On April 5, 2012, JPMorganChase commodity executive Blythe Masters appeared on CNBC, and she was questioned whether the bank is manipulating metals markets?

Watch the interview here.

Masters’ response was,

"There's been a tremendous amount of speculation, particularly in the blogosphere, on this topic," she told CNBC. "I think the challenge is it represents a misunderstanding of the nature of our business. ... Our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk-management objectives. ... We have offsetting positions. We have no stake in whether prices rise or decline."

So Blythe Masters would have us ALL believe that J.P. Morgue’s 76 Trillion derivatives position – illustrated below - is ALL CLIENT DRIVEN:

source: Office of the Comptroller of the Currency [OCC]

The Undoing of Blythe Masters and J.P. Morgan Chase

Perhaps Ms. Masters is unfamiliar with [or conveniently forgets, perhaps?] the manner in which the OCC gathers and presents data, namely, they gather and publish data submitted by the banks themselves in submissions known as “Call Reports ”.

Here is what the OCC tells us about “end users” or clients [or clients who want to be identified, perhaps?] for derivatives, namely, THAT THERE ARE VIRUALLY NONE:

Source: Office of the Comptroller of the Currency

You Cannot Have it Both Ways Blythe

This is EXTREMELY INDICTING. The head of J.P. Morgue’s derivatives nightmare is telling the world that their business is “customer driven” and on the other hand – the OCC – whom J.P. Morgue reports to - is telling us there are NO CUSTOMERS [or none that want to be identified] for these hundreds of TRILLIONS of derivatives products?

The reality is that Blythe Masters is telling a partial truth – in that J.P. Morgue’s trading is customer driven; and partially misdirection in that Masters refuses to acknowledge that J.P. Morgue’s client “IS” THE Treasury [specifically, the Exchange Stabilization Fund, or, ESF] of the United States of America.

It’s appropriate – with this being Easter – that Blythe Masters would lay-such-an-egg in the mainstream press. Appropriately, it has landed squarely on her own face.