Best of the Week
Most Popular
1.BrExit House Prices Crash, Flat or Rally? UK Housing Market Affordability Crisis - Nadeem_Walayat
2.Stocks Bull Market Climbs Wall of Worry, Bubble? When Will it End? - Nadeem_Walayat
3.Gold Price Is Now On Its Way To All-Time Highs - Hubert_Moolman
4.Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - Harry_Dent
5.UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits - Nadeem_Walayat
6.Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - Plunger
7.Central Bankers Fighting An Unprecedented Global Economic Slowdown - Gordon_T_Long
8.Putin Hacking Hillary for Trump, Russia's Manchurian Candidate? - Nadeem_Walayat
9.Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - Chris_Vermeulen
10.Gold Sector - Is it time to Back up the Truck? – Mortgage the Farm? - Peter_Degraaf
Free Silver
Last 7 days
Pakistan Booming House Prices Housing Market Mania Kabza Mafia Warning! - 29th Aug 16
Post Yellen = Market Confusion - 28th Aug 16
Theresa May Instructs Police, NHS Gp's, Public Sector To Stop Racial Discrimination in Service Delivery - 28th Aug 16
Ignore Yellen and Buy the Dip in Precious Metals - 27th Aug 16
SPX Downtrend Should be Underway - 27th Aug 16
Unraveling the Secular Economic Stagnation Story - 27th Aug 16
The Precious Metals Sector and the Fed. . . - 27th Aug 16
Stock Market - All Is Calm, All Is Not Right - 27th Aug 16
Gold Junior Stocks Q2 2016 Fundamentals - 26th Aug 16
Buy Gold’s August Dip? Gold’s Monthly Sweet Spot In September - 26th Aug 16
The IMF’s Internal Audit Reveals Its Incompetence and Massive Rule Breaking - 26th Aug 16
Commodities Are the Best Bargain Now—Here’s What to Buy - 26th Aug 16
Why I Left Canada and Became A Citizen of the Dominican Republic - 26th Aug 16
The GLD vs GOLD - 26th Aug 16
Can Stocks Survive Without Stimulus? - 25th Aug 16
Why Putin Might Be on His Way Out - 25th Aug 16
Bond Guru Gary Shilling - The Bond Market Rally of a Lifetime - 25th Aug 16
A Zombie Financial System, Black Swans and a Gold Share Correction - 25th Aug 16
OPEC’s Output Freeze: What Has Changed Since Doha? - 25th Aug 16
Merkel Prepares For a Deliberate Crisis While White House Plans For a Disastrous Succession - 24th Aug 16
Suspicious Reversal in Gold Price - 23rd Aug 16
If Trump Can’t Pull Off a Victory, Expect a Civil War - 23rd Aug 16
Ceding ICANN and Internet Control to Globalists - 23rd Aug 16
How to Spot an Oversold Stock Market - 23rd Aug 16
Gerald Celente Sees Worst Market Crash, New Military Conflict, Gold Spike to $2,000/oz - 23rd Aug 16
EU Olympics Medals Table Propaganda Includes BrExit Britain - 22nd Aug 16
BrExit Win's Britain Olympics Success Freedom Dividend, Economy Next - 22nd Aug 16
Stock Market Top Forming, but Slowly - 22nd Aug 16
(Really) Alternative Banking Systems - 22nd Aug 16
Vauxhall Zafira Fires - Second Recall Issued - Inspection Before Bursting into Flames? - 21st Aug 16
Will the Stock Market Bubble Pop Regardless if the FED Never Raises Rates? - 21st Aug 16
US Government Spending - 3 Big Stories Not Being Covered – Part III - 21st Aug 16
Silver Analysis - 20th Aug 16
SPX New Highs, Correction Next? - 20th Aug 16
Housing Bubble - The Marginal Buyer Holds The Pin That Pops Every Asset Bubble - 20th Aug 16
Gold Miners Q2 2016 Fundamentals - 19th Aug 16
Which Price Ratio Matters Most in a Fiat Ponzi? - 19th Aug 16
Big Policies, Bigger Failures - 19th Aug 16
Higher Crude Oil’s Prices and USD/CAD - 19th Aug 16
Here’s Why You Should Look for Dividend Stocks and How - 19th Aug 16
Deglobalization Already Underway — 4 Technologies That Will Speed It Up - 19th Aug 16
These 6 Charts Show Why the Average American Is Fed Up - 18th Aug 16
SPX Easing Lower - 18th Aug 16
Low / Negative Interst Rate’s Legacy - 18th Aug 16
The 45th Anniversary of The Most Destructive Event In Modern Monetary History - 18th Aug 16
USDU - An Important Perspective on the US Dollar - 17th Aug 16
SPX Completes Wave 1 Decline - 17th Aug 16
How to Quickly Spot Common Fibonacci Ratios on a Chart - 17th Aug 16
When Does a Forecast Become a Trade? - 17th Aug 16
Kondratiev Wave - The Financial Winter Is Nearing! - 17th Aug 16
Learn "The 4 Best Elliott Waves to Trade -- and How to Trade Them" - 16th Aug 16
Stock Market Bears Turning Bullish At New All Time Highs - Time to Get Worried? - 15th Aug 16
Job Seekers Sacrificed to the Inflation Gods - 15th Aug 16
A Look At Commodities and Financial Markets Trading Week Ahead - 15th Aug 16
Stock Market New Top Forming? - 15th Aug 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy - 3 Secret Charts

