2 More Felony Counts For Price Manipulation For JPMorgan…

A Pfennig For Your Thoughts

September 30, 2020

* Currencies & metals give back gains overnight… 
* Chuck asks, why do people keep getting more stupid? 

Good Day… And a Wonderful Wednesday to you! Well, did you watch the debate last night? I didn’t because after cooking for 2 hours, yesterday, for some reason, I just didn’t have anything left in the tank. So I sat down, played some music and forgot about the debate… I’m sure I know who “won” the debate, without looking… But I’ll be checking that out later this morning… I forgot to congratulate the Tampa Bay Lightening on their Stanley Cup Championship that was won Monday night… Well, I hope they get to each individually get the Cup for one day, as is tradition. I say that because the new hockey season begins December 1st! Yes, less than two months of “down time”… I’m still waiting for the folks at Roger Dean Stadium to let me know about my spring training season tickets… The Stadium only has about 6,500 seats, so if they spread people out, this could get interesting! Tom Petty and the Heartbreakers greet me this morning with their song: You Got Lucky….  

Funny story, for years that I’ve been getting scans, I get into the room and they ask me about my medical history (as if they couldn’t look it up!) and I tell them about losing my left kidney, part of my right femur, my left eye, and I still have cancer in my right jaw, and then I tell them, “They call me Lucky”… That always gets a chuckle out of them!

OK, onto the markets…. Well, the dollar bugs had really retreated yesterday… Last week at this time I was telling you that they were dancing in the street and inviting their neighbors to join them… And a week later the dollar bugs had all returned home to the wall boards they crawled out of! The euro is leading the currencies back to higher ground, and Gold closed up $16 on the day to bring it back to within’ spittin’ distance of $1,900… 

However, the overnight markets have not been kind to the non-dollar assets.. Gold has lost $12 and Silver has lost 46-cents in the early trading today. There was nothing in the news or rumors or anything that would cause this reversal of yesterday’s moves… So, was it the wolf at the door? Sure smells like it to me… 

The dollar didn’t get sold yesterday, on the basis of the results of the Consumer Confidence Index for this month, as the index rose to an unbelievable high of 101.8 from 86.3 last month… I guess the 3 consecutive weeks of stock losses didn’t faze the folks they asked… And as usual, they didn’t dare ask me! What on earth are these people who are confident smoking? Or drinking? Or just being plain stupid? The Pearls Before Swine cartoon yesterday, had rat telling goat that…. for the fist time in history we have all the collective knowledge of the world in our hands. We can know anything we want to know about anything instantaneously… So, how did People get stupider?  Goat says, “you should Google that”, and Rat replies, “it’s says no clue”….

I emailed the cartoon to by good friends saying… I ask this question every day! How in the world have people got more stupid? Well, I’ll give you my two cents on that thought…. I believe it’s because of the education they receive… When they don’t have to compute math equations any longer, or know the capital of every country in the world, or whatever, the knowledge gets weaker and weaker with every year…. And Google… Instead of having to know something, they can just Google it… I’m just saying…

I have something for you this morning, stay with it… read it carefully, because it proves me to be correct about price manipulation, etc.   here we go… Yesterday, I read a report from Wallstreetonparade.com and it in they reported that Union Bank of Switzerland (UBS) had said that “Now that Indictments Have Outed Gold Manipulations at JPMorgan, UBS Says “Buy Gold” And that all sounds good, right? Well, on the same day, I read on a GATA email that, “Don’t think for a moment, the TF Metals Report’s Craig Hemke writes today at Sprott Money, that manipulation and corruption in the monetary metals markets will stop with JPMorganChase’s admission of rigging them and the bank’s paying a $920 million fine.

Market rigging, Hemke writes, remains too easy and profitable and the market regulators too corrupt or incompetent to stop it.”

Chuck again… Yes, I agree, the market regulators are both too corrupt and too incompetent to stop it!

