by Ted Butler, Silver Seek:
The big news is last night’s release of the new short report on stocks, which indicated a massive 25 million share reduction in the short position on SLV, the big silver ETF, as of the close of business April 14. The short position on SLV fell from 41.5 million shares to 16.3 million shares, the largest by-monthly drop (60%) in history, to the lowest short position on SLV in more than two years – back to the time in Feb 2021 when BlackRock (the trust’s sponsor) amended the trust’s prospectus to include new risk factors warning short sellers to beware of shorting shares due to serious concerns of the availability of physical silver bullion.
TRUTH LIVES on at https://sgtreport.tv/
https://www.wsj.com/market-data/quotes/etf/SLV
So, the immediate issue is what was behind the sudden large reduction in the short position on SLV (after all, 20 to 25 million ounces of silver is a big deal) and why would I conclude it involved any “blinking” by the Securities & Exchange Commission (the nation’s securities regulator) and BlackRock (the largest asset manager in the world)?
As subscribers know, I have dealt with the issue of the short position on SLV extensively over the years, particularly since the short position rose to record levels (60 million shares) last summer and with special emphasis starting in January of this year upon the occasion of a sudden and counterintuitive deposit of more than 20 million ounces of silver into the trust (which I linked to the short position). I have always considered the short position in SLV to be fraudulent and manipulative, due to the unique nature of this security which promises an ounce of silver standing behind each outstanding share.
I’m convinced short sellers on SLV short the shares for the precise purpose of evading depositing the required metal to avoid putting upward price pressure on silver and the shares of SLV. That’s why I have never hesitated in lodging formal complaints with the S.E.C. and BlackRock whenever the short position on SLV rose aggressively. Between August and November of last year, I complained five times to the S.E.C. as the short position grew to record levels. Since the short position subsided thereafter, I suspended my complaints. I complained for a sixth time on March 27, making my letter to S.E.C. chair Gary Gensler public for the first time, when the short position on SLV suddenly surged again to 47.5 million shares.
https://silverseek.com/article/jpm-again
Back on January 25th, upon the sudden two-day deposit of more than 20 million ounces of silver into the SLV, I wrote an article titled, “Big Doings in SLV”, in which I speculated that the reason for the big deposit was in order to reduce the short position. I fully expected the next short report would reflect the big deposit and indicate a sharp reduction. Just prior to the release of that short report, perhaps fearing my expectations for a sharp reduction of 20 to 25 million shares being proven wrong (this short report is a bear to predict – at least for me), I wrote in “Recent Patterns” on Feb 8, how there was a technique, “shorting against the box”, which might prevent my expected big reduction in the short position, due to be released the next day.
Sure enough, in the Weekly Review of Feb 11, I discussed how the new short report only declined by 3.5 million shares and not the near-25 million share reduction I expected and once again, doubled down on my “short against the box” premise, suggesting that the real short position on SLV was closer to 16 million shares (eerily close to last night’s figure).
Subsequently, of course, the short position on SLV grew again, from 36.3 million shares on Feb 28, to 47.5 million shares as of March 15, which prompted my renewed complaint to the S.E.C. and BlackRock on March 27 when the new short report was published. At this point, it couldn’t be clearer that the big metal deposit back at the end of January was intended to reduce the short position on SLV, as I suggested at the time and there was use of a “short against the box” transaction that delayed the big reduction in the short position until last night’s report. This is beyond looking, walking and quacking like a duck – it includes the ducks carrying signs declaring that they are, indeed, ducks. It actually unnerves me a bit how close all this has played out according to my script.
But what’s with my contention that this means that the S.E.C. and BlackRock blinked? Please think this through. My complaints were as far from ambiguous as it gets and couldn’t have been more serious and substantive – involving fraud and price manipulation and BlackRock’s most basic fiduciary responsibilities to shareholders in SLV. Were there ever to be any type of “problem” with the excessively large short position on SLV, there was absolutely no question that both the S.E.C. and BlackRock could not deny that they were unaware of the problem in any way.
This meant that each had to rebut and deny (prove) my allegations were unfounded or fix the darn problem – in other words, make the short position disappear. It’s been my strong conviction all along that my allegations of the short position in SLV being fraudulent and manipulative were unassailable and I can certify no such legitimate challenge has been forthcoming from the S.E.C. or BlackRock – or, for that matter, from anyone else. That left only one alternative for the S.E.C. and BlackRock, namely, make sure the short position was radically reduced pronto. The short report released last night is the very first opportunity that the S.E.C. or BlackRock could have acted to get the short position on SLV reduced following my last complaint on March 27. To think this was coincidental in any way is absurd.
