The Entire System Has Been Utterly Destroyed By The MF Global Collapse

[JohnQPublic]

"The Entire System Has Been Utterly Destroyed By The MF Global Collapse" - Presenting The First MF Global Casualty (http://www.zerohedge.com/news/entire-system-has-been-utterly-destroyed-mf-global-collapse-presenting-first-mf-global-casualty)



Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 11/17/2011 14:19 -0500


Presented without comment, merely to confirm that the market as we know it, no longer exists.
BCM Has Ceased Operations (source (http://barnhardt.biz/))
Posted by Ann Barnhardt - November 17, AD 2011 10:27 AM MST
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.
As for me, I can only echo the words of David:
“This is the Lord’s doing; and it is wonderful in our eyes.”
With Best Regards-
Ann Barnhardt

[gunDriller]

Ann B. seems to know what she's talking about.

So I would expect other brokers etc. to follow in her footsteps & close up shop because they can't do business in the present environment.

I think her singling out Obama is kind of dumb - it's not like Bush43 was any more resolute when it came to financial honesty.

If I had to guess what she's doing with her own personal cash & investments - i'll bet she's got physical.

[Book]

https://www.youtube.com/watch?v=vRQ3X4N1vmc&feature=related

jews robbing us blind and she goes after the muslims...lol.

[po boy]

https://www.youtube.com/watch?v=vRQ3X4N1vmc&feature=related

jews robbing us blind and she goes after the muslims...lol.

The only way a Jew can rob u is if u like being fucked in the ass.

So Book are u a Faggot?

[mamboni]

This is it I think, the spark to set off the chain reaction of derivative implosions that will vaporize the entire world's paper capital. This lady has been doing this business for 20 years and now she's hastically closing up shop and running for the hills. She knows what's coming and she's scared. This clarion call is going to spread thruoughout the entire derivative universe like wild fire. All it takes is for one person to run for the exits to cause everyone else to suddenly notice that the building is on fire. Given the leverage in the system, all it would take is for a few hedgies to deleverage to set off an avalanche of margin calls and credit defaults. I expect that the regulators in Washington better huddle pronto and isolate and extinguish this spark pronto by whatever means (i.e. make the clients whole now out of government funds, arrest Corzine at al., and sieze all monies related to the deal and held by the counterparties).

[osoab]

This is it I think, the spark to set off the chain reaction of derivative implosions that will vaporize the entire world's paper capital. This lady has been doing this business for 20 years and now she's hastically closing up shop and running for the hills. She knows what's coming and she's scared. This clarion call is going to spread thruoughout the entire derivative universe like wild fire. All it takes is for one person to run for the exits to cause everyone else to suddenly notice that the building is on fire. Given the leverage in the system, all it would take is for a few hedgies to deleverage to set off an avalanche of margin calls and credit defaults. I expect that the regulators in Washington better huddle pronto and isolate and extinguish this spark pronto by whatever means (i.e. make the clients whole now out of government funds, arrest Corzine at al., and sieze all monies related to the deal and held by the counterparties).

Unfortunately, the only reason for the huddle is to strategize their respective shorts being applied. They do have the inside track.

[gunDriller]

This is it I think, the spark to set off the chain reaction of derivative implosions that will vaporize the entire world's paper capital. This lady has been doing this business for 20 years and now she's hastically closing up shop and running for the hills. She knows what's coming and she's scared. This clarion call is going to spread thruoughout the entire derivative universe like wild fire. All it takes is for one person to run for the exits to cause everyone else to suddenly notice that the building is on fire. Given the leverage in the system, all it would take is for a few hedgies to deleverage to set off an avalanche of margin calls and credit defaults. I expect that the regulators in Washington better huddle pronto and isolate and extinguish this spark pronto by whatever means (i.e. make the clients whole now out of government funds, arrest Corzine at al., and sieze all monies related to the deal and held by the counterparties).

all very good points, but Osoab has a good point too (and it's hard to do nested comments with the forum software).


out of self-interest, yes the US gov. may decide, "perhaps we should have another taxpayer-funded bail-out of MFG's clients".

