"We risk becoming the best informed society that has ever died of ignorance"
- Rubén Blades

"You can't make up anything anymore. The world itself is a satire. All you're doing is recording it"
- Art Buchwald

"It's getting exciting now, two and one-half. Think of everything we've accomplished, man. Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium"
- Tyler Durden

"It is your corrupt we claim. It is your evil that will be sought by us. With every breath, we shall hunt them down."
- Boondock Saints

Wednesday, April 20, 2011

The Power of Blythe

At the open this morning JPMorganChase stock price hit parity with the Silver Futures for May 2011, crossing at $44.70.  Gains were strong until mid afternoon, about 1 hour or so after CNBC had the University of Texas on talking about their endowment's purchase of gold over the weekend.  Blythe over at JPM at 12:56 orchestrated a take down of the Silver Futures.  The dollar lacked any gain so silvers movement has nothing to do with the Currency value and there are no announcements regarding a massive new influx of supply.  The price movements do not represent valuations based on fundamentals.

I documented this morning's run-up in intervals and you can see how Silver gained from $43.96 to a high of $45.40 before Blythe and company ravaged the market.  The purple line is JP Morgue's stock price.  Once JPM stepped in, Silver fell from a 3.27% gain on the day to 1.17%.  This is the kind of volatility you get when you have a small market, large concentrated positions, market makers and banks with connections to zero interest loans from the Fed, and a printing press that lacks a kill switch.  These price movements, since 2010 have not been representative of a free market with rational participants.  Scroll down to the post with the COT table.  Large Institutions, who do not need silver for any production or need it for anything other than investment, are the ones holding the largest short concentrations.  There is no strategic hedge.  This draw down we just experienced is a result of unchecked behavior.  How much long will I need to record this, document it, and tell people about it before anyone does anything?
US Dollar Index
Silver and JPM Parity