"Safe" investment, maybe gold?
Discussion
RSTurboPaul said:
This seems to have been picked up by some on Twitter - "Regulators told to be ready to handle failed clearing houses"
https://www.reuters.com/business/finance/regulator...
Not sure why they'd need to prepare for that sort of thing.
It's probably nothing...
There's more passing through clearers books due to US changes and that's obviously more profitable for the clearer but means their risk has increased so a warning has been sent to their regulators to not FCA the situation and sit there doing fhttps://www.reuters.com/business/finance/regulator...
Not sure why they'd need to prepare for that sort of thing.
It's probably nothing...
k all but instead, bin off the afternoon nap and do their job. 
I found this from last year, wonder how that went, perhaps a result of that is this recent nudging?
https://www.reuters.com/business/finance/regulator...
can we add list to the list of ETF (low probability but potentially high impact) risks
https://www.reuters.com/business/finance/regulator...
can we add list to the list of ETF (low probability but potentially high impact) risks
I watched the interview/monologue on youtube with the author of The Great Taking but I've not read the actual (free to download) book yet.
It seems remarkable that it really does appear to be the case that if it all falls over, everything falls upwards - into the hands of just a few enormous banks / financial organisations, with those whose money it really is (i.e. us) getting pretty much f-all.
My Tin Foil Hat is therefore very suspicious of such 'planning' activities lol
It seems remarkable that it really does appear to be the case that if it all falls over, everything falls upwards - into the hands of just a few enormous banks / financial organisations, with those whose money it really is (i.e. us) getting pretty much f-all.
My Tin Foil Hat is therefore very suspicious of such 'planning' activities
lolRSTurboPaul said:
Have been tempted by them as they are c.50% cost of Gold Brits (and it seems Platinum Squeeze could be a real thing if someone really put their mind to it) but the yellow stuff just seems like it would be a wiser buy in a market that may be looking for familiarity and/or a safe haven if/when TSHTF. lol
I’m guessing it’s still only the gold that avoids VAT?AIUI RM GBP value coins are also CGT free.
I’d be skipping the other rare metals and think an ETF is a better bet?!
If physical is the requirement RM gold does it better for myriad reasons.
Mr Whippy said:
RSTurboPaul said:
Have been tempted by them as they are c.50% cost of Gold Brits (and it seems Platinum Squeeze could be a real thing if someone really put their mind to it) but the yellow stuff just seems like it would be a wiser buy in a market that may be looking for familiarity and/or a safe haven if/when TSHTF. lol
I’m guessing it’s still only the gold that avoids VAT?AIUI RM GBP value coins are also CGT free.
I’d be skipping the other rare metals and think an ETF is a better bet?!
If physical is the requirement RM gold does it better for myriad reasons.
(As I side note, I think the 1kg Britannia in silver has a £500 face value, about half current purchase value - which is much better than other sizes that have much lower percentage face value! It's not really pocket-size, though... lol)
I am extremely wary of the ETF stuff - The Great Taking is enlightening if (as it appears) it is all true and setup for anything you don't hold in your hands to be hoovered up by Big Finance!
Scootersp said:
I found this from last year, wonder how that went, perhaps a result of that is this recent nudging?
https://www.reuters.com/business/finance/regulator...
can we add list to the list of ETF (low probability but potentially high impact) risks
I don’t get how this can even work in a world of cascade/contagion failures.https://www.reuters.com/business/finance/regulator...
can we add list to the list of ETF (low probability but potentially high impact) risks
We saw how LDI nearly blew up pensions in the UK as they were selling to raise capital as the collateral lost value, causing the values (collateral) to drop, necessitating more selling.
IF the backstop funds for clearing are all losing value, and more need to sell, causing a supply spike and a price fall, the writing is clearly on the wall isn’t it?
That’s when trading is halted and trades aren’t completed isn’t it?
It’s like all this teeth gnashing about high interest rates, despite mortgages apparently being stress tested at application (lol)
The system is buggered.
My gut says MMFs are going to be the issue as people see them as safe and liquid but ultimately, in a “situation”, they’re not.
There are risks for the banks being able to own everything if SHTF as they’ll just take collateral for debts, and if SHTF they’ll say assets are worthless, vs debt against them… and try secure funding elsewhere if you think otherwise.
Which ultimately tells you to not owe banks money.
Ie, a mutual like a building society would be much more sensible, rather than a profit driven monster like a bank.
Mr Whippy said:
The system is buggered.
I tend to agree, you certainly wouldn't design it like this right! but it does seem to be patched up/managed well, it just remains to be seen how it pans out?I also agree it can't always be protected, I mean if covid had wiped out 50% of adults, would any life insurance company have survived? could all policies be paid? All the recent banking blips SVB, Credit Suisse were managed to prevent contagion, so so far so good? I just don't think these solutions can be so easily dealt with or come without negative consequences at some point in the future? Those negative consequences being we lose some degree of wealth either directly (failures/limits on protection) or more stealthily (inflation)
There seems to be a (understandable) will to save/protect the system whilst hoping for the growth or events to fix it all?
My Gold/Silver rationale comes from the fact it's real and you can self custody it (still might not do you much good mind) but also that the powers in control of the above patching up and managing also have it, tend to not sell it and I'd argue won't preside over a long term period where it's devalued.
The only reason the powers that be still hold it whilst presiding over the fiat system is that they recognise the potential frailties of the system and that a physical asset is therefore worth holding on to? it's worth it for the protection/reassurance side?
but us as individuals, we should just buy ETF's right? why trouble yourself with the hassle of ownership?
It also is currently a very under owned asset class and so could move a lot on a widespread sentiment change, such a change does not seem to be on the horizon mind, but Gold has got to nominal all time highs in recent times whilst generally still being viewed in a neutral to derogatory way by the masses as far as I can see. If central powers had just disposed of Gold then I'd be more incline to view it as others do, ie inconsequential/unimportant
I see it as merely, in a very small way, doing what they do and not what they say!
There has just been another bank failure in the USA. 1 year since the last round of failures. With all the FED measures in place. Still didn't prevent it. Clearly still stress in the system. And potentially shows how even 12 months since the last failures this bank either could not fix their problems or was just too far gone. But wait. Some other bank has bought all its rubbish. So if it was rubbish for one bank then how come another bank can buy it and see it as fine. Makes no sense to me but I dont understand banking in the modern era. I think most of these banks are betting on rates going down which will sure up their balance sheets because all their debt based assets will be worth more.
If you are talking about Republic, I think it went for $2m - basically a worthless sum or a penny. The regulators stepped in because its running a massive mismatch between assets and liabilities - the bank incoming is getting the balance of assets and will plug the liability gap (in very basic terms).
The problem you have is everyone is petrified of a bank failure kicking of a contagion event - hence you get things like FDIC bailing out banks (incoming law suits). And that was pretty Mickey Mouse sized. The problem you have Clearing Houses, they centre risk - and the more risk you centre the bigger the potential blow up if anything is wrong - like margin management. Clearing Houses are not riskless, several have collapsed previously - but we are now in a totally new world of scale and leverage, they are like Doomsday devices.
As for Money Market Funds - don't get me started on those. An industry built on the promise of high returns and intra/sameday liquidity. Sounds great, until you realise they generated those gains by taking in (your money) instant access but buying longer dated assets. Its like Lehman Brothers, Northern Rock for a new generation. In a crisis they will gate and you won't get your money out unless there is a bailout (or they break the buck).
The problem you have is everyone is petrified of a bank failure kicking of a contagion event - hence you get things like FDIC bailing out banks (incoming law suits). And that was pretty Mickey Mouse sized. The problem you have Clearing Houses, they centre risk - and the more risk you centre the bigger the potential blow up if anything is wrong - like margin management. Clearing Houses are not riskless, several have collapsed previously - but we are now in a totally new world of scale and leverage, they are like Doomsday devices.
As for Money Market Funds - don't get me started on those. An industry built on the promise of high returns and intra/sameday liquidity. Sounds great, until you realise they generated those gains by taking in (your money) instant access but buying longer dated assets. Its like Lehman Brothers, Northern Rock for a new generation. In a crisis they will gate and you won't get your money out unless there is a bailout (or they break the buck).
Locked out like the St James Property trust? Seems they'll let you add more and in fact won't stop the regular contributions, but you can't take out your money, for your own good? Oct 23 and still suspended now, I wonder how long it will be, do investor have any recourse at all?
https://www.sjp.co.uk/individuals/fund-prices
Suspension of all transactions in relation to the Property Unit Trust (UT) for UT and ISA clients.
Deferral of all withdrawal and switch out transactions on the Life and Pension Property funds for up to six months, with the exception of regular withdrawals that were already paying out.
The Life and Pension Property funds remain open for new investments and switches into the fund for those clients who wish to invest in the Property funds.
Regular contributions into the Pension Property fund will continue, whether they were set up before or after 20 October 2023.
"Non-UCITS Retail Scheme Key Investor Information"
This document provides you with key investor information about this fund. It is not marketing material. The information is required by law to help you
understand the nature and the risks of investing in this fund. You are advised to read it so you can make an informed decision about whether to invest
https://doc.morningstar.com/document/2e67cb0cd64d4...
In the first few paragraphs
you get this gem "The fund is normally priced every working day and you can
take your money out whenever you wish to do so."
Then a short while after "Property can be difficult to sell in a short
period, so you may not be able to sell or switch out of this
fund when you want to – we may have to delay acting on
your instructions. " So you can but you might not be able to, and delay it seems being very subjective........from days to er months perhaps years!
The link has this comment
"More information about charges can be found in sections 19 to 21
of the fund’s prospectus, available from your St. James’s Place
Partner."
So I don't think a google will find this to trawl through and see what it says in detail.
But I think it's a good example of how they indicate/promote the good side and hide/bury the potential downsides?
This is an active example of the risks in a fund/ETF etc playign out in real time but it doesn't seem to put people off much, sure it'll put them off this fund or perhaps even St James but it won't see them avoid something else with similar risks?
