"Apocalypse Now" for Paper Silver sellers credibility

Its all over the blogsphere.. kudos to Tyler at Zerohedge and Mark Antony at Seeking Alpha and to the forestmeister for the lead...

I'm kicking this meme cause it looks solid and don't ya know, there a bull market in hard cynicism and scepticism and a bear market is fiduciary trust these days..

The whole point of investing in precious metals is that they are physical assets and they have no counter party risks. Paper assets have counter party risks, physical metals have no such counter party risk.

So what's the point of buying precious metal ETFs such as GLD, SLV, CEF,which are supposed to be backed up by physical metals. But you are not in physical control of the metals, and you just have to trust the sponsors of these ETFs.

Counter party risk, any one? DIND DING DING DING!

The London based ETF Securities Silver Fund regularly publish a list of serial numbers of the silver bars they hold in custody:

http://www.etfsecurities.com/msl/bar_list.zip

The iShares Silver Trust (SLV) also publish a weekly updated list of serial numbers of silver bars held in their custody:

https://ebts.jpmorgan.com/ebtsWebMod/ebts_downloads/BONYBARLIST.PDF

Check out page 1698-1722 of the SLV silver bars list. They have got some silver bars from China. The brand is Great Wall. The supposedly unique serial numbers are from No. 1001 - No. 1460. With many duplications.

The ETFS's silver bars list also contains silver bars of the same Great Wall brand. The serial numbers are also the same: No. 1001 - No. 1360.



And now for the forensic accounting...... a medal to Project Mayhem for sterling service disintermediating the disfunctional element in the elite.. rational rightsizing, I call it.

Silver ETFs: Multiple anomalies detected



Project Mayhem Research Inc
July 28th 2009


project.mayhem.research@gmail.com


Recently, we have developed a computer program to conduct data mining
on the inventory of publicly available silver ETFs --namely, iShares
SLV managed by JP Morgan, and the London-based ETF Securities funds.


What we found was unusual.


Abstract:


A data analysis was conducted of the inventory holdings of two
publicly available silver ETFs: iShares SLV and London-based ETF
Securities. Custom software was written to analyze published silver
bar information for anomalies. Multiple anomalies were found. We
detected numerous duplicate bar entries within both lists, which
comprised 11.88% and 0.4619% of the SLV and ETFS bar totals,
respectively. In addition, we found several 'perfect duplicate'
entries within the iShares SLV bar list: that is, the same weight,
manufacturer, and serial number were listed multiple times. These
comprised 0.0025% of the SLV bar totals. More disturbing, however,
was our accidental discovery of the presence of what we have termed
'rough internal duplicates' --bars with near-identical serial
numbers, identical weights, and identical brands. The reason the
latter are more problematic is their very low-statistical
probability, suggesting some level of fraud and or accounting
incompetence is present. We noticed other data anomalies as well,
including large amounts of low serial number clustering, which was
identified by our industry sources as 'unusual'. Furthermore, we
tested for the presence of 'weight duplicates' --which upon
exclusion --reduced the bar inventories by an astonishing 82% and
50% for the SLV and ETFS funds. We suspect the number of 'weight
duplicates' lie well outside the expected Gaussian distribution, but
leave this for the subject of future research. Finally, we found
multiple cross-referenced bars with identical brands and serial
numbers present in both the London and U.S. funds --funds ostensibly
with different custodians. Taken together with evidence of
'revisions' published to the public ETFS data after exposure of the
initial flaws, these data suggest there is a degree of systematic
fraud or gross incompetence in these funds --perhaps both.



Introduction:


Silver has functioned as money in human activities for over 5000
years, well prior to its gradual demonetization in the late 19th
century. One question most intelligent students of world finance
will ask themselves sooner or later, is how precious metals might be
expected to function under a world oligopoly? Due to silver's
historical role as currency, as well as its competition for the
position of government funds and central bank bonds vis-a-vis the US
Treasury complex, one might expect Western governments and megabanks
to be openly hostile towards silver. Indeed, after three failed CFTC
investigations and one 'Gibson's Paradox' paper, this position
appears to be the case. From a systems perspective, we may consider
the first step required to create a functional world oligopoly is
likely to both displace and suppress the monetary metals in favor of
centrally administered paper. This gives us a possible motive for
what we characterize here.


The unique position of silver, and the subject of the present
paper concerns, is that unlike gold --silver is not carried as a
reserve asset on global central bank balance sheets. This presents a
unique problem in terms of 'cartel management' for the global
monetary authorities. The problem could be written, "How do you
manage the price of an item of which you do not possess large
supply?". As silver expert Ted Butler has articulated over the past
decade or more, above ground stores of silver have been rapidly
consumed post-WWII at such a rate that silver is now several times
more rare than gold. The question is not "Why would the price of
silver be suppressed?" --as that should be obvious to any student of
20th century history and decaying empires --but rather how?


The answer is through the settlement process --and ultimately
through perception itself. Indeed, the scam is very old, and we see
it repeated to the present day through the likes of Bernie Madoff,
all the way up to our chief scam artists and criminals at the Federal
Reserve and US Treasury Department. The scam is: "Sell more of
something than you actually have , and hope not everyone asks for
their money at the same time." Recently, new developments have come
to light regarding the details on how the US/UK financial fraud
syndicate manages to accomplish this charade. Many thanks are
deserved to Ted Butler, GATA, Rob Kirby, Bob Chapman, Adrian Douglas,
Mark Anthony, and countless others.



The recently emerging details on how silver prices are kept low
without a large bank inventory are multi-faceted. Besides the
obvious hundreds of $trillions in OTC interest rate swaps which keep
the toxic US Tbond complex afloat (in direct competition to the
monetary metals), there is the process of the commodity exchanges -specifically
of the highly concentrated unhedged silver futures
position by four large banks, of which our sources indicate the top
two include JP Morgan and HSBC. Ted Butler has detailed the math at
length, but suffice to say the concentration of large amounts of
paper futures within the COMEX, minus spreads, in the hands of four
banks goes a long way towards enabling world silver price management
and a functional oligopoly for the elite.


