Tag Archives: Jon Corzine

Why Democrats, Republicans, Wall St. and the MSM are all gunning for Trump

Wayne Allyn Root hits one out of the ballpark, again.

by Wayne Allyn Root · July 7, 2015

Someone is getting very nervous. Obama. Valerie Jarrett. Eric Holder. Hillary Clinton. Jon Corzine…to name just a few. And I know why.
I wrote a book entitled, “The Murder of the Middle Class” about the unholy conspiracy between big government, big business and big media. They all benefit by the billions from this partnership and it’s in all of their interests to protect one another. It’s one for all, and all for one.
It’s a heck of a filthy relationship that makes everyone filthy rich. Everyone except the American people. We get ripped off. We’re the patsies.
But for once, the powerful socialist cabal and the corrupt crony capitalists are scared. I’ve never seen them this outraged…this vicious…this motivated…this coordinated. NEVER in all my years in politics, have I seen anything like the way the mad dogs of hell have been unleashed on Donald Trump.
When white extremist David Dukes ran for Governor of Louisiana even he wasn’t treated with this kind of outrage, vitriol and disrespect. When a known fraud, scam artist and tax cheat like Al Sharpton ran for President, I never saw anything remotely close to this. The over-the-top reaction to Trump by politicians of both parties, the media and the biggest corporations of America has been so swift and insanely angry that it suggests they are all threatened and frightened like never before.
Why? Because David Duke was never going to win. Al Sharpton was never going to win. Ron Paul was never going to win. Ross Perot was never going to win as a third party candidate. None of those candidates had the billion dollars it takes to win the presidency. But Donald Trump can self fund that amount tomorrow…and still have another billion left over to pour into the last two week stretch run before election day.
No matter how much they say to the contrary, the media, business and political elite understand that Donald Trump is no joke and could actually win and upset their nice cozy apple cart.
It’s no coincidence that everyone has gotten together to destroy Donald. No this is a coordinated conspiracy led by President Barack Obama himself. Obama himself is making the phone calls and giving the orders- the ultimate intimidator who plays by the rules of Chicago thug politics.
Why is this so important to Obama? Because most of the other politicians are part of the “old boys club.” They talk big, but in the end they won’t change a thing. Why? Because they are all beholden to big money donors. They are all owned by lobbyists, unions, lawyers, gigantic environmental organizations, multi-national corporations like Big Pharma or Big Oil. Or they are owned lock stock and barrel by foreigners- like George Soros owns Obama, or foreign governments own Hillary with their Clinton Foundation donations.
These run-of-the-mill establishment politicians are all puppets owned by big money. But one man- and only one man- isn’t beholden to anyone. One man doesn’t need foreigners, or foreign governments, or George Soros, or the United Autoworkers, or the Teachers Union, or the SEIU, or the Bar Association to fund his campaign.
Billionaire tycoon and maverick Donald Trump doesn’t need anyone’s help. That means he doesn’t care what the media says. He doesn’t care what the corporate elites think. That makes him very dangerous to the entrenched interests. That makes Trump a huge threat. Trump can ruin everything for the bribed politicians and their spoiled slavemasters.
Don’t you ever wonder why the GOP has never tried to impeach Obama? Don’t you wonder why Boehner and McConnell talk a big game, but never actually try to stop Obama? Don’t you wonder why Congress holds the purse strings, yet they’ve never tried to defund Obamacare or Obama’s clearly illegal Executive Action on amnesty for illegal aliens? Bizarre, right? It defies logic, right?
Well first, I’d guess many key Republicans are being bribed. Secondly, I believe many key Republicans are being blackmailed. Whether they are having affairs…or secretly gay…or stealing taxpayer money…the NSA knows everything.
Ask former House Speaker Dennis Hastert about that. The government even knew he was withdrawing large sums of his own money, from his own bank account. Trust me- the NSA, SEC, IRS and all the other 3-letter government agencies are watching every Republican political leader. They know everything.
Thirdly, many Republicans are petrified of being called “racists.” So they are scared to ever criticize Obama, or call out his crimes, let alone demand his impeachment.
Fourth, why rock the boat? After defeat or retirement, if you’re a “good boy” you’ve got a $5 million dollar per year lobbying job waiting.
The big money interests have the system gamed. Win or lose…they win.
But Donald Trump doesn’t play by any of these rules. Trump breaks up this nice cozy relationship between big government, big media and big business. All the rules are out the window if Donald wins the presidency. The other politicians will protect Obama and his aides. But not Donald.
Remember Trump is the guy who publicly questioned Obama’s birth certificate. He questioned Obama’s college records and how a mediocre student got into an Ivy League university.
Now he’s doing something no Republican has the chutzpah to do- question our relationship with Mexico …question why the border is wide open…questioning why no wall has been built across the border…questioning if allowing millions of illegal aliens into America is in our best interests…questioning why so many illegal aliens commit violent crimes yet are not deported…questioning why our trade deals with Mexico, Russia and China are so bad.
Donald Trump has the audacity to ask out loud why American workers always get the short end of the stick? Good question.
I’m certain Trump will question what happened to the almost billion dollars given in a rigged no-bid contract to college friends of Michele Obama at foreign companies to build the defective Obamacare web sites. By the way that tab is now up to $5 billion.
Trump will ask if Obamacare’s architects can be charged with fraud for selling it by lying. He will ask if Obama himself committed fraud when he said, “If you like your healthcare plan, you can keep it.”
Trump will investigate Obama’s widespread IRS conspiracy, not to mention Obama’s college records.
Trump will prosecute Hillary Clinton and Obama for fraud committed to cover-up Benghazi before the election.
How about the fraud committed by employees of the Labor Department when they made up dramatic job numbers in the last jobs report before the 2012 election.
Obama, the multi-national corporations and the media need to stop this. They recognize this could get out of control. If left unchecked telling the raw truth and asking questions everyone else is afraid to ask, Donald could wake a sleeping giant.
Trump’s election would be a nightmare. Obama has committed many crimes. No one else but Donald would dare to prosecute. Donald Trump will not hesitate. Once Donald gets in and gets a look at “the cooked books” and Obama’s records, the game is over. The gig is up. The goose is cooked.
Eric Holder could wind up in prison. Valerie Jarrett could wind up in prison. Obama bundler Jon Corzine could wind up in prison for losing $1.5 billion of customer money.
Hillary Clinton could wind up in jail for deleting 32,000 emails …or accepting bribes from foreign governments while Secretary of State …or for “misplacing” $6 billion as head of State Department …or for lying about Benghazi.
Hillary For Prison 2016
The entire upper level management of the IRS could wind up in prison. Obamacare will be defunded and dismantled. The Obama Crime Family will be prosecuted for crimes against the American people. And Obama himself could wind up ruined, his legacy in tatters.
Trump will investigate. Trump will prosecute. Trump will go after everyone involved…just for fun. That will all happen on Trump’s first day in the White House.
Who knows what Donald will do on day #2?
That’s why the dogs of hell have been unleashed on Donald Trump. That’s why we must all support Donald. This may be our only shot at saving America, uncovering the crimes committed against our nation and prosecuting all of those involved.
Obama in prison
See also:

