William Cohan vs. Andrew Maguire - Some Thoughts

Thu, Oct 2, 2014 - 12:37am

The best way to start this is to reference a post on tfmr from longtime contributor, Murphy, who posted this question from an article by JS Kim https://archive.aweber.com/sku_newsletter/P8OoD/h/The_Silver_Manipulatio...

“What do you think is going on in this dispute between Naylor-Leland/Maguire/Schnell and Cohan in which each party is accusing the other of killing the silver manipulation story?”

So, let us dig in a bit and hone our analysis, and try to reason to some sort of conclusion.

First, Mr. TF issued a call to arms, here, https://www.tfmetalsreport.com/blog/6157/time-take-action, asking readers to implore that the silver manipulation story, apparently well-researched and well-written, by William Cohan : https://en.wikipedia.org/wiki/William_D._Cohan be published:

“Per Ned's request yesterday, PLEASE take a moment to review the contact information for Mr. Cohan that is listed below. Then, pick a venue and drop him a line. PLEASE be responsible, polite and courteous. However, PLEASE feel free to demand that Mr. Cohan make every effort to see his article published as soon as possible.”

Following that was an excellent interview of Mr. Cohan, by none other than Dr. Dave Janda, here, https://www.tfmetalsreport.com/podcast/6169/william-cohan-dr-janda. Mr. TF summarized the interview, as follows:

“The 25-minute interview is wide-ranging and very interesting. Cohan was open and forthright while he discussed several items of interest including:

Cohan's interpretation of the evidence that Andrew Maguire presented to him;

Former CFTC commissioner Bart Chilton told Cohan directly that he thought the silver market was manipulated; and

After the CFTC closed it's investigation, Andrew Maguire took the material to two other government agencies but both agencies declined to investigate further Cohan shopped his completed article to two mainstream media outlets, both of which declined to run it;

Cohan has offered to take the story to ZeroHedge to get it published but Andy and his attorneys have yet to give him authorization to do it.”

Then, our good friend, the brilliant, Ned Naylor-Leyland, who speaks with a strange accent, weighed in with his comments, which Mr. TF so graciously provided us in Mr. TF’s post, here, https://www.tfmetalsreport.com/blog/6176/andrew-maguire-responds-cohan-i...

“Cohan wants to insert language that directly names the TBTF bank at the heart of the manipulation (which, I guess, we all assume to be JP Morgan). Andrew and his attorneys allege that, at this stage, directly identifying the lead perpetrator would be potentially libelous and, thus, was never agreed to by Andrew and his lawyers.”

While all this fun merriment was occurring, naturally, I was nowhere to be found, buried in legal work with an upcoming trial starting in a few weeks. Hey, someone has to contribute to GDP!?

So, as I missed the show, and this fascinating, real-time drama, naturally, many folks here wondered what I thought, and asked me to weigh in, which I am most happy to do.

I will not rehash everything, though. What I will do is provide a bit of insight [I am a litigation attorney, and I work on wrongful termination cases all the time], and look at things from an incentive-based reasoning structure.

Understand that in any termination of employment situation, there exists the possibility for litigation. The employer may sue the terminated employee, fearing theft of trade secrets. Likewise, the fired employee may sue the employer, for a whole host of reasons, including wrongful termination, etc. In larger companies, the termination of a senior employee, or of an employee making significant compensation, the terminations are usually negotiated matters. The stakes are just too high in litigation, so neither the employee nor the employer want to risk an expensive, time consuming lawsuit down the road. So, both the employer, and the employee, reduce the termination terms and conditions to writing. There is a severance package, including terms of compensation, and possibly some form of non-compete condition, and as well, an anti-disparagement clause, prohibiting the terminated employee from bad-mouthing the former employer, and vice-versa. They always, always, without exception, include a confidentially clause, as well. This type of agreement is very standard.

In every single one of these that I have ever worked on, I have never seen it where the now terminated employee, who is offered a sizable severance package, refused the deal because the terminated employee demands that the severance agreement contain NO confidentiality provision. In short, the terminated employee takes a big chunk of money, and agrees to be silent as to the anything about the former company, terms and conditions of employment, etc. The punishment for breaking that agreement, [in lawyer speak, stated as “breaching the confidentiality provision”], is varied, but almost always includes a liquidated damages provision, with an added requirement that the confidentiality-breaking, fired employee must indemnify the employer for any consequences of the breach of confidentiality.

See? Clear as mud.

Really, it is quite simple. The employer basically tells the fired employee: look here, you are fired. Sign off on this agreement, and you get this fat wad of cash. Oh yeah, and you can’t ever talk about us ever again. If you do, you owe us the money back, plus $250,000 for every breach of confidentiality we prove, and if we get sued or have enforcement taken against us, you have to pay our legal bills.