The last piece of the puzzle, which brings us back to our
present topic of the ETFs, is that of the use of ETF shares as
settlement on these very same COMEX futures exchange. The final
piece was provided to us by GATA and Adrian Douglas in an article
published on July 11, 2009 entitled "The Alchemists". Douglas notes
that a year prior to the launch of the silver ETF, the COMEX
published a rule change, on February 18, 2005, which allowed ETF
shares to be used as settlement in lue of physical delivery of a
commodity. Convenient timing. No doubt this impacts silver the
most, as silver has the most concentrated and leveraged short
position of any COMEX tangible. Gold comes a close second. The
outcome of allowing ETF shares to be used as settlement instead of
physical delivery --as well as increasingly scarce global silver
supply considerations --is a byproduct of fifty years of industrial
consumption and systemic fraud. This situation is both worsening and
destabilizing despite increasingly draconian attempts at generalized
'price management' by the authorities, who are now seeking to
consolidate their respective dictatorships in thinly-disguised global
power plays. Needless to say, this will only end in tears.


Regarding our topic at hand of the silver ETF --since the
silver ETF shares are now used as settlement for price discovery on
the futures market, one would think it would be imperative that there
was careful accounting and open information in order to facilitate
proper price discovery? After all, if one can deliver paper promises
to the COMEX, there should be a physical asset backing up the paper,
right? Unfortunately, our research on the matter indicates this is
not the case, and in fact, there is now information to suggest data
anomalies in the holdings of the silver ETFs and possibly even fraud.



Methods:


Project Mayhem Research obtained the latest bar lists from
iShares SLV managed by JP Morgan, and from the London ETFS silver
funds managed by ETF Securities. After obtaining the lists, we
converted both data sets to plaintext (flat-file) using open source
tools on a Linux platform. We then constructed several iterations of
custom Perl software (written in vi of course) which analyzed the
data sets by loading silver bar information into memory, and cross
referenced the information against itself as well as with the
opposite list. Eventually we decided on three forms of indexing -in
other words, the selection of the primary key --the first was to
use a standardized manufacturer name appended to bar serial number,
and the second, to use manufacturer name, bar serial number, and
specific bar weight appended together, and the third, to use the
manufacturer name appended to the four digit bar weight. After
experimenting with various parameters, we conducted data runs to
calculate various statistics on these data sets, mainly to include
analysis of forms we initially termed 'collisions', perhaps better
identified as 'duplicates'. We found numerous duplicates of various
forms. These are characterized as follows:


Definitions:


Internal Duplicate:
A silver bar with identical serial number and
brand, listed two or more times within a single inventory list.


Rough Internal Duplicate: A silver bar with an almost-identical
serial number (AB1024 vs 1024), yet identical brand and weight,
listed two or more times within a single inventory list.


Perfect Internal Duplicate: A silver bar with identical serial
number, weight, and brand listed two or more times within a single
inventory list.


Weight Duplicate: A silver bar with identical brand and weight listed
two or more times on a single inventory list.


Cross Reference Duplicate: A silver bar with identical serial number
and brand listed on two or more separate inventory lists.



Results:


We found a large number of internal duplicates --far more than
we expected. Internal duplicates were much higher on the iShares
silver ETF list than on the ETFS list, although they were present on
both. Internal Duplicates comprise an astonishing 11.77% of the
iShares SLV list and 0.4619% of the ETFS list. A common objection
that may be raised is that perhaps many of these manufacturers
duplicate their serial numbers --but the bars can be told apart by
their weights. We have taken this possibility into consideration.
Our subsequent data run for perfect internal duplicates indicates
this claim regarding bar weight may have some merit, at least on
paper, as these forms of duplication comprised a substantially
smaller fraction of the lists: 0.000242% and 0.00% respectively.
Furthermore, the published weight of 281,863,452 ounces for the
iShares SLV ETF is roughly consistent with our estimation --one
which includes internal duplicates yet excludes perfect duplicates
from the published inventory list, which according to our
calculations yields 281,670,356 ounces --a figure relatively close,
within three significant figures, yet not identical the published
iShares figure.


Unfortunately we believe even these mildly positive facts are
completely dispelled by our trials with what we have termed 'rough
internal duplicates' and 'weight duplicates', among other disturbing
ancillary information including statistical clustering. A 'rough
internal duplicate' characterizes inventory bars with identical
manufacturers and weight, and 'almost-the-same' serial numbers.
'Almost the same does' not mean sequential, but rather means simply
the removal of alphanumeric prefixes or suffixes from the serial
number. Our search algorithm returns twice as many hits on the
iShares list when 'rough duplicates' are enabled. The presence of
even a few rough internal duplicates is highly disturbing, as the
mere presence of rough duplicates indicates possible bar 'cloning'
--where prefixes or suffixes are added to legitimate bar serial
numbers in order to pad the list. Since the weight of these 1000oz
bars is recorded to four significant figures, even a few numbers of
bars with "almost-the-same" serial numbers (yet perfectly identical
weights and manufacturers), gives us serious reservations regarding
the veracity of these inventory lists --due to the statistical
unlikelihood of four significant figures being identical within the
same manufacturer yet having an 'almost-the-same' serial number.



The second aspect of these rather disturbing anomalies are the
presence of 'weight duplicates', internal to both lists, where we
disregard the serial number in favor of using the manufacturer name
and four digit bar weight appended together as the primary key to
identify a bar. When using this method, the inventory of both these
funds contract via an astonishing 82% and 50% for the SLV and ETFS
funds, respectively. While obviously inventory can be expected to
contract when disregarding the bar serial number, as a certain number
of weights will overlap by chance, we suspect that the magnitude of
these contractions lie well outside expected standard deviations
(using a normal Gaussian distribution of bar weights centered on or
around 950-1000oz.) We leave this as an open question and as a
subject for future research by statisticians more capable than
ourselves as to whether this is indeed the case. However, we would
be remiss to point out that our finding here --if indeed it lies
outside the expected statistics --this could be easily explained by
bar "cloning" --an explanation consistent with our findings of both
'rough internal duplicates' as well as 'weight duplicates'.


Another strange finding we discovered was evidence of unusual
statistical clustering in the iShares SLV bar list. Many of the
internal duplicates were clustered towards early bar serial numbers
--that is, those close to zero. We have consulted with an industry
source who says this is unusual, as low serial numbers indicate older
bars. We have yet to come up with a suitable explanation for why this
anomaly would be present, and why internal duplicate concentration
would cluster towards zero. We leave this particular item as another
in an escalating series of problems with these funds and as another
subject for future research.


Lastly we note the presence of 'cross-reference duplicates',
where we found bars with identical serial numbers and manufacturers
which occurred on both the iShares and the ETFS lists. This was
despite these lists supposedly having different custodians. We
detected 80 bars, listed in Appendix C, which appear on both lists
yet have identical manufacturer and serial number. We believe this
is unusual and cause for concern, especially since this number of
bars comprises almost 0.5% of the full ETFS bar list. The brands
involved in these anomalies include Krasnoyarsk, MET/Mex,
Novosibirsk, and Nordeutsche.