This document provides you with key investor information about this fund. It is not marketing material. The information is required by law to help you
understand the nature and the risks of investing in this fund. You are advised to read it so you can make an informed decision about whether to invest
https://doc.morningstar.com/document/2e67cb0cd64d4...
In the first few paragraphs
you get this gem "The fund is normally priced every working day and you can
take your money out whenever you wish to do so."
Then a short while after "Property can be difficult to sell in a short
period, so you may not be able to sell or switch out of this
fund when you want to – we may have to delay acting on
your instructions. " So you can but you might not be able to, and delay it seems being very subjective........from days to er months perhaps years!
The link has this comment
"More information about charges can be found in sections 19 to 21
of the fund’s prospectus, available from your St. James’s Place
Partner."
So I don't think a google will find this to trawl through and see what it says in detail.
But I think it's a good example of how they indicate/promote the good side and hide/bury the potential downsides?
This is an active example of the risks in a fund/ETF etc playign out in real time but it doesn't seem to put people off much, sure it'll put them off this fund or perhaps even St James but it won't see them avoid something else with similar risks?
The above sounds very, er, enticing... lol
I appreciate the desire/need to retain funds in order to allow an investment product to not fall over the instant something slightly untoward happens and investors get spooked and want to run for the door (I am reminded of The Big Short and Michael Burry, assuming the film is accurate!) but what do investors do if TSHTF and the world's biggest financial implosion takes place?
Just sit there and watch their funds disappear into smoke and then any remains get hoovered up through the legislation that means Big Finance gets to pick through the bones first?
Perhaps the WEF is actually telling us what will happen and not 'setting a scene for discussion' when they say 'you will own nothing and you will be happy'
I appreciate the desire/need to retain funds in order to allow an investment product to not fall over the instant something slightly untoward happens and investors get spooked and want to run for the door (I am reminded of The Big Short and Michael Burry, assuming the film is accurate!) but what do investors do if TSHTF and the world's biggest financial implosion takes place?
Just sit there and watch their funds disappear into smoke and then any remains get hoovered up through the legislation that means Big Finance gets to pick through the bones first?
Perhaps the WEF is actually telling us what will happen and not 'setting a scene for discussion' when they say 'you will own nothing and you will be happy'
Edited by RSTurboPaul on Tuesday 30th April 15:55
Scootersp said:
I tend to agree, you certainly wouldn't design it like this right! but it does seem to be patched up/managed well, it just remains to be seen how it pans out?
I also agree it can't always be protected, I mean if covid had wiped out 50% of adults, would any life insurance company have survived? could all policies be paid?
Back when I worked in pensions propaganda, I mean pension comms I also agree it can't always be protected, I mean if covid had wiped out 50% of adults, would any life insurance company have survived? could all policies be paid?
… we’d make modellers and stuff to project expected pensions out to retirement.In most cases they were “dumb” and used simple linear long term expectations to project compounding vs inflation etc, while accounting for salary sacrifice, co contributions etc.
The whizz bang modellers used stochastic modelling with the back end numbers coming from statistical gurus.
However their probabilities still has crazy outcomes like 1% chance you’d retire a millionaire, or 1% at the other end of the bell curve where you’d be a pauper.
And that was all after filtering for wars, conflicts, pandemics, market crashes, etc, all which were filtered out because they made the results too noisy/chaotic to be useful.
Yet statistically these events occur several times during pension accumulation phases (for me already we had GFC and Covid19, likely a proper hot war to come etc)
No one has any clue how all this works. It’s spinning plates at best and purely hope and faith that keeps the show on the road.
But like all hope and faith it can be misplaced, or broken.
In the early 70's Paul Volcker said about Gold
"Gold is both an attractive and useful metal, but
the residual supply is in no way related to the liquidity needs of the world community.
… I suppose there are some who would argue that additional liquidity in a gold-based
system can be provided by increasing from time to time the price at which gold is traded
among monetary authorities. But surely such an approach would make a mockery of any
presumed “discipline” from a gold centered monetary system – the virtue sometimes still
attributed to the use of gold. A system relying on gold price increases to regulate liquidity
would be both continuously destabilizing to the monetary system and capricious in whom
it benefits and whom it hurts. "
Seems he didn't like 'capricious' benefits and just wanted to ensure the USA got that certainty!
Trade surplus's when they had to exchange for Gold, trade deficits pretty much ever since and now nudging $1Trillion, the house never loses........
"Gold is both an attractive and useful metal, but
the residual supply is in no way related to the liquidity needs of the world community.
… I suppose there are some who would argue that additional liquidity in a gold-based
system can be provided by increasing from time to time the price at which gold is traded
among monetary authorities. But surely such an approach would make a mockery of any
presumed “discipline” from a gold centered monetary system – the virtue sometimes still
attributed to the use of gold. A system relying on gold price increases to regulate liquidity
would be both continuously destabilizing to the monetary system and capricious in whom
it benefits and whom it hurts. "
Seems he didn't like 'capricious' benefits and just wanted to ensure the USA got that certainty!
Trade surplus's when they had to exchange for Gold, trade deficits pretty much ever since and now nudging $1Trillion, the house never loses........
This paper gives some insight into how Gold was viewed (in particular in this paper by the French) back 80-50 years ago
https://scholarship.law.columbia.edu/cgi/viewconte...
Some interesting quotes about how it would benefit the states disproportionately etc.
It's a little old now but cross-posting this from the 'I think a massive crash is coming' thread as it nicely runs through the gold buying activities of the central banks and (IMO) does seem like a well put-together argument for having physical assets in your possession with no counterparty risk in an economic situation that seems doomed / likely to change substantially towards BRICS plans:
https://www.youtube.com/watch?v=V7BnGdoaI9E
https://www.youtube.com/watch?v=V7BnGdoaI9E
"Government Central Banks continued their record-breaking gold reserve buying in the first quarter of 2024, admitting to having bought over 290 metric tons.
That is over +9.3 million troy ounces of gold, valued at over +$21 billion in fiat US dollars, of official gold buying Q1 2024.
This recent official gold bullion buying by central banks is on pace for 1,160 metric tonnes, becoming the highest net buying in recorded history after 2022 and 2023, respectively."
https://www.youtube.com/watch?v=F04F_B147kE
That is over +9.3 million troy ounces of gold, valued at over +$21 billion in fiat US dollars, of official gold buying Q1 2024.
This recent official gold bullion buying by central banks is on pace for 1,160 metric tonnes, becoming the highest net buying in recorded history after 2022 and 2023, respectively."
https://www.youtube.com/watch?v=F04F_B147kE
An interesting interview with Bart Chilton, former CFTC commissioner, where he discusses market manipulation amongst other things.
https://www.youtube.com/watch?v=n665orfBOqM
It appears he died not long after this interview, which some might find... interesting... lol
Transcript below (although it is barely formatted, just a copy and paste of the auto-generated Youtube version):
0:00
News reports in the public record showed that when Bear Stearns collapsed that
0:06
their silver positions got transferred over to JP Morgan the Bear Stearns positions when they came over
0:13
combined with JT's positions were so large that they violated the position
0:23
limits what's not really looked at too much is that we made that allowance for
0:29
a time certain and that allowance was for them to be able to get out of those
0:36
positions and after this time was coming to an end they were nowhere close to
0:42
getting out of them matter of fact at one point they bought even more hello
0:51
there my friends Chris mark is here with you for our k2 economics and tonight a special episode actually something
0:58
that's been on the channel for a while you may have seen before but with what is happening in the markets right now I
1:05
felt this one was worth sharing again this is the interview I did with Bart Chilton back in March of 2019 which was
1:13
part of the big silver short book was interesting because of some of the
1:19
stunning things that Bart said really confirming what a lot of folks like myself or Ted Butler or many others have
1:26
talked about in silver for years Bart came out who was a former commissioner of the CFTC
1:32
confirmed it he was there during the agency's silver investigation and really
1:38
some stunning takeaways that I think are things that anybody in the world would be well-served to know especially if
1:44
you're investing in the markets and certainly in gold and silver so especially since we have a lot of new
1:51
faces in our audience I thought it would be a good time to rebroadcast this one even if you've seen it before you'll be
1:58
stuff I'm still stunned every time I watch it so I think you're gonna enjoy
2:03
this and one last quick note as you may be aware Bart did pass away about a
2:09
month after that and can I just like to send warm wish to his family and and just barred Seoul
2:16
I think he did a great deal of service to this country as you will hear in the interview so with that said thanks again
2:24
Bart for all you stood for I sure appreciate it I know a lot of others did and here is
2:30
the call that we recorded last year hello there my friends Chris Marcus here with you for Arkady economics and we are
2:37
continuing on our book with the coverage of the silver market all the fascinating things that have been going on and
2:44
really excited to have a guest today Bart Chilton former commissioner of the
2:49
CFTC now host boom-bust on Rt America who has such a fascinating perspective
2:55
of what's been going on in the metals and to the degree that obviously we're not gonna ask you to share anything not
3:02
anything that's confidential but lots of topics to dig into so Bart
3:08
thank you so much for joining me it's great to have you here today well I appreciate your your service and you
3:14
looking at these issues Chris and working on the book and these pieces
3:19
will be an important integral part of that so I'm honored to spend some time I think really well appreciate that and I
3:27
guess just to start maybe if you give people a quick rundown of your background especially at the CFTC and
3:34
just for those who might not be aware what the CFTC's role is in policing the
3:40
markets and then maybe we can get into some of the other topics from there sure
3:46
my first job out of high school was in a steel mill and so I sort of became a guy
3:52
that had sympathy for average folks average working folks and then I spent 30 years in government both in the House
4:00
the Senate different administrations Republicans Democrats but always try to look out for those average folks back in
4:07
the steel mills and others like them and I carried that to my last government job
4:12
which as you say was a commissioner at the Commodity Futures Trading Commission and it's a little tongue twister acronym
4:21
but I always tried to make the case that what we did the markets that we pulled
4:27
which are commodity markets that deal with things like soybeans and cattle and
4:34
oil and gold and silver those were integrally important to
4:40
