The Tamp Down team, a wholly owned subsidiary of the Plunge Protection Team has London operations. The LBMA pulls off the greatest spoof in the history of trading – 124 million oz of silver to spook the May contract longs. JP Morgan’s criminal enterprise spoofing operation is child’s play.
Five times each year Comex futures enters a period of drama as the large contracts (January, May, July, September and December) approach first notice day. It is a display of the paper charade that Comex silver and gold markets are. With only a few weeks to first notice day there are 5 or 6 times as many contracts open as the entire metal available for delivery as registered stocks. And just because it is in the vault doesn’t mean the shorts hold title to the bars, so the key ratio is likely far higher than 5 or 6.
The drama plays out over 3 weeks as many traders either roll their position to a forward month or close their position. Only a fraction stand for delivery. With only a week to go, there are still typically about 3 times as many open contracts as metal in the vault.
This must be a stressful situation for those short silver or whose goal is to “tamp down” precious metals markets. The metals “Tamp Down Team" is a fully owned subsidiary of the “Plunge Protection Team”.
Let’s digress to routine day to day trading in the futures market. JP Morgan was found by the CFTC to be a criminal enterprise from their spoofing operation. From Reuters:
“Between 2008 and 2016, JPMorgan engaged in a pattern of manipulation in the precious metals futures and U.S. Treasury futures market, the CFTC said. Traders would place orders on one side of the market which they never intended to execute, to create a false impression of buy or sell interest that would raise or depress prices, according to the settlement.”
JP Morgan was fined by the CFTC for nearly $1 billion for spoofing the market … creating the illusion of supply or demand to manipulate the market.
The LBMA spoofed on the grandest scale in history. They created the illusion of an instant appearance of 124 million oz of silver, in essence a sell order.
First, the LBMA changed their reporting schedule. Normally they report stocks on a one month lag however on March 5, the LBMA changed the lag to just 5 business days. This enabled them to publish new vault numbers BEFORE the roll period of the May contract. If the 30 day lag was used, the published stocks report would be after first notice day of the May contract and would not impact investor psychology or actions.
The subsequent announcement of the stocks report occurred on April 9 just as the roll from the May contract started. The LBMA titled its press release as “Record stocks of Silver in London Vaults” to make the biggest splash possible.
If you held a May silver futures contract long position and thought the silver market was getting tight, would it be unnerving to see 124 million oz suddenly appear in the LBMA vault as “record stocks”? An investor could easily think that if 124 million oz can be added in this month, then maybe more could be added next month.
Note the timing of the LBMA reporting change annoucement and the initial "record stocks" press release superimposed on the May contract timeline shown below. The "record stocks" report occurred immediately before the critical weeks before first notice date.
Then on May 10, the LBMA issued a statement that effectively retracted nearly all of the “record stocks”. They stated the revised stock levels although they didn’t use the word "revised". And it only admitted its “error” in a footnote:
*A data submission error led to the publication of an incorrect aggregate figure for the total silver held in London vaults in March. The corrected figure is 1,143,194 Troy ounces (‘000s).
And just like that, the spoof was cancelled!
The metals markets manipulation has now gone to a new level. There are many indications that the metals market charade is under duress. I think this may be the sharpest signal yet.
If you haven’t heard of the "Tamp Down Team", it was recently revealed by the Mr. Rostin Brehnam, acting Chairman of the CFTC:
If you don’t know of the Plunge Protection Team, you’re not paying attention.
This is definitely retweetable:
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May 12, 2021 at 02:19PM