Conclusions:


During our research into the inventory lists of the iShares SLV
and London-based ETFS physical silver funds, we discovered multiple
anomalies which cannot be easily dismissed. These included the
presence of internal duplicates, rough internal duplicates, weight
duplicates, statistical clustering, and cross-reference duplicates.
Taken together, these anomalies are cause for concern, and we suggest
that more capable teams conduct further research into these issues,
as they effect price discovery within the precious metals market, as
these ETF shares are being used for settlement and possibly price-
suppression on the COMEX.


If these problems are caused by accounting errors, they are
disturbing and perhaps profoundly incompetent, and we suggest both
these funds should have their senior management replaced. We cannot
recommend these shares to anyone to do these glaring anomalies. In
our opinions, the only way for all of these anomalies to occur
together as noted in this paper, is via systemic fraud or gross
accounting error bordering on jaw-dropping incompetence.


Unfortunately, our private considerations are for the former,
especially considering 'revisions' published to the ETFS bar list
after the appearance of Mark Anthony's July 14th 2009 article on
Seeking Alpha regarding possible ETF fraud. The ETF Securities bar
lists were changed after the Anthony's discovery of duplicate bars in
the Great Wall brand. To us, this suggests criminal activity. We
suggest immediate future research by others to investigate these
findings.



APPENDIX A --iShares SLV 'Perfect Internal Duplicates'


***Perfect Internal Duplicate Detected: ASARCO_INC_AMARILLO_146230_997_8
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_1655_951_2
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_1804_1007_9
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_2283_966_8
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_2318_946_4
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_3491_995_8
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_5351_929_0
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_5394_978_9
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_5447_964_9
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_5764_962_9
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_6996_960_7
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_8021_906_5
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_V2029_977_3
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_W10613_956_3
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_W11430_1034_0
***Perfect Internal Duplicate Detected: BRITANNIA_REFINED_METALS_UK_W11436_1001_8
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_1_1038_6
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_2_1055_5
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_3_1050_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_4_1053_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_4_1064_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_7_1043_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_9_1042_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_10_1063_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_13_1059_8
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_15_1051_2
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_15_1052_3
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_15_1067_1
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_17_1056_0
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_22_1056_7
***Perfect Internal Duplicate Detected: COMINCO_LTD_TADANAC_CANADA_23_1066_6
***Perfect Internal Duplicate Detected: EMPRESA_MINERA_PERU_544_1050_4
***Perfect Internal Duplicate Detected: EMPRESA_MINERA_PERU_873_1027_4
***Perfect Internal Duplicate Detected: INNER_MONGOLIA_QIANKUN_GOLD_&_SILVER_62_1056_9
***Perfect Internal Duplicate Detected: INNER_MONGOLIA_QIANKUN_GOLD_&_SILVER_607230_987_8
***Perfect Internal Duplicate Detected: KGHM_POLAND_3107_1011_7
***Perfect Internal Duplicate Detected: KGHM_POLAND_3152_1009_8
***Perfect Internal Duplicate Detected: KGHM_POLAND_3188_1025_7
***Perfect Internal Duplicate Detected: KGHM_POLAND_5447_1022_6
***Perfect Internal Duplicate Detected: MET_MEX_PENOLES_MEXICO_36860_1053_2
***Perfect Internal Duplicate Detected: NIPPON_MINING_JAPAN_9383_940_8
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1118_947_3
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1337_939_1
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1126_952_4
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_13411_959_9
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1423_956_2
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1453_947_8
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_16311_948_8
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1641_937_8
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1643_965_0
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1668_954_4
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_1941_952_2
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_19411_947_6
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_20210_951_5
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2033_946_9
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2044_976_8
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2134_962_7
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_21911_957_7
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2209_974_5
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_22211_970_5
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2653_943_2
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2916_953_4
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_2985_956_3
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_39910_948_0
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_5654_952_6
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_M1343_944_0
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_N2311_950_7
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_T0736_959_6
***Perfect Internal Duplicate Detected: RUSSIAN_STATE_REFINERIES_T981_975_8



APPENDIX B --ETFS 'Internal Duplicates'


***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1204
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1205
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2494
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2495
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2501
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2502
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2491
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2492
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2493
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2531
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2532
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2533
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2534
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2535
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2571
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2572
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2573
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2574
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2575
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2581
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2582
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2583
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2584
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2585
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2591
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2592
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2593
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2594
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_2595
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1273
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1275
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1023
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1032
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1234
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1133
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1138
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1142
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1067
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1068
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1070
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1079
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1083
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1085
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1092
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1096
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1298
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1302
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1309
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1317
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1318
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1171
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1183
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1184
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1189
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1195
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1038
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1041
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1047
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1063
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1064
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1065
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1199
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1200
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1203
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1222
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1226
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1230
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1109
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1110



***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1119
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1126
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1106
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1108
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1112
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1115
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1122
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1125
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1127
***Internal Duplicate Detected: KRASNOYARSK_RUSSIA_1111
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4611
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4512
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4540
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4614
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4542
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4610
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4612
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4517
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4524
***Internal Duplicate Detected: PRIOKSKY_RUSSIA_KP4544



APPENDIX C --iShares SLV and ETFS 'Cross-Reference Duplicates'


Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2295
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2483
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2484
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2485
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2531
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2532
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2533
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2534
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2535
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2541
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2542
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2551
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2552
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2553
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2554
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2555
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2561
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2562
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2563
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2564
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2565
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2571
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2572
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2573
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2574
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2601
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2602
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2603
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2604
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2605
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2611
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2612
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2613
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2614
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2615
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2621
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2622
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2623
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2624
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2631
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2632
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2633
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2634
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2635
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2651
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2652
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2653
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2654
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2655
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2661
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2662
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2663
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2664
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2665
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2671
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2672
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2673
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2674
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2675
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2681
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2682
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2683
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2684
Cross Referenced Duplicate Detected: KRASNOYARSK_RUSSIA_2685
Cross Referenced Duplicate Detected: MET_MEX_PENOLES_MEXICO_21866
Cross Referenced Duplicate Detected: MET_MEX_PENOLES_MEXICO_21932
Cross Referenced Duplicate Detected: MET_MEX_PENOLES_MEXICO_21934
Cross Referenced Duplicate Detected: NORDEUTSCHE_GERMANY_2607
Cross Referenced Duplicate Detected: NORDEUTSCHE_GERMANY_2608



Cross Referenced Duplicate Detected: NORDEUTSCHE_GERMANY_2609
Cross Referenced Duplicate Detected: NORDEUTSCHE_GERMANY_2610
Cross Referenced Duplicate Detected: NORDEUTSCHE_GERMANY_2611
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_1395
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_354
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_355
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_356
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_357
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_358
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_359
Cross Referenced Duplicate Detected: NOVOSIBRISK_REFINERY_RUSSIA_360




N.S.W is not New Jersey; Why is that?

