SLV Database (Guest Post by Warren)



Time to test some claims again. Todays spotlight of scrutiny turns to SLV, the world’s largest stockpile of physical silver. For those of you looking for conspiracy, you will NOT find it here. What you will find, is analysis and questions of CLAIMS being made. The people running the trust CLAIM they have 366 million ounces of silver. Others CLAIM they don’t. Who is correct? And darn it, there’s money to be had depending on who is right or wrong.
Following GM Jenkins fine example of putting a chart to opinion, here is an anecdotal chart drawn from information available in the blogosphere. Note that each party has their own line of reasoning backing their stance (if I have unfairly presented anyone here, let me know):



First, why does it matter? Well first up – it’s a very big pile of silver. If the real silver is there as CLAIMED by the iShares Silver Trust, then most of the other stories we’ve been hearing don’t make sense. After all, it’s a simple case of whoever wants physical silver just buys a bunch of SLV shares and redeems them at spot price. No premium-laced cash settlements necessary. No 22% NAV premium required. No tightness of physical market. No delivery problems.
Now, I could write a book (or a very good action movie) about all the various counter claims – unless living under a rock then you are familiar with them already, and therefore I won’t discuss them in depth. Instead I want to focus on doing some hard concrete objective analysis. I also want to expose the methods for my research, to demonstrate that I’m not making any conjecture. Then I want to go to the extra step of making this accessible.
Here’s the gambit:

  1. SLV publish their bar serial numbers in a new PDF every week. Very transparent.
  2. There’s a lot of (public) information there, but it’s difficult to study because of the format.
  3. Let’s collate this information so that we can analyse it better (a relational database).
  4. Let’s put the database online and open it to the public so that anyone can access the info.
  5. Let’s graph this data and slice and dice it.

I’ll be working on the premise that good forgery is very difficult to do consistently – particularly with large amounts of data. I have no way of telling whether some interns have a full time job fabricating data records to make it look real – we can only look at the data presented to us and see if any anomalies exist.
I need to advise that some earlier studies have been done on the same. I currently am aware of at least two:

  1. The excellent weekly analysis of the Silver ETF bar numbers, here. We are very appreciative of the folk at http://About.Ag/ as they shared a bunch of data with us. You should check out their site for a very detailed and comprehensive analysis of all things related to silver.
  2. The Project Mayhem July 2009 investigation, who tried very hard to conjure a duplicates bogeyman, but has since been really well dissected by Bron Suchecki here.

Given that some analysis already exists out there, my strategy is slightly different and there are 4 phases to this project:

  1. (DONE) Construct a database and make it publicly accessible (using SQL Azure).
  2. Make a general call out there for all historical silver bar serial number files that people might have – both from SLV and other funds.
  3. Some kind of website component that people can put on their website to do an easy bar serial lookup (e.g. an investor could verify that a bar they received from SLV was actually held in their stock).
  4. Over time, with enough data it might be possible to cross-reference data from various funds and check for any multiple claims on the same metal.


The most important element of this is that it’s all independently verifiable. What is there is merely a copy of what was previously publicly available. If you have TSQL skills, or you can hire a data monkey who does then you can easily check and double check the claims that I make about the claims. There’s nothing to hide here, you can test everything yourself. If you don’t have access to your own data monkey then I can help (in exchange for some benny bucks).

  Database Server: erwzbgqjg0.database.windows.net
  Database Name: BullionBars
  User Name: slvreadonly
  Password: *12345screwtapefiles



If you have access to some OLD serial bar lists which you may have downloaded in the past and would like these to be added to the analysis data, please get in contact me at this blog, we would love to have a larger data picture.


If you have some ideas for some charts and graphs, requests changes and ideas: Submit Ideas Here

Disclaimer: I don’t accept any responsibility for the accuracy of the data however it is easily verifiable from visiting the source of the original documents (listed in the database). I may change the database schema and data at any time and I may revoke access to the public login if I desire. Making the database public is NOT an acceptance that the SLV bars are real. Do not make any trades based on the information I present, however please feel free to use the information as part of your own due diligence.

Currently I have loaded data from mid-March 2011 to present, with more historical data to come (I am in possession of files from July 2010 onwards). I’ve done a little bit of analysis so far. Here is a quick profile of bar weight distribution. Dead boring – there is nothing to see here except that the shape is pretty close to what you would expect and is the classic distribution of bar size.