H/t FOTM’s maziel
~Éowyn

Please follow and like us:
error0
 

Obama’s Treasury loots federal retirement accounts

The federal government blew the roof off the U.S. debt ceiling — again.

The RT reports that in May 2013, the U.S. Treasury exceeded the federal legal borrowing limit of $16.7 trillion. America’s  outstanding public debt is already $38.82 million above the statuary debt ceiling and now at $16,738,220,000,000.00, according to Treasury data.

Do you know how the Obama regime finances the debt and manages to stay “afloat”?

Answer: By looting federal employees’ retirement accounts.

Back in May 2011, the Obama regime first tapped into federal retirement funds.

Jack Lew

Jack Lew

Hesh Goldstein reports for Natural News that on May 17, 2013, America’s chief bankster, Treasury Secretary Jack Lew, announced that the Obama regime (in order to avoid default) would tap into and suspend investments into the Civil Service Retirement and Disability Fund, as well as halt the daily reinvestment of the government securities (G) fund, the most stable offering in the Thrift Savings Plan’s portfolio.

This is the same Jack Lew about whom I had asked FOTM readers in October 2011, whether you would hire this man who signs his signature in this childish easily-forged scrawl:

JACK-LEW

The G Fund is invested in interest-bearing Treasury securities (i.e. bonds) that make up the public debt. The Civil Service Retirement Fund finances benefit payments under the Civil Service Retirement System and the basic retirement annuity of the Federal Employees’ Retirement System, and those investments are made up of securities also considered part of the public debt.

Goldstein explains that:

“In other words, for you people who have cushy federal government jobs, Lew is telling you that the government controls your retirement. They own it and they own you. And you people who thought serving the New World Order was a such a good idea, are you reconsidering your loyalties now? Military and law enforcement personnel take note on how you will be treated for your subjugation of the American people, followed by the total obliteration of the Constitution.

The government says they are just borrowing the money. How much of the bailout money has been paid back by the banks? Is MERS still in existence?”

Goldstein concludes that “Iceland had the right idea” when they threw bankers like MF Global’s Jon Corzine and Jack Lew (Lew had worked in Wall Street hedge funds before he became Obama’s OMB director, then White House chief of staff, and then Treasury secretary) in prison for their crimes against their fellow citizens. “Iceland struggled for five years and is back stronger than ever. We should have told Wall Street to go to hell in 2008. We should have already arrested the CEO’s of the six megabanks which created MERS.”

MERS is the Mortgage Electronic Registration Systems, Inc., a privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States.

Alas, people in Iceland have a better awareness of how the world works, whereas Americans only know how American Idol works.

