Collusion & Corruption

Fri, Oct 14, 2011 - 9:59am

I have several items that merit your attention today but first, here's an update of the charts.

I'm still hopeful that a rally is coming. The technical picture remains positive and the open interest numbers continue to trend well. I'll also be interested to see the CoT numbers when they come out later today. For now, the charts a virtually unchanged from earlier this week.

OK, onto the news. This first item is truly disturbing. I must admit that I saw these headlines but never had a chance to go back and delve deeper. Well, thankfully, Dave in Denver took the time to digest and interpret the situation. All of the sordid and disgusting details are plainly laid out for all to see here. Please take time, right now, to leave this site by clicking on the link below. Read Dave's article and then return:

So, let me see if I've got this straight. JPM reports "earnings" of $1.02/share for the quarter, well ahead of the $0.92/share expectation. The media reports this as great news and proof that the banks and overall financial system continue to recover and improve. However, of the $1.02, 29 cents came from an accounting gimmick. Without the gimmick, JPM would have reported just $0.73/share, which would have been a complete disaster.

That's bad enough on its face but let's go back and re-visit, courtesy of the plain-English supplied by Dave, how they "found" the 29 cents in the first place. Here's how this works:

1) JPM issues bonds (debt) at 100 cents on the dollar. At maturity, these bonds must be retired by repaying principle to the bondholders at 100 cents on the dollar.

2) These bonds are currently trading at 80 cents on the dollar.

3) Because, theoretically, JPM could buy back all of the bonds at the current price and retire the issue prematurely, JPM theoretically could save themselves 20 cents on each dollar. Theoretically.

4) Never mind the reasons the bonds are trading at a discount and never mind that JPM has neither the cash nor the intention of purchasing and retiring the debt in question.

5) Regardless, simply because the bonds are trading at a discount, JPM is allowed to claim the theoretical advantage of retiring the debt at 80 cents on the dollar as actual earnings!

6) This is an outright and upfront fraud akin to the accounting of Social Security or some other insulated-from-scrutiny government program.

7) Perhaps more disheartening is the collusion of the unindicted co-conspirators in the financial media who report these "great numbers". You're left with only two choices:

a) For whatever reason, the media is purposefully misleading the public.

b) The media that reported these numbers are utterly and completely clueless regarding the subject matter.

Which is it? It has to be one or the other?

In the end, all of this simply continue to fit the narrative here. The great Government-Financial Ponzi is coming to an end. It is inevitable regardless of how long the lies and distortions continue.

Next up, another story that I've had minimized on my screen for a while. Like Venezuela, Mexico is discovering that the gold that they think they own in unallocated accounts, may not actually be there for delivery. As more and more sovereign nations realize that they have been scammed by the LBMA/Comex system, a "run" on the bullion banks will develop. Once again, this only proves the adage: "the only gold you truly own is the gold you hold in your own two hands".

Also, one of the main guys behind this Mexican effort is Hugo Salinas-Price. Mr. Salinas-Price is a tireless advocate of sound money and he was one of the feature presenters at Ned Naylor-Leyland's conference back in January. If you haven't yet seen his presentation, I urge you to take some time to watch it. Linked below:

Lastly, I found this little ditty on ZH a couple of days ago. I know that many of you are concerned about confiscation. As you know, I think that, in this age of instant information and communication, a gold confiscation plan would be nearly impossible to implement. However, what the hell do I know? That's just my opinion. I could be wrong so, therefore, I urge you to read this:

OK, that's all for now. The metals are trying to move higher so maybe we can end the week on an UP note. We'll see. Keep the faith! TF

About the Author

turd [at] tfmetalsreport [dot] com ()


Oct 14, 2011 - 11:46am

It's all coming down

The Banksters haven't much time left, and they know it. The question is, will their puppet governments be able to push trough any more bail-out packages for them (basically, will they be able to rob the tax payers and middle class any more), or will the people finally rise up and put an end to this intentional transfer of wealth... With the kind of protests we are seeing across the globe right now, it seems it would be very dangerous for them to try this again...