Understand, too, that the terminated employee has no bargaining power, and cannot really say no.

I have recommend to plenty of potential clients, who come to me as they are contemplating whether to take the severance deal, or sue the company, and ask my advice. In every case, I tell them to take the money, because that is guaranteed, but my success at trial is not. Some end up suing, some don’t. The ones that take the money simply go quietly off into the night, never to rise up and speak out about the bad things that happened at the former company. I have seen this time and time again.

So, let’s now focus on the Cohan v. Maguire battle.

We know Cohan is a former JPM big wig https://en.wikipedia.org/wiki/William_D._Cohan with a sterling pedigree:

“After graduating from Duke University in 1981, he was an investigative reporter for the Raleigh Times and won several awards. He then worked on Wall Street for seventeen years as a mergers and acquisitions banker. He spent six years at Lazard Frères in New York, then Merrill Lynch & Co., and later became a managing director at JP Morgan Chase. He also worked for two years at GE Capital. Cohan is a graduate of Duke University, Columbia University School of Journalism, and Columbia University Graduate School of Business.”

We know William Cohan never worked for Goldman Sachs, and we know, from Cohan’s own mouth from an interview three years ago, that Cohan, as a Wall Street Insider, was a staunch competitor against Goldman Sachs for years https://thedianerehmshow.org/shows/2011-05-24/william-cohan-money-and-po...

“No, I never worked for Goldman Sachs. I competed against Goldman Sachs. I worked with Goldman on deals. I lost business to Goldman Sachs. I won business from Goldman Sachs. You know, no matter what firm I worked on on Wall Street, and I worked at four different firms, we all wanted to be like Goldman Sachs. We all wanted to emulate Goldman Sachs. Goldman Sachs still is the most admired firm on Wall Street for its brains, for its brawn, for its audacity and for its aggressiveness. Goldman is sort of like IBM used to be in the olden days when you could not go wrong hiring IBM to design your computer systems. You couldn't go wrong hiring Goldman Sachs to underwrite your securities or to advise you on an M & A deal. Obviously, some of the bloom is off the rose.”

We know that JPM fired Cohan in 2004:

“I was fired because it was after 9/11 and the firm that I worked for at the time had just gone through a big merger, the merger of J.P. Morgan and Chase. And when they put this merger together which closed at the beginning of 2001, they had these grandiose plans about how much business the firms combined were going to do and how many people they needed for that.
Well, after 9/11, the business on Wall Street dropped off a cliff and they began a series of massive layoffs. And finally in January of 2004, my number came up and it was time for me to go. It was either, you know, one Bill Cohan or 25 young associates and analysts and I think that became an easy decision.”

And, we know that Cohan wrote a book all about how corrupt, and too big too fail Goldman Sachs really is. https://thedianerehmshow.org/shows/2011-05-24/william-cohan-money-and-power

Based on my research of Cohan, I do not believe for one second that Cohan is disloyal to the firm that made him a Managing Director, despite the fact that they fired him. Cohan wrote a book blasting Goldman Sachs, not JPM. Why is that? There can be but one conclusion for that fact. Cohan has no love for Goldman Sachs, and perhaps, despite getting fired by JPM, perhaps he feels loyalty towards JPM, not unlike college football fanatics, even as grown adults, still harbor deep resentment towards their alma mater’s rivals [hey TF, Big Red fanatic, how are the Sooners doing, or the KSU Wildcats?]. See?

So, can we reason to an incentive structure in place that perhaps is motivating Cohan to want to write an article about silver manipulation, (1) without identifying which major player is actively doing the manipulation, (2) which simultaneously discredits criticisms of JPM and places blame upon Goldman Sachs [or others] for market manipulations, and (3) which allows Cohan to avoid getting sued by JPM for violating the terms of a severance agreement between Cohan and JPM containing confidentiality provisions? Umm, to use my best Bugs Bunny voice, “could be!”

So, does it seem to explain the fact of Cohan writing the article, but not really wanting it to get published, all while dangling the implied assertions that manipulation is occurring by a too big to fail bankster, who we will all conclude is JPM, or possibly Goldman Sachs?

What about Andrew Maguire and his incentive structure? Is there one bit of evidence suggesting anything but honest motives by Mr. Maguire in risking personal health, lawyering up, relentlessly proffering reams of evidence to all who will listen, trying constantly to shine the light of truth upon the corrupt market manipulation of the gold and silver futures markets? My opinion is straightforward. Andrew Maguire is one of the good guys, his actions have been consistent with his desire to shine truth onto the corrupt Comex, et al., and now, here is Cohan, casting aspersions and making nonsensical challenges about easily disproved things.