There's been a bit in the Australian press in amazement about goings
on in New Jersey. Here's Adam Graycar, who used to run the
Australian Institute of Criminology here, giving his take on the
US system compared with the Australian one. It's pretty superficial,
but cross-cultural studies are revealing, so here goes:
================================
http://www.abc.net.au/pm/content/2008/s2635881.htm

MARK COLVIN: It's a story with the all the hallmarks of a script
of the Sopranos; a massive corruption scandal in New York's
hinterlands of New Jersey and Brooklyn.

Three mayors, a member of the New Jersey Governor's cabinet,
two state assemblymen and five rabbis are among the 44 people
arrested in a huge police round-up.

Most of them are accused of taking big backhanders to help
developers get their building projects through.

Professor Adam Graycar used to run the Australian Institute
of Criminology, but now he's living in New Jersey as Dean of the
School of Criminal Justice at Rutgers University. He's back in
Australia where he's taking a seminar at the United States Studies
Centre at Sydney University.

You must also be wishing you were back in New Jersey again?

ADAM GRAYCAR: Well, I can read it on the net, but nevertheless
it's like another day in New Jersey.

MARK COLVIN: But you run an institute for the study of corruption.
Just tell us the story here, what's been going on?

ADAM GRAYCAR: We do that… I work in the criminal justice school.
Corruption is a very important area of study; it's an important area
of criminality.

When I set the institute up I wanted to work internationally - World
Bank, United Nations and the local media gave me stick and they
said why don't you study local things there's enough happening.

MARK COLVIN: In New Jersey, in the city in which I teach five of the
last seven mayors have gone to jail…have been indicted or gone to
jail for corruption. Numerous governors and others have done
things that you wouldn't even read about in novels.

MARK COLVIN: Some of this is absolutely lurid. Some of it actually
involves the sale of human kidneys.

ADAM GRAYCAR: There are two elements to this story today. One
part of it is, you know, good straight honest corruption; you pay the
local mayor a bag full of money so that you can get a building
approval through.

But a lot of the money that was being handled was laundered also
by a group of rabbis it appears. One of whom was deeply involved
in selling kidneys, getting donors to contribute their kidneys for a
small amount of money, selling them for a large amount of money
and laundering the money.

MARK COLVIN: Were people taking money for themselves or for
the Democratic Party, or what?

ADAM GRAYCAR: I've only just started to read the charge sheets.
It's a bigger issue than that. Very often money comes as campaign
contributions below the radar, but a lot of it does go into private
pockets.

The Mayor of a town called Hoboken, which is just on the waterfront
opposite Manhattan, was arrested today. He'd been in the job for 23
days and he had more than $25,000 in bribes, and this was the third
payment…

MARK COLVIN: In that 23 days?

ADAM GRAYCAR: That he'd taken. And the FBI had wire tapped him
according the charge sheet and he said we know who's with us and
we'll, you know, grind into the ground those who aren't. So it appears
- and this is the cultural thing - many people have gone into politics
so that they could get their hands on the loot.

MARK COLVIN: Could this happen here in Australia? Could… it seems
to be a sting operation. Would Australia law allow this?

ADAM GRAYCAR: Ah, it's not the sort of thing that I think Australian
law enforcement officials would get themselves involved in.

I'm here at the United States Studies Centre trying to look at some of
comparisons. And I tell people story after story about New Jersey and
of course not all of America is like New Jersey. But there are parts of
Pennsylvania and New York and, where things have happened and I
keep saying - could his have happened here? And the answer, I think,
is no, for many reasons.

MARK COLVIN: You mean the corruption couldn't have happened or
the operation against it couldn't have happened.

ADAM GRAYCAR: The corruption would not have happened. I don't
know enough about the local law as to whether a sting operation
could take place. Some of the sting operations in the United States
have set up fictitious situations and that is, yeah, ethically, you
know, quite challengeable.

MARK COLVIN: So what is about the culture there?

ADAM GRAYCAR: I think there are two significant differences. One,
the American system of government, or the many systems of
government, doesn't really have any responsibility fixed in any place.
Municipalities do a lot of stuff. There's local government, there's
county government, there's state government, there's federal
government. The rules are so complex and things change all the
time and so the lower down you go the easier it is to be below the
radar. And secondly, there is no generally accepted culture of
integrity. There are individuals with integrity, but the very thought
of having something like a corruption commission, an ICAC
[Independent Commission Against Corruption], giving it teeth,
just wouldn't work there because people don't see it.

And thirdly, I suppose, people are rewarded for getting ahead,
and if you cut a corner or two to get ahead, well, it shows that
you've got a bit of wherewithal.

MARK COLVIN: Is it an area where there's actually too much
democracy. I mean, we know that in some municipalities in
America even the dog catcher is elected. Is the fact that there
isn't a permanent public service to the level that we have it,
is that part of it?

ADAM GRAYCAR: The public service in… where I work is
generally despised. It's regarded as low grade people who
can't do anything else and there in it for security. People don't
go into public service as they do in Europe, in the United
Kingdom and Australia, you know, to do good work and
who've done well.

But it's more than that. It's the complexity of the situation
and a culture where people feel you've got to get ahead.
And there are so many rules.

When you read the history of New Jersey, what you read today
is no different to what you read a decade ago and two decades
ago and three decades ago. And numerous politicians have come
in saying - I'm going to clean it up, this is not acceptable. And
within a year, two years, you know, they're indicted as well.

MARK COLVIN: In the meantime can we watch old editions of
the Sopranos as if they were a documentary?

ADAM GRAYCAR: (laughs) I've never worked out whether the
movies follow real life or real life follows the movies.

MARK COLVIN: Thank you very much Professor Adam Graycar.
====================
Keith

Deep Capture, Cramer and the story of Dendreon

This story, like too many others, begins with Jim Cramer, the CNBC personality, making “a mistake.”