but - Corzine 'taking one for the team' - a little like Madoff ? i don't know.


i think this is a lot like the scene in Wizard of Oz where Toto pulls back the curtain to reveal this guy that looks like Colonel Sanders.

not that the whole entire world will realize that the US gov. & financial & corporate execs are, at heart, criminals.

personally, i would have thought that message would have been conveyed L O U D and C L E A R by the mortgage backed securities (MBS) credit crisis in 2008-2009.

there are details about MF Global that make clear to many, many more people - influential people in the world business community - the extent of the rot in the US.

i wonder if many of them were smart enough to avoid MBS losses, and are pissed off because they either lost their customer funds or realize, as Ann B. says, they realize that it could happen with any CME customer, or with any firm regulated by the CFTC.

being burned personally being far more educational than when your neighbor gets burned.


what happened with MF Global is like going to your bank and them telling you, "our manager went to Reno to gamble with your money, the arrangement being that if he won, he kept the money, and that if he lost, we would go bankrupt and you would get to get in line with the other bankruptcy plaintiffs".


personally i think that there is considerable overlap between THAT rot, and the rot of 9-11 - both involved Jews loyal to Israel, what I call the "Silverstein Mafia", and New York City & Israel are involved in both rottenness-es.

i think to re-build limited confidence the delayed reaction to MF Global has to be compensated with some genuine legal consequences, something as severe as the death penalty for Corzine, without the death part - but that severe. things that would seem logical to us, such as seizing the private assets - outside the corporation - of the entire MF Global management team. my guess is, they have way more than $630 million between them.

in other words, the US gov. would have to go after the private assets of some of the most influential Jewish bankers in the US. guys like Corzine. the same guys the US gov. works for.

that's not going to happen, except for token, "throw a bone to the enraged Gentile masses", a la Madoff.

[osoab]

all very good points, but Osoab has a good point too (and it's hard to do nested comments with the forum software).


out of self-interest, yes the US gov. may decide, "perhaps we should have another taxpayer-funded bail-out of MFG's clients".

but - Corzine 'taking one for the team' - a little like Madoff ? i don't know.


i think this is a lot like the scene in Wizard of Oz where Toto pulls back the curtain to reveal this guy that looks like Colonel Sanders.

not that the whole entire world will realize that the US gov. & financial & corporate execs are, at heart, criminals.

personally, i would have thought that message would have been conveyed L O U D and C L E A R by the mortgage backed securities (MBS) credit crisis in 2008-2009.

there are details about MF Global that make clear to many, many more people - influential people in the world business community - the extent of the rot in the US.

i wonder if many of them were smart enough to avoid MBS losses, and are pissed off because they either lost their customer funds or realize, as Ann B. says, they realize that it could happen with any CME customer, or with any firm regulated by the CFTC.

being burned personally being far more educational than when your neighbor gets burned.


what happened with MF Global is like going to your bank and them telling you, "our manager went to Reno to gamble with your money, the arrangement being that if he won, he kept the money, and that if he lost, we would go bankrupt and you would get to get in line with the other bankruptcy plaintiffs".


personally i think that there is considerable overlap between THAT rot, and the rot of 9-11 - both involved Jews loyal to Israel, what I call the "Silverstein Mafia", and New York City & Israel are involved in both rottenness-es.

i think to re-build limited confidence the delayed reaction to MF Global has to be compensated with some genuine legal consequences, something as severe as the death penalty for Corzine, without the death part - but that severe. things that would seem logical to us, such as seizing the private assets - outside the corporation - of the entire MF Global management team. my guess is, they have way more than $630 million between them.

in other words, the US gov. would have to go after the private assets of some of the most influential Jewish bankers in the US. guys like Corzine. the same guys the US gov. works for.

that's not going to happen, except for token, "throw a bone to the enraged Gentile masses", a la Madoff.

You can quote multiple quotes if you select the button to the right of "reply with quote". You have to hit that button in all the posts you want to quote. I do the selecting in chronological order. I have never tried it any other way.

I didn't know Corzine was a jew. Sources?

