The mundane machinations of a mania: the story of Wynter Benton.


WARNING: This post is a work of FICTION.
The original intent of the story was to provide a plausible explanation for how the Wynter Benton legend was born. It is based largely on a text supplied to us by Trinity B (which she described to us as fiction herself) at the end of May 2011.

We decided not to publish it at the time, but – given recent interest in the themes expressed in Trinity’s work - we have now decided that it actually could serve as a useful insight into just how easy it is to craft plausible stories about the silver market. Of course, we also cannot rule out the possibility that Trinity ‘got lucky’ with some of her guesses, or that she knew more than she was letting on.

It has been edited by me and Warren. There is also an epilogue, not penned by Trinity B, but written in keeping with her style (we hope) to ‘round off’ the story.

Get a cup of coffee, and enjoy...


THE MUNDANE MACHINATIONS OF A MANIA
By Trinity B (June 2011)

This post describes no murders, no conspiracies, and no mention of the CIA, Bilderberg or a New World Order. It deals largely with the mundane reality of slightly dodgy web use to promote modern business. Please look away now if the lack of references to smoke-filled rooms, failed assassination attempts or George Soros may offend you.

Flushed with success following her appointment as President of a new precious metals dealer at the end of 2009, X and others in her organisation scouted around various Toronto-based ‘PR solutions’ companies looking for novel ways to make an impact that would benefit both her end of the family business and that of a soon-to-be-launched new silver ETF. The idea, common when starting new ventures, was to use ‘new’ media to support her family’s standard tactics of creating a buzz around a silver shortage. Rumours about JPM’s silver short positions and their use of SLV to suppress the price had circulated for years, but some of the hedgies were beginning to get pretty uptight about it, and a number of events had started to make such discussion more mainstream. X thought there might be some mileage in seeding this rumour in retail quarters, which was not a bad idea, as we now know.

Two ideas were proposed:

1. Message boarding: Wynter Benton’s first posts in March – July 2010 were tests/examples, to show how such a process might work. They weren’t serious posts, nor part of any particular project, and were not especially meant to be read by anyone. Blythe, never a popular figure in the banking world, was used as an example of how stories have more traction if things are personalised. This was rather a quirk of fate – half a dozen other names might equally have been used.

X gave permission to go ahead in order to see how the process might develop. She was not especially hopeful, but felt sufficiently convinced that it might create a bit of a buzz and a bit of extra interest in silver useful to her and her family’s plans for the year.

2. A Canada-based blogspot. Again, a few test posts were created around the same time (summer 2010). The final format, aims and tone of the site would be decided later. The website played around with a few articles and videos reposted from elsewhere, with no particular attempt to ‘add value’ by the ‘host’, gradually developing a focus on the JPM/silver shortage meme. But results were poor – traffic to the site was execrable and lagged far behind that of the WB posts.

At a rather frosty meeting in October, the PR company were told to either drop the blog project or pull something out of their behind. Further, X wanted ‘WB’ to become more convincing, more likely to appeal to grown up silver investors. The rather crass September/October posts by Wynter Benton, which had followed the summer test posts, had not impressed.

So, at the end of October, the PR solutions people assigned someone else to manage the project and X assigned time from an analyst to provide intelligent-sounding details to WB about the Comex, JPM, silver price, etc. We then started to see classical references ('Varro at Cannae'), more precise, technical –sounding information ('Based upon the COT and BPR, if silver hits $60, JPM will lose around an additional $6 billion dollars'), a back story developing (the 'interesting career moves'), and a more articulate writing style. Traces of previous authors had to be left in – notably the ‘body bag’ references – to provide continuity. The claims were magnified for exaggerated effect, and responses to the story were monitored, reposted and encouraged in various forums, along with the help of other ‘entities’ supporting the claims and creating ‘buzz’.

On a roll, the PR solutions people reached a climax of creativity and on 3 December (2010) the blog did something new. Suddenly, the reposted articles (sans commentaire) were replaced by something that would quickly go viral in the silver community. Pushed by ZH and available to all who typed ‘Silver, JPM’ into YouTube, a new audience was rapidly created.