everything that goes on in our lives you know whether or not it's you know
4:46
transportation because of oil or eating because of food they make the world go around so we're really the sister agency
4:53
the CFTC - this carries and Exchange Commission and we looked over the
4:59
commodity markets to ensure that they were a freer fraud manipulation and
5:04
malfeasance the best we could we caught a lot of bad guys but there's still a
5:10
lot of bad guys and gals out there there were then there continued to be today
5:15
but it's a rewarding job and in that position I was able to because he can't
5:21
be fired Chris I was able to say what I wanted and I did so for anybody who was
5:27
paying attention and I was particularly tough on large financial institutions
5:32
but not only then any any market participant who violated the law I was
5:38
tough on but I certainly did not spare the large banks and you can name any one
5:44
of them and I was pretty tough on them and vocally tough on them so it's a great job and really enjoyed it yeah
5:51
it's an important role in the market and obviously in the silver community we've
5:57
heard a lot about the CFTC and allegations of inappropriate behavior in
6:03
the market was it how did you first hear about that was it when Andrew Maguire
6:09
contacted you back I believe it was 2009 or 2010 or how did you first become
6:15
aware of the at least just the premise that many felt something might not be
6:21
right in silver gold as well but primarily silver emails
6:27
Andrew was Andrew did contact me but he wasn't the first and I think Ted Butler
6:34
contacted me some other people contacted me and and many others I mean
6:40
of others contacted me through emails and I responded to every every one of
6:46
them every one of them that wasn't calling me a rat or other names I responded to them and all times of the
6:55
day I respond to them and all through the weekend I responded to them and I ended up being the only Commissioner
7:00
there five commissioners at CFTC who felt like it was a responsibility to do
7:06
so matter of fact other commissioners all got those emails block from their
7:12
computers which I found pretty disappointing the market participants
7:18
those in the u.s. especially but even others should have regulators be accountable to them and so they they
7:27
were all complaining but but they didn't have any hard evidence they to say well the price should be higher and then it
7:34
wasn't until the whistleblower silver whistleblower Andrew Maguire over in
7:41
London got on the phone with me and and he sent me some emails and he described
7:47
what he thought might happen and he did it over a series of maybe a month or six
7:53
weeks he said that you know watch the market between this time and that time
7:58
and a lot of these were around the openings by the way and I bet you the
8:04
price goes up or I bet you the price goes down or whatever he would suggest and it didn't occur every time but like
8:11
seven out of ten times he was right and so that gave me some evidence that said
8:18
there's there's something going on here and that's when I asked for the enforcement folks to in bokken an
8:27
investigation other commissioners agreed with that and so what began a long I two
8:35
long investigation started with that yeah well it was fascinating again I
8:41
remember reading that exchange with Andrew Maguire and I blue was Elliot Ramirez
8:46
where like you said he pointed out some manipulations and I've heard you comment
8:51
how a lot of these did play out not at time as that investigation was going on
8:58
obviously there was that memorable 2010 meeting one thing that I was always
9:04
confused about was my understanding was that was shortly after the the emails
9:11
that McGuire sent and then I remember he was supposed to appear at the meeting but then somehow was canceled are you
9:19
able to comment at all on what happened because I think that's something that a lot of people have been confused by
9:27
where I agree and appreciate what you said and can confirm how when you did
9:32
respond to people's emails although it often felt to folks like a lot of the other commissioners weren't doing the
9:39
same thing and curious what happened where McGuire was not allowed to speak
9:45
at that I'm not sure that that's the case you know you have to check the
9:50
record but I don't know that he was you know banned from speaking or anything I
9:57
remember that I included bill Murphy with data on the gold front in that
10:05
meeting and my shirt ed Butler came to that meeting or not but I certainly
10:13
don't recall that Andrew wasn't invited or that he was not allowed to come
10:19
that's not my recollection of what happened but he wasn't there but I don't
10:25
know that he wanted to testify and we mean he had you know once once you become a whistleblower and you provide
10:32
your evidence and your information to the investigators and I know that he did
10:37
sit down with investigators released on the phone maybe in person and speak with
10:43
them so you know we had the information and would it have been better if if he
10:52
wanted to have it out in the public probably but as far as I know he wasn't
10:57
banned or anything from from that but you could ask him I still am in contact
11:03
with Andrew pretty regularly he's a gem of a person
11:08
and a honest and credible character
11:14
buyout by any stretch imagination so sure he'd tell you yeah well we're hoping to get him on board for this so
11:21
we'll look forward to running that by him along the lines of that meeting was
11:27
actually watching one of the videos again the other day and I know between Jeff Christian and Adrian Douglas they
11:34
were disputing whether the metal is actually there to back the paper claims
11:39
whether the contracts on the Comex or derivatives curious your thoughts it
11:46
seems to me like we're in a situation where we've had we now have a fractional banking system in the metals from what
11:53
you've seen is there actually metal in existence that these claims could be fulfilled or is there an imbalance in
12:00
there somewhere there's never in the silver and soybeans
12:06
and oil there's never enough physical to
12:11
back up all of the contracts the futures contracts never is I think a good gauge
12:21
was like 10 to 1 I'm not sure they in and silver but overarching among all
12:26
commodities none to one now futures are essentially and traders hate when I say
12:33
this but they're essentially bets their gambled and they don't play out know
12:39
everybody's not collecting them all at the same time when there's an expiration people get other contracts because
12:46
nobody wants to hold on to a bunch of crude oil they don't have enough swimming pools around in their yards so
12:53
there's never enough and that fact that
12:59
there's never enough seemed to me to be some you know basis for a lot of the
13:07
conspiracy theorists in the silver community well it's not there so it must be you know messed up there must be
13:14
something sneaky going on what happens with every single commodity it's not it's it's how the systems work
13:21
now you can debate whether or not good or bad or not but you know you can if
13:26
you if you have if you want a futures contract you're gonna have more out
13:31
there in contracts then there is physical supply for just the way it is
13:39
or futures contracts so look there's a lot other things that I think were shady
13:44
in the silver market but the fact that there wasn't enough silver to back up all the futures contracts which would
13:51
never be redeemed at the same time anyway I think was just you know sort of a Trojan horse to get into sort of nutty
14:00
conversations at times right although you mentioned that there were other many
14:07
other things you saw that did raise the alarm anything that you can get into again while respecting the
14:13
confidentiality with the agency but some of the things that you did see that raised your attention well there's some
14:21
stuff that's out there in the public that I'm not sure everybody you know put together most people did I would never
14:28
for example and I won't now say that you
14:35
know there was a bank and name it that held you know close to 40% of silver
14:43
market at one point but the news reports I mean people surmise at JPMorgan Chase
14:49
and the news reports in the public record showed that when Bear Stearns
14:55
collapsed that their silver positions got transferred over to JPMorgan and we
15:03
the CFTC had to approve those positions because they those positions the laymen
15:10
positions divided sorry the barristers positions the bear stearns positions
15:16
when they came over combined with JT's positions were so large that they
15:24
violated the position limits on which one trader could hold so the CFTC had to
15:33
approve JP could take on the bare silver positions so people want to do the math
15:42
they can do the math on who had the largest silver but there was an exception there that we made and that's
15:48
in the public record what's not really looked at too much is that we made that
15:56
allowance for a time certain and I forget exactly how long it was but it
16:01
was not years it was you know months maybe it was three months or six months or maybe it was nine months I think it
16:08
was probably six but I don't recall and that allowance was for them to be able
16:17
to get out of those positions well one thing we didn't know right at first is
16:22
that there was a the head silver trader for bear he went with the silver
16:31
positions to JP and so he's trading at JP and after this time was coming to an
16:36
end the the the runway which we had given for them to get out of the positions in excess of position limits
16:44
they were nowhere close to getting out of them matter of fact at one point they'd bought even more which was like
16:51
direct you know conflict what we had in mind and so they were granted a little bit
16:57
more time a couple of months as I recall and they did ultimately get down to the position but it was at that time that I
17:04
when they were so large that I made the comment about how large a particular
17:11
Bank was in the market which sort of shocked people and shocked me quite
17:16
frankly that it was so large so anyway these were very troubling times and a
17:25
lot of this was going on and the the accused manipulation and it was a really
17:35
time certain period at which our investigators were looking at market
17:42
participants including those at that Institute
17:48
they had such large positions to ensure that everything was okay and the bottom
17:55
line is we found a lot of things that indicated things we're not okay and I
18:02
talked about that a little bit yeah and for folks who might be a little bit newer to it can you explain why the
18:08
you know big concentrated position is something that the CFT looks for and is
18:14
on the watch for to be careful about and how that impacts the market or has the
18:19
potential to impact the market well I mean if you and I are trading in the
18:24
futures markets you know for a personal account nobody's going to notice but if
18:29
you're got a sizable position and you trade that sizable position it's one
18:38
thing to just have it but if you're trading it that you know all sudden 20%
18:43
of the market goes long or goes short that can move markets and so that's why
18:53
there are not what I want with regard to position limits so it's a whole nother
18:59
topic of further position limits but there are some position limits in what
19:06
is called the spot month that's the delivery month that month where you hope
19:11
everybody doesn't get a you know pool full of oil and so there are limits in
19:18
the spot month there's not limits in what we call the back month that's every
19:24
month other than the spot months or all month combined which would be the spot month and the back months those limits I
19:31
pushed for but have not been put in place even though they're required by law but those those limits can people
19:43
that traders that have large positions that are approaching those limits or
19:49
above those listed or or limits or had an exemption from those limits they are
19:55
particularly traders that could role
20:01
markets with large trades so it doesn't mean that they're a problem just because they
20:06
have the positions but they're certainly suspect and regulators look at those
20:12
sorts of things because they can push or pull markets around and appropriately and that can damage a lot of a lot of
20:22