I think MF gets off the hook. I will have to do some searching, but there was a key provision that was granted by the SEC to use customer funds for collateral. Something like that I think.

[osoab]

More of MF getting off the hook. I think I first caught this at ZH.


More On Legal Stealing - The Infamous CFTC Rule 1.29 (http://truthingold.blogspot.com/2011/11/more-on-legal-stealing-infamous-cftc.html)





Obfuscate - transitive verb: Darken, to make obscure; Confuse; intransitive verb: to be evasive, unclear or confusing (Merriam Webster)Time to cut to the chase. Let me just preface this with my belief that the missing $600 million from MF Global was money taken from segregated customer accounts and used by MF Global to satisfy a massive margin call issued by JP Morgan on MF Global proprietary accounts. I say JPM ultimately has the funds in question because if you have been following all of the news from the beginning, including the initial proclamation that the missing funds were found in the basement of JP Morgan followed by the slightly delayed statement of denial by JPM, then it makes sense to me that the dotted lines ultimately connect that missing money to JPM.

If the court rules that JP Morgan's claims are superior to that of the customers, whose assets were supposed to be in a segregated account and arguably should be treated with a greater degree of superiority and protection than that of a general creditor, then the MF Global bankruptcy is indeed a case of legal stealing.

Everyone is discussing this nefarious CFTC rule 1.29 and pointing to it like it's the culprit. In order to understand exactly what 1.29 is, it requires a review of the CFTC regulations with respect to "Safeguarding Customer Funds," which starts with rule 1.20 and includes the subsequent rules through 1.30, plus rule 1.32. A definitive summary of these rules can be found HERE (http://www.cftc.gov/ucm/groups/public/@internationalaffairs/documents/file/30-10guidance.pdf) starting on page 8. Reading and understanding this is crucial to understanding the degree to which MF Global acted illegally and fraudulently and to understanding why my view is that the segregated customer funds should be treated as "superior" to any and all other creditor claims by the bankruptcy court.

The nefarious rule 1.29 simply says that any profits from customer funds which are hypothecated for purposes defined in 1.20-1.28 may be kept by the broker (FCM - Futures Commission Merchant aka commodities broker). Whether or not you agree or disagree with this ruling, and I disagree with it, the rules outlined in 1.20-1.28 set forth very specific procedures which must be followed in order to keep customer funds not only definitively segregated but clearly defined in terms of amount and market value. Here's some examples from the link:
- the books and records of an FCM shall at all times accurately reflect the FCM's interest in total assets on deposit in segregated accounts, which is the amount of funds in segregation in excess of the amount of funds required to be segregated (CFTC Regulation 1.23)
- each FCM that invests customer segregated assets must keep a record of such investments that shows certain information for each investment (CFTC Regulation 1.27)
- each FCM must prepare, as of the close of each business day, by noon the following business day, a record showing the total amount of customer assets required by the Act to be deposited in segregated accounts, the total amount of assets deposited in Section 4d(2) segregated accounts, and the amount of the FCM's residual interest in such segregated customer assets (excess funds in segregation) (CFTC Regulation 1.32)As you can see, the procedure for segregating and accounting for this segregation is very well defined and explicit. It's essentially the "mother's milk" of the securities industry. Furthermore, pursuant to the following, at any given point in time firms like MF Global should know exactly how much each customer has in its segregated account, how much can be hypothecated or repo'd and how much is hypothecated or repo'd AND what the usage is of those hypothecated funds - these are all legally defined procedures which are computerized and backed-up on a separate server, typically:
Whenever an FCM knows or should have known that the total amount of its funds on deposit in segregated accounts on behalf of customers is less than the total amount of such funds required to be segregated on behalf of customers, CFTC Regulation 1.12(h) requires the FCM to report immediately such deficiency to the CFTC and to either NFA or the exchange having primary responsibility for compliance surveillance of the firmIn effect, these rules dictate that the customer funds should not be missing and that tracking down what happened to them should have been a few mouse-clicks away. This is true regardless of whether or not 1.29 enables MF Global to accrue profits on the funds. Moreover, the CFTC and CME, the exchange having primary responsibility for compliance surveillance, should have been on top of this. I guess since Goldman Sachs people (Corzine and CFTC Chairman Gary Gensler, Corzine's buddy from Goldman) are used to throwing around and losing $10's of billions, they couldn't be bothered with mere pocket-change like $600 million.