Finally, there is the angle that many of the brilliant turdites figured out, that perhaps Cohan is timidly avoiding stating JPM is the manipulator due to his fear of being sued for defamation.

As you all know, defamation is a non-contractual civil wrong, which places monetary liability upon one who makes a false statement of fact, that injures another. Opinions are not defamation. So, if Cohan had said something like “I don’t know whether the manipulator is JPM, but I am offering only my opinion that it may be them,” that is far different than a statement of fact that “JPM is manipulating the futures markets.”

Truth is an absolute defense to any defamation lawsuit, but the costs to defend against a defamation lawsuit can reach well into the six figures, depending upon the nature of the lawsuit, and who is doing the suing. Since JPM has unlimited fiat available to it, and since high priced lawyers are all over the place like cockroaches, even if one is telling the truth, the costs to prove it may be excessive.

Another possibility, is that in a lawsuit for defamation, Cohan could defend based on the truth, which would open up JPM to discovery. That means Cohan could take depositions, get documents, and dig real deep into the innards of JPM and actually uncover such manipulation.

With that said, surely, if he was truly motivated to tell the truth that JPM is the manipulator, and since he wrote the article, including sourcing documents and facts, then Cohan should have zero concern of liability, and should relish the opportunity to bring to light the sensational story of our times. Cohan would be world renowned, of Bernstein and Woodward-type fame, or Matt Drudge fame, and since he is a publicity hound, then a simple threat of a defamation lawsuit could not possibly be a deterrent.

There is finally, the real likelihood that Cohan is afraid of personal harm if he points out that JPM is the manipulator, doing the US Fed’s dirty work for the plunge protection team. Cohan would last one minute, then he would accidentally shoot himself with a nail gun in the head seven times . . .

What about Maguire? Has he shown anything but constant effort to point out the truth?

There are others who dislike them both, figuring they have incentives, to talk their books. Oh well, that may be the case as well, but I do not find that opinion persuasive.

I hope that gives a little more sustenance to this story. I’m not going to put too much more effort into all of this, though, as there are two things of a more pressing concern:

(1) Acquiring as much silver as I can before we lose the 17 handle [I missed the 16 handle altogether, damn!]

(2) Building preps for what is SURE to be a fascinating fourth quarter.

You know how this ends,

Prepare accordingly.

About the Author


Oct 2, 2014 - 1:03am

People want to believe in

People want to believe in good guys. Maguire has played us all. Especially so because he still makes his living trading paper contacts. He's part of the problem, not the solution. How can you possibly ignore that he has screenshots from a trading platform that indicates the price before it moves there and he probably still has access to it? He syphons wealth away from honest people every day. Every single stacker every single trade. And you have convinced yourself he's a good guy?

Dr. P. Metals
Oct 2, 2014 - 1:10am

Well reasoned cal

But this all just seems overly complicated to me. Doesn't this beg the question: why doesn't andrew just write it himself and give to media, all at once, all outlets. I only keep thinking of the saying "what a tangled web we weave..."

Oct 2, 2014 - 1:16am

If I could ask AM just one question...

It would be: Why did you choose Cohan?

Dr. P. Metals
Oct 2, 2014 - 1:21am


why "only" Cohan?

Oct 2, 2014 - 1:27am

Most excellent

Thank you CALaw,

Much to consider that folks like me would never think about.

Pounds of Money
Oct 2, 2014 - 1:28am

Cal, Isn't Something Backwards in Your Conclusions?

Cal, isn't something backwards in your conclusions here?

You suggest that Cohan is avoiding publishing because he can't name JPM due to confidentiality agreements, or doesn't want to because of loyalty to JPM.

But didn't Cohan say he WANTED to name the manipulator, and that Andy and his lawyers won't let him due to potential liability?

In the end, this is like a joke or story that gets built up way too much as people beg the original storyteller to tell it again for someone else. When he is finally convinced to tell it, it's not funny, or its a big let-down. Way to much build-up on this silly soap opera.

I can't believe I let myself just get sucked into it.

Oct 2, 2014 - 1:35am


I do not besmirch Maguire's profession. That he makes his living trading paper concerns me only in that it reinforces my belief of his expertise in being able to intelligently discuss the paper markets and spot manipulation. I'm not ignoring the screenshot issues, for that very reason. He is an expert in this area, I am not, and his actions speak for themselves.

I reject your argument that Maguire siphons wealth away from honest people every day. How? One is not forced to enter into the paper markets. If one loses in a paper trade, that one voluntarily entered, then is that person being honest by blaming external factors for the loss rather than ones own self?

Excuses are no substitute for reasoning.

"Every single stacker, every day," is what you say. By that I presume you mean that stackers lose wealth because of Maguire? That is simple, but fallacious reasoning.