On September 26, 2005, Cramer announced to his television audience the sad news (punctuated by funny sound effects – a clown horn, a crashing airplane) that Provenge, an experimental treatment for prostate cancer, had flopped. Thousands of end-stage patients had been pinning their hopes on Provenge, but according to Cramer the treatment had just been rejected by the Food & Drug Administration. It would never go to market.

This seemed odd, because Dendreon (NASDAQ: DNDN), the company developing Provenge, had not yet submitted an application for FDA approval. As everybody in the biotech investment community knew, Dendreon had, in fact, only recently completed Phase 3 clinical trials and probably would not face scrutiny from an FDA advisory panel for at least another year.

As for the likelihood that the advisory panel would eventually vote in favor of Provenge, the odds looked quite good. The Phase 3 trials had demonstrated that Provenge significantly increased patient survival with only minimal side-effects, such as a few days of mild fever. Moreover, Provenge was an altogether different sort of treatment – one that fought tumors by boosting patients’ immune systems rather than subjecting them to the ravages of chemotherapy.

Provenge was not a magical elixir of life, but Dendreon was doing more than just developing a new technology. It was pioneering a treatment that could revolutionize the way that doctors fight prostate cancer. By some conservative estimates, the market for Provenge alone could reach more than $2 billion a year. If the treatment could be applied to other cancers, the market would be even larger.

The morning after Cramer declared Dendreon and Provenge to be dead in the water, Mark Haines, the anchor of CNBC’s “Squawk Box” program, apologized for Cramer’s “mistake.” That afternoon, at an important UBS investor conference, Dendreon presented still more promising data. This would normally have given a significant boost to the company’s stock price, but the value of Dendreon’s shares stayed flat for the day, and then began a gradual decline.

This had partly to do with Cramer. The next evening, on his “Mad Money” program, the journalist (or entertainer, or self-confessed criminal, or… whatever Cramer is) acknowledged that the FDA had not yet rejected Provenge, but drawing upon his medical expertise, Cramer maintained that Provenge was not effective. In characteristically level-headed fashion, he announced that Dendreon shareholders were drunken, carousing, gambling Falstaffs who “might as well take their money to Vegas.”

Dendreon, Cramer added (rather ominously), was a “battleground stock.”
* * * * * * * *

What Cramer meant by “battleground ” has since become all too apparent. For the past four years, Dendreon has been one of the most manipulated stocks on NASDAQ. During some periods the volume of trading in the shares of this little company has exceeded the trading in America’s largest corporations – a good sign that hedge funds have been churning the stock to move the market.

And with every burst of good news, the company has faced waves upon waves of naked short selling – hedge funds illegally selling millions of shares that do not exist to flood the market and drive down the stock price. Along with the phantom stock, people seeking to diminish Dendreon have deployed false financial research , biased media, bogus class action lawsuits, Internet bashers, dubious science, and other familiar weapons of the “battleground.”

The denouement of this stock market “battle” occurred recently, on April 28, 2009, when Dendreon was to present all-important results at the American Urological Association’s annual meeting in Chicago. Some days prior, Dendreon’s CEO, Mitch Gold, had announced that the results of an Independent Monitoring Committee study were “unambiguous in nature…a clear hit” for Provenge.

If a CEO uses language like that and does not produce the data to back it up, he is guaranteed a visit from the Securities and Exchange Commission. Unless the CEO or his allies have juice with the SEC, the commission will usually charge the CEO with making false statements to pump his stock. Gold was unlikely to take that risk, so it was clear to most people that the meeting in Chicago was going to be a triumph for Dendreon.

And it indeed it was. The data presented that day showed that Provenge lowers the risk of prostate cancer death by 22.5 percent, with little or no toxicity. With a few notable exceptions (some of whom are to appear as prominent characters in this story), nearly every medical professional on the planet now concurred that Provenge was a blockbuster drug – one that should receive FDA approval and make Dendreon a highly profitable company.

But the hedge funds weren’t finished. In the days following Gold’s announcement, short sellers piled on with a vengeance, returning Dendreon to the leagues of the world’s most heavily traded stocks. The firm once again found itself on the SEC’s “Reg Sho” list of companies whose stock was “failing to deliver” in excessive quantities –a sign of illegal naked short selling.

On CNBC, meanwhile, Cramer had hammered Dendreon. On April 6, 2009, amidst ear-rattling sound effects –dogs fighting, and (inexplicably) a baby crying — Cramer had said “I don’t like Dendreon.” He had shouted that Provenge had no chance of getting FDA approval and Dendreon shareholders should “SELL! SELL! SELL!”

Then, on April 28, at 10:01 am central time — just hours before Dendreon’s triumph in Chicago – an anonymous message board author on Yahoo! Finance posted this message: “HIGH PROBABILITY OF MASSIVE BEAR RAID…DNDN [Dendreon] could easily drop 50% on a massive bear raid…its coming today@12:30 pm central.”

Just minutes before 12:30 pm central, Dendreon’s stock price began to fall. It didn’t just fall–it nosedived from $24 to under $8 … in 75 seconds. That’s correct, during a period of 75 seconds, more than 4,000 trades were placed, totaling 3 million shares, or about 50% of Dendreon’s (spectacularly high) average daily volume. Given that the message board poster knew what was coming more than two hours beforehand, and predicted the timing almost precisely, it is a safe bet that this was a coordinated, illegal naked short selling attack. And just in case you still didn’t get this – it caused Dendreon’s share price to lose more than 65% of its value – in just 75 seconds flat.

“My desk was floored,” one trader wrote on a message board. “We all just stood up swearing, headsets and other assorted desk items being thrown at monitors…I haven’t heard that much swearing in years…”

It was, say others, one of the strangest occurrences in Wall Street history.
* * * * * * * *

In fact Dendreon had witnessed even stranger occurrences – brutal naked short selling attacks occurring simultaneously with antics that simply have no precedence in the world of medicine. As will be described presently, these strange occurrences very nearly destroyed Dendreon in 2007. These strange occurrences have also prevented patients from having access to Dendreon’s treatment – a treatment that, as will become clear, should have reached the market some time ago.

And from the day of that first strange occurrence in September 2005, when Cramer predicted that Dendreon would become a “battleground” stock, to the latest strange occurrence in April 2009, when Dendreon’s stock nosedived by 65% in 75 seconds, more than 60,000 men in the United States died of prostate cancer.

