More Evidence That JPM Has Cornered Comex Gold

Sat, Aug 31, 2013 - 11:36am

If I can bring all of this together, it will go a long way toward proving correct Ted Butler's theory on JPM's current corner of the Comex gold futures market.

So, let's start with Uncle Ted and his assertions. Recall that Ted is a first-rate analyst who has been trading commodities for about 40 years. He has paid particular interest to the silver manipulation for the past 20. He writes an excellent newsletter to which you can subscribe by clicking here:

Using the CFTC-issued weekly and monthly data (Commitment of Traders & Bank Participation Report), Ted has followed along over the past eight months of position changes and, over that time, the changes have been dramatic. As you know, The Bullion Banks were caught heavily short at the initiation of QE∞ last autumn. I contend that this entire manufactured correction scheme was initiated by The Bullion Banks to give them an opportunity to get out from under their naked short positions and move net long. Ted has concluded that it's not the Bullion Banks per se. Instead, the scheme was initiated by JPM solely for the benefit of JPMand, from a net short gold position in excess of 50,000 contracts last December, JPM has now transitioned into a net long gold position of more than 65,000 contracts. IF THIS IS TRUE, there can be absolutely no doubt as to:

  • The motive behind the counter-intuitive price correction AND
  • The certainty of a very large and significant UP move for gold in the very near future.
  • I did not set out to prove or disprove Ted's assertions. After following the Comex gold and silver deliveries these past 60 days, simple curiosity led me to do some research on recent delivery patterns. What I found not only piqued my interest, I think it proves Ted correct. And again, IF TED IS CORRECT, then there is most certainly a very big move coming in gold.

    So, let's start here: After taking into their house account (again, this means stopping the metal to themselves, into their own, proprietary account) 280 of 3,922 Dec12 silver deliveries, 970 of 2,526 March13 silver deliveries, a big fat zero of 3,416 May13 silver deliveries, JPM stopped to themselves 2,824 of the 3,444 July13 silver deliveries. That's 82%. For obvious reasons, this anomaly got my attention.

    As I've been chronicling here all month, this trend continued into the August13 gold delivery period. Last Thursday alone, the final day of August deliveries, the JPM house account took down 154 of the 164 Aug13 gold deliveries. This brings their monthly total to 3,151 of the 4,075 contracts delivered. That's 77.3%! What's more, after the initial surge of 1,962 deliveries on the 1st and 2nd of the month, the JPM house account claimed for itself 1,945 of the 2,113 remaining deliveries. That's 92%!

    With this as inspiration, I went back and reviewed the previous delivery months for gold on The Comex. These delivery months in 2013 have been February, April, June and now August. What I found is startling.

    Let's start with February. Before we begin, recall that for every buyer, there is a seller...and...for every person or entity taking delivery, there is an issuer from whose vaults that metal will flow. Further, keep this in mind...If you have been naked shorting paper contracts all month, you stand the risk that the entity on the other side of your trade will stand for delivery. So, it follows that, when we see one firm taking consistently taking delivery and another firm consistently issuing the metal, we can deduce who has been shorting all along and who has been buying. Does that make sense? I hope so. If it doesn't. then please re-read that info before proceeding. It is critical that you understand this.

    OK, back to February. During that month, the Feb13 contract was in its delivery period. What initially caught everyone by surprise was the sheer volume of deliveries. After just 3,253 in Dec12, a month which is usually one of the biggest delivery months of the year, the delivery total for February surged to 13,070. Of that total, the DeutscheBank house account took 5,917 and the HSBC house account took 4,879. Between the two of them, they accounted for 82% of all Feb deliveries. And just whom was issuing this metal? JPMorgan. For the month, JPM issued 7,854 of the 13,070 delivery requests. That's 60%. Also getting in on the act was Scotia. They got clipped for the issuance of 3,644 contracts. That's 28%. So, the DB and HSBC house accounts took 82% of the deliveries while the JPM (house and customer) and Scotia house accounts supplied 88%. And don't forget, this was a lot of metal! Thirteen thousand and seventy Comex contracts is 1,307,000 troy ounces, which equates to 40.6 metric tonnes.

    Suddenly, the deliveries for March surged, too. Instead of the moribund 500 or so settlements that we typically see in this "non-delivery" month, March13 saw an incredible 4,229 made...more than last December! I'm quite certain that that has never happened before. So what happened? Why was the March total about 3,000 to 3,500 more than typical and expected? Keep reading...