The bottom line here is that ultimately the flow of funds should have been very easy to track. And given that $600 was initially traced to JP Morgan, I believe that JP Morgan needs to be given the financial accounting equivalent of a proctology exam to convince me that they were not the beneficiaries of the $600 million missing from the customer accounts. Finally, Corzine and every staff member responsible for oversight on this matter needs to be held accountable and punished accordingly. There is a massive amount of fraud and theft going on here that is systematically being covered up and obsfuscated by the CME, the CFTC and JP Morgan.

The problem with this situation is that if it is not settled in a manner which creates a vast overhaul of the CFTC regulations and rules regarding the treatment of customer funds and if JP Morgan and other Wall Street creditors to the bankruptcy are treated with superiority with respect to the liquidation claims and distribution, what's to stop this method of legal stealing from being implemented on a widescale basis by every large securities broker who is about to go under anyway? (Think: Jeffries, Bank of America/Merrill, Morgan Stanley...) Edit.

Here is the Zero Hedge piece I read.

It’s Official: Wall Street Firms May Legally Steal From Their Customers (http://www.zerohedge.com/contributed/it%E2%80%99s-official-wall-street-firms-may-legally-steal-their-customers)



Courtesy of Jesse's Cafe Americain (http://jessescrossroadscafe.blogspot.com/2011/11/its-official-wall-street.html)
http://www.philstockworld.com/wp-content/uploads/08_TradingPlaces_BD-jesse.jpg
...and they may not have to pay them back, even when they are caught. The customers will be expected to 'take one for the team,' and for the good of the system. Confidence and all that.


“This means they can take segregated funds and leverage them to kingdom come. It means nothing is safe.”
Andy Abraham
If you have a commodity account with Wall Street, they may gamble with your money, with your assets, the rule on segregated accounts be damned. If they lose the money you might be reimbursed, or not. The losses may have to be 'socialized' and haircuts received.
This is most likely a distortion of the principle known as 'rehypothecation' in which a broker can use customer positions and holdings as collateral pledged for a margin loan for the purpose of securing funding from a third party to service that loan.

The principle at play here may be closer to a type of droit du seigneur, in which any assets you have posted at a futures brokerage may be used at will by the broker for their own purposes without regard to any customer obligations. It depends on the extent to which MF took customer assets and leveraged them.

In a way it is just making the unbalanced relationship between Wall Street and its customers official.

It means that customers are bearing hidden counterparty risks on assets to which they thought they had a clear title, such as Treasuries, and foreign currencies, and warehouse receipts for precious metals.

It means that brokers can go beyond the mere provision of funding for loss, and use customer accounts to fund their own leveraged speculation under exemptions duly granted by their 'regulators.'

This sort of systemic abuse is typically exposed when there is a market dislocation. It is what finally exposed Madoff, for example, despite the many years that the regulators were turning a blind eye to his scheme.

This sort of arbitrary distribution of gains and losses occurs more frequently than you might imagine on Wall Street, at least from what I have seen and heard, and not just with commodity brokers. I have even heard of specially privileged customers who can make $100,000 in a few trading days without even having any knowledge of the markets in which they have 'traded.'
I stopped trading on the futures exchanges a few years ago when I experienced enough one-sided 'rule changes' to persuade myself at least that it was becoming an insiders' game with slim odds of success for the 'outsider.' Or perhaps I was just becoming aware of it had already become, or had always been.

Unfortunately it is hard to escape inefficiency in markets, because despite all that has happened, these fellows still set the prices for much of the world's food, energy, and basic materials, at least on the official exchanges.

The CFTC has been disgracefully negligent, and given to cronyism, but in the spirit of modern American management practice it may just hide behind a claim of incompetence. They granted some exemptions to influential insiders, and the markets proved that the exceptions were loopholes for fraudulent abuse of the public trust.