So we must ask: Who did this? Who stood to profit from Dendreon’s demise? Were the extremely odd delays in getting Provenge to market purely accidental? Or, were the remarkable trading patterns and volatility accompanying those delays in fact an expression of stock manipulation, and if so, who were the manipulators? Since we know that Dendreon experienced naked short selling, and naked short selling is a crime, who are the criminals? And when much of the medical community rallied around Provenge last month, which manipulators crashed the stock to single digits – possibly to make the company ripe for a hostile takeover by the very people who once sought to destroy it?
* * * * * * * *

It is one of the peculiarities of the Securities and Exchange Commission that while it is ever-eager to hassle CEOs of small companies, it goes to considerable lengths to protect billionaire hedge fund managers. The SEC has publicly stated that naked short selling is a crime. It has said that it has evidence that illegal naked short selling occurs on a large scale and does serious damage to public companies. But it almost never says which hedge funds are responsible. It never says who is flooding the market with phantom stock.

As far as the SEC is concerned, it’s all a big secret. As the commission states on its website, the naked short selling statistics “of individual firms and customers is proprietary information and may reflect firms’ trading strategies.” It seems not to matter to the SEC that those “proprietary” trading strategies are illegal.

Meanwhile, the SEC does not require hedge funds to disclose even their legal short positions. As a result, it is impossible for any journalist to present photo-perfect portraits of attacks on companies like Dendreon.

But brokers and other sources can tell us who some of the short sellers are. And by analyzing public information (such as data that hints at various hedge funds’ options strategies) we can make educated guesses as to who has the most to gain from a company’s decline. We can also come to understand the relationships that bind certain hedge fund managers and miscreants, and ask whether these people might have been acting in concert.

If the relationships are few in number, or separated by six degrees, we must abandon the project – a spatter of dots on the wall is not a work of art. But if the dots are plentiful, precise, and show a recognizable pattern, then we have something valuable – a sort of pointillist painting of market behavior.

In the case of Dendreon, we have such a painting. And when we look at this painting, with its dozens of data points, we can see quite clearly the familiar smirk of Michael Milken, the famous “junk bond king” and criminal stock manipulator.

During the times when Dendreon has been most evidently a “battleground stock,” nearly every hedge fund known to have placed large bets against Dendreon and a significant number of Dendreon’s detractors — esteemed medical professionals, financial research analysts, government officials, and Jim Cramer himself – have been tied to Milken or his close associates.

Most of the hedge fund managers who appear in this story are part of a tight network that has been in operation – exchanging information, attacking the same stocks, employing the same tactics – for upwards of twenty years. This is the same network that attacked the major financial institutions in 2008, possibly contributing to the collapse of the American financial system. And though I recognize that some people find this hard to absorb, I will present further evidence that a good number of the people in this network have ties to organized crime – the Mafia.

As for Milken, he was released from prison in 1993, at which point he went to considerable lengths to rebrand himself as a “prominent philanthropist.” One of the “philanthropic” outfits that he founded is the Prostate Cancer Foundation, and for this he has received widespread applause from the media, government officials, and the business elite. Because Milken has effectively bathed himself in the glow of his “philanthropy” (and because his public relations machine is so indisputably clever), many people find themselves saying that Milken’s financial crimes were but misdemeanors – the slight over-exuberance of a “market innovator.”

But the Dendreon story raises serious questions about the nature of Milken’s “philanthropy” – and about a society that venerates and even seeks guidance and favor from the most destructive financial criminal the world has ever known.

http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-1-of-15/

Turning on the architects of the "faux boom" ~ Mozilo

Loan sharks, right sizers and financial aggregators of all kinds were never real hero material.

Citing e-mail messages in which Mr. Mozilo referred to Countrywide loan products as “toxic” and “poison,” S.E.C. officials said he misled investors about growing risks in the company’s lending practices from 2005 through 2007. During this time, he also profited by selling stock in the company, gaining $140 million.

“This is the tale of two companies,” said Robert Khuzami, enforcement director at the S.E.C. “Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk.”

The suit also said David Sambol, former president of Countrywide, and Eric Sieracki, its former chief financial officer, concealed from investors the high-risk nature of the subprime loans that the company was making. Countrywide needed to maintain its position as the leading lender in a hot mortgage market, the S.E.C. said, and underwrote increasingly dangerous loans; all the while assuring investors that its loans were top quality.

On April 13, 2006, for example, the S.E.C. said, Mr. Mozilo wrote an e-mail message to Mr. Sambol and Mr. Sieracki stating that loans had been written with disregard for the company’s processes and compliance with its guidelines. He went on to describe subprime second mortgages, a product Countrywide was offering, as “poison.”

“Frankly, I consider that product line to be the poison of ours,” Mr. Mozilo wrote, according to the S.E.C.

And in an e-mail message on March 28, 2006, Mr. Mozilo referred to 100 percent loan-to-value subprime mortgages as “the most dangerous product in existence and there can be nothing more toxic,” the S.E.C. said.

The S.E.C. also contended that Mr. Mozilo sold shares in the company in late 2006 even though he knew that the types of loans that Countrywide was making to risky borrowers would perform poorly. His gains from these sales totaled $140 million, the suit said. The S.E.C. is seeking financial penalties and an order barring Mr. Mozilo from becoming a director or officer of a public company.

FT explores the outer limits of monetary nutjobbery

Negative interest rates, spend it or lose it. Why people wouldn't buy gold and bury it in the back yard or why the negative nominal rates won't result in hyperinflation and a flight to real goods (Flucht in die Sachwerte) is unexplored. Indeed the whole notion of savings representing idle resources that can be put to the task of capital formation is hereby turned totally on its head.

All I can say is those whom the gods would destroy they first make mad!

The Financial Times blog presents this as a serious proposal.

Removing the zero lower bound on nominal interest rates would represent a valuable addition to the policy arsenal of the central banks. We know something about how interest rates work. There is no reason to believe there would be any dramatic change in the effectiveness of policy rate cuts if these cuts bring the official policy rate to a level below zero. We know next to nothing about the effectiveness of the alternative policies that central banks are forced to adopt if they don’t just want to sit on their hand once the official policy rate hits the zero lower bound: quantitative easing and credit easing, relaxing the collateral requirements for central bank lending etc.

All these alternative measures also blur the distinction between the responsibilities of the monetary and the fiscal authorities. It undermines central bank independence, something which, up to a point, I consider valuable.

There are at least three ways to remove the zero lower bound that are feasible: abolish currency, tax currency and ensure that currency is not the numéraire. Taxing currency may be awkward and intrusive, but abolishing currency is not just easy (just do it) but also has considerable advantages as a blow against criminality and terrorism. Unbundling currency and numéraire is something that can be done over the weekend.

