Ted Butler

[Zed]

Who here subscribes to his work?

Any good?

Any thoughts you would like to share?

Thanks in advance!

[dacrunch]

subscribe? no...

but here you can judge for yourself:

http://www.investmentrarities.com/tbarchives.shtml

Cook: How big have the losses been for the shorts?
Butler: In silver, the big 8 were out over $3 billion at the top, and more than $5 billion if you include all the shorts.
Cook: You pointed out that there had to be a lot of margin calls, when gold is included, what’s the total?
Butler: All in all, almost $15 billion.
Cook: They actually had to cough up $15 billion?
Butler: Absolutely. That’s a key component of the clearinghouse system.

[Zed]

Yeah... no...

I have read almost everything he has published for free since 2001.

That doesn't really tell me what his paid content looks like.

[dacrunch]

Yeah... no...

I have read almost everything he has published for free since 2001.

That doesn't really tell me what his paid content looks like.

never read it... but the open commentary is plenty for me...

Cook: It’s hard for me to believe that JPMorgan is sitting flatfooted waiting for the axe to fall. Don’t you think they’ve dug up a lot of silver to help reduce this short position?
Butler: I’m sure they’ve come up with as much silver as possible, but there are physical constraints to that. Their problem is not a money problem, but a physical material problem.
Cook: I see they raised margin requirements on silver. Why only silver?
Butler: Silver had moved the most and the margins should have been raised. The scandal was when they raised the margins. This is an issue of timing. They waited until prices made a downside reversal and then raised silver margins.
Cook: Is this fishy?
Butler: This is an example of why I refer to the CME Group (COMEX) as operating a criminal enterprise, as I’ve seen them pull this dirty trick numerous times in the past. The exchange times the margin increase so that it comes when it is least likely to hurt, and maybe help, its big constituent member short holders. That time is always best when the price makes a sudden reversal down after a big climb. This way, the margin increase actually hurts the longs and benefits the shorts. The reversal to the downside swings the financial tide against the longs temporarily.
Cook: What should they have done?
Butler: What they should have done is raised margins on the way up, but that would have hurt the shorts, something the exchange would never do. By timing the margin increase just after a price reversal to the downside, the exchange helps the shorts.
Cook: Are they above the law?
Butler: What’s particularly infuriating and illegal is that the exchange is designated under commodity law as a self-regulatory organization (SRO). That means the CME Group is supposed to do things on a fair and even-handed basis, not cater to the selfish interests of its most important members. The phrase that comes to mind when describing how the CME fulfills its regulatory obligations is letting the fox guard the henhouse.
Cook: How in the world did this come about?
Butler: The CFTC and Congress made a very big mistake when they turned over so much regulation to the exchanges years ago. There is a conflict of interest in what the exchange does in its regulatory role. That’s why the COMEX is fighting the CFTC tooth and nail over position limits and every other issue that may infringe on its own interests.
Cook: The Commodity Future Trading Commission has ruled that within 3 months or so they will put limits on how much one entity can be long or short. Will this break up the concentrated short position?
Butler: If they stick to the timeline dictated by the new law and if they impose legitimate limits and throw out the phony exemptions to those limits.
Cook: Won’t that set silver “free at last?�
Butler: Yes, “thank God Almighty.