Earlier today we listened with bemused fascination as Blythe Masters explained to CNBC how JPMorgan’s trading business is “about assisting clients in executing, managing, their risks and ensuring access to capital so they can make the kind of large long-term investments that are needed in the long run to expand the supply of commodities.” You know – provide liquidity. Like the High Freaks. We were even ready to believe it, especially when Blythe conveniently added that JPM has a “matched book” meaning no net prop exposure, since the opposite would indicate breach of the Volcker Rule. …And then we read this: “A JPMorgan Chase & Co. trader of derivatives linked to the financial health of corporations has amassed positions so large that he’s driving price moves in the multi-trillion dollar market, according to traders outside the firm.” Say what? A JPMorgan trader has a prop (not flow, not client, not non-discretionary) position so big it is moving the entire market? And we are talking hundreds of billions of CDS notional. But… that would mean everything Blythe said is one big lie… It would also mean that JPMorgan is blatantly and without any regard for legislation, ignoring the Volcker rule, which arrived in the aftermath of Merrill Lynch doing precisely this with various CDO and credit indexes, and “moving the market” only to blow itself up and cost taxpayers billions when the bets all LTCMed. But wait, it gets better: “In some cases, [the trader] is believed to have “broken” the index – Wall Street lingo for the market dysfunction that occurs when a price gap opens up between the index and its underlying constituents.” So JPMorgan is now privately accused of “breaking” the CDS Index market, courtesy of its second to none economy of scale and fear no reprisal for any and all actions, and in the process causing untold losses to, you guessed it, its clients, but when it comes to allegations of massive manipulation in the precious metals market, why Blythe will tell you it is all about “assisting clients in executing, managing, their risks.” Which client would that be – Lehman, or MFGlobal? Perhaps it is time for a follow up interview, Ms Masters to clarify some of these outstanding points?