06 April 2012

MF Global Trustee Giddens in 'Substantive Talks with JPM' Over Return of Stolen Customer Funds



It is nice to see that JPM is cooperating with Mr. Giddens, who is investigating their role in the funds that were stolen from MF Global's customers.

It remains to be seen how much, if any, money that they will return.

But it is good news to see that someone is stepping up besides the Commodity Customer Coalition.

It will be interesting to hear what Edith O'Brien will disclose when she testifies, and how it will be received.

Her situation is outlined here: The Big Fix Was In - MFGFacts

The legal rationale for their actions which JPM might take is outlined here: MF Global Warning: The Financial Markets Have Not Been Fixed - MFGFacts

The SIPA Liquidation of MF Global Inc.
James W. Giddens, Trustee
STATUS OF TRUSTEE'S INVESTIGATION OF CHASE
Date: April 4, 2012

The Trustee has conducted an investigation of the actions of JPMorgan Chase Bank, N.A. regarding JPMorgan's activities in connection with MF Global.

JPMorgan has cooperated with the Trustee's investigation, which has included witness interviews and review of extensive documentation by the Trustee's professionals, including attorneys and forensic accountants from Ernst & Young.

The Trustee and JPMorgan are presently engaged in substantive discussions regarding the resolution of claims.

JPM In Talks Over Missing MF Global Customer Money - New York Times

05 April 2012

Gold Daily and Silver Weekly Charts - The Dr. Evil Strategy and Some Targets


"The exact methodology being deployed that enables the dominant commercial traders to pull this scam off repetitively, aside from outright collusion, is High Frequency Trading (HFT). HFT is the collusive bundling of advanced computer hardware and software that is so advanced and powerful that it has achieved the power to move prices sharply with little actual trading required in setting prices. The way HFT works is that the collusive trading programs suddenly flash great numbers of contracts for sale. But before much actual selling occurs, all the other traders in the market see the great volumes of contracts apparently offered for sale and these other traders withdraw buy orders and start entering their own sell orders to get ahead of the great wave of HFT sell orders offered. Then a not so funny thing happens. Most of the time, very few of the HFT orders originally offered for sale get filled or executed. Instead, they are quickly cancelled. There's even an operative term for this practice that's perfect – spoofing.

Most of the HFT orders are never filled, nor are they ever intended to be filled. These spoof orders are intended to scare others into selling so that the dominant commercial traders can buy gold and silver contracts. And make no mistake, this phony HFT activity has been successful, to the great shame of the regulators at the CFTC, who know that this manipulative trading is against commodity law. The proof that it is manipulative trading lies in the data published by the CFTC. That data shows the big dominant commercial traders are always the big net buyers on the big down days. It is not possible for that to be coincidence; it as close to cause and effect as is possible."

Ted Butler, Butler Research


“The tactic is always the same. The gold banks enter the COMEX and offer more gold for sale at the market than has been mined in the last five years. Immediately, the locals (pit traders) try to run in front and hit any bids they happen to have on their book or are out there in order to get the price down.

Gold tanks down to the $1,640 level and now the brokers for the gold banks begin to enter the market to cover shorts to reduce the short position taken, and most likely to completely flatten it on the day. This has been going on from 1968 to 1980 and it’s also been going on from 2001 to today. The net effect is absolutely nothing."

Jim Sinclair, KWN


“Gold has to get through $1,800. $1,600 has to hold in the short-term. $1,550 to $1,600 is okay, but I wouldn’t like to see a move to the lower end of that range because your uptrend and support are coming in right now around $1,600.

Gold has a horizontal consolidation in place. I was disappointed gold couldn’t break $1,800 previously, but again, sideways is okay. This sideways action is healthy, this consolidation, but gold now has to prove itself.”

Louise Yamada, KWN


"These big plunges in price look to be driven by short selling, with weak hands being driven out, and then short covering or determined buyers stepping back in to maintain the overall number of contracts at a relatively steady level, but with some good profits from covering their short positions at cheaper prices. There is also a lucrative cross trade to be had in other markets like the mining stocks. An operation in bullion is often preceded by some noticeable movements in the miners.

Recall the case in the Euro bond market, wherein Citi came in and sold an enormous volume precipitously, running the stops and driving the price down sharply. The Citi trader came back in and covered his shorts, pocketing the difference in his market disruption based on size. This trading strategy was known as 'the Dr. Evil' trade at Citi, but has deep roots in speculative market manipulation, with the counterpart to a bear raid being the longer term bull pool.