Oct 14, 2011 - 11:47am

@ TL

I am an engineer by trade & education, so take my point of view into consideration. I don't necessarily disagree with your general points of view, just see them through a different lens.

I also think that our "animalistic" nature that drives us to focus on the here and now is also rapidly becoming our greatest weakness as our technology advances. As we become more advanced, long term stability of our societies becomes ever more dependent on long term planning. That is not necessarily the same as central planning either. I am referring to a more general case of the average joe becoming more forward thinking. This is certainly doable but would require the average joe to actually receive a functional education that taught them to think critically. Alas such an average joe would make a very poor consumer so is unlikely to be selected for by the governments at large.

One last point regarding engineers & thinkers. There is actually very little engineering that occurs anymore since those who have the money to finance R&D and engineering no longer want to "waste" money on that. Most engineers are now stuck reapplying old methodologies and acting more as advanced maintenance men. Most real engineers would love to be given new problems to solve. What's holding us back is consumerism.

real engineering and R&D is expensive and pays dividends that will probably not be seen for years.

Oct 14, 2011 - 11:48am

Bloomie is reporting a 50%

Bloomie is reporting a 50% haircut on all Greek bonds is under consideration by Merkel/Sarkozy and the G20.

Keep an eye on Pigasus.

Oct 14, 2011 - 11:50am

Redwood and Brimstone

Redwood - you're very much correct that the "nurture" component plays a very large role in human development. Humans do need very much care and instruction continually through life.

Brimstone - Polarity is something we cannot hope to escape on Earth (from a collective standpoint). Nature works toward a balance between opposing forces.

If you combine these two ideas, perhaps it is fair to say that we start off at least very close to a neutral state with an infinite capacity for all acts, and everything from there is a combination of experience and universal forces.

Grigeo George Clooney
Oct 14, 2011 - 11:51am

"Ladies present... I mean really"

Anyone posting inappropriate images immediately goes on the Ignore User list, and that was WAY past the line. From a man's perspective, that is completely unacceptable even without Ladies present.

Angelic beauty...

Oct 14, 2011 - 11:52am

Nasty Capping Today

But I suspect it's nearly over.

The metals will likely bottom before 1:00 EDT and then rally on the Globex, just as they've done on most of the recent Fridays.

Oct 14, 2011 - 11:52am

Which would win out? WAR IN ME - VS. - GREEK DEFAULT

I think a Greek default pushes the dollar way up and commodities down. War is clearly bullish and could send oil and other commodities skyrocketing. If both were to occur simultaneously, I tend to think bullishness wins out, but wow - what a mindfuck.

Oct 14, 2011 - 11:53am

I do not do options....

But if I had to think of something that is going to payout big time from here...

I would look @ FAZ

FAZ Options during the next two weeks going to be very strong...

IMO only.

Be careful though if one ventures this way.. as the time-decay will hurt you twice in this type of instrument if you try to squeeze out max profits.... first from the options time decay and twice from the FAZ time-element decay built into this instrument.


I hold no options and do not trade options. Nor am I in FAZ... was just putting it out there.

Holders of FAZ also must be very vigilante because once central banks deem the markets have seen enough, they will pump them back on up.... and FAZ will get knocked down.

Oct 14, 2011 - 11:55am

It's been a mindfuck all

It's been a mindfuck all along...and if anything will accelerate from here on.

Oct 14, 2011 - 11:56am

21st century accounting

TF, can see why you are disturbed but its not surprising since new accounting principles are endemic.

1. How many years ago is it since the "mark to market" rule was disbanded. Now if BAC forecloses on a house where there is a $300,000 mortgage they carry the "book value" at $300,000 even though the house may only fetch $100,000, even if they can find a buyer. No wonder BAC trades at less than 50% of book.

2. Greek bonds along with other Euro bonds being "risk free sovereign debt" don't require any fractional reserves and are carried at face even though the market discounts the Greek 1 years over 60%.

We're at a point where global debt is trending parabolic and TPTB are responding with distort and extend.

