilton, the CFTC's own reporting (the bank participation report) and CFTC's vote to exempt the standing position from position limits.

BUT it's still not verified that the final, final short IS JPM. JPM could have placed the trades for others.

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

[Spartacus]

Re: JPM silver story is a complete farce!!!

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

Suppose the above from Jesse comes down to JPM and HSBC; IOW, JPM & HSBC have to take all those numbers as losses?

SO WHAT if JPM & HSBC have not yet collapsed?

I remember quite clearly reading this type of critique of those criticizing Enron ("If your critique of Enron was true Enron would have been dead years ago").

After Enron's collapse we found out there was massive arbitrage & shorting; the Enron doubters saw no need to publicize their actions, and those who did were laughed at.

There have been many, many examples over the last 20 years, and especially in the last 3. Your argument has some validity but history repeatedly shows it's very, very weak.

There's also a game theory argument that "proves" playing a hot tip (that's 100% accurate) doesn't pay off much of the time. I'll look for that. Post it first if you find it (or a disconfirming game theory treatment)

[dropthatcash]

Re: Peak cheap oil....

nice... 31 yrs. what's your take on trading a 'peak cheap oil cycle'?

Well...since you asked, true peak oil itself occurred in 1853 when the first commercial oil well was drilled. We've been draining the worlds tank ever since and usage has increased nearly every year since but those two facts alone would have never made you a penny and from an investment standpoint the concept 'cheap peak oil' is far to ambiguous to be traded. Just ask Jim Rodger and T Boone Pickens whom rode oil all the way up and down from $50 to $150 to $50 and made and lost a fortune. Timing is crucial. If you don't have timing your gambling.



Right now most traders are working under the assumption that the BRIC nations will only continue to use more oil. This model doesn't conform with the U.S. hyper inflation theory. A weaker dollar will destroy their exports and impede growth in these nations. It will also destroy oil consumption here as limited wealth will require consumers to start using fossil fuels like the irreplaceable gift they are.

Before this happens I still expect a further rally in metals and fuels as easy money (hence growth) is still flooding the system. Even stocks continue to act very bullish. I went long at 7000 on the DOW and my number one pick then was Ford at $2 (no longer a good investment at these prices).

[grapejelly]

Re: silver train leaving the station?

silver could take a quick runup of $10 to $20 and then crash by that much...I wouldn't be surprised to see silver at $45 or so, then $25. All in the next 30 - 60 days.

[we_are_toast]

Re: Peak cheap oil....

Right now most traders are working under the assumption that the BRIC nations will only continue to use more oil. This model doesn't conform with the U.S. hyper inflation theory. A weaker dollar will destroy their exports and impede growth in these nations. It will also destroy oil consumption here as limited wealth will require consumers to start using fossil fuels like the irreplaceable gift they are.

One thing that has concerned me is that many emerging markets (due to cheap labor) can produce products far below what developed nations can.

If an emerging market can produce a widget for X$, and it takes the U.S. 2X$ or 3X$, you have to devalue the $ an awful lot before you put a dent in their exports and improve your own. In fact, not only will you be creating inflation for products at home, you'll be importing inflation as prices of imports rise, but still remain below the cost of production here. It seems to me that if China were to actually bow to the pressure to rapidly raise the Yuan, we might see a POOM effect until prices finally rose enough where our widgets would be competitive with theirs.

[Kadriana]

Re: silver train leaving the station?

I'm trying to figure out how excited versus how scared I should be as silver crosses $34.

[jpetr48]

Re: silver train leaving the station?

Gold leads breakouts as confidence in our monetary system continues to deteriorate. Silver is being traded as a risk asset like stocks and commodities.

Chasing silver right now is like chasing the S&P 500 . Once we get thru this period of denial and as long as macro indicators like core retail sales net of gas and food and non farm payroll employment continue to bottom bounce, we will see another nice correction and slv with its high beta will go down for the ride.

Gold will break resistance and then silver follows. Calmer minds and hands will prevail.