    After getting clipped for 3,644 deliveries in February, Scotia immediately went on to warpath to get that gold back. For the month of March, the Scotia house account took in 3,383 deliveries while at the same time issuing 179. All totaled, Scotia net deliveries were 3,204 of the 4,229 deliveries for March. That's 76% and, if you take that away, you're left with just the typical 1,025 March deliveries. (Actually, it's not that typical. The Barclays customer account took 834 of the 1,025.) Oh, you're probably wondering which firm provided the metal for all those deliveries? JPM. For March, JPM issued 1,813 out of their house account and 2,209 out of their customer account. That's a total of 4,022 or 95% of all March deliveries.

    The next month is April and, once again, it's a delivery month. The surge in total deliveries continued as 11,632 contracts were delivered to eager buyers. Of those, HSBC was again the big winner with 3,954 deliveries into their house account. Scotia took 3,292 and Barclays got in on the act with 1,276. Between the three of them, these proprietary house accounts combined for 73% of all April13 gold deliveries. And who got stuck with the bill? DB paid out 992 and Scotia paid out 595. This left the balance with none other than JPM and they issued 9,690 contracts or 83%. 5,990 came out of JPM house and 3,700 came out of their customer accounts. Again and just for fun, 9,690 Comex settlements means that JPM had to ship out another 969,000 troy ounces or 30.1 metric tonnes.

    So now it's May and, remarkably, the trend of deliveries in traditional non-delivery months continues and, whaddayaknow, it's a near-repeat of March. Of the 3,050 total deliveries in May, the Scotia house account took 1,746 or 57%. And guess who provided the metal...again? JPM. This time they got stuck providing 97% of the metal or 2,948 of the 3,050 deliveries. What's more, they issued the vast majority of this out of their customer account, which was raided for 2,781 of the 2,948 contracts. Again, "customer" gold is metal held on deposit for JPM customers. This is registered and eligible gold and, as we've seen for years, JPM is able to shift it around wherever they see fit. (And who are JPM's "customers"? Well, wouldn't you like to know?...)

    Finally, this trend repeated one more time during the delivery month of June. For the month, 9,869 contracts were delivered. Once again, HSBC grabbed the lion's share, moving 4,935 (almost exactly half) of the deliveries directly into their house account. The Barclays house account took 2,000 and, for the first time since last December, the JPM house account claimed 547 or 5.5%. Issuing? You guessed it. JPM issued 7,425 or 75% while Barclays and DB added about 1,400.

    So, through adding all of this together we get this. For the 3 delivery months of Feb, Apr and June plus the traditional non-delivery months of March and May:

    HSBC House Account: 13,768 deliveries. Total issuance: One. Yes, you read that right. One.

    Scotia House Account: 8,932 deliveries. Total issuance: 4,259

    DeutscheBank House Account: 5,918 deliveries. Total issuance: 1,746

    Barclays House and Customer: 5,384 deliveries. Total issuance: 908

    JPM Customer: 1,444 deliveries. Total issuance: 16,758

    JPM House: 547 deliveries. Total issuance: 15,181

    OK, now before we go any further, I want you to take a second and review this excellent piece by Mark McHugh from back in April. Not only had he spotted this trend, he also goes on to explain how and why the deliveries out of the "customer" account should almost always match. There should not be a significant disparity.

    Can you see what has transpired here?

    Desperate to cover and eliminate their 50,000 contract short position but not wanting to do so through the actual buying of futures contracts for fear of disrupting the building price collapse, JPM decided to eliminate most of the position by settling and closing the short contracts in physical metal, instead. They likely made this decision in the expectation of re-acquiring the metal in the near future at lower prices. So confident were they in this eventuality, they even used customer gold to settle more than half of these obligations.

    The month of June marked the bottom for the manufactured "correction" with price beginning the month at $1390 before trading down to a low of $1179 and closing out the month at $1224. Price has since continued to recover to a last of $1375.

    Not coincidentally, June was also when Uncle Ted first noticed the change of position for JPM and he reported it in early July after reviewing the Bank Participation Report changes from June. Ted got me all worked up so I did some of my own research and wrote about it here. ( The gist of it is this: After years of being net short, the U.S bullion banks were net long, so much so that on the July BPR, they were suddenly net long almost 45,000 Comex gold contracts! This trend then continued onto the August BPR ( which showed the four largest U.S. banks to be net long an astounding 59,473 contracts.