Then something more interesting, here is a chart of inventory by ‘country of origin’ for the refiner who produced the bars. This graph goes not currently show movement in-and-out (or movement over time), but one thing is clear – it has lots of silver from Russia and China. Again this only proves that SLV claims to have lots of silver which originates from refiners in Russia and China. Someone might be able to call the significance on that – I don’t have enough knowledge to make a judgement. Note these don’t necessary represent new bars being made, just a representation of what SLV claims to hold @ April 27.



Wading through all the data has been quite an exercise – there are a lot of records. On the surface it looks quite real to me, and the idea about JPM being long physical silver looks real when you stop to think about it. Personally we have to come up with a better theory … for example let’s say they do have the silver but can’t release it because it forms the collateral for all their leveraged paper trading then that also makes sense of what we’re seeing, and the real value for that underlying silver is worth more to them, than an 80% premium, i.e. perhaps everyone is right but for the wrong reasons. The key to this whole thing appears to be ‘derivatives’ and I’m trying to find the right interpretation of it. Discussion is encouraged and I’ll be adding extra dimensions to my analysis and database over time, but I would really welcome some notes from Amber/Wynter_Benton if you’re out there. And Kid Dynamite, just so you know – my database does not PROVE the silver is there – it simply makes the existing CLAIMS more accessible for analysis (to everyone). Paul D. Bain, I’m interested in some of your theories too if you had a comment (you owe me one).

14 comments:

Louis Cypher said...

U da Man Warren

Brian O'Flanagan said...

good post Warren, love the opinion chart.

I'd be very interested in any other conclusions people draw from working with your database.

My view has always been that the silver is there because the inspector says so and I have yet to see any credible evidence that says otherwise.

Regarding whether that silver is leased to somebody or serves as collateral for another party, I believe doing so would violate the statements in the prospectus. So again, to argue otherwise is to accuse SLV of fraud. I have yet to see evidence of such fraud.

Kid Dynamite said...

nice chart up top - hah.

fyi, you reversed the project mayhem and Bron Suchecki links. I'm glad you found Bron's piece on that.

suggestion - you might as well capture a copy of PSLV's bar list, just for the heck of it... in case they ever do a secondary.

Warren said...

Thanks KD. Links fixed. Yep Sprott's PSLV is also going in soon - we're interested to see if any of his secondary offering comes from SLV or vice versa.

Robert Leroy Parker said...

Nice charting Warren.

You guys have been fishing for WB for a while now. But imo WB can't come back right now because they'll lose their credibility when people realize they don't have a crystal ball to wade through volatility. They concocted a good story and timed their silver calls alongside turd and others who were calling the bottom of a secondary trend.

Now that we may have hit a potential top in silver, their story of blackmailing JPM for premiums and silver increasing relentlessly until a comex default doesn't hold water. My guess is they'll show up again if silver resumes its blast upwards to take credit, but otherwise they're gone. Why take the chance of destroying their mythical cult status when they can ride their tall tale, forever leaving us wanting more.

If the subject was a little bit more interesting to the average joe, somebody would have a decent screenplay concept on their hands.

Robert Leroy Parker said...

Warren,

Would it be possible to confirm PHYS's most recent gold accumulation came from GLD with the serial numbers? The anecdotal evidence was there in a gld redemption matching the size of sprott's purchase.

Warren said...

RLP, yes .. if we can pull together enough serial number files, that would be a perfect application for mining the data. It was my hope to start tracking gold bars (same database) after we do silver. One of the issues we have is getting historical files (which is why I'm putting the call out there). Louis is particularly interested in Sprott.

With the database we get to see interesting things like a 1000-ounce bar entering the SLV inventory then leaving, then coming back. So during that 3 months it may have been wandering between vaults and it would be interesting to collate enough information to track these movements between funds.

Yukon Cornelius said...

Wow Warren, this is very cool and a great idea.

You can pin me up directly in the middle of that graph. I lean strongly to the idea that they have the silver yet I'm wise enough to realize that I'm sure of only that I'm unsure - therefore I hold real physical silver. Would I buy some SLV? Of course, I trade a bit on occasion just like anyone. I simply can't understand why with all the unknowns around SLV, silver, future currency, and the unknown likelihood of the monetization of silver that someone wouldn't hold some physical. I myself hold 50% total physical (AU, AG, PD, PT, etc) to 50% total paper (Cash, Stocks, etc.) It just makes sense in my mind. I go to bed each night not caring what happens.