The Justice Department is investigating the case of MF Global for any violation of the laws. I suggest they pay special attention to the laws regarding 'fraudulent conveyance' in the posting of the customer assets as collateral with MF's creditors, even as the firm was paying its employees bonuses, knowing that it was insolvent.
Actual fraud typically involves a debtor who as part of an asset protection scheme donates his assets, usually to an "insider", and leaves himself nothing to pay his creditors. Constructive fraud does not relate to fraudulent intent, but rather to the underlying economics of the transaction, if it took place for less than reasonably equivalent value at a time when the debtor was in a distressed financial condition.

For example, where the debtor has simply been more generous than they should have or, in business transactions, the business should have ceased trading earlier to avoid giving certain business creditors an unfair preference (see generally, wrongful trading).
Obama should bring meaningful reforms to the regulatory agencies and the financial markets after the shocking abuses of the past twenty years. But I doubt he will bite the hand that feeds him. He will likely hide behind committees and a building of 'consensus' with the unabashed servants of the monied interests. It's in the nature of a credibility trap that reform will not come until the system finally seizes, and crashes, and there is an opportunity to hide their crimes in the rubble.
Forbes (http://www.forbes.com/sites/robertlenzner/2011/11/08/mf-global-used-customer-funds-in-the-losing-6-3-billion-trade-without-informing-clients/)
MF Global May Have Used Customer Funds In The Losing $6.3 Billion Trade Without Informing Clients
By Robert Lenzner
After an intense day of investigation, I have just discovered that a CFTC rule (1.29) allowed Jon Corzine’s MF Global to use the margin and cash in customers heretofore segregated accounts to amass a risky $6.3 billion investment in European sovereign debt that backfired. Nor did Corzine have the obligation to inform any of these customers he was gambling with their money. Or that he was intending to keep all the profits for himself and his troubled firm. Nothing for the customers.
The language of Rule 1.29 allows “The investment of customer funds in instruments described in 1.29 shall not prevent the futures commission merchant (MF Global) or clearing organization so investing such funds and retaining as its own any increment or interest resulting therefrom.” Increment refers to any trading profits or gains.
The criminal division of the Justice Department in New York — as well as the SEC and the CFTC and members of Congress– are investigating whether any laws were violated and if so, whether any criminal charges can be brought. As of 3 pm today, there has been no sign of the missing $633 million. My sources believe it was probably grabbed by the institutions that made the margin calls on MF Global as the European bonds sank in value.
This shocking loophole, which is available to all commodity traders, whether giant ones like Goldman Sachs or members of commodity exchanges, means that huge risks are being taken with money that does not belong to the trading firms– without the customers having any idea of the danger they are in. As Andy Abraham, a futures trader in Israel put it to me today; “this means they can take segregated funds and leverage them to kingdom come. It means nothing is safe.”
This rule, which has been in effect since 1974, is shocking and highly irregular since it allows any futures dealer to use customers money for its own selfish purposes– and never inform its customers it is doing so. What’s even more unfair is that the dealer (MF Global) gets to keep all the income and the trading profits, if any from a transaction that uses other people’s money– not its own house capital. That is unless some prior arrangement about sharing profits was made privately beforehand with the client. None of the MF Global clients I’ve spoken to today had the foggiest notion about this arrangement– which at minimum is outrageously unfair to the rule that the customer comes first. All losses must be made up by the dealer, which in this case may be totally impossible..."
Read the rest here (http://www.forbes.com/sites/robertlenzner/2011/11/08/mf-global-used-customer-funds-in-the-losing-6-3-billion-trade-without-informing-clients/).

I wonder if they will even disclose the name of the firm that took the $600+ million in customer assets as collateral.

That will speak volumes in itself.