It's a good thing folks like Dave in Denver put out the straight goods since the MSM is beholden to their advertisers for their continued existence, and so are corporate mouthpieces.

Oct 14, 2011 - 11:58am

Mr. Market l@@king to place

Mr. Market l@@king to place the blame after todays 401k sell is completed....

"Spreading social unrest could upset global stock markets ."

Time for a nice lunch, thinking homemade chicken salad on some nice Pumpernickel bread with Zucchini chips, all made by my lovely wife and served with love.

( Take out the dam trash! you lazy bastard!!!)

Yes dear. :)

Tom L
Oct 14, 2011 - 11:58am


I'm an R&D Chemist by trade, so I hear you. That's why I brought up the difference between dreamers/thinkers and implementors/engineers. I'm definitely more of the former than the latter. I was literally the mad scientist in his cave for 5+ years at my last job. We need both within the division of labor.

I agree as well, that we're not doing real R&D and real engineering in general b/c the money just isn't there. The margins have been squeezed and the whole process of research has been corrupted by gov't money... I can go on for days about the mis-allocation of capital as it pertains to the Education-Industrial Complex, which is every bit as wasteful and dangerous as its Military counterpart.

Suffice it to say that I believe in the human capacity to overcome in the face of extreme adversity (external pressure) and find solutions to problems. Nothing in our history tells me otherwise. So, I don't sweat how we're going to get there or that I can't see the answer for myself.

As Steve Jobs said 'you can't connect the dots going forward, you can only connect them in hindsight'... and have to trust that the dots will connect.


Oct 14, 2011 - 12:00pm


Not to take away from this site, but I'm interested in hearing why you think engineering is becoming rapidly obsolete. First of all, what does R&D stand for?

Oct 14, 2011 - 12:02pm

Wow, HUI has held up well

Wow, HUI has held up well with this drop in metals.

Oct 14, 2011 - 12:03pm

Collusion and Corruption

it's what's for dinner.

and dessert.

with a little manipulation for breakfast the next morning.

i need a new diet...

Brimstone redwood
Oct 14, 2011 - 12:09pm

@ redwood

I didnt mean to imply that engineering is in any way becoming obsolete. if anything both "real" engineering and R&D are needed more then ever. I was simply saying that from my real world perspective there is very little engineering done any more. most engineers in most companies simply work at applying known solutions to existing technology (i.e advanced maintenance men). In its prime engineering is about taking new or existing R&D and developing novel applications. those applications may be used to solve some existing problem or may be entirely novel developments.

As an example, consider taking a bunch of 20 something engineers fresh out of school and telling them to put a man on the moon. That is exactly what NASA did. Those engineers took the basic tools developed by the early "rocket scientists" and built apollo.

Oct 14, 2011 - 12:10pm

Goin' Fishin'

I love hanging with you lot, but damn, I feel like we've already top-ticked in PMs today. Wtf, is this Groundhog year or what?

I'm going to go watch the 2nd episode of American Horror Story that I dvr'd. Gosh I have absolutely no idea why I'd pick that show today.

Btw and FWIW, I think the show kicks ass. Very good right out of the blocks. Huge potential and pretty ok already. New epi's on fx Wednesdays at 10 eastern.

Anyone here see the season finale of Breaking Bad Sunday night? Um, here's an expression that kinda fits:


Oct 14, 2011 - 12:12pm

IMF official dodges hurled eggs

IMF official ducks egg attacks in Turkey Fri Oct 14, 2011 2:2AM GMT Mark Lewis, an IMF official in Turkey, successfully avoids an egg pelted at him during a university lecture in Turkey's western province of Bursa on October 13, 2011. Students have hurled eggs at International Monetary Fund (IMF)'s Turkey Representative Mark Lewis during a university lecture in Turkey's western province of Bursa.

On Thursday, the students chanted "IMF get out" as well as other slogans as they threw eggs at Lewis, who took cover behind the podium and dodged all the projectiles, showing quick reflexes, Reuters reported.

The IMF official was delivering a keynote speech to economics students at Uludag University.