    It's important to note here that the BPR does not provide specifics. It simply aggregates the positions of the four largest U.S. bullion banks and the 20 largest non-U.S. bullion banks. So, it's impossible to say with certainty how the 59,473 contract net long position is divided. But consider this:

    On the BPR dated 2/5/13, the 4 U.S. banks had a combined net short position of 69,300 contracts. After five months of deliveries and a $500 price drop, the 4 banks had flipped to 59,473 contracts net long. Now, go back up and reconsider all of the delivery totals listed above. Can you connect the dots??? If not, I'll do it for you.

    JPMorgan decided late last year to rig the gold market lower in order to create the ideal conditions under which they could flip a 50,000 net short position to a sizeable net long position. Price, delivery notices and the CFTC-supplied reports document that they accomplished this feat by covering and delivering shorts while at the same time initiating and buying longs. They have no doubt been on the buy side of the record-setting Large Spec selling:

    And here is where it begins to come together...

    If this is the case, and JPM is now net long a massive amount of gold futures, we should expect a complete change in the recent delivery pattern on The Comex. Instead of JPM being the primary issuer, they should be the primary stopper. Additionally, instead of the other banks being the stoppers, they should now be the issuers, particularly the non-U.S. banks as the August BPR showed them to have a net short position in excess of 22,000 contracts.

    And what has happened this month? Exactly that! As stated above, of the 4,075 total contracts deliveries in August, and noting the huge dropoff from the volume of the three previous delivery months, 3,414 were stopped by JPM with 3,151 specifically designated for the JPM house account. And which firms have been issuing? Deutsche issued 1,116, Barclays has done 447 and Scotia accounted for 463. That's a total of 2026 or 49.7%. Note that all three are non-U.S. banks!

    To me, this proves that Ted is correct. Not only is JPM net long the entire 59,473 shown on the August BPR, their position is likely even higher, offset in the net total by a net short position held by the other three U.S. banks included in the report.

    And's the rub. The Big Kahuna. The Grand Finale. JPM is likely going to want back most, if not all, of the 3,193,900 ounces of gold that they delivered earlier this year. (16,758 customer + 15,181 house = 31,939 contracts = 3,193,900 troy ounces = 99.341 metric tonnes of gold) But the other banks aren't least not yet. There were only 4,075 total deliveries in August! And note that HSBC has taken delivery of 13,768 contracts so far in 2013 while delivering just ONE. And who is HSBC??? Yes, they're an English company but what do the "H" and "S" stand for? Do you really think that they are going to be in any hurry to return this 1,376,700 ounces of gold to The Comex and JPMorgan??? I'd say that this is pretty unlikely. Think about it. If HSBC would have simply played ball and handed back to JPM the 4,935 contracts that it settled to itself in June, total deliveries for August would have been at 9,000 not 4,000, a pace that would have matched February, April and June. Instead, total delivery volume came in at just 4,075 and JPM was left grasping to deliver any contract it can get its grubby little hands on as the final two delivery days saw JPM House stop 395 of the 419 remaining deliveries (19 out of every 20).

    So, most importantly, what happens next?

    Right now, the total open interest for the typically slow delivery month of October is just 23,758. Of that total, how many do you think are held long by JPM? 5,000? I'll guess we'll see when the deliveries begin next month. More significantly, the total open interest of the December contract stands at 229,838 (that's 60% of the entire Comex gold complex) and this is where JPM likely holds the majority of its net long position. If that's correct...and it most likely is...what the heck is going to happen in December? Is JPM going to simply roll into the Feb14 and the Apr14 OR are they going to stand for delivery AND, if they stand for delivery, are they going to attempt to extract 20,000 contracts or more worth of gold from the other BBs? And if the other BBs get wind of this, are they just going to sit idly by and wait to deliver or will they begin to move net long before it even gets that far? And then you're only left with Spec Shorts who don't have the capability to deliver 2,000,000 ounces of gold because they don't have it. They're just short the paper!

    All of this could and should set off a buying frenzy/short-covering spree like no one has ever seen. Not only could and should price move higher in the weeks and months ahead, it should move dramatically higher, catching nearly everyone (except the readers of this site) by complete surprise.

    Of course, all sorts of unforeseen events could come along and derail this plan so caution is always warranted. War could erupt in the MENA. Another Financial Collapse could materialize. Maybe India really will dump 200 metric tonnes onto the market. Any of these things could happen and nullify this forecast. However, I firmly believe that it is highly likely that this plays out almost exactly as I've described above.

    I hope you're ready. Prepare accordingly.


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    cris Bollocks
    Sep 1, 2013 - 6:41am

    Did you watch the news?

    It never ceases to amaze me the lengths that Obama's opponents will go to disparage him.

    You say he is a hypocrite for not getting a Congressional vote; when he asks for one, he "has blinked".

    This is disingenuous. I for one am glad he has recognized the importance of following the Constitution. Regardless of the outcome of the vote, it is an important precedent for our republic in terms of limiting autocratic executive power.

    I hope our representatives step up and deny authorization. I am afraid they will go the same route as when they declined to stop NSA spying. That same coalition could give authorization to Obama.

    Obama's judgment to bomb is in my view shortsighted. But I applaud him for following the Constitution, and despite what Bollocks implied in his comment, for being intellectually consistent.

    Sep 1, 2013 - 6:51am

    Wow - you never know what a google search for "East German

    legs" might find, but this is a really interesting snippet of history and also artistically cool:

    Though David Černý’s work may at first seem to be all about the visual joke, his sculptures often do make a political point. Given the artist’s reluctance to talk about his work and what his intended meaning for it might be, it can require a bit of knowledge and/or research to get to the heart of the matter. For me a case in point is the sculpture Quo Vadis, a Trabant on legs, that I encountered quite by accident in Prague. (Had I done my research before visiting Prague I might have planned a walk through the city to find more of Černý’s public sculptures; as it is, well, maybe I’ll get back there and follow the Černý sculpture trail at some point.) Anyway, while a bit lost, I ended up looking through a fence into the garden of the German Embassy, intrigued by the sight of a car on legs. That the car in question was a Trabant – a cheaply produced East German car, with a fibreglass body – was a clue.

    The location here is important too. In the run up to the revolutions of 1989 that ultimately resulted in the fall of communism across the Soviet bloc, East German refugees who reached Prague would scale the fence and camp in the garden of the West German Embassy, housed in the Palais Lobkowicz. By 30 September 1989 when Hans-Dietrich Genscher, the West German Foreign Minister, announced a deal to allow the refugees passage to West Germany where they would be given asylum, there were thousands of East Germans in the makeshift refugee camp in the gardens. Leaving Prague for West Germany, through this chink in the iron curtain that helped speed its collapse, many left their Trabants behind.


    What an incredible story and a reminder that it is possible to topple governments through perseverance.

    Sep 1, 2013 - 7:06am

    @cris, Mr. Obama's constitution


    Obama is not going to congress because he stayed up all night reading the Constitution and the Federalist Papers and War Powers Act analysis.

    If you believe that he is delaying things due to his love of the Constitution, then you are a complete and utter fool.

    He is, however, reading polls. Takes less time and effort. And permits appropriate manipulation and "transformation" tactics.

    Sep 1, 2013 - 7:19am

    Political Hotter Colder

    The psycho pyschologists, and they are, have defined the 5 stages of grief, putting Charlie Brown, GOOD GRIEF, to shame, and they are: 1) Denial; 2) Anger; 3) Bargaining; 4) Depression; and 5) Acceptance. In the political dimension, there is the same Hotter Colder progression, and they are: 1) Demonizing, 2) Violence, 3) Compromise, 4) Despair; and 5) Submission.

    Political Hotter Colder elaboration.

    1) Demonizing. This is often reflected as name calling. "You are an Idiot" "You are Crazy", "They are extremists", denigrating the messenger, exhibiting foul or impolite language.

    2) Violence. This mostly characterized as active protesting, such as blowing up abortion clinics, or burning down churches, or brutalizing homosexuals, and like acts of political discourse.

    3) Compromise. This is midcourse correction, trying to retain core values with others having dynamically opposing views that reach the heart of long felt beliefs and agenda, such as Civil Unions in lieu of Gay Marriages, no amnesty in lieu of forcible deportation, pay go, and like types of compromise.

    4) Despair. Such as when a shrink couch could not be found in all of NY after Bush won his 2nd term, or Turdville habitual complaining about the power structures affecting lives.

    5) Submission. This is often characterized by accepting political votes and blaming all ills upon the victor, the blame game, rather than working actively to change things within the mind set of victor, and is often stated as "just say no" in the political context, yet not resorting to Violence or Compromise.