Here is some additional information from Lenzner at Forbes: Some MF Global Customers Want Corzine "Led Away In Cuffs" (http://www.forbes.com/sites/robertlenzner/2011/11/10/some-mf-global-customers-want-corzine-led-away-in-cuffs/?partner=yahootix)


My most well-informed source, who won’t identify himself tells me my original story was “partially correct in the usage of customer funds.” IE MF Global was allowed under Rule 1.29 of the CFTC, to use segregated customers accounts to invest in “high quality, liquid investments.”
He insists that, “The segregated funds rule prevents the firm from answering margin calls with Seg (segregated) funds for house bets. Lots of people in other trading firms are taking bets on when Corzine will be led away in cuffs.” My source also insists that Corzine was NOT allowed to use these funds for directional bets- and that “customer funds can only generate interest for MFG while they are held separately from house money.”
Lots of excuses will be made for what happened. The status quo has a huge vested interest in covering this up, for their personal benefit and 'the sake of the system.'
For example, the analogy in the above piece by Lenzner about customer banks deposits, and the actions of banks in lending them out to other people. Yes, and you are paid interest for that usage, and you know that they are doing it, and you know that their loan operations and deposits are (at least theoretically) regulated and insured by the government.
But overall Lenzner is one of the best financial reporters, and he shows remarkable journalistic integrity. Most mainstream reporters won't even touch this one because they are afraid to say something that might involve the sacrosanct monied interests and TBTF. Simon Johnson was not waxing poetic when he said that there had been a financial coup d'etat.
Wall Street has a wonderful way of rationalizing their slimier behaviour. After all, when the tech bubble of fraudulent representations crashed, the financial news anchor said that 'no one had MADE people buy those stocks.' Its not Wall Street's fault that people are uninformed and gullible, right?


"There will always be apologists for the powerful and politically connected who commit crimes."
Eliot Spitzer
My expectations for reform are remarkably low. I just hope that the customers get their money back, and more people become aware of what is going on. If anything is done about this except to make excuses for it, I will be pleasantly surprised to say the least.
In the short term, I think the avoidance of the worst neighborhoods in the financial system is a likely reaction by investors. And those seem to be the forex, stock options, and futures markets, with a few of the slimier ETFs that are designed to lose as well. Such de facto boycotts have happened before and will happen again. What else can one do?
Wall Street is trying to organize a boycott of Mario Batali for remarks he made about (http://youtu.be/4FLKQ3A6q90)#OWS (http://search.twitter.com/search?q=%23OWS) and Wall Street. I think they are showing what they fear the most - a boycott by their own retail customers.
A credibility trap is not a pretty thing. It smothers goodness and justice with a dark cloak of complicity. This will not be resolved quickly or easily.

[Book]

The only way a Jew can rob u is if u like being fucked in the ass.



http://www.myspace.com/infamouzzpoboyblazze

::) po boy

[Sparky]

She has a very interesting blog. You might be interested the video she posted where she lectures about the relationship between Israel and Christianity. Some of you aren't going to like it. Here's Part 1.


http://www.youtube.com/watch?v=quVmg1c99HY

[BrewTech]

She has a very interesting blog. You might be interested the video she posted where she lectures about the relationship between Israel and Christianity. Some of you aren't going to like it.

http://www.youtube.com/watch?v=quVmg1c99HY&feature=player_embedded

Well, that cleared things right up for me... I got as far as "Islam and Marxism"... that's all I needed to hear. The rant in the OP is bullshit, she's just a typical neocon left/right paradigm hack. Judging by the look in her eyes and the tone of her cackling, a nutjob as well.

[Hatha Sunahara]

So if the CFTC and the SEC are so thoroughly corrupt, and it's not safe for anyone to buy paper securities, when will TPTB lose the power to manipulate PM prices?

Any bets on when the paper market for PMs will crash?


Hatha

[gunDriller]

So if the CFTC and the SEC are so thoroughly corrupt, and it's not safe for anyone to buy paper securities, when will TPTB lose the power to manipulate PM prices?

Any bets on when the paper market for PMs will crash?