J.P. Morgan Loving Their Market Manipulation Handiwork

Stock-Markets / Market Manipulation Nov 07, 2008 - 04:01 AM GMT

By: Rob_Kirby

Stock-Markets

Best Financial Markets Analysis ArticleThe following research paper was compiled as the basis for a radio interview with Patrick Timpone at One Radio Network .

Morgan is the quintessential leviathan in the Interest Rate arena through their obscenely sized Medium-Term Interest Rate Swap book which stood at 59 Trillion at June 30, 2008 .


The interest rate swap book, due to its sheer size, overwhelms the bond complex by creating artificial demand for government securities. This interest rate suppressive activity began in earnest back in the 1990's and has kept market rates of interest at artificially low levels. The FUNDAMENTAL [and ongoing] MISPRICING of CAPITAL – for many years – has led to a myriad of economic excesses like the Dot Com boom, subsequent housing boom and the financial asset boom itself.

Morgan's overbearing effect in the interest rate complex required the simultaneous suppression of the gold price. This was done to make falsified inflation data seem credible. It has often been said that, “if real inflation heats up – BOND VIGILANTES would raise market rates of interest reflective of real inflation”. The reality folks, the BOND VIGILANTES are extinct – they lost their jobs long ago – being swallowed by the black hole that is J.P. Morgan's derivatives book. This is documented in a laundry list of articles archived at Kirbyanalytics.com

In the energy area [crude] – J.P. Morgan was “granted” the rights to, effectively, set up the Central Bank of Iraq in Dec. 2003:

J.P. Morgan Chase was chosen by the Coalition Provisional Authority [CPA] to “set up” the NEW Central Bank of Iraq [specifically, the Trade Bank of Iraq ]. Take note how this TRADE BANK only became operational in December of 2003:

•  Trade Finance. The Trade Bank of Iraq (TBI) was established in July 2003 to facilitate trade of goods and services to and from Iraq by providing irrevocable letters of credit. The TBI officially became fully operational in December 2003 and has a services contract with a multi-international banking consortium led by JP Morgan Chase. Since opening in December , the Trade Bank of Iraq has issued or has pending 183 letters of credit, totaling $708.9 million in imports from thirty-one countries. Letters of credit have been issued on behalf of Iraqi Ministries as well as several state-owned enterprises.