    The Coasters - Charlie Brown
    Robin Trower - The Fool and Me.

    Sep 1, 2013 - 7:41am

    I hope for the thread

    I truly hope this golden thread

    does not get tangled with the dead

    ly topic of American




    tribe ...


    Sep 1, 2013 - 7:47am


    I have strolled along beaches in the South of France as well as Holland. I can assure you there are no shortages of similar legs to the East Germans. While certainly pleasing eye candy, things can get out of hand, and I personally think it should be limited to restricted areas. When our children were young, I was happy they were more interested in the sand then looking around. We moved back here when they were 5 and 6 so we appreciated the more family friendly beaches here.

    Sep 1, 2013 - 8:10am


    I am scarred by the memory of my mother responding to my older brother's statement that nudity should be allowed everywhere, "Just imagine Mrs Okipniuk running down the street naked shouting "Meeron, Merron, time for dinner!" with nothing but a wooden spoon to clothe her."

    It ended the conversation quickly, and we agreed there was a time and a place for most things. Having young children changes one's attitude too - an argument I had with a niece about the co-opting of the rainbow as a political symbol comes to mind. We live in a government town, and years ago my hubby asked if we could get a rainbow bumper sticker like so many of our neighbours, and I had to 'straighten' him out about what it would imply. Not, to paraphrase Seinfeld, that there is anything wrong with rainbow bumper stickers.

    Sep 1, 2013 - 8:15am

    I was there

    I was there, ground zero of youthful rebellion to the power structure at the close of the Nixon years, during the Impeach Nixon Rallies and the kidnapping of Patty Hearst, in Berkeley California, attending UC Berkeley, engineering school, at the THE ZOO. Of course, I was to busy studying, while noticing there seemed not to be a bra on campus, being the token Orange County CA conservative, at the time. :o

    The Who - My Generation
    The Who - Pinball Wizard
    Sep 1, 2013 - 8:53am

    Oh dear, My 'puter is running rough

    Keeps freezing up.

    Am running a malware bytes scan for 10 hours and 80k+ objects in C/drive... has 3 objects 'infected' but yet to complete the scan.

    Woe is me.

    May have to call in Cousin Computer fixer! ( I feel bad, the only time I call him is when we have issues with our screen and button box!)

    I am getting that " winter is coming, store some goods away" feeling. Am going to work in the wood pile for the morning. ( maybe by then the scan will be finished!)

    Sep 1, 2013 - 9:18am

    JP Morgan

    In my humble opinion JPM has stocked up on gold at the instruction of Bernanke. They work hand-in-hand and gold price must be restrained for Ben to keep interest rates low.

    JPM can make lots of money just doing the Fed's bidding (no pun intended).

    So gold price will be restrained until Ben leaves office.

    cris Hrunner
    Sep 1, 2013 - 9:37am

    @hrunner - grow up

    I may have a different opinion than you, but I can assure you I am far from being a "complete and utter fool".

    After all, I am enlightened enough to be a part of Turdville, no?

    Exactly how is "reading polls" not consistent w having a respect for democratic principles, and by extension, the Constitution?

    Would Stalin, or for that matter, Putin, have delayed an action he believed was in his best interests simply bc "The People", or their representatives, would have disapproved?

    Perhaps I am naive. I actually believed that here in Turdville there were grown ups who were more interested in substantive conversation/debate than ad hominem. I guess I may have been wrong.

    Sep 1, 2013 - 9:51am

    Egypt Military Bolsters Suez Security

    Egypt Military Bolsters Suez Security After Failed Attack

    By Tarek El-Tablawy & Alaa Shahine - Sep 1, 2013 7:37 AM ET

    Egyptian authorities said they tightened security along the Suez Canal after foiling an attack on a passing ship, even as they pressed their crackdown on the Muslim Brotherhood by arresting another top leader.

    The failed attack on the Panama-registered Cosco Asia as it crossed the waterway didn’t damage the ship or its cargo, the state-run Middle East News Agency reported, citing Suez Canal Authority head Mohab Mamish. The military dealt “decisively”with the attempt, he said, without giving details. Canal traffic is normal and 55 ships are expected to cross today, Mamish said, according to the news agency.

    The reported assault on the waterway that handles about 8 percent of world trade comes as the military-backed government pursues an offensive against the Muslim Brotherhood and militants following the July 3 ouster of Mohamed Mursi from the presidency. More than 1,000 people have died, most of them supporters of the toppled Islamist leader who were killed in a single week in August amid clashes with security forces.