average folks a lot of other traders right and again you mentioned the position that went from Bear Stearns to
20:28
JPMorgan and also in that was in 2008 when we saw silver go from about $21 to
20:34
9 do you think that that those two were connected and that that position that
20:41
JPMorgan eventually added the waiver for had an influence on the price
20:47
yeah don't know don't know I mean I was about to say I can't say but it's not that I can't say it's the truth is I
20:53
don't know right fair enough curious and
20:59
I thought no I saw no evidence of such okay another year that we had a wild
21:10
series of price moves in silver was obviously 2011 again we had Bernanke and
21:16
I believe was October of 2010 launched qe2 I bought a thousand ounce block of
21:23
silver in response to that so again it just in the sense that it made LA it was
21:29
logical to me that part of the run-up was in response to a lot of money printing we hit $49 in April and then
21:37
the price crashed down and been in a bear market ever since then any thoughts on anything you'd like to comment on
21:45
about the price especially in 2011 or what's happened since well you know a
21:54
lot of these I mean I when precious
21:59
metals is essentially you know or their safe havens so when you see things like you saw why you bought makes all the
22:07
sense in the world and but you know ideally these things are supposed to
22:15
operate under market fundamentals and those involve supply demand and they involve the
22:21
number of traders out there who's willing to risk and how long they're willing to risk it so you know I'm away
22:27
from it now I mean I could cover our dollar ship program we look at precious
22:33
metals all the time but I'm certainly not in a position now to see anything in markets that if some untoward was going
22:41
on I wouldn't necessarily I wouldn't know about it I certainly wouldn't know the details about it but I can tell you
22:48
things were suspect and the
22:54
investigation that we did uncovered a lot of evidence that would lead to a
23:03
manipulation case or an attempted manipulation case but the standard of
23:09
evidence the cumulative standard of evidence was a very high bar and so
23:16
while we did have evidence direct evidence you know voicemail evidence
23:22
text evidence trading evidence at some
23:27
point we had price movement evidence but we never had all of the things that you
23:33
needed together in one place that were
23:38
enough for us to go after there were just there were just holes and it was
23:44
frustrating and and we looked at it a bunch of different ways and at one point
23:51
we even thought we had enough to go forward with the case and we asked for some forensic economists outside of the
24:00
CFTC to examine it and they came back and they said no we don't think so and
24:06
that was after about four years by the way I've never talked about this that was after about four years and I
24:13
said oh whoa wait a minute we thought we had enough evidence and we hire somebody outside and they say we don't have
24:19
enough evidence let's go to somebody else so people don't know this part but
24:25
I essentially I extended the investigation yet another year because I didn't believe it and so we went to
24:33
yet another forensic economist and had them look at it and they came back with
24:38
the opinion of the first folks that we we just didn't we didn't have we didn't
24:45
have the traders and we didn't have the market participants dead to rights but
24:52
we had lots of stuff and we had real stuff that would have played really well
24:58
in court not just numbers but the the rhetoric the banter between traders that
25:05
we had and I'm not saying there was lots of it but there was enough of it that it
25:11
was damning but the damning part had to
25:17
be backed up by other requirements of evidence under the law and we didn't get
25:25
all of that we didn't get to that it troubled me so much by the way that I
25:33
did seek and a change in the law and we
25:40
ultimately got it and we have a there's a newer lower standard for manipulation
25:46
that's been in place since that time it was not it was not retroactively a lower
25:54
standard of manipulation for the CFTC which is similar to the SE C's standard
26:03
for manipulation or one of their standards there there I think it's there
26:08
10 B 5 standard which is based upon recklessness so instead of having these
26:15
four different hurdles that I was describing earlier that we're pretty high for us to get over the new standard
26:24
that I fought for and Maria Cantwell with the champion in the Senate in Congress on this by the way although
26:30
there were others Bernie Sanders etc but Marie Cantwell was the real champion that now there's a lower manipulation
26:38
standard one that would be easier to prove
26:43
you know would the same evidence back then result in a charge and potential
26:54
conviction on manipulation I think so I think so but you know it's something that we'll
27:01
never see it's not it wasn't a grandfather thing the law was the law then and I'm glad we changed it but it
27:09
may be one of the small little you know for lack of a better world silver rays
27:16
of light in this whole torrid debacle yeah that's really fascinating here you
27:24
mention that again a lot of this I've followed and is certainly interesting
27:30
especially since in the time after that we've had Deutsche Bank have a settlement where they release some
27:35
trader transcripts which were not very positive and then of course more
27:42
recently we had a former JP Morgan trader John Edmonds plead guilty to the
27:48
Department of Justice I thought it was particularly interesting that he mentioned that what he did now he pled
27:54
guilty to spoofing but mentioned that it was with the knowledge of his superiors
28:00
and widespread practice at the firm cured would love to hear any thoughts
28:05
you have on that because essentially you know it may be further verification of
28:10
what you were investigating and advocating and just talking about as well
28:16
well spoofing is another thing that wasn't against the law when a lot of these nefarious trades were taking place
28:23
spoofing was a spoofing was a dodd-frank
28:29
invention it's another thing I worked on another thing that Maria Cantwell worked
28:35
on by the way that and spoofing is
28:40
essentially camera two being part and parcel of manipulation you spoof to
28:46
manipulate markets you mean you exposed to push markets up or down and then you take the opposite
28:53
position right so it was a you know we ultimately I forget when we
29:00
held when we did the rule because even though the law even though you passed the law
29:08
you know once the law is passed and you have to promulgate the tough word but promulgate is the word we used for
29:14
actually implementing the rule and that took a while so let it define what the
29:20
word spoofing meant more importantly what it didn't mean because people take
29:26
Gamble's and markets all the time but essentially sending out false price
29:31
signals on trades that you never intend to execute and that phrase never intend
29:39
is a is a tough one to define because how can you divine somebody's intent
29:46
I said well Chris I intended on doing it you say oh no you didn't know how do you
29:52
know I didn't intend on so it's a sort of a weasel word but we did the best we
29:58
could on it and that's another thing that although the statutes been used effectively used against an HF treaty
30:07
trader and cago couple times actually so the laws working but all these laws
30:14
whether or not it's the the recklessness manipulation standard I mentioned
30:19
whether or not it's spoofing or any other law or rule or regulation these things need to constantly be living
30:27
documents to ensure that they are keeping up with market participants and
30:33
what they're doing because boy these these traders that they'll look for any
30:39
way to get a competitive advantage sometimes that enters an area that is a
30:45
little gray and sometimes if they get into that gray area they will really
30:52
take advantage of it and and regulators and lawmakers need to be aware of that and constantly devising their rules and
30:59
regulations and updating them so that they're appropriate for the circumstances so that we don't have a
31:06
you know environment like we did with silverware we had all sorts of evidence and just
31:13
couldn't get them because the law the rule rags weren't we're too stringent I
31:19
mean the stuff we add was pretty pretty damning but just not enough yeah and
31:29
certainly for my experience on Wall Street I can confirm what you're saying about how unfortunately you know if you
31:36
leave a little room for error some traders out there will try and exploit that again I appreciate you mentioning
31:43
the spoofing curious because my
31:49
understanding of what how some of the manipulation has occurred is that you
31:55
know if silver is trading twenty dollars in five cents there's a lot of stop orders placed
32:00
around the twenty dollar handle so often if the price can get pushed a little bit
32:06
then you get a lot of those high-frequency algorithms kicking in and then you'll see a drop with many feeling
32:13
that people kind of nudging a little or then able to buy lower does that sound
32:18
like a reasonably accurate portrayal to put it in perspective to folks or would
32:24
you phrase it different well it's a good procure it's a good portrayal but it's actually it's a very good portrayal but
32:32
it's actually also a reflection of what
32:38
I was just speaking speaking about of how trading has changed so even back in
32:43
two thousand eight nine ten maybe a
32:49
little bit of eleven even when a lot of these silver trades and some gold trades were pretty suspect when you're looking
32:55
at them you didn't have high-frequency traders in these markets like you do today right and they're still not all
33:01
over them but spoofing that one thing when it was you know an average person
33:09
out there you know saying they're going to sell a hundred loss of something and trying to tick the price up a penny and
33:16
then once it goes up and they offer you know half a penny if they get it to go
33:22
up a penny they offer half a penny make a half a penny where they weren't going to make anything and then they
33:27
pull back those other offers for a penny right so they say I'll sell these things for a penny more than anybody else is
33:34
offering and the price takes up and a couple of people may take advantage but
33:39
then they pull back the offer real quick and then they chart they say now I'll sell a pair of this amount and they get
33:45
a bunch of buyers so markets are changing and so you have these
33:50
high-frequency traders who are getting into more and more areas and at first they weren't really they weren't into
33:56
the futures and weren't into commodities but now they're getting into them particularly oil from the larger trailer
34:03
t-bills you know getting into gold and silver
34:10
Alesso like pork belly is in life cattle and stuff but you know what they want is
34:17
volume high frequency traders I call them cheetahs not that not because
34:23
they're like Boston card cheaters but because they're fast like the market
34:29
cheese sheet is in the jungle and you know they're trying to prey upon any little time lapse that they can see and
34:37
but they've got to have volume to make those changes and they serve a purpose the cheese's because they add liquidity
34:44
you markets so if there's somebody wants to buy or sell cheetahs will take them they'll do it
34:50
they're just going to offload it one way or another in the meantime and it'll be
34:56
so quick that they're trying to make you
35:02
know just little micro pennies in nanoseconds so the difference in your
35:08
description is that today when a market moves because of a spoof it can move a
35:16
lot more so you know we people hadn't really I mean maybe two or three times
35:22
in history you heard about a flash crash but it really wasn't until 2006 2010
35:30
that when we had this major flash crash that impacted started in S&P many seats
35:37
the Chicago Mercantile Exchange group and then there was contagion the S&P 500
35:47
emini futures country then there was contagion into the equities related
35:54
equities markets it wasn't until then people really started to hear this term flash crash and since that time there's
36:01
been you know a dozen 15 of them and we had a big investigation back then on