Meanwhile another group of students unfurled anti-IMF banners.

At least one student was injured and taken to hospital for treatment, when clashes erupted as the university's security officers were taking protesting students away.

Most of the country's population opposes the IMF's policies regarding Ankara.

video of the event here:

Oct 14, 2011 - 12:13pm

KEG and others on Accounting issues

As I understand it, if FASB did not do what they did with mark to fantasy, Congress had threatened to do legislation to get it done. A real rock and hard place. Kind of denudes FASB and private sector--Govt knows best apparently.

I also know someone who was a heavy hitter in that private area but resigned before all this happened. His take: I stopped being frustrated and angry a long time ago since there was nothing I could do about it.

Oct 14, 2011 - 12:18pm

Here is where I stand as I sit:

I suspect that I am somewhat older than most of the participants here so I thought that I would share my perspective.

I had just obtained my first real job after college during the late 1970's. It was at that time that gold and silver were as much in the headlines as they are today. I was completely taken up with the job of buying gold. I purchased as many kruggerands as I could--not many really. I had been saving 90% silver for many years. This was before the internet, of course, so I purchased newsletters at what was then great expense. We were told that the current economic system was unsustainable and that gold and silver would go to $10,000 or more and silver would follow. We were told that our Country was on the immediate road to economic collapse. We were even told to store extra food/water in a safe place so that when all this evilness happened, we would have some margin for safety.

To my surprise, none of that happened.

I cannot help but think that we are perhaps experiencing the kind of mass hysteria now that occurred at that time. It is even worse because the internet provides a forum for those who think in the same vein--and when that happens, the hysteria becomes even worse because it feeds on itself.

I am in my early 60's and plan to be around for maybe 20 years or so and I have no children so I am on the "twenty year plan" (the Powers that Be willing, of course). Based on history I would present the following for your consideration:

1. Our political system will once again bumble itself through. By that I mean there will be no massive economic collapse. There will be no need to store guns and ammo or plan to move to North Dakota to farm and escape the rest of the Country.

2. Neither the Comex or the big banks will fail. Our economy will be pretty much as it is now in twenty years. We always think that NOW is the worst time ever and NOW is when we fail. That is just not true. Crash JPMorgue is SO 2010.

3. Precious metals will continue a slow rise in price but nothing spectacular. PM's are priced in Dollars and, weak as they are, the Dollar is the strongest currency the world has now.

4. I continue to be a "stacker". Over the years I have slowly built up a good supply of gold/silver. I just like the stuff. But I do not share many of the climactic views as expressed on this Board.

I suspect that if many of you are able to re-access your postings on this Board in say 20 years, you will be surprised as to how wrong you were in many of your predictions. Of course, I could be wrong instead.


Oct 14, 2011 - 12:19pm

Treasury mulls issuing

Treasury mulls issuing floating rate notes - MarketWatch

The Treasury Department on Friday gave another indication that is thinking about issuing floating-rate notes. The indication came in the latest series of quarterly questions for the bond dealers. A floating rate note has a variable interest rate that gets adjusted periodically and is generally seen as offering investors protection against rising interest rates. Treasury has never issued floating rate notes although Fannie Mae and Freddie Mac have. Other governments have issued such notes. Treasury officials asked dealers on the optimal structure of the product, how it would affect Treasury's overall borrowing costs and whether there would be strong market demand for the new product. At the same time, Treasury asked bidders if it should let the yield on an auction of Treasury bills come in below zero if that is where the security is trading

( My comment ) Next up, bozo the clown dolls with every treasury note happy meal...

desperation is a good thing...

Oct 14, 2011 - 12:20pm

War with Israel and Iran

This may be what ewc58 was referring to, but I understand Alex Jones will be featuring Dr. Pieczenik who will addressing war with Iran that has been "greenlighted" to happen within 2 weeks. Lindsey Williams has been referring to this for over a year perhaps we should brace ourselves.