I really don’t understand why central banks are not aggressively pursuing options for removing the zero lower bound. It is that they love the seigniorage so much? But they retain seigniorage revenue from currency issuance in the rallod economy. Is it hidebound conservatism and lack of imagination? Quite possibly. But if so, this is a costly mistake. Central banks should act to remove the zero lower bound on nominal interest rates now.

http://blogs.ft.com/maverecon/2009/05/negative-interest-rates-when-are-they-coming-to-a-central-bank-near-you/#_ftn1

The Visible Hand ~ manipulation is a fact

That tip to Charles for this one! Zero Hedge publish sprott pdf on market manipulation.

http://zerohedge.blogspot.com/2009/04/visible-hand.html

Griff Rhys Jones understands, perfectly....

THIS will cheer you up. I lost a big sum of money recently. It evaporated with Lehman Brothers.

As it happens, I was hardly aware that I had anything deposited with this distinguished banking house (or hopelessly greedy incompetents, depending on the way you choose to look at them) until I telephoned the manager of my account at a hedge fund.

Now let's go back. I am a financial innocent. I distrust all wealth management and fund manager types. I distrust them from a deep, puritanical atavistic well. But I happen to have savings and pension funds to consider. We drones make our money by luck and talent, by inventing things or creating things, and not by accountancy, so we are doomed to be the patsies of the financial sector. We are the wildebeests by the waterhole. We are the ones who have to die to feed these ghastly, lazy, incompetent predators.

I became intrinsically distrustful of all financiers in 1985, beating the present British Chancellor of the Exchequer (treasurer) by more than 20 years, after the only tax scheme I took part in (an industrial building allowance) proved to be hooey. I have remained a suspicious old woman most of my professional life. And I have still been embezzled, suffered gross incompetence and been double and triple-charged (by mistake, of course). I have experienced the hubris of "bulletproof, perfectly legal" tax arrangements, the cupidity of lawyers and the stupidity of accountants who forgot to file, "tax advisers" who delayed meetings because they were so busy and then charged pound stg. 10,000 an hour for out-of-date advice. And I am just a standard freelance money earner with a moderately successful career.

So, briefly, like many, I had a bit of money in equities; only, pessimistically, unlike many, it caused me to fret. I heard rumblings and warning beeps and decided I wanted to withdraw all my money from the stock markets last April. The hedge fund hedged. But it was all in cash by June. Cash. Dangerous, but real stuff. Money in the bank.

Well, let me rephrase that: money in a bank.

Then the bank collapsed. It was apparently a segregated or custody account. These were both terms I had never heard before. But everybody told me that was OK. The hedge fund briskly suggested that I contact the liquidators myself, and I would get my custody money back within a week. (Soothe, soothe.) Er ... that was six months ago.

It transpires that, far from an answer within a week, the liquidators seem to want a few years to sort things out. They are offering to scrape together about a quarter of this "segregated custody account money pool" and then charge me for doing so. I may well end up owing them money, I guess.

This is, by the way, actual money, not fantasy earnings or funds or the-value-could-go-up-or-down money. It happened, by sheer accident, to be in a deposit account. The truth is that my real money, and the other custody accounts, increasingly appear to be the only actual money that Lehman had at all. But what makes it slightly bizarre is that the false money seems to be all right. Its brokerage divisions go on. Barclays and Nomura have taken them over. The jobs of the perpetrators of this asinine calamity have been secured.

This is seen as great success. More soothing words were needed. "You're probably scratching your head about all this," the lawyer kept saying, as if I were Winnie-the-Pooh. No doubt I needed the gruesome Robert Peston, the BBC's business editor, to help me with a diagram showing that "the good parts" of the bank have been sold on while "the bad parts" are going to be taken up by the Government or shot or recycled or something. But in my Pooh naivety I thought of a deposit account as a good part, not a bad part. That's how much of a patsy I am.

Apparently the brokerage business was handed over to Barclays with pound stg. 3.5 billion in cash as a sweetener (that's actual money, by the way) to pay the wages and bonuses of the bankers that went with it. The money on deposit that has evaporated (my technical term, not theirs) and of which my pittance was a part, amounts to about pound stg. 2.5 billion. Something doesn't add up.

As it happens, Barclays has not paid those naughty bankers their undeserved incompetence bonuses. Phew. They wriggled out of that. So that's all right then. Basically my money seems to have been spirited away and given to another bank. It is a heads-I-win, tails-you-lose business, isn't it? But we musn't blame the bankers. They were making the wealth that powered the economy and the Porsches too.

The greed involved is Mother Goose greed. These people were making a lot of money but, not content with lending, they worked out a way of making more than was feasible. Never mind quantitative easing, the banks have already created money that didn't really exist by inventing a lending inflation. They took genuine money, turned it into stocks, inflated the value of the stocks and then used that to leverage false money (more "value"), which they lent into a fantasy market (the price of houses) at impossible future returns, the profits of which they banked as bonuses before anything had actually matured.

I'm sorry, but we must blame the bankers. Lehman and my hedge fund have taken a significant wodge of this false money out of the fantasy market and put it in custody accounts (which I assume were better protected than mine). The bankers who bleat for their money are part of the whole network of artificially hyped inflation. They were all involved in a sort of Ponzi scheme. It was clear to anyone years ago that this was a teetering tower of trash. But still bankers in brokerage firms with giant bonus options think they can prop it back up.

The reason why these brokerage bits are Peston's "good business" is because, even if the market has collapsed, even if the bubble has burst, they will make money if there is any trading at all. They don't lose money like the mug punter, the pensioner, the saver or the depositor does. They slow down, that's all.

Once there was sense. Sense will return as a cold douche. Meanwhile, back in the real world, the British Government wants to penalise savers by dropping interest to nothing. Unemployment soars, but those feckless and stupid enough to get a mortgage at five times their annual salary have been given a respite, in the hope that this will reinflate the gigantic bubble.

The Times reports that at last British house prices have gone back up again. Wehey! "A return to normality!" Those wealth management people and estate agents can go back to their Georgian mansions and spend their money on private education. I, like Pooh, am scratching my head again.

Griff Rhys Jones is a comedian and author of Mountain (Penguin).

The Best Way to Rob a Bank is to Own One.