I stack, thanks to Mr. TF, and many other brilliant thinkers who have guided my thinking over the past several years. I still have the same number of ounces, and none of the physical metal has lost any value in my mind.

I am stacking as we speak, as I firmly believe that I am getting the bargain of a lifetime by acquiring precious metals far below the costs of production.

I choose not to play in the rigged markets. I am confident and knowledgeable that those in charge have manipulated every single financial market in existence. You agree, by implying that Maguire is part of that cabal because he participates in that system, and derives his income from it. That argument, that the paper markets are manipulated should motivate you to acquire as much physical, at any price, by exchanging worthless fiat for historically valuable precious metals, and have no regrets over the fiat price at all!

Dollar cost averaging is the way to go. No wealth loss exists, unless one sells precious metals for fiat at the bottom!

I exchanged ten ounces of gold for my legal services in the past several years. I still have that gold. As far as I am concerned, the spot or future price of gold means nothing to me until the system resets or reforms to a gold standard. At that point, I expect to realize gains, not taxable mind you, but real, purchasing-power gains.

How much would you pay to acquire a non-taxable investment opportunity, with no fees or ongoing management costs, that is liquid, portable, and beyond the reach of any government scrutiny or tax man, that could return ten or more times the investment, conservatively?

If you do not understand this, then you are not a stacker.

Oct 2, 2014 - 1:38am


I considered all of that. My conclusion is that Cohan has strong incentives to not name JPM As the manipulator.

Oct 2, 2014 - 1:42am

@Dr. P and Infometron

Excellent points, well done.

That nags at me, too. Reasoning from an incentive-based model, I took the Occam's razor approach: the simple explanation is most likely.

Cohan had vast, insider knowledge, from years on Wall Street, had publically come out hard against Goldman Sachs, and was an accomplished investigative journalist and successful book author. Perhaps Maguire choose Cohan because of those things? I would like Maguire to answer that question, too.

4 oz
Oct 2, 2014 - 2:04am

~ ~ ~ ~

Only 1/2 serious here, but seem to me these -He said/She said's- always come down to the, 'was there penetration' question....

boomer sooner
Oct 2, 2014 - 2:22am

He Lives!

Thank you CL for taking the time to weigh in. This whole thing has the clarity of the Red River just after a spring thunderstorm (knee deep at best). Cohen wanting/not wanting to get a dig into JPM, I had not thought about that angle. I am beginning to think it may be JPM and GS. Why could it not be GS taking the off side of the trades through one or many of their subs?

I have a feeling that Barrick is in this also, no proof, just a hunch. Barrick issues funny numbers to Blythe to give JPM cover on the hedging story. They are just washing the precious to make them more shiney.

Sooners doing well, (thanks for askin, lol) Test of wills in Dallas next weekend with Texas. I hope not to bring a "bug" back home with me. Big annual family get together, lots of orange and Red in one house (wifes extended family all UT grads), lots of fun, drink many brews and eat some poison (Fletchers Corn Dogs at the Fair) and golf at the annual 7:45 am tee time Friday at Los Colinas. Look for me at the game on TV, I'm the dumbass wearing red on the orange side!

Opticsguy Hope you you got your order in for the hazmat suit before DHS otherwise they might be all out!

Spartacus Rex
Oct 2, 2014 - 2:29am

Again; Is William Cohan The Only Financial Journalist On Earth?

Supposing the Cohan's severance package from JPMorgue included a gag, wouldn't Cohan have disclosed such to Maguire and his Attys? Or that AM and his Attys checked Cohans background/pedigree and simply asked same if there were any conflicts of interest involved before choosing same to write the story?

And which MSM publisher would seriously risk a Libel Suit, if they cannot vet the truth and veracity of the allegations with undeniable competent fact evidence, and sworn affidavits from the witnesses making the allegations?

Interestingly enough however, is that when I personally contacted a couple other well known writers in the PMs industry who are indeed wholly cognizant of the blatant ongoing manipulations in the metals market, in hopes of finding alternative venues for getting Maguire's story out, in both cases, I was expressly told by one that he "wouldn't last a week with (his employer) if I started posting stories from sources such as these." and was told by the other, 'Not even a snowball's chance in Hell...try peddling it to the Drudge Report".

ie Considering the deep pockets and teflon flak jacket of the suspected well known Culprit at Large, a mere "smoking gun" is not going to cut it with any of the so called "reputable" publishers. Either AM is willing to 100% back up the allegations with bonafide evidence and actual named witnesses willing to sign affidavits, or quit wasting everyone's time.