Oct 14, 2011 - 12:20pm

Could somebody help me understand? EUR vs USD gold price

Why is gold climbing slowly in USD and falling in EUR? It doesn't seem to me that the exchange rate is enough to explain. Am I wrong? I already asked in the other discussion but got ignored. Be patient with a newbie, it's an honest, maybe naive, question.

Oct 14, 2011 - 12:20pm

Nasty Capping Today

but then after that comes...what does Dec 31st gold and silver look like. any predictions

Oct 14, 2011 - 12:22pm

@Tyler ... RE:- The nature of man

I spend much time wondering about the true nature of humanity. Are we good or evil, or somewhere in between? I would like to think that the great atrocities that have occurred on this planet were initiated by a very small group of people looking to reap huge gains and increase their power.

Man is guilty of ignorance and laziness, but I don't think hatred and violence are naturally occurring qualities. This is an acquired response, in my opinion.

Five Great Truths from five great philosophies :-

What a piece of work is a man, how noble in reason, how infinite in faculties, in form and moving how express and admirable, in action how like an angel, in apprehension how like a god! the beauty of the world, the paragon of animals—and yet, to me, what is this quintessence of dust? Man delights not me— nor woman neither ...

........... Shakespeare


"All governments suffer a recurring problem: Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible."

........... Missionaria Protectiva (Frank Herbert)


“Our government has kept us in a perpetual state of fear – kept us in a continuous stampede of patriotic fervor – with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it.”

........... Douglas MacArthur


"A Walk Through The Ocean Of Most People's Souls Would Scarcely Get Your Feet Wet."

You are a fluke of the Universe.
You have no right to be here,
and wether you can hear it or not,
the Universe is laughing behind your back.

........... Deteriorata!


"Nobody Expects The Spanish Inquisition!"

Galaxy Song - Monty Python's The Meaning of Life

........... Monty Python

GS_PHYS cdellis
Oct 14, 2011 - 12:24pm

"No paper is safe. A

@ cdellis

Good that you raised this first.

I am out of US, my 401K is in Sprott only on premise that it is Canadian.

I asked dave in Denver the same question and he was also of the same opinion about 1 year back. Hope things have not changed during the last 8-9 months.

Oct 14, 2011 - 12:25pm

Managed Perceptions, and co-operation

The symmetry of this site, Goldseek, and Zero Hedge are spot on.

Lets set up the network to find if you are with us or against us. Be sure to look at the screenshot of the questionnaire.

The article on Goldseek is worth a read;

The way to keep the youth of the country down, and enslaved and, if you have an education you are danger to TPTB.

Which led me to this bureau which might be able to be legally used against the bank fraud if the perception of banking fraud can be defined as terrorism.

I don't see why the RICO act isn't applicable to JPM-CFTC, Goldman-Sachs-SEC. If the bureaus can be set to investigate one another, it might work out like a poorly written program with instruction-loops and such.

Long ago I was thinking it was all corrupt, and going to all fall apart. Then I had a thought....

What if the reason it doesn't all fall apart is that there are a great many more honest, honorable, willing to help, good people in the world working to hold it together?

Oct 14, 2011 - 12:26pm


Thanks for the post! Some good thoughts there.

Oct 14, 2011 - 12:27pm

Well considering that's a triangle pattern

If I knew more about how to order options, one might think about a straddle. You know it's going to move after the triangle is finished, but I've seen enough goofiness in the market to know that you really don't know which way it's going to go.

Moderator Jane
Oct 14, 2011 - 12:29pm

Comments about candidates need to go to the Politics forum

Hi folks,

We are instituting a policy that any comments pro or con for political candidates in the upcoming 2012 election need to go into this forum:

There are a few reasons for this:

1) To avoid constant bickering and flame wars in the blog comments

2) To encourage more forum use (that's what they are there for)

3) No-one wants to be constantly proselytized on the blog with VOTE FOR MY CANDIDATE 2012!!! comments.

This site is not endorsing any one candidate, and no-one should expect that any person here supports any specific candidate. We have members across the political spectrum. Feel free to discuss the elections to your heart's content in the forums.

Thank you!


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TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
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