November 2010 Archives - 6/59

If JPM covers just 10% of it’s Silver short liability, the stock would trade at zero

Until the Irish (Portuguese, Spanish, etc.) wake up and understand they are fighting a financial war, not a political war, they are guaranteed to lose big time. To fight a financial war you have to deprive the opposition of their finances. The most effective way to achieve this would be to crash JP Morgan (one of the banks funding the IMF that is stealing your money) by buying Silver and forcing JPM to write off their 1.5 trillion dollar loss – against a market cap. 1/10th that size; (i.e., go bankrupt). Or, you can wave your placards in the streets and pay taxes on non existent jobs to the IMF, while living in your IMF owned homes raising the next generation of IMF slaves – for the rest of your sorry lives. Irish banks had debts that were 2 X’s Ireland’s GDP. JP Morgan has debts that are 430 X’s the market cap. of JPM (65 trillion / 150 bn.). JPM has more derivatives debt on their books than the ENTIRE GDP OF THE WORLD. Do you understand why they need to gobble up your puny little country and steal the $20 bn. you have on your books? They are suicide bankers – blowing themselves and you up – for their ideology of bonuses, drugs and hookers. Your money will make a lot of drug dealers and prostitutes on Wall St. happy this holiday season as Wall St. pays itself a record 140 bn. in bonuses.

Here’s a typical email from someone trying to rationalize their appeasement of financial terrorists.

MK: The emailer below makes two mistakes; first, if JPM is forced into a secondary offering of JPM shares to cover their losses on Silver shorts – earnings get diluted – and the stock takes an enormous hit. Based on the Silver short exposure – on the order of 1.5 trillion in size (of the total 65 trillion in derivatives liabilities sitting on JPM’s balance sheet) – against JPM market cap. of 150 bn. – means that just covering 10% of their liability would wipe out share holder equity completely.

Second, any gov’t bail out means printing more money – which makes the Silver price sky rocket more – which means more losses on JPM’s balance sheet and more incentive for those seeking to destroy JPM to buy more Silver. Why isn’t JPM’s stock at zero today? Because – as we see in Ireland – people still think that marching on the street and peacefully asking financial rapists not to rape them will somehow save them. This is f****** stupid. If you want to kill the disease that is killing you, decapitalize it. Crash JP Morgan Buy Silver.

Hi Stacy

I am wrighting this e-mail to you and not Max directly, as with all due respect to Max and his intension, I’m afraid he might simply ignore, if not totally deny the following.

First of all, I’ve been aware of the JPM’s (and few others megabanks) massive silvershorts for a long time now, which actually was my own primary reason to go long and keep buying silver for the last few years now. So because of my attribution/position bias, in fact I should be cheering Max’s call for “buy silver, crash JPM”. However, I cannot do that blindly, as the way things played out in the last few years primarily in the financial world, forced me to think realistically and not in fair and traditional terms.

The reason why I think Keiser will be wrong about his JPM-crash call (even if silver will explode in price say tomorrow), is because JPM does not have to admit their losses in traditional and fair manner, i.e. by eventually getting short-squeezed so to speak… Why?.. For about a year ago, BarrickGold got into trouble with their gold “hedges” which amounted to a few billions of dollars (I think it was around $3b). As the gold price kept going up, Barrick kept taking more and more losses (and justifiable critique from shareholders). So they ended up being forced to close those hedges, or let’s just call it shorts, which they were. But as I recall, the way they/Barrick did it, was that they DID NOT GO BACK INTO THE MARKET AND COVERED their gold-shorts.. what actually happened was a secondary offering of new shares, they took this money to PAY their bank TO SETTLE THEIR SHORT POSITION OUTSIDE THE MARKET!!.. so again, Barrick didnt go back into the market and buy their contract.. Barrick simply paid their broker to settle ever rising losses – I actually think it was JPM who managed their hedges.. So NO TRADITIONAL SHORT SQEEZE HAPPENED
Now, the gold price went up for a small period at that time anyway.. only to retrace a good deal shortly after (few month later gold rallied, but for way other reasons than Barricks short”covering”).

That’s why, knowing the above mentioned Barrick story and the very fact that JPM was already getting away with even having these concentrated huge silver-shorts (by having SEC look the other way for at least a few years), I think it’s quite prematurely to expect JPM not get away with their “crime” this time too..
I personally think and expect a scenario, where after silver has gone up further 30-50% and the issue gets enough attention, SEC, FED and UST will get behid JPM, say that regular squeeze would be too much of a systemic risk (hell yeah it would), then either covertly or even overtly force another bailout from the very same taxpayers that were castrated enough to put up with the previous bailouts, and just cancel out their shorts from the books – WITHOUT GOING OUT AND BUYING IT ALL BACK IN THE MARKET.. only to disappoint the less realistic minded silverbulls..

I hope my explanation wasn’t too long and that you will at least inform Max about it and make him reconsider the certainty of his call.

Otherwise, love you and Max, your work. Keep doing what you do.
Best regards
Victor

A bankrupt IMF close to seizing Ireland’s $20 billion cash horde

Thousands protest against Irish bailout

MK: The IMF is a consortium made up of bankrupt banks, mostly in the U.S. The IMF was close to bankruptcy a few back – but the ‘global financial crisis’ that they caused – gave them a chance to swoop into countries with weak politicians and grab some easy cash. Ireland, as reports have said, has plenty of cash for two years of operations – but the IMF needs that money now. So Ireland must lose its sovereignty. It’s tragic, but it’s history. Next week it’ll be Portugal and Spain. The naked bond sellers have already softened up those countries and the rating agencies stand by to downgrade their debts. By the time the IMF shows up to steal what’s left these countries will be paralyzed with fear and the pickings easy.