www.lemtropolecafe.com and Jim Willie.
I first would like to publish communications I haid with the Commissioner of the CFTC and with Ted Butler:
Very well said. It is really hard coming up with a legitimate explanation for why they aren't digging deeper. Maybe because there are no legitimate explanations
From: Harvey Organ <firstname.lastname@example.org>
To: 'Chilton, Bart' <BChilton@CFTC.gov>
Cc: ; email@example.com
Sent: Wed, 4 Feb 2009 6:21 pm
Subject: RE: RE: SLV shorts Butler's Latest paper
Sorry about you drowning in more emails but the situation is quite dire.
I know you cannot micro-manage everything, however it is strange that the
man who has been complaining for over ten years and a man who has without a
doubt the most knowledge on the subject, has been totally and purposely
ignored by the CFTC.
If there was a desire on the part of the commmission to ascertain what has
happened, and as well receive no co-operation from the "mark" in the
investigation, then I would leverage Mr Butler. He should quickly and
thoroughly solve all your unanswered questions.
Just like the Madoff testimony given by Mr Markopolis today, the regulators
have a fear of being blacklisted by JPMorgan and Goldman Sachs, and this
fear guides their actions.
Regulators forget that their duty is to the public, not the banks. If their
actions are guided by the plum job offers that they get when leaving their
positions within the Commmission, then I can only say that all are complicit
in this crime and should suffer the consequences once the fraud has been
The bank shares are trading as if going into a vortex. Bank of America
today traded at $4.72. Citibank continues to flounder at around 3.70 as
well. Both of these banks have huge derivatives and also massive credit
default swaps underwritten by JPMorgan and AIG. Their failure will blow up
It is for this reason that I urge you to present our documents to the
cabinet so that President Obama can deal with the problem in an expedient
fashion as I don't believe we have the luxury of waiting.
Harvey Organ BScPhm MBA
From: Chilton, Bart [mailto:BChilton@CFTC.gov <mailto:BChilton@CFTC.gov?> ]
Sent: February-04-09 11:49 AM
To: Harvey Organ
Subject: RE: SLV shorts Butler's Latest paper
I'm drowning in e-mails - sorry. I know that the investigators will take Mr.
Butler's testimony, but I can 't micro-manage their schedules or timing on
the investigation - they are looking at myriad things. I had hoped they
would have done so by now, but it is really not my call.
From: Harvey Organ [mailto:firstname.lastname@example.org <mailto:email@example.com?> ]
Sent: Tuesday, February 03, 2009 4:58 PM
To: Chilton, Bart
Cc: 'Don H. Jack'; 'Robert G. Hryniak'; firstname.lastname@example.org
Subject: SLV shorts Butler's Latest paper
I am sending you down Butler's latest paper and it has many of disturbing
elements that I have forwarded to the CFTC and Enforcement in earlier
It has to do with the massive shortfall in shares at the SLV which violates
the terms of the prospectus. This is an area that Mary Schapiro should
delve into as well as the enforcement arm of the CFTC.
I would also like to point out to you that the Central fund of Canada
purchased in excess of 4 million oz of silver at prices 22% higher than
They did not use a bullion bank.
I have asked Christine to call Stefan Spicer the CEO of Central Fund who
would be delighted to speak to the CFTC. In front of her lawyers and Mr
Jack, she promised that she would speak to him but to no avail. She refuses
to call Mr Spicer who without a doubt can fill in many missing pieces with
respect to physical silver purchases.
Christine emphasized in a rather strong manner that she "WILL SPEAK TO MR
BUTLER". To this date, nobody at the CFTC has talked to Mr Butler. Mr
Butler without a doubt has more knowledge in the silver arena than any
person on earth.
With respect to the SLV, its sponsor is Barclays and its custodian is the
HSBC. Barclay's is rumoured to be in hot water as they are terribly offside
on their banking covenants.
I sent you an earlier email on Mr Gensler to which I have not received a
It has now been 7 months and the crime continues unabated including
yesterday and today.
A lot of people have been damaged by the actions of JPMorgan. I can only
urge the regulators to do the right thing for a change!!
Gold closed up by 70 cents to 913.50 and silver caught a tailwind closing up by 37 cents to 13.16.
The big news of the day however was the jobs report and it was worse than thought. A total
of 598000 people lost their jobs. A revision of a further 77000 on previous reports adds to the
list. The unemployment rate went up to 7.6%.