I recall reading at the time [that it was fined for disrupting the eurobond markets] how the Citi traders were incredulous at being outed by the regulators, because that is how they would do things in the States, running the stops and using outsized positions to perform short term price manipulation. In the states 'price management' has become quite notorious around key market events, such as option expiration.

It is so prevalent that it has its own momentum among traders. The only time that it is remarked by the exchanges in the states, however, is when other prop trading desks are caught by it unawares and complain. The public is fair game."

Jesse, Bear Raid In Gold - Memories of Citi's Eurobond Price Manipulation, December 2009

I had a little chuckle a few weeks ago.  Someone wrote in and asked that I stop referring to precipitous decline in the price of the metals as 'bear raids.'  Well, not all declines are bear raids, but the hallmark of such a market operation is fairly obvious to someone watching the tape all day.  And they are not exactly subtle at times.  If you want to be in the markets, you need to know these things, and if they upset you, well then you should probably be reading the funny papers, or watching your favorite financial news station, which is equally diverting.  They will make you mindlessly content, at least for the time being.

In a somewhat unusual circumstance, the BLS has decided to release the Non-Farm Payrolls number tomorrow even though US markets will be closed.

Since gold, and to a lesser extent silver, typically get hit around NFP days, we might attribute the action that was tied to the FOMC minutes release and the PM fix to that.

Chart-wise I am very comfortable with a short term decline in gold to the 1580 level, although I would be a little concerned if it should break support at 1550 and stick a few daily closes down there.

This all looks like a long sideways consolidation within a broad symmetrical triangle. But we have to let the market instruct us, and that will only come over the next few weeks, and maybe months.

This notion that the Fed will not be stimulating the economy and subsidizing the debt through a rolling monetization is a fairy tale.

The words may change, but the song remains the same.
Ben Bernanke Was a Money Printin' Man.






SP 500 and NDX Futures Daily Charts - Why Is This Market Like Every Other Market?



The markets today were marked by thin volume and largely artificial intra-day price movements. Traders were squaring off ahead of the three day weekend so there was a slight downward bias except in tech, which was cheered by the awarding of the Facebook IPO to the NASDAQ, and of course, perpetual Apple-mania.

Cautionary words about Europe and the upcoming earnings season had the markets on edge in the early morning, but they managed a bounce today after yesterday's sell off in the aftermath of the Fed's jawboning about its ongoing monetization, which in reality continues unabated.

Three day weekend for the Easter holiday.

See you Sunday evening.




Unfulfilled Dreams: A Tension At the Heart of the Universe


"...So many of us in life start out building temples: temples of character, temples of justice, temples of peace. And so often we don’t finish them. Because life is like Schubert’s "Unfinished Symphony." At so many points we start, we try, we set out to build our various temples. And I guess one of the great agonies of life is that we are constantly trying to finish that which is unfinishable. We are commanded to do that. And so we, like David, find ourselves in so many instances having to face the fact that our dreams are not fulfilled.

Now let us notice first that life is a continual story of shattered dreams. Mahatma Gandhi labored for years and years for the independence of his people. And through a powerful nonviolent revolution he was able to win that independence. For years the Indian people had been dominated politically, exploited economically, segregated and humiliated by foreign powers, and Gandhi struggled against it. He struggled to unite his own people, and nothing was greater in his mind than to have India’s one great, united country moving toward a higher destiny. This was his dream.

But Gandhi had to face the fact that he was assassinated and died with a broken heart, because that nation that he wanted to unite ended up being divided between India and Pakistan as a result of the conflict between the Hindus and the Moslems. Life is a long, continual story of setting out to build a great temple and not being able to finish it.

Woodrow Wilson dreamed a dream of a League of Nations, but he died before the promise was delivered.

The Apostle Paul talked one day about wanting to go to Spain. It was Paul’s greatest dream to go to Spain, to carry the gospel there. Paul never got to Spain. He ended up in a prison cell in Rome. This is the story of life.

So many of our forebearers used to sing about freedom. And they dreamed of the day that they would be able to get out of the bosom of slavery, the long night of injustice. And they used to sing little songs: "Nobody knows de trouble I seen, nobody knows but Jesus." They thought about a better day as they dreamed their dream. And they would say, "I’m so glad the trouble don’t last always. By and by, by and by I’m going to lay down my heavy load." And they used to sing it because of a powerful dream. But so many died without having the dream fulfilled.