Hatha


i think in a sense they just did.

precious metal sellers like APMex i think use the paper markets to hedge positions. if i was them, i would discontinue that. that doesn't stop them from building up markets with the physical sellers.

inability to hedge in the paper markets will tend to increase spreads.

of course once all those investors that used to trust SRFO (self regulatory financial organizations) like CME to administer trades, say "screw this" ... then they show up at Tulving with a check for $100K to invest in PM's.


i think the general economic collapse (and the need to raise cash by selling what's valuable - gold and silver) will continue to cause major volatility. i wouldn't be surprised to see us back at $28 for silver, just because the economy is so broken and that's what happens in a crash.

but in the background, money is flowing out of paper metal and into physical - which is obviously mega-bullish for holders of physical.

[Horn]

Any bets on when the paper market for PMs will crash?

When China grows a set of balls.

[Hatha Sunahara]

So the commodities and futures markets just crashed? If the media doesn't tell us that's what happened, does that mean it didn't happen? Or do the only people who know about it are the ones it crashed on? Like Celente?

The mainstream media defines our reality more than our own experience does.


Hatha

[JohnQPublic]

So the commodities and futures markets just crashed? If the media doesn't tell us that's what happened, does that mean it didn't happen? Or do the only people who know about it are the ones it crashed on? Like Celente?

The mainstream media defines our reality more than our own experience does.


Hatha

If a tree falls in the forest, and the mainstream media does not report on it, did it happen?

The Copenhagen interpretation: The act of the media reporting on an issue results in the event becoming real and defined.

[Hermie]

Well, that cleared things right up for me... I got as far as "Islam and Marxism"... that's all I needed to hear. The rant in the OP is bullshit, she's just a typical neocon left/right paradigm hack. Judging by the look in her eyes and the tone of her cackling, a nutjob as well.

I don't know if she's a nutjob, but she is definitely mis-informed.
The lady has balls though.
She says out loud what she believes.
Too bad she buys the conventional BS.
Wonder if she has ever seen any 911 truth or read any Eustace Mullins etc.

[gunDriller]

sort of reminds me of Karl Denninger. he is refreshingly honest and well-informed about a lot of financial stuff.

but when he talks about politics or 9-11 or the War on Terror - i'd have to give him mixed reviews.

[JohnQPublic]

sort of reminds me of Karl Denninger. he is refreshingly honest and well-informed about a lot of financial stuff.

but when he talks about politics or 9-11 or the War on Terror - i'd have to give him mixed reviews.

Or precious metals...

[Tumbleweed]

https://www.youtube.com/watch?v=vRQ3X4N1vmc&feature=related

jews robbing us blind and she goes after the muslims...lol.


I met her a few years ago at a seminar on trading comodities and futures she was putting on with another fellow. They were teaching the goyims how to get screwed by the jews. I didn't ask her if she was a Jew but I figured she was.
When I told some of the attendees I'd bought physical silver at $6.80 and buried it they laughed their asses off. I couldn't stand to watch that whole video about the goyims and the jews. It just made me feel like puking.

[Horn]

Well, that cleared things right up for me... I got as far as "Islam and Marxism"... that's all I needed to hear. The rant in the OP is bullshit, she's just a typical neocon left/right paradigm hack. Judging by the look in her eyes and the tone of her cackling, a nutjob as well.

At least she makes sense to herself, alls you have to do is replace God with the devil and it'll make sense to you, (not that i recommend it)

[gunDriller]

Or precious metals...

it's possible that he will maintain his asset base during a panic.

but i think eventually he will be burned big-time, e.g. relying to TIPS to hedge against inflation. he will discover even super Mr-Clever Karl Denninger is not immune to counterparty risk.

i wouldn't be surprised if he is one of the guys buying at $60 silver and $2400 gold.

[Sparky]

I met her a few years ago at a seminar on trading comodities and futures she was putting on with another fellow. They were teaching the goyims how to get screwed by the jews. I didn't ask her if she was a Jew but I figured she was.
...


If you read her blog, she is passionately Roman Catholic.

[Neuro]

If you read her blog, she is passionately Roman Catholic.

Ahaa! That is suspicious! She probably spits out the pork in her napkin! ;)

[Twisted Titan]

https://www.youtube.com/watch?v=vRQ3X4N1vmc&feature=related

jews robbing us blind and she goes after the muslims...lol.