Here is the report:
US economic news:
08:30 Jan non farm payrolls reported (598K) vs. consensus (540K); unemployment rate 7.6% vs. consensus 7.5%
* * * * *
08:30 Jan average hourly earnings 0.3% vs. consensus 0.2%; average weekly hours 33.3 vs. consensus 33.3
Dec average hourly earnings revised to 0.4% from 0.3%; average weekly hours unrevised from 33.3.
* * * * *
08:30 Dec non-farm payrolls revised to (577K) from (524K)
* * * * *
U.S. January job losses most severe in 34 years
WASHINGTON, Feb 6 (Reuters) - U.S. employers slashed 598,000 jobs in January, the deepest cut in payrolls in 34 years as the national unemployment rate shot up to 7.6 percent, according to a Labor Department report on Friday that underlined a deepening recession.
January's job losses were worse than the 525,000 that had been forecast by Wall Street economists, who also had expected the unemployment rate to come in lower at 7.5 percent. The bleak employment data is certain to be cited by the Obama
administration as a fresh reason for Congress to speed up debate over a multibillion-dollar package of proposals to try to stimulate economic activity.
Last month's job reductions were the largest since 602,000 in December 1974, while the jobless rate reached its highest level in more than 16 years.
"January's sharp drop in employment brings job losses to 3.6 million since the start of the recession in December 2007," Commissioner of Labor Statistics Keith Hall said in a statement, and "about half the decline occurred in the last three months."
January's losses followed upwardly revised cuts of 577,000 in December and 597,000 in November.
The manufacturing sector bled jobs at the sharpest rate during January in more than 26 years, shedding 207,000 workers after cutting 162,000 in December. The last time more factory jobs were lost in a single month was in October 1982 when 221,000 were cut. An index measuring total paid hours for factory workers dropped to its lowest level since 1940, department officials said.
Construction industries dropped 111,000 jobs in January after 86,000 in December and Hall said that pace of cuts was accelerating. Retail businesses cut another 45,000 positions after shedding 82,700 in December.
The job losses has created havoc for all levels of government. Municipalities are not receiveing funds from the states. Sales tax revenue is falling off a cliff as we have already seen California default. Jefferson County is threatening default as will the state of Alabama. The state of Arizona will run out of money in 3 weeks. I highlighted a paper written on Thursday showing that 46 out of 50 states will file for bankruptcy protection this year.
Prior revised to ($11B) from ($7.9B). end.
REUTERS EXCLUSIVE-INTERVIEW-US consumers miss more debt payments-Equifax
* Lenders tracking credit trends to prevent more losses
* More lenders requesting Equifax's "bankruptcy scores"
* Consumers leery of taking on more debt, saving more
* Lender and borrower retrenchment part of rebalancing
NEW YORK, Feb 6 (Reuters) - U.S. consumers are falling further behind on their debt payments even as both borrowers and lenders struggle to keep the debt burden from getting even heavier in the face of a worsening recession and employment picture, a credit bureau executive told Reuters.
Dann Adams, president of U.S. Information Systems for Equifax Inc
"Lines of credit are being very closely monitored," said Adams, whose clients include banks struggling to prevent more bad debt from piling onto their balance sheets.
Banks are, for example, warily watching their credit card portfolios in anticipation that consumers whose home values are plunging will turn to credit cards as their home equity lines of credit are cut or canceled.
They are also preemptively culling inactive cards, seeing them as a potential liability: "If the consumer gets in trouble with someone else they'll start using the bank's card, and the bank doesn't want them to do that," he said.
Customers whose credit scores are on a downward trend are finding themselves on the receiving end of more aggressive action to limit or cut off credit.
And more lenders are requesting an Equifax product called "bankruptcy scores" that expresses the probability that an individual will be bankrupt over the next one to two years, Adams said.
But Adams is careful to note that this is "a supply-demand contraction." Consumers are likewise saving more, and growing leery of new debt.
The retrenching on both sides is part of a "rebalancing" underway in the banking system that will insure safety and soundness in the long term, Adams said. But closer in, the tightening of purse strings is exacerbating the recession as consumers miss payments, traumatized banks pull back and the economy contracts further.
"We're not seeing a real positive trend in anything we track," Equifax's Adams said…
On Monday, the new Secretary treasurer is going to finally detail his long awaited rescue plan for the banks. Many believe that he is going to
introduce a bad bank to hold all the toxic waste from the banks. I would like to review what I commented to you throughout the past few weeks on this matter:
The banks have a total of 10.5 trillion dollars of securtized debt mortgages, commercial mortgages, subprime, alt a's and jumbo mortgages out there. Roubini , and other noted economists have forcast that approximately 35-50% of this junk is uncollectable. Roubini puts the figure at around 3.6 trillion. Goldman sachs puts the figure at around 4 trillion dollars. The banks have retained earnings of about 1.2 trillion dollars.
Now the problem is how are they going to price the toxic junk to remove it from the banks balance sheet. If they price the purchase at 8 trillion dollars (i.e. 100% higher than the correct market value) then the banks get to live another life. Their recapitalization needed will be 1.3 trillion dollars ( 2.5 trillion minus 1.2 trillion (retained earnings to equal 1.3 trillion dollars.) The banks would still need 1.3 trillion dollars to recapitalize. They would probably get foreign countries to inject capital.(the loss of 2.5 trillion comes from 10.5 -8 trillion equals 2.5 trillion)
However, the usa taxpayer would get hosed. The loss to the taxpayer would be 8 trillion of payouts minus the 4 trillion in recovery or 4 trillion dollars of loss, plus interest.
While this is going on, the usa would be running a huge deficit and the government would keep the printing presses on 24/7. Not a good scenario. Gold and silver will run to the strasophere. Long bonds will lower in price (rise in yield) imploding all the interest rates derivatives of JPMorgan.
I will highlight this in a commentary written by Jim Willie later in my comments.
If they only give the banks 2 trillion instead of 8 trillion for their bonds, the banks would be insolvent. Not only will the banks blow up but also the entire derivatives will blow up as there will be nobody to collect or pay on those derivatives. Gold and silver explode to the strasophere as in the above scenario.
This was released last night by Jim Willie and it highlights the mess than JPMorgan is in:
The secret weapon of mass destruction in the last decade has been the Interest Rate Swap. Notice how the dreaded 'Bond Vigilantes' are all dead, run out of town, or converted to blacksmiths. The IRSwap device enabled JPMorgan to use lower Fed Funds rates and immediately associated short-term USTreasury Bill yields in order to leverage down the long-term USTBond yields. The IRSwap extended the reach of JPMorgan and the US Federal Reserve to control long-term rates. Fires are burning hot in the JPM basements, complete with visible smoke, since 0% yields put nearly infinite pressure on the leverage devices. This is pure physics. USTBills have approached a near infinite value, thus exerting unsustainable pressures on the IRSwap leverage. The end result is a shattered triangle that reined supreme for two decades. The powerful machinery is broken. Like horses no longer held back by weighty stagecoaches loaded with burdensome ballast and overweight men in stolen suits, the gold price will be released. The crude oil triangle will be broken also, but later.
For years, JPMorgan has been swapping short term treasuries for long term treasuries through derivatives. In plain English their moves lowered interest rates and forced the bond vigilantes to escape Dodge. They wanted no part in this scam.
The problem for Morgan is that short term rates went to zero which forced long term rates also to go to ridiculously low levels. JPMorgan is massively short the long term bonds and thus they are frying as these instruments are now lowering in price and rising in yield as foreign holders do not want to hold low producing interest vehicles. They would rather hold gold and silver. This was the message that we received last week and now we are hightlighting this for you. We are also hearing that many are preparing to remove all the febuary gold and March silver in the next few weeks. Here is the link:
Jim Willie of goldenjackass.com has heard through his sources that gold has been leaving through the back doors of the COMEX warehouses and there is a group of billionaires ready to empty the vaults by the end of March.
The next area of concern is General Motors. They must report to congress on the 17th of Feburary. If they cannot come up with a comprehensive plan and return to profitability, then they all go bust. The problem here is the massive derivatives written by them and on them.
General Motors has about 1 trillion dollars of credit default swaps written on them on their survivability. We also have massive credit interest rate derivatives written by GMAC et al. If they blow up, the entire interest rate derivatives also blow up.
This is what we have to look forward to next week.
My guess, is that Geithner is going to disguise the rescue attempt in order to give his banking buddies a life line and hose the public.
Expect some type of insurance on those toxic securities and a guarantee that the banks will lend. I am not sure that the banks are lining up to loan the money. For what business? Nothing makes money anymore!!.
I now must add another country to my list of potential failures. I have highlighted to you in the past, Iceland, Greece, Spain, Portugal, Ukraine, Italy and the number one on the list England.
We have a new country and that is Mexico. This country is running out of control as the drug cartels are seizing the country.
To boot, their big oil field, Canterell is drying up. The Mexican peso has fallen from 10 to the dollar to 14.5 dollar. The unemployment in Mexico is rising and they are in serious trouble.
We are witnessing riots on the streets in Spain, France, Russia, China and Iceland. Pretty soon you will riots everywhere especially when we are witnessing famine in many countries.
have a great weekend.