And each of you this morning in some way is building some kind of temple. The struggle is always there. It gets discouraging sometimes. It gets very disenchanting sometimes. Some of us are trying to build a temple of peace. We speak out against war, we protest, but it seems that your head is going against a concrete wall. It seems to mean nothing. And so often as you set out to build the temple of peace you are left lonesome; you are left discouraged; you are left bewildered.

Well, that is the story of life. And the thing that makes me happy is that I can hear a voice crying through the vista of time, saying: "It may not come today or it may not come tomorrow, but it is well that it is within thine heart. It’s well that you are trying." You may not see it. The dream may not be fulfilled, but it’s just good that you have a desire to bring it into reality. It’s well that it’s in thine heart.

Thank God this morning that we do have hearts to put something meaningful in. Life is a continual story of shattered dreams.

Now let me bring out another point. Whenever you set out to build a creative temple, whatever it may be, you must face the fact that there is a tension at the heart of the universe between good and evil. It’s there: a tension at the heart of the universe between good and evil. Hinduism refers to this as a struggle between illusion and reality. Platonic philosophy used to refer to it as a tension between body and soul. Zoroastrianism, a religion of old, used to refer to it as a tension between the god of light and the god of darkness. Traditional Judaism and Christianity refer to it as a tension between God and Satan. Whatever you call it, there is a struggle in the universe between good and evil.

Now not only is that struggle structured out somewhere in the external forces of the universe, it’s structured in our own lives. Psychologists have tried to grapple with it in their way, and so they say various things. Sigmund Freud used to say that this tension is a tension between what he called the id and the superego.

But you know, some of us feel that it’s a tension between God and man. And in every one of us this morning, there’s a war going on. It’s a civil war. I don’t care who you are, I don’t care where you live, there is a civil war going on in your life. And every time you set out to be good, there’s something pulling on you, telling you to be evil. It’s going on in your life. Every time you set out to love, something keeps pulling on you, trying to get you to hate. Every time you set out to be kind and say nice things about people, something is pulling on you to be jealous and envious and to spread evil gossip about them.

There’s a civil war going on. There is a schizophrenia, as the psychologists or the psychiatrists would call it, going on within all of us. And there are times that all of us know somehow that there is a Mr. Hyde and a Dr. Jekyll in us. And we end up having to cry out with Ovid, the Latin poet, "I see and approve the better things of life, but the evil things I do." We end up having to agree with Plato that the human personality is like a charioteer with two headstrong horses, each wanting to go in different directions. Or sometimes we even have to end up crying out with Saint Augustine as he said in his Confessions, "Lord, make me pure, but not yet." We end up crying out with the Apostle Paul, "The good that I would I do not: And the evil that I would not, that I do." Or we end up having to say with Goethe that "there’s enough stuff in me to make both a gentleman and a rogue."

There’s a tension at the heart of human nature. And whenever we set out to dream our dreams and to build our temples, we must be honest enough to recognize it.

And this brings me to the basic point of the text. In the final analysis, God does not judge us by the separate incidents or the separate mistakes that we make, but by the total bent of our lives. In the final analysis, God knows that his children are weak and they are frail. In the final analysis, what God requires is that your heart is right. Salvation isn’t reaching the destination of absolute morality, but it’s being in the process and on the right road.

There’s a highway called Highway 80. I’ve marched on that highway from Selma, Alabama, to Montgomery. But I never will forget my first experience with Highway 80 was driving with Coretta and Ralph and Juanita Abernathy to California. We drove from Montgomery all the way to Los Angeles on Highway 80—it goes all the way out to Los Angeles. And you know, being a good man, being a good woman, does not mean that you’ve arrived in Los Angeles. It simply means that you’re on Highway 80. Maybe you haven’t gotten as far as Selma, or maybe you haven’t gotten as far as Meridian, Mississippi, or Monroe, Louisiana—that isn’t the question. The question is whether you are on the right road. Salvation is being on the right road, not having reached a destination.

Oh, we have to finally face the point that there is none good but the father. But, if you’re on the right road, God has the power and he has something called Grace. And he puts you where you ought to be.

Now the terrible thing in life is to be trying to get to Los Angeles on Highway 78. That’s when you are lost. That sheep was lost, not merely because he was doing something wrong in that parable, but he was on the wrong road. And he didn’t even know where he was going; he became so involved in what he was doing, nibbling sweet grass, that he got on the wrong road. Salvation is being sure that you’re on the right road. It is well—that’s what I like about it—that it was within thine heart.