36:07
that one that I pointed to with the SEC and the CFTC it still stands as a really
36:12
hard look at what was going going on but the bottom line is HF keys were involved
36:18
in the markets they didn't do anything wrong we thought they might have but we
36:23
there's never any cases that came out of it but we thought they may have but the
36:29
bottom line is they're doing what they do they're in two markets they are in two markets when markets were going down
36:35
they saw this 75000 a lot being created and they just took advantage of it and
36:42
it created and traded and traded and traded and traded and they took the other side and the market went down faster than anybody thought it ever had
36:49
this was a flash crashed and then fortunately because they were in the
36:55
market the untold story the other part of that story is if the hfts actually
37:01
helped bring up the price back up because while it crashed I think 18 P went down to a penny their stock would
37:07
come to a penny that it was a the hfts
37:13
are in the market taking advantage of the buy back to so markets are different now so to my point about trying to make
37:20
sure that regulations are right sized you know we wrote the spoofing law you
37:26
know as a dodd-frank bank didn't get implemented for a couple more years is it correct as written now now it's
37:33
been used effectively so a lot of people a lot of regulators probably say yeah sure it's been used it's great no
37:38
problem I'd say it's worth a look-see given what we know about it how many
37:43
times traders are trading I mean there are times Chris I love this figure because
37:50
it's so amazing there are times that we looked at particularly during the close where
37:57
high frequency traders are trading 450 to 500 times in any aggregate 450 all
38:05
all of them 450 or 500 times per second per second crazy numbers like I like how
38:14
do you you know how do you Adil and then they want somebody to analyze those trades per second 450 or 500 tons so
38:22
we're in a whole new world of trading and we need to ensure that the laws are
38:28
updated to have an environment and in which we can endeavor to the fullest
38:35
extent to catch the bad guys and those who are trying to be better they're
38:41
being bad actors and these important markets that impact the economic engine of our democracy yeah it's it's it's
38:48
like you said it's fascinating the way finances change the world has changed everything so digital we're not using
38:55
hand signals on the floor to do everything anymore right all right
39:01
perhaps just the final question before we wrap up and let you go as I sure do
39:06
appreciate your time today just with the JP Morgan case with the Department of
39:11
Justice again no one knows the future but do you have any thoughts on how that
39:17
plays out and whether you think maybe some of the things that you and the CFTC
39:22
we're trying to bring to light that perhaps the Department of Justice will be able to do so going forward
39:33
nothing specific Chris but I tell you that during this whole time on we were
39:38
doing the investigation something it wasn't covered because it really wasn't any action really no reason to cover it
39:45
I guess but was it we were keeping DOJ up-to-date on what we were doing they
39:51
had a couple of briefings during the it was it ended up being five years in total of the investigation I can't tell
39:58
how many times we were briefed on it dozens and dozens and dozens and and I had
40:04
probably you know 200 meetings on on silver separate from those Commission briefings but there were ongoing
40:16
conversations with DOJ about what we are finding and they wanted to be updated
40:22
but when we said we weren't going forward they you know they said they're
40:28
not going forward either they usually take these things as a referral and fortunately they are real serious about
40:36
it unfortunately they don't have the manpower to DOJ to go after as many bad
40:46
actors as I think the country deserves back in the day and I'm talking you know
40:54
back during this time period 8 9 10 11 12 only about 75% of the referrals that
41:01
we sent to DOJ did did only about 25% 75% they rejected only 25% did they
41:09
accept and we never sent them something that we didn't win on we weren't like
41:16
sending them things oh we didn't get this maybe you can now these are all things that we went on that we got
41:21
either got a conviction or a settlement these were you know we were winners on
41:29
these things and we said we think that you know you should put the folks behind bars and so I don't have anything
41:38
negative about any individuals the DOJ I think this is a reflection of Congress
41:45
and budget policies about where staff resources need to go and DOJ Criminal
41:53
Division is one that deserves certainly more resources and and the number of
42:00
referrals rejected is less over at the SEC it was back then I don't remember
42:05
the number but it still was about 50% I can't tell you what it was maybe in 60%
42:11
it was less than ours but it was still about 50% I remember that and so now not
42:17
so bad actors may have been fined but is that
42:23
old detective series we're now on people remember beretta used to say to do the crime you do the time I just pay a fine
42:31
and so more people I think should be doing time when they violate these
42:36
important financial laws yeah I can certainly understand that and
42:42
fortunately as I get I've crossed 40 in the past year I'm getting better at
42:47
accepting what we can change and what we can't and while there's certain things are out of our control I really do
42:54
appreciate how you've all the effort that you've put into this over the year again I contacted the five CFTC
43:02
commissioners a couple of years back and like you mentioned before you were the only one to respond and I think
43:08
especially when people see things going on you know obviously we all want things
43:13
to be fair but really even just having someone that's accountable and comes on
43:19
in speaks and lets folks know what's going on truly grateful for what you're doing what you've done and sure the
43:26
great things you'll be doing going forward so perhaps just to close out maybe one last time you can mention the
43:32
show and where people can find you and stay up-to-date on the great research you're doing sure well I've been really
43:39
pleased I've been doing this show on Rt America and it's broadcast globally and
43:46
it's great because the business of Finance show it's every day a week it's called boom-bust and you can get it in
43:54
the US a bunch of places you get it Direct TV and directv and dish and the
44:02
Groff Comcast right now we'll be back soon you can only check it out at youtube.com
44:08
slash boom-bust Artie and I continue to have I think a different voice in
44:15
finance and business and I continue to call them as they see them and as I see
44:21
them and you can check us out there thank you so much Chris sure appreciate time that you are willing to talk to
44:29
this important subject and feel free to let me know never be of help in the future well I
44:34
sure appreciate that Bart that's kind of you to say you've you've been a big help in my career just helping me to see some
44:40
of these things and keep going so really great pleasure to catch up with you today and thanks so much for joining and
44:47
I look forward to staying in touch my friend good luck my friend thank you so
44:52
there you go obviously so the stunning things Bart said there a few key takeaways I know a
45:00
lot of people focused on what he said directly about Bear Stearns having the position JP Morgan making it bigger and
45:07
certainly that was a key one in fact what I found interesting was how he mentioned that he told them to make the
45:13
position smaller now he didn't clearly say whether it was a short position although given my research it seems to
45:22
me that Bear Stearns I've heard one person debate this although it seems to me Bear Stearns was very short silver
45:28
could have factored in their demise and then combined with JP Morgan position that they made bigger keep in mind the
45:35
time period he describes when they were making it bigger was when silver was falling from $21 to nine dollars while
45:43
dealers were reporting shortages of metal which to me was one of the most
45:49
blatant examples of how big of an impact on the price that can have I know a lot
45:55
of people talk about that period in 2008 when gold went from 7,000 to 700 silver
46:00
went from 21 to 9 and the general rationales that that was panic selling I
46:06
dispute that largely based on what Bart said and seeing the impact of that short
46:11
position because price drops more than 50 percent while there's a shortage of the product certainly you know a few
46:21
other things he mentioned when I asked about whether you know you have a situation where there's more contracts
46:27
out there than silver to be delivered and he didn't dispute that but said that that's just the case with all the
46:33
commodities and lastly the one that I thought was really worthwhile that stood
46:39
with me was that he said that he thought they had a good case you know the forensic economist told
46:45
no but that actually led him to change the rule so under the current rule according to Bart JPMorgan he thinks
46:53
would have faced a conviction there I guess we will never know but again just
47:00
different than saying that markets aren't manipulated I don't know how much more clearly he could have said it it's
47:06
a shame that he's not still with us so that could follow up although I'm just
47:14
aren't grateful that he shared what he did it was very kind to me and I appreciate what he did in his career and
47:21
hopefully this shed a little more light on things again this was part of the book the big silver short that we have
47:28
just released here which the whole point was to get to the bottom of what's really going on so this was a big part
47:34
of it and really grateful to Bart for all he shared again sending best wishes to his family and with that sad hope you
47:43
enjoyed this if you'd like to know a little bit more about the book this is part of well there's a video coming your
47:48
way now and you just click on that [Music]
48:01
you
https://www.youtube.com/watch?v=n665orfBOqM
It appears he died not long after this interview, which some might find... interesting... lol
Transcript below (although it is barely formatted, just a copy and paste of the auto-generated Youtube version):
0:00
News reports in the public record showed that when Bear Stearns collapsed that
0:06
their silver positions got transferred over to JP Morgan the Bear Stearns positions when they came over
0:13
combined with JT's positions were so large that they violated the position
0:23
limits what's not really looked at too much is that we made that allowance for
0:29
a time certain and that allowance was for them to be able to get out of those
0:36
positions and after this time was coming to an end they were nowhere close to
0:42
getting out of them matter of fact at one point they bought even more hello
0:51
there my friends Chris mark is here with you for our k2 economics and tonight a special episode actually something
0:58
that's been on the channel for a while you may have seen before but with what is happening in the markets right now I
1:05
felt this one was worth sharing again this is the interview I did with Bart Chilton back in March of 2019 which was
1:13
part of the big silver short book was interesting because of some of the
1:19
stunning things that Bart said really confirming what a lot of folks like myself or Ted Butler or many others have
1:26
talked about in silver for years Bart came out who was a former commissioner of the CFTC
1:32
confirmed it he was there during the agency's silver investigation and really
1:38
some stunning takeaways that I think are things that anybody in the world would be well-served to know especially if
1:44
you're investing in the markets and certainly in gold and silver so especially since we have a lot of new
1:51
faces in our audience I thought it would be a good time to rebroadcast this one even if you've seen it before you'll be
1:58
stuff I'm still stunned every time I watch it so I think you're gonna enjoy
2:03
this and one last quick note as you may be aware Bart did pass away about a
2:09
month after that and can I just like to send warm wish to his family and and just barred Seoul
2:16