Why dosent she read the Talmud where it gives sanction to The zionist filth to rape young childern because if they are under three their virginity comes back to them over and over again.

[Twisted Titan]

Well, that cleared things right up for me... I got as far as "Islam and Marxism"... that's all I needed to hear. The rant in the OP is bullshit, she's just a typical neocon left/right paradigm hack. Judging by the look in her eyes and the tone of her cackling, a nutjob as well.

I was absolutely riveted because I think she could pass a lie detector test as she wholly consumed with the bull sheeeet she is spewing

[Tumbleweed]

If you read her blog, she is passionately Roman Catholic.


Crypto Jew would be my guess then. We need another Inquisition by the church to get rid of all these Jew/mason/satanists.

[DMac]

The only way a Jew can rob u is if u like being fucked in the ass.

So Book are u a Faggot?

Stay classy, po boy.

[DMac]

So the commodities and futures markets just crashed? If the media doesn't tell us that's what happened, does that mean it didn't happen? Or do the only people who know about it are the ones it crashed on? Like Celente?

The mainstream media defines our reality more than our own experience does.


Hatha

If the digits representing the market crash, and no one looks at the monitor, was any money actually lost?

[Tumbleweed]

If you read her blog, she is passionately Roman Catholic.

I took a look at some of her other videos and finished watching the one about Jews and Christians. I think she's misguided and sorely in need of more information concerning this issue so I sent her some. I hope she reads it.

[po boy]

Stay classy, po boy.


Yes another dark stain on my interweb adventure.

Perhaps it should have read don't invest in paper, and quit consenting to be governed by those one dislikes.

[Awoke]

If you read her blog, she is passionately Roman Catholic.

"Barnhardt"...

Just because she says she is passionately Christian does not mean she actually is (http://gold-silver.us/forum/showthread.php?28375-Crypto-jewry-in-the-Catholic-Church) passionately Christian.

[Tumbleweed]

Awoke I sent her links to the following books that she can read online. "The Plot Against the Church" by Pinay, "The Talmud Unmasked" by I.B. Pranaitis and "The Jews and Their Lies" by Martin Luther.

I also copied and pasted this article that you posted a link to in another thread here on G-sus. That ought to keep her busy and I Hope she responds.
_con (http://www.overlordsofchaos.com/html/jewish_conspiracy_9.html)http://www.overlordsofchaos.com/html/jewish (http://www.overlordsofchaos.com/html/jewish_conspiracy_9.html)spiracy_9.html (http://www.overlordsofchaos.com/html/jewish_conspiracy_9.html)

[Awoke]

It is important that she learns the distinction between true biblical seed-line jews and BLT khazars who pose as jews.

The problem with the Plot against the Church is that Pinay doesn't make the distinction.

Hopefully she will discern the two via research.

[Tumbleweed]

The link to the article at the end end of my last post does point out the difference. I was going to paste that article here but it's to long.

[Awoke]

Ahh yes, I remember. Thanks Tumbleweed.
That site was critical to my own awakening to the reality of the many deceptive layers of disguise that the synagogue of satan use to work in secrecy.

Good call.

[dys]

"Barnhardt"...

Just because she says she is passionately Christian does not mean she actually is (http://gold-silver.us/forum/showthread.php?28375-Crypto-jewry-in-the-Catholic-Church) passionately Christian.

And isn't this the crux of the issue that we as Christians face? As many times as I've said it, I'll say it again: fake Christians are the most dangerous group of people that I've ever encountered.

dys

edit to add: incidentally, I was watching a movie last night (The Book of Eli) and it occured to me that I can't recall watching one mainstream movie containing a religious element that mentions Jesus Christ. What does that tell you?

[osoab]

Fuck Jon Corzine

As Day In Court Looms, Corzine Tries To Settle MF Global Fraud For Just $5 Million (http://www.zerohedge.com/news/2016-10-06/day-court-looms-corzine-tries-settle-mf-global-fraud-just-5-million)