Oh, and once again JPMorgan has admitted to two new Felony counts of price manipulation, which brings the total to 5 Felony counts that have all occurred under Jamie Dimon’s leadership… or lack of, whichever you choose to use…  Now that’s me talking… Here’s Pam and Russ Martens of wallstreetonparade.com Read carefully…

“Under the richly compensated leadership of Chairman and CEO Jamie Dimon, JPMorgan Chase, the largest bank in the United States, has admitted to an unprecedented five criminal felony counts since 2014 and put on criminal probation three times. Dimon notched two of those felony counts in his belt today. (That’s five felonies more than the bank pleaded guilty to in its prior 100 years of existence. Translation: this is not normal even on Wall Street.)

The bank has agreed today to pay criminal fines and admit to two felony counts of wire fraud for manipulating (spoofing) trading in the precious metals and U.S. Treasury markets. Why the Justice Department is bringing only two counts when its own charging document indicates that traders engaged in “tens of thousands of instances of unlawful trading in gold, silver, platinum, and palladium…as well as thousands of instances of unlawful trading in U.S. Treasury futures contracts and in U.S. Treasury notes and bonds…” is one more sign that this Justice Department is egregiously failing the American people and making a mockery of the word “justice.””

Chuck again… I just had to include their explanation of what’s going on at JPMorgan’s metals and Treasuries desks…. Now, back to regular programming… Oh, and JPMorgan’s fine? It was $920 Million… Like I said earlier this week, that’s just chump change for what they made doing the unlawful trades… 

So… the question is this about the dollar rebound overnight… As I said yesterday, the wolf is always at the door here, and we had better not forget it… And like I said above, this rebound overnight smells of PPT…. But they’ll come a time when the markets say, “to hell with the PPT, we’re selling dollars before we get caught holding them” And when that day comes, and it will come in my opinion, I don’t think the PPT will want to stand in front of that bus…. Do you? 

The U.S. Data Cupboard yesterday had the aforementioned stupid Consumer Confidence. In addition, it also had the Case/ Shiller Home Price Index for July, which showed that home prices were rising at a good clip in July… Of course we’re one day away from Rocktober, so that data is a little stale, eh?

Today’s Data Cupboard has the ADP Employment Report for Sept, which the forecasters believe will be around 430,000, which if you were paying attention in class on Monday, I told you that the forecasters has thought the BLS Jobs Jamboree would be around 880,000…. Now there’s a Big Difference there isn’t there? As always, I say we should pay attention to the ADP report, but then that would mean the markets had to change their minds, and we can’t begin to have that happen! They aren’t smart enough to adapt, Change, innovate… In addition, the 2nd Revision of 2nd QTR GDP will print and is expected to remain unrevised at negative 31.7%… And there will be a regional manufacturing index that I’m boycotting, so we’ll just move along from here…

To recap…. The dollar bugs had all returned home to the wall boards they crawled out of yesterday, but that all reversed in the overnight markets… Gold climbed higher by $16 to $1,897, and Silver followed along… But has given those gains back early this morning… JPMorgan has admitted to being guilty of 2 more felony counts on price manipulation of metals and Treasuries… Chuck has a long explanation of it all from the good folks at www.wallstreetonparade.com  In addition Chuck asks how people continue to just keep getting more stupid?

For What It’s Worth… since I spent a good part of the morning going through the price manipulation felony counts against JPMorgan this morning, I thought that this article tied it all up in a neat little bow for you… It’s an article about who’s behind all this price manipulation at JPMorgan, and can be found here: https://www.zerohedge.com/markets/how-jpms-precious-metals-trading-desk-manipulated-markets-crime-ring-within-bank?

Or, here’s your snippet: “There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity”, when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything.

