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Comex: JPMorgan, Commercial Signal Failure & Default
As many know there are a group of ex Morgan traders who decided to take on Blythe Masters and JPMorgan by standing for delivery but then asking for a huge fiat premium. We have now heard from one trader who also is a reader of my blog. The name given to the ex traders is "Wynter_Benton:
Here is what is posted by Louis Cypher:
"Wynter_Benton update on their recent raid
With permission, I can update the results of our raid. It was successful beyond imagination but that "success" has spawned even more questions about the price of paper silver going forward. It was reported by SGS that he heard that on Friday Blythe was offering 30-50 percent premium and that at least 4500 hundred contracts will stand for delivery. I am here to give you a more accurate update (and a first hand account of what happened on Friday Feb 25). Our group was detemined to stand for delivery going into Monday because we were not going to take a 30 percent premium on a price of $33.50. It was reported that Blythe offered 50 percent premium.
That was not even close in our case. We got over 80 percent premium. That's right. Over $50 per contract on the condition that our group sell all our contracts. Our counterparty even threatened us with the ghost of Herstatt. They openly admitted that they could not deliver even 20 million ounces to us but that if we stood for delivery they would be sure that they make delivery to everyone else before they defaulted on us which would make us 'unsecured creditors'. They told us directly that they could not allow even 5000 contracts to stand for delivery because they could not deliver a mere 20 million ounces.
Like Vito Corleone said, "I'm gonna make him an offer he can't refuse." And indeed we did not refuse as this was our intention all along.
These sets of facts from our traders lead us to believe that the paper price of silver may have a difficult time surpassing $36 because if the counterparty at the Comex is so willing to pay north of $50 to dissuade people from standing for delivery yet the paper price of silver is still under $35, then we suspect that losses triggered by derivatives is the main reason for the price suppression of silver. We can see no reason why they would not allow the paper price to go up yet are so glad to pay off the comex contracts to show the world that so few are standing for delivery. In our mind, Comex could default with if as little as 4,000 contracts stood for delivery. We are very curious to see how high the paper price of silver actually trades during this run.
Posted by Louis Cypher"
http://harveyorgan.blogspot.com/
