Searchlight Innovations Inc T.SLX

RE: Hating to sound stupid, but..

[MudCreeker]

"These people at JP Morgan can not be that stupid,"

I've thought the same thing myself.  Why on earth would they expose their company to such risk?  Oh, they're too-big-to-fail, (and from the Comex's latest margin actions one could conclude they're too-big-to-have-to-bail-out too).  Still, I don't think they were counting on that years ago when these positions were established.

The only thing I can think of that might make sense of it is this:  Perhaps they are on the long side of a large quantity of silver (and gold) price swaps.  If they were, no one would know, because that market is essentially unregulated and anything but transparent (and huge squared).  Then the real shorters would be whoever was on the other end of those swaps.  Likely someone even bigger than JPM. 

Who would benefit from keeping the price of paper silver (and gold) down?  JPM certainly doesn't.  People who'd like to accumulate the physical stuff at reasonable prices do.  Who's been doing that for the last decade or so?  I'm sure you can imagine a few names. 

If that were the case, then JPM would not be exposed to undue risk due to the large visible short position, because it would be offset by an equally large non-visible long position.  And JPM gets an overwhelming short position to use to pull the market up and down whenever they want, making money both directions.

It's all rosey, at least until whoever is on the short end of that invisible swap has accumulated all the physical silver and gold they think they can get, and defaults on the swap.  At that point, JPM is on the hook, but they're too big to fail, so the government is on the hook, but it's in such a state that bailing this one out might be fatal to the currency.  And who would benefit from that?   

Probably not even close to the mark.  It's late at night.   With my imagination, I should have spent my life writing fiction.

lol