Cheers. S. Rex

Spartacus Rex
Oct 2, 2014 - 2:50am

Better Yet, To Quote Cal's Favorite Disbarred Atty:

For those who may have missed Michael J. Kosares Special Report:




Let's start with some big, but digestible numbers:

$3,950,000,000,000 = China’s total foreign exchange reserves

$1,250,000,000,000 = Value of the world’s 31,866 metric tonnes gold reserve at $1220/troy ounce


$1,280,000,000,000. = China’s holdings of U.S. Treasuries in its foreign exchange reserves

$ 319,000,000,000. = Value of U.S. 8133 metric tonnes gold reserve at $1220/troy ounce (...)

Consider this:

- China could purchase the total United States gold reserve (8133 metric tonnes) with 8% of its foreign exchange reserves.

- It could purchase the total global gold reserve (31,866 metric tonnes) with 32% of its foreign exchange reserves.

- It could purchase all the gold stored by Exchange Traded Funds (+/- 1750 metric tonnes) with less than 2% of its foreign exchange reserves.

- At $4900 per troy ounce, the value of U.S. gold reserves would match China’s U.S. Treasury holdings of roughly $1.28 trillion.

- At $4700 per troy ounce, the value of the world’s gold reserves would match China’s total foreign exchange reserves of roughly $4 trillion.

- To put it another way, China could pay double the current price for the world’s total gold reserve and still have nearly $1.5 trillion in foreign exchange reserves.

- China sits atop the list of the world’s foreign exchange holdings. The United States ranks thirteenth at $133 billion. For the United States to ascend to the top of the rankings, it would need to revalue its $319 billion gold reserve to almost $4 trillion – or raise the value to just under $15,300 per troy ounce."

Continued at the link provided above

Oct 2, 2014 - 2:50am

It is over!

The best of the best called it, and it is over, so dump all that junk shiny for whatever you can get now (don't wait for even lower prices) and move on with your lives!


All is lost, so suck it up and move on already!

Spartacus Rex
Oct 2, 2014 - 2:53am

@ Darth

You forgot the "sarc"

Oct 2, 2014 - 3:44am

@King Spart

That link isn't working for me, unless that is more self-censorship in motion ;-) I fully agree with your comments on AM above.

"The URL you requested does not exist, or is temporarily out of service."

Spartacus Rex
Oct 2, 2014 - 3:49am

@ philipat

Whenever the URL does not hyperlink, simply copy & paste into your browser and it will work just fine.

Cheers, S. Rex

philipat Spartacus Rex
Oct 2, 2014 - 3:54am

@King Spart

Thanks. I just learned something new today. It works just fine when pasted in.

thurd aye
Oct 2, 2014 - 4:55am

thanks for that,Cal Law.

thanks for that,Cal Law.

Spartacus Rex
Oct 2, 2014 - 6:27am

As Long as the Free Sh*t / Free Ride Army Can Vote...

They will continue to believe that tobacco smoke enemas are actually beneficial.

Obama: Premiums Will Decrease 3000% So You Should Get A Raise When H'care Is Passed

Obama: Premiums Will Decrease 3000% So You Should Get A Raise When H'care Is Passed

That's progress for you. Here is how it used to be administered:

Edward G
Oct 2, 2014 - 7:14am

Yawn...but...(Thanks Btw CL !!)

On naming the bank not being the issue: "everyone knows JPM is the big kahuna here as i wrote in my NYT article." said MR Cohan in his most recent reply (To Janda, posted in last TFMR post under Ned's latest.)

Oct 2, 2014 - 8:21am
Green Lantern
Oct 2, 2014 - 8:25am

Send the article to Xinhua,

Send the article to Xinhua, RT news, and La Opinion or whatever the most influential spanish newpaper is.

It will be a miracle if the US Press publishes it and spits in the face of their owners.

It will be another miracle if gains any traction outside the metals community and somebody on Capitol Hill decides to hold hearings and anything comes out of it.

Let's see just how willing the foreign media is to play ball and put out damaging information to this US bank. Let's see how wide spread the conspiracy is. Is China in on the flow of metals from west to east and price suppression? What better way to find out than use their puppet media.

They have a large presence in the US. INcluding the middle of Times square.

Yeah, US regulator's will call it propoganda but it's not important. Millions of people will read it. The seed will be planted.

If no foreign media agree's to print it than Houston, the problem is bigger than Mr. Cohan and AM even know.

The disagreement between AM and Cohan is insignificant to us as investors. LIke us arguing about Ebola-alternative medicine or not even before we know if there is a threat to us. . It's some sparring match that even if it is resolved doesn't ensure that the article will make changes.

Oct 2, 2014 - 8:43am

Confirmation Bias vs. Conspiracy Theory

I would like to see AM's allegations published only so that I can examine the evidence myself. Will it change my mind? Will it change anyone's mind? Hard to say, be each of us here have been converted one at a time, once upon a time.