    Two days ago, a Brotherhood call for mass protests fizzled because security authorities prevented demonstrators from rallying in a single location. The group, which maintains Mursi was deposed in a military coup, said in an e-mailed statement today that “the era of sleep and rest is over until we take back the revolution.”

    Leaders Arrested

    A prominent element of the crackdown has been the arrest of top group members, and yesterday, authorities detained Sobhi Saleh, a senior Brotherhood leader, in the Mediterranean city of Alexandria, state-run Ahram Gate reported. In all, more than 1,000 Brotherhood members, including its supreme guide, have been arrested, with many facing charges ranging from inciting violence to murder.

    Authorities also arrested a top suspected militant who confessed to killing 25 policemen in the Sinai peninsula last month, Ahram Gate said. The militant, known as Adel Habara and sentenced to death in absentia for another attack, recreated the incident for authorities, the news website reported, citing unidentified security officials in Sinai.

    The report of an attempted attack on a freighter in the Suez Canal complicates Egypt’s already troubled security situation. Canal Authority spokesman Tarek Hassanein said by phone that he didn’t have additional details and Zhang Jiqing, general manager at the executive division of the Beijing-based COSCO, didn’t return two calls outside normal business hours.

    Traffic Flowing

    Keeping canal traffic flowing normally became a concern even before Mursi was deposed. The military stepped up security along the waterway months ago, concerned that the political tumult that led to his overthrow would affect canal operations.

    The Suez Canal and SUMED pipeline, as the link between Egypt’s ports of Ain Sukhna on the Red Sea and Sidi Kerir on the Mediterranean is known, together handled 3.8 million barrels a day of crude and products...(more)

    Sep 1, 2013 - 10:01am


    If you believe that he is delaying things due to his love of the Constitution, then you are a complete and utter fool.


    donno, it seems to make sense to me. The Politician in Chief, first and foremost, concerns himself with political fallout and support, as being the panderers main driver. He raged on Bush for being cowboy, and may not want to appear to be duplicitous, for the political cover. The constitution reads of limited government, yet that totalitarian socialistic fascist racist will jam obamacare down everyone's throat, the constitution be damned.

    There seems to be bit of truth in the prologue assertion.

    Sep 1, 2013 - 10:05am

    re winter is coming

    Reminds me of the old joke about a man who has moved to the country and, having cut some wood that morning, climbs a nearby mountain to ask a local indian guru if the winter is going to be long and cold and if he should cut a lot of wood? The guru looks at him and says, "Come back tomorrow."

    So, better safe than sorry, the man goes back home and cuts some more wood the next morning, just in case. Then he climbs the mountain again, and gets the same message.

    Still in doubt, he cuts more wood, and returns to the guru for a third time, and asks again if the winter will be long and cold.

    The guru looks at him and says, "Winter will be long and cold."

    The man dares to ask him how he knows and why he didn't tell him before.

    Guru answers, "White man in valley cut wood for three straight days, so I assumed he knew."

    DeaconBenjamin cris
    Sep 1, 2013 - 10:08am

    Obama, Congress and Syria

    The president is celebrated for seeking a vote on his latest war even as his aides make clear it has no binding effect

    President Barack Obama, joined by Vice President Joe Biden, delivers a statement on Syria in the Rose Garden of the White House in Washington, D.C. on 31 August 31, 2013. Photograph: Kristoffer Tripplaar/Pool//Corbis

    It's a potent sign of how low the American political bar is set that gratitude is expressed because a US president says he will ask Congress to vote before he starts bombing another country that is not attacking or threatening the US. That the US will not become involved in foreign wars of choice without the consent of the American people through their representatives Congress is a central mandate of the US Constitution, not some enlightened, progressive innovation of the 21st century. George Bush, of course, sought Congressional approval for the war in Iraq (though he did so only once it was clear that Congress would grant it: I vividly remember watching then-Senate Foreign Relations Chairman Joe Biden practically begging the Bush White House to "allow" Congress to vote on the attack while promising in advance that they would approve for it).

    But what makes the celebratory reaction to yesterday's announcement particularly odd is that the Congressional vote which Obama said he would seek appears, in his mind, to have no binding force at all. There is no reason to believe that a Congressional rejection of the war's authorization would constrain Obama in any way, other than perhaps politically. To the contrary, there is substantial evidence for the proposition that the White House sees the vote as purely advisory, i.e., meaningless.

