Monday, May 2, 2011

Is The Comex Getting Desperate To Prevent Longs From Taking Delivery?

To coin a famous line from the classic movie "Apocalypse Now:"  "I love smell from Comex silver margin hikes in morning - it smells like, DESPERATION!"...The CME has announced the THIRD margin increase in silver futures since last Monday.  This is truly unbelievable and it explains the way silver was smashed for $1.90 in 20 minutes around 3:20 p.m. NY time, the least liquid part of electronic trading during the week.  Why would someone all of a sudden decide that they need to unload enough silver futures to drive the price down this much two hours AFTER the close of Comex trading, when they had all morning to sell those contracts at higher prices during Comex pit hours?   LOL.  Here's the margin increase LINK


  1. Desperation is a stinky cologne.

  2. No doubt margin hikes can force speculators out of the market. And no doubt that will cause the price to fall.

    But how could margin hikes "prevent longs from taking delivery"? That was your premise.

    To take delivery you have to come up with 100% of the cost of the contract in cash. If you can do that, you can obviously meet any margin requirement. No margin hike could ever force you out of your position, if you were actually prepared to take delivery.

    In fact, it seems to me that margin hikes might make a default more likely, in that by forcing some speculators on margin to sell they reduce the price, making holders of physical silver less likely to part with it, right when the Comex shorters need to buy the stuff to meet delivery demands.

  3. No ..they want that money scared into the slow death mode....

    Bill Gross: "The Treasury Market Is On A Collision Course With Financial Repression"

    In fact, the authors found that “for the United States and the United Kingdom, the annual liquidation of debt via negative real interest rates amounted on average to 3 or 4% percent of GDP a year…which quickly accumulated (without compounding) to a 30 to 40% of GDP debt reduction in the course of a decade.” Even after interest rate “caps” were removed in 1951 via the Fed-Treasury Accord, extremely low/negative real interest rate policies continued until the Volcker revolution in 1979. By that time, U.S. (and U.K.) debt levels had been normalized, primarily at the expense of savers who had been “repressed” (and depressed!) for over three decades. At that historical turning point, government bonds were labeled “certificates of confiscation.” Not only had savers received Treasury bill rates that were negative for over 25% of the nearly four decades, but they were holding long-term AAA rated bonds trading at 30 to 40 cents on the dollar.

    Bond investors forced to invest in dollar government bonds either through indexation, convention, regulatory guidelines or simply falling asleep at the helm are being shortchanged by 1 to 2% annually compared to historical norms and in many cases receive negative real yields

  4. The Silver Bears Are Back

  5. QE To Infinity!

    now, we have,

    Margins To Infinity!

    You called it right, they must avoid delivery, as they have none to give. So they just raise the Margins until only players with money like Buffett are in the game.

  6. keep buying physical and you will be rewarded in the end.

  7. How many low life scum bags tried to put a negative spin on this headline? Lets see the jackoffs report this on tv....

    Eric Sprott - “Sprott Has More Physical Silver Now Than Ever!”
    With silver recently plummeting from $50 to the $40 area, today King World News interviewed Eric Sprott, Founder of Sprott Asset Management
    to clear up some misperceptions about Sprott’s sales of PSLV. There is a great deal of misinformation out there regarding what Sprott was actually doing when SAM sold some PSLV. When asked about what has transpired Sprott remarked, “Well Eric in response to your question, any proceeds that we’ve received from selling PSLV have immediately gone back into silver or other silver equities. And I can tell you we have the highest position in physical ownership that we’ve ever had, and we have not lost one ounce of our encouragement for the outlook for the silver price.”
    Sprott continues:

    “I sort of regard the things that are going on in the (silver) market as basically some group of traders working to get the price down quickly, particularly the overnight action on Sunday night when it (silver) goes from $48 to $42 in whatever it was, 9 or 13 minutes. It’s a travesty of a trading system that would happen.!.html

    Sprott interview...