As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.1 When the person that controls a seemingly legitimate business or government agency uses it as a "weapon" to defraud we categorize it as a "control fraud" ("The Organization as 'Weapon' in White Collar Crime." Wheeler & Rothman 1982; The Best Way to Rob a Bank is to Own One. Black 2005). Financial control frauds' "weapon of choice" is accounting. Control frauds cause greater financial losses than all other forms of property crime -- combined. Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a "criminogenic environment" (Big Money Crime. Calavita, Pontell & Tillman 1997.)

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud.
Don't ask; don't tell: book profits, "earn" bonuses and closet your losses

The first document everyone should read is by S&P, the largest of the rating agencies. The context of the document is that a professional credit rater has told his superiors that he needs to examine the mortgage loan files to evaluate the risk of a complex financial derivative whose risk and market value depend on the credit quality of the nonprime mortgages "underlying" the derivative. A senior manager sends a blistering reply with this forceful punctuation:
Any request for loan level tapes is TOTALLY UNREASONABLE!!! Most investors don't have it and can't provide it. [W]e MUST produce a credit estimate. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.

Fraud is the principal credit risk of nonprime mortgage lending. It is impossible to detect fraud without reviewing a sample of the loan files. Paper loan files are bulky, so they are photographed and the images are stored on computer tapes. Unfortunately, "most investors" (the large commercial and investment banks that purchased nonprime loans and pooled them to create financial derivatives) did not review the loan files before purchasing nonprime loans and did not even require the lender to provide loan tapes.

The rating agencies never reviewed samples of loan files before giving AAA ratings to nonprime mortgage financial derivatives. The "AAA" rating is supposed to indicate that there is virtually no credit risk -- the risk is equivalent to U.S. government bonds, which finance refers to as "risk-free." We know that the rating agencies attained their lucrative profits because they gave AAA ratings to nonprime financial derivatives exposed to staggering default risk. A graph of their profits in this era rises like a stairway to heaven [PDF]. We also know that turning a blind eye to the mortgage fraud epidemic was the only way the rating agencies could hope to attain those profits. If they had reviewed even small samples of nonprime loans they would have had only two choices: (1) rating them as toxic waste, which would have made it impossible to sell the nonprime financial derivatives or (2) documenting that they were committing, and aiding and abetting, accounting control fraud.

Worse, the S&P document demonstrates that the investment and commercial banks that purchased nonprime loans, pooled them to create financial derivatives, and sold them to others engaged in the same willful blindness. They did not review samples of loan files because doing so would have exposed the toxic nature of the assets they were buying and selling. The entire business was premised on a massive lie -- that fraudulent, toxic nonprime mortgage loans were virtually risk-free. The lie was so blatant that the banks even pooled loans that were known in the trade as "liar's loans" and obtained AAA ratings despite FBI warnings that mortgage fraud was "epidemic." The supposedly most financially sophisticated entities in the world -- in the core of their expertise, evaluating credit risk -- did not undertake the most basic and essential step to evaluate the most dangerous credit risk. They did not review the loan files. In the short and intermediate-term this optimized their accounting fraud but it was also certain to destroy the corporation if it purchased or retained significant nonprime paper.
Stress this: stress tests are useless against the nonprime problems


What commentators have missed is that the big banks often do not have the vital nonprime loan files now. That means that neither they nor the Treasury know their asset quality. It also means that Geithner's "stress tests" can't "test" assets when they don't have the essential information to "stress." No files means the vital data are unavailable, which means no meaningful stress tests are possible of the nonprime assets that are causing the greatest losses.
The results were disconcerting

A rating agency (Fitch) first reviewed a small sample of nonprime loan files after the secondary market in nonprime loan paper collapsed and nonprime lending virtually ceased. The second document everyone should read is Fitch's report on what they found.

Fitch's analysts conducted an independent analysis of these files with the benefit of the full origination and servicing files. The result of the analysis was disconcerting at best, as there was the appearance of fraud or misrepresentation in almost every file.



[F]raud was not only present, but, in most cases, could have been identified with adequate underwriting, quality control and fraud prevention tools prior to the loan funding. Fitch believes that this targeted sampling of files was sufficient to determine that inadequate underwriting controls and, therefore, fraud is a factor in the defaults and losses on recent vintage pools.


Fitch also explained [PDF] why these forms of mortgage fraud cause severe losses.

For example, for an origination program that relies on owner occupancy to offset other risk factors, a borrower fraudulently stating its intent to occupy will dramatically alter the probability of the loan defaulting. When this scenario happens with a borrower who purchased the property as a short-term investment, based on the anticipation that the value would increase, the layering of risk is greatly multiplied. If the same borrower also misrepresented his income, and cannot afford to pay the loan unless he successfully sells the property, the loan will almost certainly default and result in a loss, as there is no type of loss mitigation, including modification, which can rectify these issues.

The widespread claim that nonprime loan originators that sold their loans caused the crisis because they "had no skin in the game" ignores the fundamental causes. The ultra sophisticated buyers knew the originators had no skin in the game. Neoclassical economics and finance predicts that because they know that the nonprime originators have perverse incentives to sell them toxic loans they will take particular care in their due diligence to detect and block any such sales. They assuredly would never buy assets that the trade openly labeled as fraudulent, after receiving FBI warnings of a fraud epidemic, without the taking exceptional due diligence precautions. The rating agencies' concerns for their reputations would make them even more cautious. Real markets, however, became perverse -- "due diligence" and "private market discipline" became oxymoronic. These two documents are enough to begin to understand:
the FBI accurately described mortgage fraud as "epidemic"

nonprime lenders are overwhelmingly responsible for the epidemic


the fraud was so endemic that it would have been easy to spot if anyone looked

the lenders, the banks that created nonprime derivatives, the rating agencies, and the buyers all operated on a "don't ask; don't tell" policy


willful blindness was essential to originate, sell, pool and resell the loans

willful blindness was the pretext for not posting loss reserves


both forms of blindness made high (fictional) profits certain when the bubble was expanding rapidly and massive (real) losses certain when it collapsed

the worse the nonprime loan quality the higher the fees and interest rates, and the faster the growth in nonprime lending and pooling the greater the immediate fictional profits and (eventual) real losses


the greater the destruction of wealth, the greater the (fictional) profits, bonuses, and stock appreciation

many of the big banks are deeply insolvent due to severe credit losses


those big banks and Treasury don't know how insolvent they are because they didn't even have the loan files

a "stress test" can't remedy the banks' problem -- they do not have the loan files



1 "Mortgage Fraud: Strengthening Federal and State Mortgage Fraud Prevention Efforts" (2007). Tenth Periodic Case Report to the Mortgage Bankers Association, produced by MARI.

http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html