All that changed in November 2018 when a former JPMorgan precious-metals trader admitted he engaged in a six-year spoofing scheme that defrauded investors in gold, silver, platinum, and palladium futures contracts. John Edmonds, then 36, pled guilty under seal in the District of Connecticut to commodities fraud, conspiracy to commit wire fraud, commodities price manipulation, and spoofing, a trading technique whereby traders flood the market with “fake” bids or asks to push the price of a given futures contract up or down toward a more advantageous price, and to confuse other traders or HFTs which respond to trader intentions by launching momentum in the other direction. As FBI Assistant Director in Charge Sweeney explained at the time, “with his guilty plea, Edmonds admitted he intended to introduce materially false and misleading information into the commodities markets.”

A little more than a year later, former Deutsche Bank precious metals trader David Liew sat in a federal courtroom telling a jury about how he learned to ‘spoof’ markets from his colleagues, and that he considered the behavior to be “OK” because it was “so commonplace.” Unfortunately for him, federal authorities didn’t see it that way, and have aggressively prosecuted the big dealer banks for market manipulation across a variety of markets. His testimony led to convictions for two of his former coworkers. A few days later, JP Morgan agreed to settle similar allegations with a record $1 billion fine, netting another major victory for the government in the nearly decade-long campaign to root out manipulation from the precious metal markets.

Today, Bloomberg is finally catching up to years of “conspiracy theory” reporting, such as this article published here in 2014 and titled “Gold Rigging By Bullion Banks Exposed: The Complete Chart“, with a sweeping expose about the precious metals manipulation and spoofing scandal, focusing on the precious metals trading desk at JPM and its top trader, Mike Nowak.

And although Bloomberg inexplicably did not mention it even once in its lengthy report, Nowak’s desk was under the direct purview of Blythe Masters, who from 2007 until 2014 was the head of Global Commodities at JPMorgan.  

Which is ironic because going all the way back to 2012, the “tinfoil hat” crowd was abuzz with speculation that central banks, perhaps in league with the big broker dealers and occasionally aided by HFT momentum ignition, were conspiring to manipulate precious metals prices. When questioned about this in an interview with CNBC, Masters denied that JPMorgan was engaged in any manipulation, and instead insisted that JPM’s precious metals desk was reputable a “client-driven business.”

“Our business is a client-driven business where we execute on behalf of clients to help them with their…risk management objectives,” Blythe Masters said before going on to claim that the bank runs a “balanced book”, where its long and short positions are always evened out. But the punchline was when Master, who is perhaps best known for discovering the Credit Default Swap, said that manipulating markets to benefit the bank’s positions to the detriment of clients would be “wrong, and we don’t do it.””

Chuck again…So where are all those naysayers that laughed at me, and made me stop talking about price manipulation now? And to Blyth Masters’ comment about price manipulation would “be wrong and we don’t do it” I say… OOPS!  

Market Prices 9/30/20: American Style: A$ .7122, kiwi .6578, C$ .7469, euro 1.1708, sterling 1.2830, Swiss $1.0838, European style: rand 16.8254, krone 9.4805, SEK 9.0253, forint 312.08,  zloty 3.8871,  koruna 23.2323, RUB 79.08, yen 105.72, sing 1.3692, HKD 7.7499, INR 73.64, China 6.8168, peso 22.34, BLR 5.6491, Dollar Index 94.10, Oil $39.15, 10-year .64%, Silver $23.81, Platinum $880.00, Palladium $2,382.00, and Gold… $1,885.60

That’s it for today… Well, today’s the day… My beloved Cardinals start their best of 3 playoff series with the Padres… The American League started their playoffs yesterday, and the National League starts their playoffs today. The Cardinals need to steal game 1… I’m just saying… Man did I go Emeril in the kitchen yesterday, and made a very yummy dinner for me and Alex, I’m not doing that again! I am going to make some pig-cluckers today, but the Big Green Egg will do most of the work! It’s been 11 days now that, for the most part I’m alone… I liked it at first, but now it’s beginning to become a drag… Deep Purple takes us to the finish line today with their song: Hush….  And with that, I hope you have a Wonderful Wednesday, and I ask you to please, Be Good To Yourself!

Chuck Butler

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A Pfennig For Your Thoughts