    Recall how - in one of most overlooked bad acts of the Obama administration - the House of Representatives actually voted, overwhelmingly, against authorizing the US war in Libya, and yet Obama simply ignored the vote and proceeded to prosecute the war anyway (just as Clinton did when the House rejected the authorization he wanted to bomb Kosovo, though, at least there, Congress later voted to allocate funds for the bombing campaign). Why would the White House view the President's power to wage war in Libya as unconstrainable by Congress, yet view his power to wage war in Syria as dependent upon Congressional authorization?

    More to the point, his aides are making clear that Obama does not view the vote as binding, as Time reports:

    To make matters more complicated, Obama's aides made clear that the President's search for affirmation from Congress would not be binding. He might still attack Syria even if Congress issues a rejection."

    It's certainly preferable to have the president seek Congressional approval than not seek it before involving the US in yet another Middle East war of choice, but that's only true if the vote is deemed to be something more than an empty, symbolic ritual. To declare ahead of time that the debate the President has invited and the Congressional vote he sought are nothing more than non-binding gestures - they will matter only if the outcome is what the President wants it to be - is to display a fairly strong contempt for both democracy and the Constitution.

    cris SilverSurfers
    Sep 1, 2013 - 10:25am

    Talk about revisionist history

    I just can't understand how anyone says with a straight face that Obama care was "jammed down everyone's throat, Constitution be damned".

    i don't know where you lived, but i recall that it was debated seemingly endlessly. The whole process went on for almost two years. There were public votes in committees and then in the full Congress. And then it was reviewed by the Supreme Court.

    If you disagree w the policy or don't agree with those representatives involved in the process, that's fine. But characterizing the process as being unConstitutional is just unfounded.

    and characterizing the POTUS, regardless of who he/she is, as a "totalitarian, socialistic, fascist racist" is just ignorant. As I said earlier, I thought Turdville was above that sort of ad hominem.

    Sep 1, 2013 - 10:34am

    from WSJ rag

    Just disgusting. This is the last paragraph. Not with Congress's approval...... rather their blessing.

    At the Last Minute, Obama Alone Made Call to Seek Congressional Approval

    Change in president's thinking confounded White House insiders

    A senior administration official voiced confidence Mr. Assad won't take advantage of the delay to push ahead with his offensive using chemical weapons. White House officials also predicted that Congress would authorize using force, citing the strength of the underlying intelligence being shared with lawmakers this weekend. With Congress's blessing, strikes could still be launched, officials said, within weeks.

    Sep 1, 2013 - 10:38am

    The 'Real': Can Brazil's Currency Be Saved?

    Can Brazil's Currency Be Saved?

    ByRaul GallegosAug 29, 2013 5:47 PM ET

    One almost feels sorry for Brazil’s central bank President Alexandre Tombini these days. The man charged with steering the monetary policy of the world’s sixth largest economy has a lot to handle.

    The U.S. Federal Reserve has signaled it will finally reduce its quantitative-easing policy, a move that spells the end of the easy money that has helped Brazil's economy coast for years. This has contributed to an initial blow to the Brazilian real, which last week dropped to its lowest level in 4 1/2 years. The currency is now down about 11 percent against the U.S. dollar in the past three months according to Bloomberg data. Meanwhile, yesterday the central bank raised its lending rate by 50 basis points in a signal it plans to keep inflation below 6.5 percent -- the government's upper bound on its target range -- despite its exchange-rate woes.

    So Tombini may have made a smart decision when he skipped the U.S. Federal Reserve’s Jackson Hole, Wyoming, symposium last week and on Aug. 22 launched a $60 billion intervention plan using currency swaps and loans to stem the decline. By using derivatives the bank avoids an immediate loss of reserves to defend the currency.

    The real jumped the most in almost two years after the announcement. Martin Redrado, Argentina's central bank chief before he was ousted in 2010 by left-leaning President Cristina Fernandez de Kirchner, gave the measure a thumbs up in an Aug. 23 tweet: “Brazil shows how economic policy must stabilize the dollar in uncertain times. They will use US$60 billion in reserves to achieve it.”

    Brazil's Folha de S. Paulo newspaper also approved in an Aug. 24 editorial, titled “An exchange tranquilizer,” arguing the move “contributes to quell the protests and alleviate the fears of lack of control over the exchange rate, which could erode even more the confidence of economic agents.”