This essay below doesn't address confirmation bias vs. conspiracy theory outright, but to me it brings out some interesting points of "why is it so hard to change our minds" about anything, specifically.

Longish, but I thought it was worth a read here since these issues affect our own asset allocation decisions, and is relevant to our recent experiment in "rating the experts".

Why People Believe Things You Don't Believe

David McRaney

Put your right hand on your head. Unless you are near a mirror, you can no longer see your hand, but you know where it is, right? You know what position it is in. You know how far away it is from most of the other things around you. I’m using the word “know,” but that’s just for convenience, because you don’t actually know those things. That is, you can’t be 100 percent certain your hand is on your head. You assume it is, and that’s as good as it is going to get - a best guess. We’ll come back to that. You can put your hand down now.

I once interviewed the great neuroscientist V.S. Ramachandran, and asked him about a condition known as anosognosia. This is the term for a disorder that causes the sufferer to deny another disorder. Blind people will sometimes believe they are not, for example. I asked him about this because I had learned that he once treated a patient with paralysis of one arm who denied that the arm was paralyzed even though she couldn’t move it when asked. She could no longer make an emotional connection to her arm. She denied that the arm was even a part of her. That biological connection, that feeling of ownership, was missing from her mind, and when asked whose arm it was she would say it was her mother’s or her brother’s. She said someone was playing a prank on her from under the table. Patients like this will explain away obvious things, but never seem to come out and say something like “it is my arm but I can’t feel ownership of it.” If she looked at her arm she could see the facts of the matter, but facts couldn’t alter her narrative. This is a form of anosognosia, and in these cases family and friends who are on one side of reality have a difficult time understanding how those on the other can continue to believe as they do. Inside the head of the sufferer, it’s not an easy thing to realize they are wrong. One of the defining features of anosognosia is that facts often don’t work on those who suffer under its terrible spell. I asked Ramachandran how that could that be possible.

Ramachandran said I should imagine a general on a battlefield, about to give the command to attack when an advisor approaches. The advisor tells the general that one of their scouts now says the enemy is stronger than initially believed, and that the attack should be postponed. The general decides that the chances of this one scout being right isn’t worth the cost of delaying the attack, and decides to ignore him. Ramachandran then said to imagine that the scout instead says he saw that the enemy had nuclear weapons, and believes as soon as the battle starts the enemy will launch them. Now, in this scenario, the general decides it would be a bad idea to continue, and decides to believe the scout. In a typical brain, he said, the general is careful not to overreact to reports coming in from the field; many of your strange psychological mechanisms serve to keep you on-task in this way, phenomena like denial and rationalization. But if a report is serious and reliable, the general puts all that aside, suppresses it, and responds appropriately. Except in some people the general inside their heads doesn’t do that. Damage to the right parietal seems to make it so the brain can’t properly gauge when a situation has become too serious to depend on rationalization and denial. Those sorts of brains keep on confabulating, and that’s why people who are blind can somehow continue to believe they are not despite what seems like irrefutable evidence to those of us on the outside of their skulls. That’s how come a person can deny her arm belongs to her even though it is physically attached at the shoulder.

V.S. Ramachandran also writes about treating patients who have lost limbs, often an arm, but the maps of their bodies do not get updated after the loss. The brain continues to generate a virtual arm, a representation that was once grafted onto flesh. That’s what you felt when you put your hand on your head. That’s the difficult truth to accept, that there never was a real arm in the first place, at least, not in the brain...it was always virtual, it was always a model, the only difference now is that the model represents something that no longer exists, and it can’t be updated. The sensory organs that used to provide the information that updated the model have been lost, yet the model remains.

To borrow from Ramachandran’s battlefield, the agencies of your mind are kind of like a general surrounded by lieutenants, all receiving news of the world by messengers, but the whole group is trapped in a war room and only able to interact with a map of the battlefield populated by models of tanks and little toy soldiers. That’s what it is like to be a brain. You are trapped in a skull, unable to actually interact with the world outside. You depend on messages from sense organs written in code. When you decode the messages, you alter the map and the models, but that’s all you can ever hope to know about the outside world - that map and those models. The evidence gathered so far suggests that one of the most important discoveries in neuroscience and psychology is that you often mistake your interactions with the world to be direct and intimate, and your sensations to be perfect replicas of the elements of the world that your senses perceive. In other words, you sometimes believe that the map in your war room isn’t a map at all, that it doesn’t represent anything outside of itself, but that it actually IS the real world.

Once you understand that the brain generates a model that is a representation of a more complex and nuanced reality, you can see that your interactions are broad and blunt, approximate and presumptuous, and probably wrong in many ways but in the end, good enough. That’s as much as neuroscience is willing to give you - good enough. Your narratives and strategies and memories and actions and decisions and judgments, they are good enough.

