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More Serious Than I Thought: Bank of America 800M Ounces Short on Silver
- ztratar 5y agoAll of these silver folks sound like nutcases. The amount of conspiracy thinking in this article, without evidence, is wild.
- xibalba 5y agoReally? Can you quote a few of the statements that are conspiratorial but that are lacking evidence?
- vorpalhex 5y agoAt the moment the price of silver is $21.18 and seems to be slowly dropping. BoAs bet seems to be moving to break even. Silver at most moves small amounts, not "hundreds".
- adrianpike 5y ago23 minutes old, 21 points, zero comments - I've been on HN for a bit now and this is the first time I've seen something pop off of new without at least a discussion starting. Seems slightly suspicious, at least to me.
- xur17 5y agoAt least for me it's taking a bit to fully unravel what is actually going on, and whether or not there is any validity to the claim. The linked article is fairly long, and even it doesn't have all of the context.
- AlexandrB 5y agoHalf of the US is also probably asleep by now.
- duxup 5y agoI’m just having trouble figuring out the article at all. Having said that, some articles are a bit slow on comments, I don’t find that odd.
- dougmwne 5y agoThis appears to be inane drivel from a silver hyperbull.
- webinvest 5y agoI upvoted hoping someone knowledgeable on this subject will comment.
- dang 5y agoIt's not suspicious—it happens all the time. In fact, it happens so often that even comments like yours appear on a regular basis.
- adrianpike 5y agoThanks for the reply & the wider context!
- nawgz 5y agoSeems like the whole finance industry continues to cheat until they get caught. Why wouldn’t they after that 2008 when everyone lost all their money and they got massive taxpayer dollars?? The descent into naked oligarchy continues.
- duxup 5y agoCan you explain what exactly the article is saying?
- nawgz 5y agoYes. BofA has written IOUs to buyers unknown to me saying they will deliver 800M ounces of silver to them at some point in the future, where this point is determined by the buyers. Given their lack of capability to produce this good, they have taken about $18 billion risk assuming they are able to manipulate the market with more strength than the buyers. I cannot imagine how this level of risk is acceptable… without a massive taxpayer footed fallback plan
- et2o 5y agoIn Q3 2021 they had profits of about 8 billion... This is not a big deal and it's unlikely they'd lose everything. Certainly poses little to no systemic risk.
- impendingchange 5y agoProbably the most interesting paragraph of the article to me was: >The seriousness of this issue is rooted in the scale of the numbers. If Bank of America is short 800 million oz of silver, as the data in the OCC report strongly suggests, then that means every dollar higher in the price of silver translated into an $800 million open (unrealized) loss. Every $10 move equates to an $8 billion loss. A hundred dollar move higher from here equates to an $80 billion loss. Can BofA fund such losses or will taxpayers be called upon to bail the bank out? Even the slightest hint of such a development should be enough to require immediate clarification from the regulators and BofA and there’s a lot more than the slightest hint in the OCC report.
- xur17 5y agoSilver is currently ~$22 / ounce. Is a hundred dollar move really a realistic outcome?
- whatshisface 5y agoIt depends on how big the silver market is compared to 800 million ounces. If someone with no short exposure and lots of money starts buying it, and BofA has to cover their shorts, then something like Gamestop will happen and a major bank will blow up. The silver market has been cornered before, in the 1980s, quite famously, in an event that moved the price by a factor of ten (order-of-magnitude). https://en.wikipedia.org/wiki/Silver_Thursday https://en.wikipedia.org/wiki/Silver_Thursday
- postpawl 5y agoReminds me of this Wall Street Bets post: https://www.reddit.com/r/wallstreetbets/comments/mbx510/slv_is_a_complete_scam_its_a_scalp_trade_set_up/ https://www.reddit.com/r/wallstreetbets/comments/mbx510/slv_... Basically says the silver market is manipulated to crush retail investors.
- pottertheotter 5y agoThat’s a really great write up. Wish there were an easy way to find others like this from WSB. There’s so much junk on there to weed through.
- webinvest 5y agoBut the price of silver dropped. People that bought silver when that post came out lost money.
- impendingchange 5y agoThat's why they hodl.
- colechristensen 5y agoThe way this guy writes does not inspire confidence, he doesn’t seem to know what he’s talking about. He’s made a pretty big speculative leap about a large short position and then goes on to suggest that BoA would go under if they lost a few billion dollars (they have hundreds of billions in cash). Nothing to see here unless you’re a conspiracy fan or somebody more legitimate says something.
- trembonator 5y ago
- et2o 5y agoThis article is nutty