X was (understandably) delighted by the success. A whole new tranche of retail buyers had been drawn in. Even some of the hedgies began to pay attention to some of the crap that was being spooled out on the net – not necessarily because they genuinely believed any of it, but because they knew when to buy a good rumour. Price increases ‘predicted’ by Wynter Benton and others suddenly became a self-fulfilling prophecy. Already in a bullish phase, silver demand started to fuel more demand. Traffic to websites spiked. Blog posts that might have got only a dozen comments before Christmas were now getting a thousand. Posters talked about using credit cards to buy silver at $47, all spurred on by talking bears and a multitude of websites spinning a good yarn about skulduggery at the Comex.

But unfortunately for retail, the cartoon bears forgot to tell anybody what hedge funds always do after they have bought the rumour...


EPILOGUE
By The Screwtape Files (January 2012)

In order to wrap the project gracefully, ‘Wynter Benton’ had left a last communiqué to let them know that hell or high water, they would ‘stand for delivery at the Comex’. With no remaining obligations to the community, Wynter Benton retired, the project finished. Ownership of the blog was gifted to an associate who wished to maintain the brand for the purposes of ad revenue. The May crash followed.

Months passed. Most staff by this point had moved up or moved on, but after the waterfall there were some who smelled an opportunity for a second round. Unknown to X, two members of the original team took the story to a large trading firm, then quickly defected from the design company taking with them the login details for the wynter_benton alias. The new crew wasted no time in re-pumping the Wynter Benton story – the claims were bigger and grander, taking advantage of offering new hope to demoralized silver investors.

The new trading group also had a plan – they would use client funds to purchase futures and be long or short at critical times. Everything was going great, but without the guidance of the senior advertisers and copywriters the story started to wobble in the hands of the less experienced crew. It was also difficult to work separately from the Canada blog. Price calls were suffering because the silver market was not as robust as at the start of the year. Hope was placed on QEIII or a Greek default to make the calls come good. To make things even worse, silver suddenly crashed down through the much-vaunted $36 mark – exposing their fraudulent claims they would ‘defend’ that price point or ‘bust the Comex’.

Once again the two hapless individuals were called to task by their furious new partners – massive losses were made when suddenly silver plunged, and the original ‘purchase’ of the Benton Story had become a very sad investment. In desperation, the junior marketers decided to rescue the story by putting all their chips into a final price call – ‘$45/oz by the end of November’. No caveats, no excuses – words used by the management team who needed to make good their losses or be exposed.

The trading firm filed for bankruptcy at the end of October – the 8th biggest in US history.


IMPORTANT: This entire piece is a work of creative fiction, based on the Wynter Benton story as it unfolded throughout 2011. It should not be reproduced without permission from the Screwtape Files, and any approved reproductions must carry this caveat.

3 comments:

Kid Dynamite said...

If you plug "Wynter Benton" into google translate, and translate from English --> Greece, then from Greece --> Australian and then back to English, you will not BELIEVE what comes out....

JP MORGAN!!!

(note: anyone who reads this comment and goes to try this on Google Translate should punch himself in the face)

Brian O'Flanagan said...

fiction or not, the above captures the essence of what was going on in 2011 and a perfect epilogue to a period of insanity in the PM community. Despite ZH's attempt to recreate the magic, I believe that mania is done for good.

do da...do da

Jeanne d'Arc said...

Brian - I agree totally about the insanity of last year, and also about how Trinity's article sums it up. I even wouldn't be surprised if some parts were very close to the truth.

But I have to say, I don't think the mania is done yet. It feels like there's some gearing up on the blogosphere for 'Round 2'. The whole 'spot price is decoupling from physical price' garbage is really gathering steam.

This process actually started with SGS with a Bears video put out just after the May smackdown. The idea got tossed around for a few months and then got the blogosphere stamp of approval after the second smackdown. Now it's been whole-heartedly embraced by Turd and others, and has real legs.

I wouldn't be at all surprised if we see $42 then $22 this year... It suits me, I'm long silver, and will be quite happy to sell at $39 and buy back (more) in the 20s. But I fear for a second wave of naive market chasers. The last time there were heart-breaking stories about ruin, smashed 401ks, and even suicides. Shudder.