All you can ever know about your own body, or the world outside of it, is what your brain tells you, and your brain doesn’t tell you the truth. It just makes an approximation, it makes a model of the world. This is where belief begins. If you drill all the way down. If you dig until you reach the rock, your original faith, your central belief, is in your model of reality, the one generated by your brain. That is your terminal dogma: your faith in your internal representations of the world around you. It isn’t limited to ownership of your limbs or the belief that your hand is on your head when you place it there. Who is right, you ask, when your messengers arrive, the people telling you vaccines are harmful or those telling you that they are harmless? Who is right, the climate scientists or the politicians who distrust them? Locked in the skull, its only interaction with the world based on models and maps, your brain can only make best guesses that are good enough.


Storr proposes you try this thought experiment. First, answer this question: Are you right about everything you believe? Now, if you are like most people, the answer is no. Of course not. As he says, that would mean you are a godlike and perfect human being. You’ve been wrong enough times to know it can’t be true. You are wrong about some things, maybe many things. That leads to a second question - what are you are wrong about? Storr says when he asked himself this second question, he started listing all the things he believed and checked them off one at a time as being true, he couldn’t think of anything he was wrong about.

Storr says once you realize how difficult it is to identify your own incorrect beliefs you can better empathize with people on the fringe, because they are stuck in the same predicament. They are just as trapped in their own war rooms, most of the time unaware that the map they use is, as psychologist Daniel Gilbert once said, a representation and not a replica. They are judging the evidence presented to them based on a model of reality, a map that they’ve used their entire lives, and you can’t just tell someone that his or her map is a fantasy realm that doesn’t exist and expect them to respond positively. You can’t just ask a person like that to throw away that map and start over, especially if they’ve yet to realize it is just a map, and their beliefs are only models.


Oct 2, 2014 - 9:28am

Gold steadies as dollar, equities slide, but outlook still bleak

Gold steadied on Thursday as the dollar fell and weak global manufacturing data unnerved equity investors, but expectations of further gains in the US currency kept demand for the metal sluggish.

Spot gold was up 0.1 per cent to $1,214.16 an ounce by 1012 GMT, while US gold futures lost $1.10 to $1,214.40 an ounce. Cash prices had touched a nine-month low of $1,204.40 an ounce on Tuesday.

Gold's steadiness was also helped by lower European stocks after a slew of surveys on Wednesday showed German factory activity shrinking for the first time in 15 months, China's manufacturing sector barely growing and the United States slowing more than expected.

Economic uncertainty sent investors scurrying for insurance assets, often considered as an alternative during times of heightened financial or political risk.

"With the likelihood of further weakness in equity markets, coupled with the still volatile situation in Hong Kong, we would rather not want to be short gold here, as we think the precious metal may benefit from some short-covering heading into the weekend," INTL FCStone said in a note.


Oct 2, 2014 - 9:30am

Gold Sales at Perth Mint Reach 11-Month High as Prices Retreat

Gold sales from Australia’s Perth Mint, which refines all the bullion output in the world’s second-biggest producer, climbed 89 percent in September to the highest level in almost a year as prices declined.

Sales of gold coins and minted bars rose to 68,781 ounces from 36,369 ounces in August and the most since October 2013, according to data from the mint compiled by Bloomberg News. Sales were about 68,487 ounces in September 2013, data show.

Bullion prices dropped 6.2 percent in September, the biggest decline since June 2013, nearly erasing this year’s gains. The dollar has climbed amid improving U.S. economic data and as the Federal Reserve raised interest-rate forecasts, while central banks in Europe and Asia maintained or expanded stimulus to spur economic growth. Gold coin sales by the U.S. Mint more than doubled in September to the highest since January, according to data compiled by Bloomberg.


Oct 2, 2014 - 9:42am

Financial Repression

Is There A “Back Door” Method For The Government To Pay Down The Federal Debt Using Private Savings?

By Daniel R. Amerman, CFA

In practice, there are four primary methods which nations use to pay down huge government debts when they have borrowed in their own currency:

1) Decades of austerity with higher taxes and lower government spending. This painful choice can lower economic growth rates for decades, and fundamentally change investment returns. It is also overt and clearly understood by voters, and can thus have devastating political implications.

2) Defaulting on government debts. This radical option can devastate bond and stock portfolios, bank deposits and retirement accounts. It is also clearly understood by voters, and thus can have devastating political repercussions.

3) Inflating away the value of the debt through rapidly slashing the value of the currency. Very high rates of inflation rapidly reduce the value of savings, bonds, deposits and retirement accounts. Because collapsing the purchasing power of savings and salaries powerfully impacts the day-to-day lives of voters, this can have devastating political implications.