Some weeks ago somebody was saying something to me about a person that I have great, magnificent respect for. And they were trying to say something that didn’t sound too good about his character, something he was doing. And I said, "Number one, I don’t believe it. But number two, even if he is, he’s a good man because his heart is right." And in the final analysis, God isn’t going to judge him by that little separate mistake that he’s making, because the bent of his life is right.

And the question I want to raise this morning with you: is your heart right? If your heart isn’t right, fix it up today; get God to fix it up. Get somebody to be able to say about you, "He may not have reached the highest height, he may not have realized all of his dreams, but he tried." Isn’t that a wonderful thing for somebody to say about you? "He tried to be a good man. He tried to be a just man. He tried to be an honest man. His heart was in the right place." And I can hear a voice saying, crying out through the eternities, "I accept you. You are a recipient of my grace because it was in your heart. And it is so well that it was within thine heart."

I don’t know this morning about you, but I can make a testimony. You don’t need to go out this morning saying that Martin Luther King is a saint. Oh, no. I want you to know this morning that I’m a sinner like all of God’s children. But I want to be a good man. And I want to hear a voice saying to me one day, "I take you in and I bless you, because you try. It is well that it was within thine heart." What’s in your heart this morning? If you get your heart right . . . [gap in tape]

Oh this morning, if I can leave anything with you, let me urge you to be sure that you have a strong boat of faith. The winds are going to blow. The storms of disappointment are coming. The agonies and the anguishes of life are coming. And be sure that your boat is strong, and also be very sure that you have an anchor. In times like these, you need an anchor. And be very sure that your anchor holds.

It will be dark sometimes, and it will be dismal and trying, and tribulations will come. But if you have faith in the God that I’m talking about this morning, it doesn’t matter. For you can stand up amid the storms. And I say it to you out of experience this morning, yes, I’ve seen the lightning flash. I’ve heard the thunder roll. I’ve felt sin-breakers dashing, trying to conquer my soul. But I heard the voice of Jesus, saying still to fight on. He promised never to leave me, never to leave me alone. No, never alone. No, never alone. He promised never to leave me. Never to leave me alone.

And when you get this faith, you can walk with your feet solid to the ground and your head to the air, and you fear no man. And you fear nothing that comes before you. Because you know that God is even in Crete. If you ascend to the heavens, God is there. If you descend to hell, God is even there. If you take the wings of the morning and fly out to the uttermost parts of the sea, even God is there. Everywhere we turn we find him. We can never escape him."

Martin Luther King, Ebenezer Baptist Church, Atlanta, Georgia, 3 March 1968

Martin Luther King was murdered, 44 year ago, on April 4, 1968, one month after giving this sermon to his church.

He was murdered because of his principled stand against war and oppression, and greed and deception, which are the twin temples of the rich and the powerful. He knotted his belt, and in his righteousness, exposed their injustice. And even in his gentleness, they hated him for it, because they could not bear the light.

As a very young man, and it seems so long ago, I spent some time walking with those who spoke out against injustice. Later, as a grown man and thankfully as a visitor, I stood in the same dark cells of the Mamertine Prison in Rome, where Paul and Peter were imprisoned, and where Paul wrote his second letter to Timothy, a letter from jail, where he was held by the power of an empire that, at that time, ruled the world.

And I walked along some of the paths in the catacombs, the hidden places of the early believers who did not yet even have the name of Christians, but simply called their beliefs 'the good news' and 'the Way.' And they loved one another, and watered the roots of their faith with the blood of martyrs.

We are travelers through history, although slowly, one step, one day at a time. But we are in it, in history, and we play our part of it. It is not something distant, but real. This is our moment.  And Christ calls us to follow him now, even as he did then, in those days when he walked the earth, when he was a passing figure in the crowd, and beckoned with a simple wave of his hand, and the sound of his voice.

Now as an old man I see a nation that has been given great power, and has come once again to a decision point, where it may choose for the truth, or take a darker road. And it seems as though we have already turned away from the truth, and are going down that fateful path, the way of greed and fear and above all pride, and the worship of worldly power for its own sake, cleverness, deception and the arrogance of money, in our willful blindness.

And may God have mercy on us, and our children and our grandchildren, if we do.