naked capitalism Sun 2010-01-03 10:58 EST

On Goldman's (and Now Morgan Stanley's) Deceptive Synthetic CDO Practices (aka Screwing Their Customers)

Goldman is trying to diffuse the increasingly harsh light being turned on its dubious practices in the collateralized debt obligation market, with the wattage turned up considerably last week by a story in the New York Times that described how a synthetic CDO program called Abacus was the means by which Goldman famously went ``net short'' subprime....Goldman wanted its Abacus trades to fail. That was the most profitable course of action for them (note the Times clearly states that that was the role of the Abacus trades and Goldman has not disputed that claim). They were net short, this was no mere hedge of a long position but a trading bet. And those CDOs did turn out to be big turkeys...

aka Screwing; customer; Deceptive Synthetic CDO Practices; Goldman's; Morgan Stanley's; naked capitalism.

Jesse's Café Américain Thu 2009-12-17 10:11 EST

Is the Price of World Silver the Result of Legitimate Market Discovery?

Jesse

Ted Butler: ...the concentrated short position in COMEX silver futures is so extreme, that it is hard to imagine how it can be resolved in an orderly manner. The most recent data from the CFTC indicate that one US bank, JPMorgan, now holds 200 million ounces net short in COMEX silver futures, fully 40% of the entire net short position on the COMEX (minus spreads). As I have previously written, JPMorgan accounted for 100% of all new short selling in COMEX silver futures for September and October, some 50 million additional ounces...So extreme is JPMorgan's silver short position that it cannot be closed out in an orderly fashion...As extreme as JPMorgan's position is, there is a total true net short position of 500 million ounces (100,000 contracts) in COMEX silver futures. Try to put that 500 million ounce short position in perspective. It equals 75% of world annual mine production, much higher than seen in any other commodity.

Jesse's Café Américain; Legitimate Market Discovery; Price; resulting; World Silver.