I will say that the "they have the silver" arguments are light years ahead of the "they don't have the silver" arguments. Simply put some of the stuff the "no-silverer's" put together are completely made up bullshit. Some of them should start by reading a COMEX rulebook before they write some of the things they do.

Warren, what do you mean when you said, "...they do have the silver but can’t release it"?

Louis Cypher said...

YK,
Warren is in flight at the moment I think. So he may not answer you until he lands and gets settled.

Warren said...

Got some internet access on the plane :) Thanks Yukon for the comments. Part of charting this is to form a new thesis - an advanced 'they have the silver' argument (as you put it) is needed because even if they do have it all then some other things still need explaining.

I'm wondering whether they make more money holding the physical silver than they would if they sold it off. i.e. the asset is the thing which allows the leverage, without it, no leverage allowed. So in their hands, the silver itself is worth much more to them and they would rather give big payouts than part with it. They also continue to add to their inventory because it's lucrative.

Something like that anyway. Brian and Costata have had some dialog recently over at FOFOA which I think holds the key, but I'm still putting it together in my head. Wynter Benton's position on the chart is important - they knew the flow of physical was important and they acknowledged most of the SLV inventory. They didn't see it as a reason to stop them making money.

I'll keep adding the weekly SLV data. This has certainly been a worthwhile study as the base of my due diligence :)

Bron said...

"With the database we get to see interesting things like a 1000-ounce bar entering the SLV inventory then leaving, then coming back. So during that 3 months it may have been wandering between vaults and it would be interesting to collate enough information to track these movements between funds."

You really need to start recording the bar lists of every ETF to be able to catch out a single ETF as it increases your data pool.

As to bars wandering between vaults, possible, but mostly likely is it never moved at all and just a change in the custodians records as to who owned it.

A bar disappearing and then reappearing in the same (or other, hence the importance of getting all bar lists) fund now tells us that for those 3 months the bar was privately held, part of a dark pool of stock. Over time you'll build an authoritative estimate of that dark pool.

Perth Mint is now publishing the bar list of metal backing its new pool allocated silver product

http://www.perthmint.com.au/pool_allocated_bar_listing.aspx

This will be insignificant size wise compared to SLV, but data is data. It will be mostly composed of Chinese and Russian bars, as none of our investor like those brands.

By way of explanation, Perth Mint only refines 200t of silver a year as a byproduct of gold, so we pull in 1000oz bars ex-London for the additional metal we need to make coins and bars and also back this new product. You just get what you get when you ask for delivery from a BB, it is often quite a mixed bag of brands.

Warren said...

Bron thank you for stopping by - your interest is important. I'll add the PerthMint data you supplied, to the database.

Your interpretation of the allocation moving rather than bars seems correct to me - I have just been looking over the bar serials in ETPMAG whose silver is held in London by HSBC. There is nothing suspicious to see here but I do see the sequences and runs of bars from a particular refiner and realised that (again as you point out) there is a lot of silver in those vaults. For me, the idea of the allocation changing rapidly explains the vast 'inflows' and 'outflows' which Harvey gets so worked up about in his narrative. For example, the 20M oz which recently went out, would most likely have been allocated somewhere else rather than physically delivered.

So yep, hopefully we'll get a fuzzy image of those dark pools, over time. There certainly seems to be a lot of silver out there and the ones who are laughing will be the ones who are able to know the price manipulation in advance - made all the more easier by the tightening of the flow as described by Costata.

Again, thanks for taking the time to comment and give the link - I hope to release periodic updates of whatever I find in the data. I am focusing on getting some 'age' metrics next.

Warren said...

Clarification on my last comment for anyone reading - ASX:ETPMAG is via Australia. It is the same ETF also known SIVR and others. Reference: http://www.etfsecurities.com/. Their physical silver holding is about a tenth of what is in SLV. These guys have a new version of their spreadsheet daily, which I would like to include in the database so I will have to be writing a code routine which unzips and extracts then imports the contents automatically on a daily basis. Lots of work..

I have setup a notification if Perth Mint update their lists/pages, this will be nice as we'll have data from the start.

Bron said...

Perth Mint list will be updated weekly each Monday as at the preceding Friday.

If Harvey even thought about it for half a second the explanation of the moves is that the bars don't move, just the ownership.

This puts the size of the ETFs in perspective http://goldchat.blogspot.com/2010/08/silver-leader-board-july-2010.html