In that capacity , Morgan was charged with developing the framework of collateralizing movable and immovable property for the nation of Iraq

When we take a look at “The Administrator's Weekly Report” – Feb. 28 – March 5, 2004 where it's all neatly explained for us:

V. LAY FOUNDATIONS FOR AN OPEN ECONOMY

Provide IG Staff Capability; Trade Bank ; WTO Observer Status; Draft Intellectual Property law to IGC by April 15, 2004; Develop Framework for Collateralizing Movable and Immovable Property  

Here's What They Did:

I'd now like to draw your attention to a research paper published just last week by the good folks over at the Commodity Futures Trading Commission [CFTC]:

CFTC's Office of the Chief Economist Releases Study on “Market Growth, Trader Participation and Pricing in Energy Futures Markets”

Washington , D.C. — The Commodity Futures Trading Commission's (CFTC) Office of the Chief Economist today released a study titled “ Market Growth, Trader Participation and Pricing in Energy Futures Markets .” This study provides an analysis of the composition of traders across different energy futures contract maturities and addresses questions relating to price discovery in these markets. Specifically,

•  The authors use CFTC data on futures trader positions to document major changes in the size and term structure of the U.S. crude oil (WTI) futures market. The authors find that as recently as 2000, trading activity in this market was heavily concentrated in nearby contracts. Since then, overall open interest has grown two-fold, with trader activity at the back end of the term structure increasing more than twice as much as the market as a whole.

•  The market growth in long-term (more than three years) positions generally started in 2004, which coincides with the growth in participation by commodity swap dealers.

We know Morgan was a major player because they admit it and brag about it:

To get your head around how ole J.P. Morgan trades energy futures, we need look no further than their own web site , [ article has since been removed from J.P. Morgan's site ] where they're more than happy to tell us,

Risk magazine, January 2006

J.P. Morgan was named Risk magazine's Energy derivatives house of the year  in their January issue. According to Risk , "J.P. Morgan has emerged as a key player in energy derivatives over the past year." Since 2004, under the guidance of Beau Taylor, global co-head of Energy, the firm has built a leading energy trading practice. Focus has extended from natural gas and crude exotic derivatives to include electricity, coal and emissions trading. [RK bold emphasis]

They wear it like a badge of honor, don't they? To “borrow” a cliché [pun intended] - these guys really are good, aren't they? 

The selling of “long dated” oil futures [ by guess who? ] began in earnest in 2004. We know this because the CFTC has told us. Long dated futures [similar to long dated bonds or Medium-Term Interest Rate Swaps] is where EXPECTATIONS are formed about the future price of commodities.

And we all know how important expectations are, where inflation is concerned, to folks like Chopper Ben Bernanke.

We all read and hear from officialdom that the prospects for inflation, while elevated somewhat recently, always remain anchored and/or subdued on a forward looking basis:

….if the public experiences a spell of inflation higher than their long-run expectation, but their long-run expectation of inflation changes little as a result, then inflation expectations are well anchored. If, on the other hand, the public reacts to a short period of higher-than-expected inflation by marking up their long-run expectation considerably, then expectations are poorly anchored. ~ FED Chairman, Ben Bernanke, July 10, 2007

In this speech titled, Inflation Expectations and Inflation Forecasting , Mr. Bernanke goes on at length about the influence that ‘expectations' have on inflation but he fails [intentionally, perhaps?] to mention its true cause :

“Inflation is a phenomenon caused by the increase of money supply relative to the growth of production capacity for goods and services.”

Having firmly established themselves in the crude oil marketplace, in Dec. 2005 J.P. Morgan moved on to the Natural Gas Arena:

By Rob Kirby
http://www.kirbyanalytics.com/

Rob Kirby is the editor of the Kirby Analytics Bi-weekly Online Newsletter, which provides proprietry Macroeconomic Research. Subscribers to Kirbyanalytics.com are benefiting from paid in-depth research reports, analysis and commentary on rapidly unfolding economic developments as well as recommendations on courses of action to profit from chaos. Subscribe here .

Copyright © 2008 Rob Kirby - All rights reserved.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Rob Kirby Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife