FERC Suspends JP Morgan’s Power Trading Unit

JP Morgan ChaseJP Morgan’s electricity trading desk will essentially be sidelined for 6 months next year because of actions taken by the U.S. Federal Energy Regulatory Commission (FERC).  According to the Los Angeles Times, the regulations authority accuses JP Morgan of misrepresenting facts and filing false information in its reporting and communications with the California Independent System Operator known as Caiso.

This all stems from August last year, when FERC started investigating JP Morgan Ventures Energy Corp. for alleged abusive bidding activities and potentially manipulative trading practices in the energy markets. Then, earlier this year in July, FERC sued JP Morgan because it had refused to turn over internal emails FERC had requested during its investigations.

Of course JP Morgan officials deny any wrong-doing, excusing any reporting deficiencies as inadvertent mistakes that were made in “good faith.”  But in its decision, FERC states “no showing of the respondent’s intent or mindset is necessary in order to demonstrate that a violation” has occurred.

So here we have a regulatory agency that has the integrity and courage to stand up to the banking giants when they see clear violations and market manipulation. If only the CFTC would take notice. In their 4+ years of investigating the alleged silver market manipulation by JP Morgan, nothing has resulted.

In his letter to subscribers, Ted Butler included the following:

While we hear excuses from the CFTC about the need to prove intent before bringing charges of manipulation against JPMorgan in silver, FERC insisted that intent was a side issue. FERC’s got it exactly right, in my opinion. If someone is messing with the market, there is no need to pussy foot around intent; stop the messing around first and then sort out the details later.  We can decide in time if JPMorgan is manipulating silver intentionally or by accident; the important point is to first stop the manipulation. Not every homicide is premeditated and to be prosecuted as murder one; some homicides are manslaughter and not premeditated. That doesn’t mean we tolerate people killing people if the intent isn’t clear. Likewise, JPMorgan is clearly manipulating the price of silver by virtue of their concentrated short position and status of being the dominant seller of new short contracts. First the CFTC should make them stop; then charges can be decided upon.

 But then again, there aren’t any FERC members within the inner circle of elite central planning known as the Plunge Protection Team.

CFTC Commissioner Bart Chilton Comments on Silver Manipulation

In this RT episode, Lauren Lyster interviews CFTC Commissioner Bart Chilton and they discuss:

  • The ongoing investigation of alleged silver market manipulation and Mr. Chilton specifically admits he’s seen one market participant have a controlling 30% concentrated position in that market. (It should be noted that this 30% position dominance is on the short side of the market. And the reader is urged to remember that in 1980, the Hunt Brothers were charged with having only a 20%  dominance on the long side of the market.)
  • The difficulty in winning a legal action suit that alleges manipulation is in proving intent.
  • The increasing evidence of fraud in the market place, exemplified by such cases as MF Global and Peregrine.  Mr. Chilton’s recommendations on protecting against future occurrences include the creation of an investor insurance program like that savers are provided with by the FDIC.
  • The delay in Dodd-Frank rules and the fact that “government is slow and reactive.”

RT: The Empire of Debt and the Election

In this episode of Russia Today’s Capital Account, Lauren Lyster interviews Bill Bonner, author of Empire of Debt. The highlights include:

  • Do the statistics and reports generated by the government help anyone determine the real state of the economy?  GDP, CPI and Unemployment reports “mean something, but they don’t mean what they say it means.”
  • A economic system based on fiat/paper money has never lasted in the past. Ever since 1971, when Nixon closed the gold window,  the resources of the country have been used unwisely, investing in programs that destroy the country’s wealth.  In order for real economic growth, this practice must be changed so that resources are invested in initiatives that build wealth.
  • The outcome of the presidential election will not alter the current course. Instead, the election is basically a contest to determine which group of ‘zombies‘ will get government sponsorship. A Romney win will ensure the military industrial complex stays in business, while an Obama victory will further the social/welfare state.
  • The government employing stimulus as a policy to help the economy is ridiculous. Again, it doesn’t help the overall economy generate wealth, it only serves those favored cronies with close ties to those in political office.