4) Using "Financial Repression", a process that is complex enough that the average voter never understands how it works, thus allowing governments to use this potent but subtle method of taking vast sums of private wealth, year after year, decade after decade, with almost no political consequences....

....As covered in the IMF working paper / governmental tutorial, this combination of shearing and fencing in the postwar era shared four to five core characteristics: 1) inflation; 2) governmental control of interest rates to guarantee negative real rates of return; 3) the funding of government debt by financial institutions; 4) capital controls; and 5) discouraging (or even outlawing in some cases) precious metals investment.(Emphasis mine)

....5) Precious Metals Controls (Fence #3). Now there is a fifth component that is very important as well. This one's a little more optional, but it's part of classic Financial Repression in the United States as well as the UK and other nations.

And that is if the government is creating inflation, and as a matter of law it's not allowing citizens the ability to protect themselves from that inflation, then investors will be tempted to seek refuge in precious metals.

So the fifth component of classic Financial Repression is to either make illegal or discourage investment in precious metals. To some extent that's already true in the US when we look at our collectibles tax treatment as compared to other investments, which strongly penalizes investments in precious metals, as explained here.

At this stage, there have been fewer changes with regard to precious metals than with the other categories of Financial Repression. However, it is worth keeping in mind that the more successful precious metals investors are in dodging Financial Repression – then the more likely the return to Financial Repression for precious metals investors. After all, the underlying theory is based upon not allowing savers to escape the pen.


Oct 2, 2014 - 9:45am

Oh Look!

Oh look!

Silver is on sale! (again)

Alonzo Jazzberry
Oct 2, 2014 - 10:42am

Much appreciated to get thoughts on this from a lawyer, but...

The idea that Cohan doesn't want to name JPM Appears to be the least likely explanation:

(1) The argument from the beginning was that Maguire was the one who didn't want JPM named.

(2) As someone already pointed out, Cohan already named JPM in an email to Craig earlier this week, and argued that it was never a bone of contention in the first place.

(3) Cohan named JPM in the original NY Times article from 2011: https://opinionator.blogs.nytimes.com/2011/03/02/a-conspiracy-with-a-silver-lining/?_php=true&_type=blogs&_r=0

(4) I think it was the host here that linked to this article in bloomberg where Cohan goes after JPM: https://www.bloombergview.com/articles/2014-05-09/is-wall-street-killing-its-bankers

If anything, Cohan would appear to maybe even have an axe to grind with JPM.

I think we're seeing some mental gymnastics in this article because the author is assuming as a premise that Maguire's actions are perfectly defensible and understandable. Cohan has said repeatedly now that Maguire's behavior is baffling and 'becoming ridiculous'.

I was hoping to get some lawyerly thoughts on the libel thing. Doesn't seem like there is any threat to Maguire possible here, but I know UK laws are bizarre on that one.

Oct 2, 2014 - 11:04am

Alonzo - Approach This From the Perspective of Incentives


I wrote this article based trying to evaluate Cohan's and Maguire's credibility based on their respective incentives for either lying or telling the truth. I am weighing each of their incentives, as I understand them, and THEN, based upon my belief that one tends to act in accordance with one's incentive structure, I evaluated the likelihood that one or the other was telling the truth.

Since I have never met either person, nor do I have any special access or insider information, I cannot evaluate credibility directly. Hence, I use the tool that I know how to use.

it may very well turn out that your assessment of Cohan is true, and that it is Cohan that is telling the truth. I do not hold that viewpoint, as I seen Cohan's incentive structure being overwhelming, in that there is no benefit to Cohan's naming JPM, while the disincentives are numerous, and compelling.

Ned said this, and let it sink in:

"Contrary to his (Cohan) claim, this (naming JPM) was never agreed by Maguire's lawyers and for legal reasons cannot happen. But since everyone has a pretty good idea who the institution is anyway, I find it ridiculous that Cohan is making a demand that cannot be met and using that as a reason to remain mute. Contrary to what he appears to be saying, this detail wasn't agreed in the version of the article he wanted to put in newspapers. Cohan appears to want this all to go away, which it won't."


Cohan is telling Maguire to do something, name JPM, which Cohan KNOWS Maguire cannot do, for good and compelling reasons. Maguire's lawyers tell him to not say JPM or else there is risk of litigation. I do not know British law, so I cannot chime in there. If Maguire gets sued in the USA, then if Maguire names JPM as a fact versus Maguire's opinion, Maguire can be on the wrong end of a libel or defamation lawsuit. Maguire thus has strong incentives to keep silent re JPM. But, for the reasons mentioned, including by you, Cohan has already come out with his opinion that the big manipulator is JPM, so why won't he just publish his article?

Based on the incentive-based credibility model, I conclude Cohan is the one not telling the truth on this.


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