I think he did a great deal of service to this country as you will hear in the interview so with that said thanks again
2:24
Bart for all you stood for I sure appreciate it I know a lot of others did and here is
2:30
the call that we recorded last year hello there my friends Chris Marcus here with you for Arkady economics and we are
2:37
continuing on our book with the coverage of the silver market all the fascinating things that have been going on and
2:44
really excited to have a guest today Bart Chilton former commissioner of the
2:49
CFTC now host boom-bust on Rt America who has such a fascinating perspective
2:55
of what's been going on in the metals and to the degree that obviously we're not gonna ask you to share anything not
3:02
anything that's confidential but lots of topics to dig into so Bart
3:08
thank you so much for joining me it's great to have you here today well I appreciate your your service and you
3:14
looking at these issues Chris and working on the book and these pieces
3:19
will be an important integral part of that so I'm honored to spend some time I think really well appreciate that and I
3:27
guess just to start maybe if you give people a quick rundown of your background especially at the CFTC and
3:34
just for those who might not be aware what the CFTC's role is in policing the
3:40
markets and then maybe we can get into some of the other topics from there sure
3:46
my first job out of high school was in a steel mill and so I sort of became a guy
3:52
that had sympathy for average folks average working folks and then I spent 30 years in government both in the House
4:00
the Senate different administrations Republicans Democrats but always try to look out for those average folks back in
4:07
the steel mills and others like them and I carried that to my last government job
4:12
which as you say was a commissioner at the Commodity Futures Trading Commission and it's a little tongue twister acronym
4:21
but I always tried to make the case that what we did the markets that we pulled
4:27
which are commodity markets that deal with things like soybeans and cattle and
4:34
oil and gold and silver those were integrally important to
4:40
everything that goes on in our lives you know whether or not it's you know
4:46
transportation because of oil or eating because of food they make the world go around so we're really the sister agency
4:53
the CFTC - this carries and Exchange Commission and we looked over the
4:59
commodity markets to ensure that they were a freer fraud manipulation and
5:04
malfeasance the best we could we caught a lot of bad guys but there's still a
5:10
lot of bad guys and gals out there there were then there continued to be today
5:15
but it's a rewarding job and in that position I was able to because he can't
5:21
be fired Chris I was able to say what I wanted and I did so for anybody who was
5:27
paying attention and I was particularly tough on large financial institutions
5:32
but not only then any any market participant who violated the law I was
5:38
tough on but I certainly did not spare the large banks and you can name any one
5:44
of them and I was pretty tough on them and vocally tough on them so it's a great job and really enjoyed it yeah
5:51
it's an important role in the market and obviously in the silver community we've
5:57
heard a lot about the CFTC and allegations of inappropriate behavior in
6:03
the market was it how did you first hear about that was it when Andrew Maguire
6:09
contacted you back I believe it was 2009 or 2010 or how did you first become
6:15
aware of the at least just the premise that many felt something might not be
6:21
right in silver gold as well but primarily silver emails
6:27
Andrew was Andrew did contact me but he wasn't the first and I think Ted Butler
6:34
contacted me some other people contacted me and and many others I mean
6:40
of others contacted me through emails and I responded to every every one of
6:46
them every one of them that wasn't calling me a rat or other names I responded to them and all times of the
6:55
day I respond to them and all through the weekend I responded to them and I ended up being the only Commissioner
7:00
there five commissioners at CFTC who felt like it was a responsibility to do
7:06
so matter of fact other commissioners all got those emails block from their
7:12
computers which I found pretty disappointing the market participants
7:18
those in the u.s. especially but even others should have regulators be accountable to them and so they they
7:27
were all complaining but but they didn't have any hard evidence they to say well the price should be higher and then it
7:34
wasn't until the whistleblower silver whistleblower Andrew Maguire over in
7:41
London got on the phone with me and and he sent me some emails and he described
7:47
what he thought might happen and he did it over a series of maybe a month or six
7:53
weeks he said that you know watch the market between this time and that time
7:58
and a lot of these were around the openings by the way and I bet you the
8:04
price goes up or I bet you the price goes down or whatever he would suggest and it didn't occur every time but like
8:11
seven out of ten times he was right and so that gave me some evidence that said
8:18
there's there's something going on here and that's when I asked for the enforcement folks to in bokken an
8:27
investigation other commissioners agreed with that and so what began a long I two
8:35
long investigation started with that yeah well it was fascinating again I
8:41
remember reading that exchange with Andrew Maguire and I blue was Elliot Ramirez
8:46
where like you said he pointed out some manipulations and I've heard you comment
8:51
how a lot of these did play out not at time as that investigation was going on
8:58
obviously there was that memorable 2010 meeting one thing that I was always
9:04
confused about was my understanding was that was shortly after the the emails
9:11
that McGuire sent and then I remember he was supposed to appear at the meeting but then somehow was canceled are you
9:19
able to comment at all on what happened because I think that's something that a lot of people have been confused by
9:27
where I agree and appreciate what you said and can confirm how when you did
9:32
respond to people's emails although it often felt to folks like a lot of the other commissioners weren't doing the
9:39
same thing and curious what happened where McGuire was not allowed to speak
9:45
at that I'm not sure that that's the case you know you have to check the
9:50
record but I don't know that he was you know banned from speaking or anything I
9:57
remember that I included bill Murphy with data on the gold front in that
10:05
meeting and my shirt ed Butler came to that meeting or not but I certainly
10:13
don't recall that Andrew wasn't invited or that he was not allowed to come
10:19
that's not my recollection of what happened but he wasn't there but I don't
10:25
know that he wanted to testify and we mean he had you know once once you become a whistleblower and you provide
10:32
your evidence and your information to the investigators and I know that he did
10:37
sit down with investigators released on the phone maybe in person and speak with
10:43
them so you know we had the information and would it have been better if if he
10:52
wanted to have it out in the public probably but as far as I know he wasn't
10:57
banned or anything from from that but you could ask him I still am in contact
11:03
with Andrew pretty regularly he's a gem of a person
11:08
and a honest and credible character
11:14
buyout by any stretch imagination so sure he'd tell you yeah well we're hoping to get him on board for this so
11:21
we'll look forward to running that by him along the lines of that meeting was
11:27
actually watching one of the videos again the other day and I know between Jeff Christian and Adrian Douglas they
11:34
were disputing whether the metal is actually there to back the paper claims
11:39
whether the contracts on the Comex or derivatives curious your thoughts it
11:46
seems to me like we're in a situation where we've had we now have a fractional banking system in the metals from what
11:53
you've seen is there actually metal in existence that these claims could be fulfilled or is there an imbalance in
12:00
there somewhere there's never in the silver and soybeans
12:06
and oil there's never enough physical to
12:11
back up all of the contracts the futures contracts never is I think a good gauge
12:21
was like 10 to 1 I'm not sure they in and silver but overarching among all
12:26
commodities none to one now futures are essentially and traders hate when I say
12:33
this but they're essentially bets their gambled and they don't play out know
12:39
everybody's not collecting them all at the same time when there's an expiration people get other contracts because
12:46
nobody wants to hold on to a bunch of crude oil they don't have enough swimming pools around in their yards so
12:53
there's never enough and that fact that
12:59
there's never enough seemed to me to be some you know basis for a lot of the
13:07
conspiracy theorists in the silver community well it's not there so it must be you know messed up there must be
13:14
something sneaky going on what happens with every single commodity it's not it's it's how the systems work
13:21
now you can debate whether or not good or bad or not but you know you can if
13:26
you if you have if you want a futures contract you're gonna have more out
13:31
there in contracts then there is physical supply for just the way it is
13:39
or futures contracts so look there's a lot other things that I think were shady
13:44
in the silver market but the fact that there wasn't enough silver to back up all the futures contracts which would
13:51
never be redeemed at the same time anyway I think was just you know sort of a Trojan horse to get into sort of nutty
14:00
conversations at times right although you mentioned that there were other many
14:07
other things you saw that did raise the alarm anything that you can get into again while respecting the
14:13
confidentiality with the agency but some of the things that you did see that raised your attention well there's some
14:21
stuff that's out there in the public that I'm not sure everybody you know put together most people did I would never
14:28
for example and I won't now say that you
14:35
know there was a bank and name it that held you know close to 40% of silver
14:43
market at one point but the news reports I mean people surmise at JPMorgan Chase
14:49
and the news reports in the public record showed that when Bear Stearns
14:55
collapsed that their silver positions got transferred over to JPMorgan and we
15:03
the CFTC had to approve those positions because they those positions the laymen
15:10
positions divided sorry the barristers positions the bear stearns positions
15:16
when they came over combined with JT's positions were so large that they
15:24
violated the position limits on which one trader could hold so the CFTC had to
15:33
approve JP could take on the bare silver positions so people want to do the math
15:42
they can do the math on who had the largest silver but there was an exception there that we made and that's
15:48
in the public record what's not really looked at too much is that we made that
15:56
allowance for a time certain and I forget exactly how long it was but it
16:01
was not years it was you know months maybe it was three months or six months or maybe it was nine months I think it
16:08
was probably six but I don't recall and that allowance was for them to be able
16:17
to get out of those positions well one thing we didn't know right at first is
16:22
that there was a the head silver trader for bear he went with the silver
16:31
positions to JP and so he's trading at JP and after this time was coming to an
16:36
end the the the runway which we had given for them to get out of the positions in excess of position limits
16:44
they were nowhere close to getting out of them matter of fact at one point they'd bought even more which was like
16:51
direct you know conflict what we had in mind and so they were granted a little bit
16:57
more time a couple of months as I recall and they did ultimately get down to the position but it was at that time that I
17:04
when they were so large that I made the comment about how large a particular
17:11
Bank was in the market which sort of shocked people and shocked me quite
17:16
frankly that it was so large so anyway these were very troubling times and a
17:25
lot of this was going on and the the accused manipulation and it was a really
