Bear Stearns – A Different Opinion

http://silverseek.com/commentary/bear-stearns-%E2%80%93-different-opinion-17161

Class action against Morgan, HSBC specifies silver manipulation mechanism

http://news.silverseek.com/SilverSeek/1293546686.php

"Before the Class Period began, JPMorgan had become the custodian and an authorized participant of the largest known concentration of silver bars, the iShares Silver ETF, which holds in excess of 340 million troy ounces of silver, a sum that equals an estimated 1/3 of the total present global supply of silver bullion. As a result, it had actual knowledge of the precise whereabouts of much of the world's known silver bar supply.

"In approximately March 2008, JP Morgan acquired Bear Stearns, which held a very large short position in silver. With more of the total short position in silver concentrated in the hands of JP Morgan, it had a further motive to suppress prices.

"Upon information and belief, JP Morgan works together with HSBC, the other dominant player in the silver and precious metals markets. In July 2009, HSBC became the custodian of the SIVR ETF, which meant that it had physical access to and knowledge of the silver held by that trust. Notably, it named JP Morgan as one of the sub-custodians of the SIVR ETF.

"As a result of their participation in the silver ETFs, JP Morgan and HSBC had a direct opportunity to confer and discuss with each other the prices of silver held by each of them.

"In addition, Defendants had a strong incentive to suppress downward the price of silver as measured by the NYSE-Arca and CME/COMEX instruments. For example, Defendants could pledge their silver to the ETFs in exchange for ETF shares, sell their shares to other market participants, drive down the prices of silver through trades on NYSE-Arca and CME/COMEX, buy back their ETF shares from investors at lower prices, and return their (now lower-priced) silver ETF shares in exchange for the silver bars initially pledged against those shares, the real value of which remained the same, and only notionally appears lower because of Defendants' suppression.

Things that make you go hmmmmmmm...

Does anybody find it ironic that the Federal Reserve hired Michael Alix, the former Chief Risk Officer from the now-defunct Bear Stearns, to manage the Fed's risk profile? What on earth did he do right to manage Bear Stearn's risk--considering they were insolvent? I guess on Wall Street at least, losing money is a badge of honor and gets you fast-tracked into a top position within the government.

Also, what makes former investment bankers selling collateralized debt obligations (mortgage-backed securities) and credit default swaps competent fund managers? Many are out on the streets, and are now starting hedge funds, charging 2/20, I'm sure. It's astounding...fool me once, shame on you...fool me twice, shame on me...

An entry from last year

I posted this almost a year ago, on a sports message board, of all places:

Posted: Thu Jul 26, 2007 1:43 pm Post subject:
There's a lot of misinformation going on here. Some of you guys assume that the high-technology boom and bust cycle is unique. Perhaps it's more volatile than most, but it is far from unique. I happen to believe a similar bubble is forming in real estate that is just starting to implode, esp. in ridiculous markets like south Florida, many parts of California, and especially Vegas. You saw mortgage lenders, esp. ones that serve the sub-prime market get hammered. Wall St. was not unscathed--Bear Stearns and other investment and commercial banks took a beating as well. Seeing how most individuals have most of their net worth tied to their homes, it is a troubling sign of worse things to come. Add in a lame-duck president next year, and a Democrat-elect potentially, and look for the stock market to "correct" itself between now and early 2009. The weak dollar may prop up the manufacturing and tourism industries short-term, but long-term, it structurally makes all Americans poorer--it is not a good thing. Too high, and it makes American exporters uncompetitive. Too low as it is now, and we sell ourselves out to foreigners (I consider our dependence on foreign investors to buy our bonds to support our deficits to be "selling out"--because once they decide to stop buying said bonds, interest rates will soar, and we will be in a real world of hurt). A weak dollar makes the US too vulnerable to global capital flows. How do and would I deal with it? Tax-free equity index-based contracts guaranteeing a minimum of 3%, with a cap in the mid-teens to participate in any volatility and upside. PRESERVING CAPITAL in a tax-advantaged vehicle is HUGE--ask anyone with a math or financial background. I don't care if the NASDAQ goes up 50% next year--I'll take my 17%, avoid any down years, and say thank you very much. And while I am not a real estate broker, I would consider buying some in Detroit. Call me crazy, but I recall when the best business in the early 90's was renting U-Haul's one-way out of California. People were leaving in droves due to earthquakes, navy base closures, race riots, a slumping economy, and the downturn in defense spending. The only growth industry was grunge rock. A house on half an acre (with some earthquake damage) in Beverly Hills was listed at $550,000. Today, it's probably worth ten times that. 12-unit apartment buildings barely 5 years old (built during the 80's boom) were going for $300,000 in Long Beach, as foreclosures hit hard. Today, that same building probably would sell for $4 million. Detroit, tho royally screwed, will come back, altho not back to its former glory, but it will come back. I don't know if oil and gas prices will come down, I don't know if Detroit somehow can reverse the market share downward trend, I don't know if they can somehow make more hybrids, but it will come back, and those $20,000 houses will be worth $150,000 again (at least in some neighborhoods). Hell, you can buy a whole skyscraper in Detroit for $3 million. That wouldn't even buy you half a home in some California neighborhoods. _________________ A cynic is someone who knows the price of everything, and the value of nothing.