Big Banks | - Part 20

The Fed Under Fire

It’s probably fair to say that, after the last few years, a lot more Americans know what the Federal Reserve is and what it does, but, that’s not necessarily a good thing as they probably don’t like what they’ve learned. This interview with New York Fed President William Dudley (formerly of Goldman Sachs) probably isn’t going to do anything to change that view.

The initiative to change the Fed’s mandate from low unemployment and stable prices to just a price mandate as detailed by CNBC’’s Steve Liesman early on in the clip is an interesting one indeed – it would be a lot harder to justify monetizing trillions more dollars in government debt without the cover of a nearly 10 percent unemployment rate.

“Crash JP Morgan Buy Silver!”

This is one of the tamer videos over at Max Kaiser’s blog where, by the looks of it, there is a concerted campaign to bring down TBTF bank JP Morgan by urging the masses to buy and take possession of silver bars and silver coins.

Recall that JP Morgan is believed to have massive silver short positions that, you’d think, after the recent price surge, would be causing  a good deal of grief for whoever is keeping the books over there. It looks to be another interesting week in metals markets with gold and silver rising along with the trade-weighted dollar so far today. It’s always kind of creepy when that happens because you know something really bad is happening in Europe.

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A Dismal Outlook in the U.K.

Between cleaning paint off of my fingernails, changing addresses, and holding the front door open while all sorts of installer types traipse through the new house, there hasn’t been time to write much here lately (we move on Thursday), but I couldn’t help but notice this dismal set of headlines at the Telegraph today in a brief scan of the latest news.

There appears to be some optimism there in the lower right. Hopefully, the 2010 green shoots in the U.K. lead to something more enduring than the 2009 green shoots in the U.S.

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Silver, JP Morgan, HSBC, and the CFTC

It looks as though the JP Morgan/HSBC silver market manipulation story has developed some serious legs after CFTC (Commodities Futures Trading Commission) commissioner Bart Chilton said yesterday that market participants have made “repeated” and “fraudulent efforts to persuade and deviously control” the price of silver.

The details are in this story that leads the Money & Investing section of the Wall Street Journal (yes, that  means it’s more than just a conspiracy theory now).

The CFTC’s investigation of silver has heated up in recent weeks. The agency’s enforcement staff has circulated a packet of information to CFTC lawyers and commissioners, outlining some of its findings in the silver probe, including documents that could suggest there have been attempts to manipulate prices. In recent days, the commissioners have been discussing how to proceed in the investigation, but they haven’t made a decision.

Earlier this year, the investigation took a new twist when the CFTC began looking into allegations by a trader in London who contended that J.P. Morgan Chase & Co., one of the largest silver traders, was involved in manipulative silver trading, a person close to the situation says.

In recent months, CFTC lawyers have interviewed employees of J.P. Morgan in its metals-trading business as well as industry traders, commodity executives, experts and employees of other metals-trading firms, a person familiar with the situation says.

J.P. Morgan and HSBC Holdings PLC traditionally have been big players in the silver market. A CFTC weekly report for Oct. 19, the most recent period, shows that less than four market players hold 24.3% of all net bearish bets in the silver market. J.P. Morgan and HSBC are among those market participants, according to silver traders and a person close to the investigation.

There is a good deal of background in the report about the Hunt brothers in the 1980s and the email campaign prodding the CFTC to action, an effort that was spearheaded by silver analyst Ted Butler. Of course, both JP Morgan and HSBC declined to comment.

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