Blythe Masters on Silver Manipulation: We Hold Positions on Behalf of Clients, Manipulation Would Be Wrong & We Don't Do It!

When questioned by CNBC today about allegations that JPM is manipulating the price of silver Blythe Masters responded that objections to JPM's activity in the silver market come as a misunderstanding, that they hold these positions on behalf of clients. 
Translation: we manipulate silver on behalf of others!!:

• "There's been a tremendous amount of speculation particularly in the blogosphere on this topic. I think the challenge is it represents a misunderstanding as the nature of our business. As i mentioned earlier, our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk management objectives. The challenge is that commentators don't see that. So to give you a specific example, we store significant amount of commodities, for example, silver, on behalf of customers we operate vaults in New York City, Singapore and in London. And often when customers have that metal stored in our facilities, they hedge it on a forward basis through JPMorgan who in turn hedges itself in the commodity markets. If you see only the hedges and our activity in the futures market, but you aren't aware of the underlying client position that we're hedging, that would suggest inaccurately that we're running a large directional position. In fact that's not the case at all.
  
  
• Manipulating metals would be wrong and we don't do it

While we concur that JPM's manipulation of silver is likely on behalf of a client (Federal reserve or possibly China per Ted Butler's thoughts), the claim that JPM's outrageous short position is simply a hedge and that JPM does not manipulate the price of silver is the biggest lie since Slick Willie's famous one-liner.

Full interview with the Manipulation Queen on Silver as well as The Doc's analysis below:




Full transcript:

so the decision to fund the commodities center here at cu denver was really driven by the belief that we need to increase and expand talent in the commodity markets because commodities play such an important role in economic growth and jpmorgan has been investing heavily in commodities for some time definitely under your leadership.

we've seen as sue mentioned a tripling of your revenues in 2011 topping $2.8 billion. tremendous growth many see it as part of your vision, your strategy for the reason that that is happened. is that really sustainable?

Well, we've been investing in the commodities business. that our commodities business is not about betting on commodity prices. it's about assisting clients in exuting, managing, their risks and ensuring access to capital so they can make the kind of large long-term investments that are needed in the long run to expand the supply of commodities. and that is an area which we anticipate will continue to grow very, very rapidly over the next couple of decades in fact.

so, yes, we are very excited about the prospects for growth in this particular area. and you're looking at growth not only in agriculture and metals and in oil, but across the board in all facets. that's what you're investing in.

A lot of concern has been placed about jpmorgan particularly its positions in the metals space and looking at your positions in silver we talked earlier about the volatility in the silver market, can you talk about jpmorgan's positions and price volatility and how are they related?

Yeah. that's a great question. you're right, there's been a tremendous amount of speculation particularly in the blogosphere on this topic. i think the challenge is it represents a misunderstanding as the nature of our business. as i mentioned earlier, our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk management objectives. the challenge is that commentators don't see that.

So to give you a specific example, we store significant amount of commodities, for example, silver, on behalf of customers we operate vaults in new york city, singapore and in london. and often when customers have that metal stored in our facilities, they hedge it on a forward basis through jpmorgan who in turn hedges itself in the commodity markets.

If you see only the hedges and our act ift in the futures market, but you aren't aware of the underlying client position that we're hedging, would suggest inaccurately that we're running a large directional position. in fact that's not the case at all. we have offsetting positions.

We have no stake in whether prices rise or decline. rather we're running a flat relatively match book.

So what is commonly out there is that jpmorgan is manipulating the metals market. from what you're outlining that is not possible because of the different side of the business that you're in part of.

That's right. it's not part of our business model. It would be wrong and we don't do it.

You've had such a long history at jpmorgan in the derivatives market now heading commodities. one of the other things that is really struggling for many traders is trying to figure out what regulation is going to look like and how that's going to impact their business. what is your view? and how concerned are you about regulations that are coming down for the otc derivatives market and for commodities?

Again, another great question. i think i want to say first that jpmorgan strongly supports the need for improved regulation in financial assets and financial institutions broadly. the key is to ensure that that regulation is good regulation. and with this type of topic, the devil is almost always in the details. so in the interest of greater transparency, less systemic risk in the system, less connectivity between major players, all of those things we feel great strides have been made in advancing regulation to promote those objectives.

Having said that, we have to be aware of unintended consequences. and there's a real risk of those unintended consequences. for example, if you make it difficult for institutions to transact in commodity markets by excessively exposing their options to the public too quickly, that would drain liquidity and make it harder. so there is a concern about liquidity longer term? yes.

I want to thank you so much for joining us. blythe masters, thank you for your perspective on the commodities sector.
From CNBC:

Silver manipulation.  First they ignore you, then they ridicule you, then they deny your allegations on CNBC.  #Winning

Folks, the fact that Blythe Masters has gone on CNBC of all places to publicly deny the allegations of silver market manipulation is absolutely MONUMENTAL AND GAME CHANGING!  If you haven't noticed, JP Morgan has completely ignored allegations of market manipulation in precious metals over the past 5 years.  The fact that they now feel the need to address this issue on a national stage as large as CNBC indicates a complete paradigm shift in the progress we are making. 

Could Blythe's statements have had anything to do with our recent release of whistle-blower testimony that JPMorgan is manipulating silver and to a lesser extent, gold?