    The jury is still out, however, on how successful the plan will be in the long term. As the Fed’s moves become clearer, more investors will probably continue to pull their money out of emerging-market economies. Brazil’s O Estado de S. Paulo newspaper discussed such doubts in an Aug. 25 editorial: “With foreign reserves exceeding US$370 billion, the Central Bank could use part of that money to address the instability. But the bank has followed a prudent approach and it’s hard to say, for some time, if an alternative measure, burning some dollars, would be more effective.”

    The key issue here is how to measure that effectiveness. If the ultimate goal of the program is to offer a limited lifeline to investors and companies with dollar-denominated debt...(more)

    Dyna mo hum
    Sep 1, 2013 - 10:45am
    Sep 1, 2013 - 10:54am


    positive to make one feel good. To often we are focused on the dark side.

    Never, Ever Give Up. Arthur's Inspirational Transformation!

    and another unrelated one

    This boy found a baby hummingbird after it was attacked, and nursed it back to health. Healed, the little bird decided to stay with the boy.

    Sep 1, 2013 - 11:07am

    Where is Motley Fool?...

    Enquiring minds...need to know!...

    To enlarge...on your keyboard...keep clicking Ctrl + to zoom in...& when you're Ctrl - to zoom out...& get back to reality!!!...

    Bag Of Gold

    maravich44 murphy
    Sep 1, 2013 - 11:16am

    "underlying intelligence"...

    jumped out at me. I'm still trying to figure out the British surprise, because i think that these clowns already knew it was coming.

    Sep 1, 2013 - 11:23am


    Couldn't find the Fool - but sure laughed when I say Rick Rule lounging in the pool.

    Sep 1, 2013 - 11:37am

    On Obama's concession

    I have no respect for Obama's political maneuverings. And just because he "did the right thing" in seeking congressional approval does not balance the scale. It is a balance scale that judges right acts, stupid acts, evil acts, uninformed acts, traitorous acts, and who knows what else. There are far too few right acts to his credit. And in the present case, by all appearances, he once again bowed to pressure to "do the right thing." But I don't believe for one minute that Obama wants to be subject to Congress in anything.

    Spartacus Rex
    Sep 1, 2013 - 11:38am

    The Fool Is Hiding...

    In the Picture next to those Truman Capote sunglasses.

    Sep 1, 2013 - 11:48am


    But characterizing the process [of Obamacare being passed] as being unConstitutional is just unfounded.

    No it's not. The U.S. Constitution incorporates a set of checks and balances to protect the country from corruption and overreach by any of the 3 branches of our government.

    In a nutshell, Congress lied to the American people, the president lied to the American people, and the Supreme Court upheld their lies in order to make Obamacare the law of the land.

    There's a lot more I could say, but your dishonest characterization of how Obamacare "passed" marks you as the type of person not worthy of debate.

    i don't know where you lived, but i recall that it was debated seemingly endlessly.

    How could the country "endlessly" debate legislation that even Nancy Pelosi, the Speaker of the House, did not know the contents of? The public was promised by the president himself that the legislation would be made public and there would be ample time for the public to review the contents and understand it before it came to a vote. All of this, of course, was a lie.

    Interesting how you only remember the political talking points of the most corrupt administration in US history.

    Sep 1, 2013 - 11:52am


    Actually, it's worse. What Nancy Pelosi said was, “But we have to pass the [health care] bill so that you can find out what’s in it....”

    Sep 1, 2013 - 11:56am

    Tax payer $

    could be better spent on more effective shills. Don't the fools know that they'd better be pretty damn sharp if they want to try and slide something slimy past the community of thinkers here in Turdville? I say this a a bystander in most debates, knowing the power of my intellect, and the breadth of my knowledge is far outweighed by many others here, to whom I pay close attention.

    Sep 1, 2013 - 11:57am

    Where's the fool?

    Also right behind wrestling Greek man's butt. (at least I hope they are wrestling. no further comment)

    How many hours did this creation take, BOG? And I wonder what others around here do in our free time while we are waiting for metals to do their moon shot.

    I spend my time fixing up the homestead and trying to prep... and a lot of solitaire when I feel stressed from work and other stuff. Maybe I should just post more here instead for stress relief.

    Sep 1, 2013 - 12:06pm

    Dr Jerome

    In answer to your question; we stack.


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