Light trading today despite all the overnight excitement.
Last night The Financial Times ran an online story that was their front page lead today suggesting that the CFTC was going to simply drop their four year investigation of manipulation in the silver market.
It is of course possible they would do this, but it seemed rather heavy-handed and clumsy to just drop a four year study one month before its expected release, especially since it is judged to be somewhat controversial. And it involves a futures market that has been rocked by scandal after scandal over the past two years.
Today we find out that the FT may have gotten their information wrong which is certainly a faux pas for a major news media outlet that generally would not run something like that without a dual confirmation of the facts, especially when it involves key market information.
At the end of the day, in the longer term, I am not sure that any of this matters. I think the market is heading towards a default in silver unless there is some sort of action or settlement imposed by the government and the exchange.
The metals manipulation has been as bad or even worse than LIBOR, and at some point rude reality is going to intrude given the stubbornly physical nature of bullion. At least that is what history suggests will happen after a long period of price manipulation.
But let's see what happens.
Still, this sort of nonsensical uncertainty and lack of transparency suggests that something is very wrong behind the scenes, and The Major Players and Very Serious People are trying to figure out what to do about it.
And of course, there is the impediment of the credibility trap for the government and the regulators to consider. Especially if He-Who-Must-Not-Be-Allowed-To-Fail has his tit irretrievably caught in the wringer, as they used to say, on the short side of a rising market where covering might not be 'practical.'
I hear the Brits are fit to be tied about the hypocrisy, especially after the public brow-beating they have taken over Barclays and LIBOR. And now the Yanks have the temerity to interfere with the attempts to clean their own house because of the potential collateral damage to Wall Street.
Read what Glenn Greenwald has to say about the modern rule of law with liberty and justice for some, and you will get the picture:
"You can often, and I would say more often than not, in leading opinion-making elite circles, find an expressed renouncement or repudiation of that principle...All of these acts entail very aggressive and explicit arguments that the most powerful political and financial elites in our society should not be, and are not, subject to the rule of law because it is too disruptive, it is too divisive, it is more important that we should look forward, that we find ways to avoid repeating the problem...the rule of law is not that important of a value any longer...
The law is no respecter of persons, but the law is also a respecter of reality, meaning if it is too disruptive or divisive that it is actually in our common good, not the elite criminals, but in our common good, to exempt the most powerful from the consequences of their criminal acts, and that has become the template used in each of these instances."
And for any who think that the problems are insurmountable, and that nothing can be done, here is a fine example of how wrong they can be. Each generation must take up its struggle with the principalities and powers, and dark forces in high places, especially those in their own hardened hearts.