17:35
time certain period at which our investigators were looking at market
17:42
participants including those at that Institute
17:48
they had such large positions to ensure that everything was okay and the bottom
17:55
line is we found a lot of things that indicated things we're not okay and I
18:02
talked about that a little bit yeah and for folks who might be a little bit newer to it can you explain why the
18:08
you know big concentrated position is something that the CFT looks for and is
18:14
on the watch for to be careful about and how that impacts the market or has the
18:19
potential to impact the market well I mean if you and I are trading in the
18:24
futures markets you know for a personal account nobody's going to notice but if
18:29
you're got a sizable position and you trade that sizable position it's one
18:38
thing to just have it but if you're trading it that you know all sudden 20%
18:43
of the market goes long or goes short that can move markets and so that's why
18:53
there are not what I want with regard to position limits so it's a whole nother
18:59
topic of further position limits but there are some position limits in what
19:06
is called the spot month that's the delivery month that month where you hope
19:11
everybody doesn't get a you know pool full of oil and so there are limits in
19:18
the spot month there's not limits in what we call the back month that's every
19:24
month other than the spot months or all month combined which would be the spot month and the back months those limits I
19:31
pushed for but have not been put in place even though they're required by law but those those limits can people
19:43
that traders that have large positions that are approaching those limits or
19:49
above those listed or or limits or had an exemption from those limits they are
19:55
particularly traders that could role
20:01
markets with large trades so it doesn't mean that they're a problem just because they
20:06
have the positions but they're certainly suspect and regulators look at those
20:12
sorts of things because they can push or pull markets around and appropriately and that can damage a lot of a lot of
20:22
average folks a lot of other traders right and again you mentioned the position that went from Bear Stearns to
20:28
JPMorgan and also in that was in 2008 when we saw silver go from about $21 to
20:34
9 do you think that that those two were connected and that that position that
20:41
JPMorgan eventually added the waiver for had an influence on the price
20:47
yeah don't know don't know I mean I was about to say I can't say but it's not that I can't say it's the truth is I
20:53
don't know right fair enough curious and
20:59
I thought no I saw no evidence of such okay another year that we had a wild
21:10
series of price moves in silver was obviously 2011 again we had Bernanke and
21:16
I believe was October of 2010 launched qe2 I bought a thousand ounce block of
21:23
silver in response to that so again it just in the sense that it made LA it was
21:29
logical to me that part of the run-up was in response to a lot of money printing we hit $49 in April and then
21:37
the price crashed down and been in a bear market ever since then any thoughts on anything you'd like to comment on
21:45
about the price especially in 2011 or what's happened since well you know a
21:54
lot of these I mean I when precious
21:59
metals is essentially you know or their safe havens so when you see things like you saw why you bought makes all the
22:07
sense in the world and but you know ideally these things are supposed to
22:15
operate under market fundamentals and those involve supply demand and they involve the
22:21
number of traders out there who's willing to risk and how long they're willing to risk it so you know I'm away
22:27
from it now I mean I could cover our dollar ship program we look at precious
22:33
metals all the time but I'm certainly not in a position now to see anything in markets that if some untoward was going
22:41
on I wouldn't necessarily I wouldn't know about it I certainly wouldn't know the details about it but I can tell you
22:48
things were suspect and the
22:54
investigation that we did uncovered a lot of evidence that would lead to a
23:03
manipulation case or an attempted manipulation case but the standard of
23:09
evidence the cumulative standard of evidence was a very high bar and so
23:16
while we did have evidence direct evidence you know voicemail evidence
23:22
text evidence trading evidence at some
23:27
point we had price movement evidence but we never had all of the things that you
23:33
needed together in one place that were
23:38
enough for us to go after there were just there were just holes and it was
23:44
frustrating and and we looked at it a bunch of different ways and at one point
23:51
we even thought we had enough to go forward with the case and we asked for some forensic economists outside of the
24:00
CFTC to examine it and they came back and they said no we don't think so and
24:06
that was after about four years by the way I've never talked about this that was after about four years and I
24:13
said oh whoa wait a minute we thought we had enough evidence and we hire somebody outside and they say we don't have
24:19
enough evidence let's go to somebody else so people don't know this part but
24:25
I essentially I extended the investigation yet another year because I didn't believe it and so we went to
24:33
yet another forensic economist and had them look at it and they came back with
24:38
the opinion of the first folks that we we just didn't we didn't have we didn't
24:45
have the traders and we didn't have the market participants dead to rights but
24:52
we had lots of stuff and we had real stuff that would have played really well
24:58
in court not just numbers but the the rhetoric the banter between traders that
25:05
we had and I'm not saying there was lots of it but there was enough of it that it
25:11
was damning but the damning part had to
25:17
be backed up by other requirements of evidence under the law and we didn't get
25:25
all of that we didn't get to that it troubled me so much by the way that I
25:33
did seek and a change in the law and we
25:40
ultimately got it and we have a there's a newer lower standard for manipulation
25:46
that's been in place since that time it was not it was not retroactively a lower
25:54
standard of manipulation for the CFTC which is similar to the SE C's standard
26:03
for manipulation or one of their standards there there I think it's there
26:08
10 B 5 standard which is based upon recklessness so instead of having these
26:15
four different hurdles that I was describing earlier that we're pretty high for us to get over the new standard
26:24
that I fought for and Maria Cantwell with the champion in the Senate in Congress on this by the way although
26:30
there were others Bernie Sanders etc but Marie Cantwell was the real champion that now there's a lower manipulation
26:38
standard one that would be easier to prove
26:43
you know would the same evidence back then result in a charge and potential
26:54
conviction on manipulation I think so I think so but you know it's something that we'll
27:01
never see it's not it wasn't a grandfather thing the law was the law then and I'm glad we changed it but it
27:09
may be one of the small little you know for lack of a better world silver rays
27:16
of light in this whole torrid debacle yeah that's really fascinating here you
27:24
mention that again a lot of this I've followed and is certainly interesting
27:30
especially since in the time after that we've had Deutsche Bank have a settlement where they release some
27:35
trader transcripts which were not very positive and then of course more
27:42
recently we had a former JP Morgan trader John Edmonds plead guilty to the
27:48
Department of Justice I thought it was particularly interesting that he mentioned that what he did now he pled
27:54
guilty to spoofing but mentioned that it was with the knowledge of his superiors
28:00
and widespread practice at the firm cured would love to hear any thoughts
28:05
you have on that because essentially you know it may be further verification of
28:10
what you were investigating and advocating and just talking about as well
28:16
well spoofing is another thing that wasn't against the law when a lot of these nefarious trades were taking place
28:23
spoofing was a spoofing was a dodd-frank
28:29
invention it's another thing I worked on another thing that Maria Cantwell worked
28:35
on by the way that and spoofing is
28:40
essentially camera two being part and parcel of manipulation you spoof to
28:46
manipulate markets you mean you exposed to push markets up or down and then you take the opposite
28:53
position right so it was a you know we ultimately I forget when we
29:00
held when we did the rule because even though the law even though you passed the law
29:08
you know once the law is passed and you have to promulgate the tough word but promulgate is the word we used for
29:14
actually implementing the rule and that took a while so let it define what the
29:20
word spoofing meant more importantly what it didn't mean because people take
29:26
Gamble's and markets all the time but essentially sending out false price
29:31
signals on trades that you never intend to execute and that phrase never intend
29:39
is a is a tough one to define because how can you divine somebody's intent
29:46
I said well Chris I intended on doing it you say oh no you didn't know how do you
29:52
know I didn't intend on so it's a sort of a weasel word but we did the best we
29:58
could on it and that's another thing that although the statutes been used effectively used against an HF treaty
30:07
trader and cago couple times actually so the laws working but all these laws
30:14
whether or not it's the the recklessness manipulation standard I mentioned
30:19
whether or not it's spoofing or any other law or rule or regulation these things need to constantly be living
30:27
documents to ensure that they are keeping up with market participants and
30:33
what they're doing because boy these these traders that they'll look for any
30:39
way to get a competitive advantage sometimes that enters an area that is a
30:45
little gray and sometimes if they get into that gray area they will really
30:52
take advantage of it and and regulators and lawmakers need to be aware of that and constantly devising their rules and
30:59
regulations and updating them so that they're appropriate for the circumstances so that we don't have a
31:06
you know environment like we did with silverware we had all sorts of evidence and just
31:13
couldn't get them because the law the rule rags weren't we're too stringent I
31:19
mean the stuff we add was pretty pretty damning but just not enough yeah and
31:29
certainly for my experience on Wall Street I can confirm what you're saying about how unfortunately you know if you
31:36
leave a little room for error some traders out there will try and exploit that again I appreciate you mentioning
31:43
the spoofing curious because my
31:49
understanding of what how some of the manipulation has occurred is that you
31:55
know if silver is trading twenty dollars in five cents there's a lot of stop orders placed
32:00
around the twenty dollar handle so often if the price can get pushed a little bit
32:06
then you get a lot of those high-frequency algorithms kicking in and then you'll see a drop with many feeling
32:13
that people kind of nudging a little or then able to buy lower does that sound
32:18
like a reasonably accurate portrayal to put it in perspective to folks or would
32:24
you phrase it different well it's a good procure it's a good portrayal but it's actually it's a very good portrayal but
32:32
it's actually also a reflection of what
32:38
I was just speaking speaking about of how trading has changed so even back in
32:43
two thousand eight nine ten maybe a
32:49
little bit of eleven even when a lot of these silver trades and some gold trades were pretty suspect when you're looking
32:55
at them you didn't have high-frequency traders in these markets like you do today right and they're still not all
33:01
over them but spoofing that one thing when it was you know an average person
33:09
out there you know saying they're going to sell a hundred loss of something and trying to tick the price up a penny and
33:16
then once it goes up and they offer you know half a penny if they get it to go
33:22
up a penny they offer half a penny make a half a penny where they weren't going to make anything and then they
33:27
pull back those other offers for a penny right so they say I'll sell these things for a penny more than anybody else is
33:34
offering and the price takes up and a couple of people may take advantage but
33:39
then they pull back the offer real quick and then they chart they say now I'll sell a pair of this amount and they get
33:45
a bunch of buyers so markets are changing and so you have these
33:50
high-frequency traders who are getting into more and more areas and at first they weren't really they weren't into
33:56
the futures and weren't into commodities but now they're getting into them particularly oil from the larger trailer
34:03
t-bills you know getting into gold and silver
34:10
Alesso like pork belly is in life cattle and stuff but you know what they want is
34:17
volume high frequency traders I call them cheetahs not that not because
34:23
they're like Boston card cheaters but because they're fast like the market
34:29
cheese sheet is in the jungle and you know they're trying to prey upon any little time lapse that they can see and
34:37
but they've got to have volume to make those changes and they serve a purpose the cheese's because they add liquidity
34:44
you markets so if there's somebody wants to buy or sell cheetahs will take them they'll do it
34:50
they're just going to offload it one way or another in the meantime and it'll be
34:56
so quick that they're trying to make you
35:02
know just little micro pennies in nanoseconds so the difference in your
35:08
description is that today when a market moves because of a spoof it can move a
35:16
lot more so you know we people hadn't really I mean maybe two or three times
35:22
in history you heard about a flash crash but it really wasn't until 2006 2010
35:30
that when we had this major flash crash that impacted started in S&P many seats
35:37
the Chicago Mercantile Exchange group and then there was contagion the S&P 500
35:47
emini futures country then there was contagion into the equities related
35:54
equities markets it wasn't until then people really started to hear this term flash crash and since that time there's
36:01
been you know a dozen 15 of them and we had a big investigation back then on
36:07
that one that I pointed to with the SEC and the CFTC it still stands as a really
36:12
hard look at what was going going on but the bottom line is HF keys were involved
36:18
in the markets they didn't do anything wrong we thought they might have but we
36:23
there's never any cases that came out of it but we thought they may have but the
36:29
bottom line is they're doing what they do they're in two markets they are in two markets when markets were going down
36:35
they saw this 75000 a lot being created and they just took advantage of it and
36:42
it created and traded and traded and traded and traded and they took the other side and the market went down faster than anybody thought it ever had
36:49
this was a flash crashed and then fortunately because they were in the
36:55
market the untold story the other part of that story is if the hfts actually
37:01
helped bring up the price back up because while it crashed I think 18 P went down to a penny their stock would
37:07
come to a penny that it was a the hfts
37:13
are in the market taking advantage of the buy back to so markets are different now so to my point about trying to make
37:20
sure that regulations are right sized you know we wrote the spoofing law you
37:26
know as a dodd-frank bank didn't get implemented for a couple more years is it correct as written now now it's
37:33
been used effectively so a lot of people a lot of regulators probably say yeah sure it's been used it's great no
37:38
problem I'd say it's worth a look-see given what we know about it how many
37:43
times traders are trading I mean there are times Chris I love this figure because
37:50
it's so amazing there are times that we looked at particularly during the close where
37:57
high frequency traders are trading 450 to 500 times in any aggregate 450 all
38:05
all of them 450 or 500 times per second per second crazy numbers like I like how
38:14
do you you know how do you Adil and then they want somebody to analyze those trades per second 450 or 500 tons so
38:22
we're in a whole new world of trading and we need to ensure that the laws are
38:28
updated to have an environment and in which we can endeavor to the fullest
38:35
extent to catch the bad guys and those who are trying to be better they're
38:41
being bad actors and these important markets that impact the economic engine of our democracy yeah it's it's it's
38:48
like you said it's fascinating the way finances change the world has changed everything so digital we're not using
38:55
hand signals on the floor to do everything anymore right all right
39:01
perhaps just the final question before we wrap up and let you go as I sure do
39:06
appreciate your time today just with the JP Morgan case with the Department of
39:11
Justice again no one knows the future but do you have any thoughts on how that
39:17
plays out and whether you think maybe some of the things that you and the CFTC
39:22
we're trying to bring to light that perhaps the Department of Justice will be able to do so going forward
39:33
nothing specific Chris but I tell you that during this whole time on we were
39:38
doing the investigation something it wasn't covered because it really wasn't any action really no reason to cover it
39:45
I guess but was it we were keeping DOJ up-to-date on what we were doing they
39:51
had a couple of briefings during the it was it ended up being five years in total of the investigation I can't tell
39:58
how many times we were briefed on it dozens and dozens and dozens and and I had
40:04
probably you know 200 meetings on on silver separate from those Commission briefings but there were ongoing
40:16
conversations with DOJ about what we are finding and they wanted to be updated
40:22
but when we said we weren't going forward they you know they said they're
40:28
not going forward either they usually take these things as a referral and fortunately they are real serious about
40:36
it unfortunately they don't have the manpower to DOJ to go after as many bad
40:46
actors as I think the country deserves back in the day and I'm talking you know
40:54
back during this time period 8 9 10 11 12 only about 75% of the referrals that
41:01
we sent to DOJ did did only about 25% 75% they rejected only 25% did they
41:09
accept and we never sent them something that we didn't win on we weren't like
41:16
sending them things oh we didn't get this maybe you can now these are all things that we went on that we got
41:21
either got a conviction or a settlement these were you know we were winners on
41:29
these things and we said we think that you know you should put the folks behind bars and so I don't have anything
41:38
negative about any individuals the DOJ I think this is a reflection of Congress
41:45
and budget policies about where staff resources need to go and DOJ Criminal
41:53
Division is one that deserves certainly more resources and and the number of
42:00
referrals rejected is less over at the SEC it was back then I don't remember
42:05
the number but it still was about 50% I can't tell you what it was maybe in 60%
42:11
it was less than ours but it was still about 50% I remember that and so now not
42:17
so bad actors may have been fined but is that
42:23
old detective series we're now on people remember beretta used to say to do the crime you do the time I just pay a fine
42:31
and so more people I think should be doing time when they violate these
42:36
important financial laws yeah I can certainly understand that and
42:42
fortunately as I get I've crossed 40 in the past year I'm getting better at
42:47
accepting what we can change and what we can't and while there's certain things are out of our control I really do
42:54
appreciate how you've all the effort that you've put into this over the year again I contacted the five CFTC
43:02
commissioners a couple of years back and like you mentioned before you were the only one to respond and I think
43:08
especially when people see things going on you know obviously we all want things
43:13
to be fair but really even just having someone that's accountable and comes on
43:19
in speaks and lets folks know what's going on truly grateful for what you're doing what you've done and sure the
43:26
great things you'll be doing going forward so perhaps just to close out maybe one last time you can mention the
43:32
show and where people can find you and stay up-to-date on the great research you're doing sure well I've been really
43:39
pleased I've been doing this show on Rt America and it's broadcast globally and
43:46
it's great because the business of Finance show it's every day a week it's called boom-bust and you can get it in
43:54
the US a bunch of places you get it Direct TV and directv and dish and the
44:02
Groff Comcast right now we'll be back soon you can only check it out at youtube.com
44:08
slash boom-bust Artie and I continue to have I think a different voice in
44:15
finance and business and I continue to call them as they see them and as I see
44:21
them and you can check us out there thank you so much Chris sure appreciate time that you are willing to talk to
44:29
this important subject and feel free to let me know never be of help in the future well I
44:34
sure appreciate that Bart that's kind of you to say you've you've been a big help in my career just helping me to see some
44:40
of these things and keep going so really great pleasure to catch up with you today and thanks so much for joining and
44:47
I look forward to staying in touch my friend good luck my friend thank you so
44:52
there you go obviously so the stunning things Bart said there a few key takeaways I know a
45:00
lot of people focused on what he said directly about Bear Stearns having the position JP Morgan making it bigger and
45:07
certainly that was a key one in fact what I found interesting was how he mentioned that he told them to make the
45:13
position smaller now he didn't clearly say whether it was a short position although given my research it seems to
45:22
me that Bear Stearns I've heard one person debate this although it seems to me Bear Stearns was very short silver
45:28
could have factored in their demise and then combined with JP Morgan position that they made bigger keep in mind the
45:35
time period he describes when they were making it bigger was when silver was falling from $21 to nine dollars while
45:43
dealers were reporting shortages of metal which to me was one of the most
45:49
blatant examples of how big of an impact on the price that can have I know a lot
45:55
of people talk about that period in 2008 when gold went from 7,000 to 700 silver
46:00
went from 21 to 9 and the general rationales that that was panic selling I
46:06
dispute that largely based on what Bart said and seeing the impact of that short
46:11
position because price drops more than 50 percent while there's a shortage of the product certainly you know a few
46:21
other things he mentioned when I asked about whether you know you have a situation where there's more contracts
46:27
out there than silver to be delivered and he didn't dispute that but said that that's just the case with all the
46:33
commodities and lastly the one that I thought was really worthwhile that stood
46:39
with me was that he said that he thought they had a good case you know the forensic economist told
46:45
no but that actually led him to change the rule so under the current rule according to Bart JPMorgan he thinks
46:53
would have faced a conviction there I guess we will never know but again just
47:00
different than saying that markets aren't manipulated I don't know how much more clearly he could have said it it's
47:06
a shame that he's not still with us so that could follow up although I'm just
47:14
aren't grateful that he shared what he did it was very kind to me and I appreciate what he did in his career and
47:21
hopefully this shed a little more light on things again this was part of the book the big silver short that we have
47:28
just released here which the whole point was to get to the bottom of what's really going on so this was a big part
47:34
of it and really grateful to Bart for all he shared again sending best wishes to his family and with that sad hope you
47:43
enjoyed this if you'd like to know a little bit more about the book this is part of well there's a video coming your
47:48
way now and you just click on that [Music]
48:01
you
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