See also:

~Eowyn
Please follow and like us:
error0
 

Breaking News – Dem Senator in Sex Scandal

What happens in the Dominican Republic does  NOT stay in the Dominican Republic, especially if the cheapskate stiffs the hookers

Full story at the Daily Caller. 

(New Jersey Senator Bob Menendez  was appointed by Obama bundler, Jon Corzine, former Goldman Sachs bigshot, Governor of New Jersey and MF Global crook who looted millions  from the accounts of his investors)

Please follow and like us:
error0
 

American Democracy Endangered by a Government-Financial Complex

On January 17, 1961, in his farewell speech as president, Dwight D. Eisenhower sounded a warning about a “military-industrial complex” in America. He urged Americans that “we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex…. The potential for the disastrous rise of misplaced power exists and will persist … Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”
Today, not only is there a military-industrial complex, there is another even more clear and present danger — the government-financial complex.

Obama-Corzine: The face of the Govt-Financial Complex


Documents released through a FOIA (Freedom of Information Act) request reveal that the 2008 TARP (Troubled Asset Relief Program) — better known as the “too big to fail” Wall Street bailout — was actually 10 times the amount we were told, totalling $7.7 trillion.
Below are excerpts of Les Leopold’s article for AlterNet, “Bloomberg Unearths Wall Street’s Secret Government,” republished on MINA, Dec. 2, 2011:

We now have concrete evidence that Wall Street and Washington are running a secret government far removed from the democratic process. Through a freedom of information request by Bloomberg News, the public now has access to over 29,000 pages of Fed documents and 21,000 additional Fed transactions that were deliberately hidden, and for good reason. (See here and here .)

These documents show how top government officials willfully concealed from Congress and the public the true extent of the 2008-’09 bailouts that enriched the few and enhanced the interests of giant Wall Streets firms. Here’s what we now know:

  • The secret Wall Street bailouts totaled $7.77 trillion, 10 times more than the $700 billion Troubled Asset Relief Program (TARP) passed by Congress in 2008.
  • Knowledge of the secret bailout funds was not shared with Congress even while it was drafting and debating legislation to break up the big banks.
  • The secret funding, provided at below-market rates, gave Wall Street banks an additional $13 billion in profits. (That’s enough money to hire more than 325,000 entry level teachers.)
  • The secret loans financed bank mergers so that the largest banks could grow even larger. The money also allowed banks to step up their lobbying efforts.
  • While Henry Paulson (Bush’s Secretary of the Treasury) was informing Congress and the public that only minor reforms were needed to protect Fannie and Freddie from collapse, he met secretly with leading Wall Street hedge fund managers — among them his former colleagues at Goldman Sachs — to alert them that he was about to nationalize the giant mortgage companies – a move that would eradicate nearly all the stock value of the companies. This information was enormously valuable because it allowed these hedge funds to short Fannie and Freddie and thereby make a fortune.
  • While Timothy Geithner [Obama’s Secretary of the Treasury] was head of the NY Federal Reserve, he argued against legislative efforts by Senator Ted Kaufman, D-Delaware, to limit the size of banks because the issue was “too complex for Congress and that people who know the markets should handle these decisions,” Kaufman recalls. Meanwhile, Geithner was fully aware of the enormous secret loans while Senator Kaufman was kept in the dark. Barney Frank, who was authoring key bank reform legislation was also not informed of the secret loans. No one in Congress was told.

All of which led Leopold to conclude:

“Usually, I am not an alarmist. In fact, I often argue against facile conspiracy theories. I want to believe that our democracy still has promise. But, the Wall Street-induced crash and the government’s response to it has me very worried. The Bloomberg News revelations suggest that Wall Street’s secret government has enormous disdain for what remains of our democracy. The financial elites obviously believe that Congress cannot be trusted to do the right thing even when it is bought and paid for by the very banks it supposedly regulates. As for the rest of us? We’re just a financially illiterate mass to be manipulated through the mass media. Our minds too can be bought and sold through careful marketing.

This financial arrogance and corruption is enormously corrosive to our democratic values. Already, many Americans, and for good reason, no longer trust their government. Already, many Americans, and for good reason, no longer vote. Already, many Americans, and for good reason, believe that democracy as we know it is a sham. Wall Street couldn’t have written a better script to maintain its domination.”

This Government-Financial Complex continues to this day, as seen in the conflicts-of-interest corrupt relations of the federal oversight agency and the now-bankrupt MF Global.
Lastly, I have a message to the Occupy Wall Street movement:

This Government-Financial Complex is not capitalism because government is interfering with and warping the free market. This collusion between the government and big business is classic Fascism — the corporatist state. Your protests are misplaced. You should be protesting before the White House.

~Eowyn

Please follow and like us:
error0
 

Conflict-of-Interest/Corruption in Govt Oversight of MF Global

Isn’t this just cozy.

The CEO of MF Global, Jon Corzine, and the head of the federal agency that’s supposed to “regulate” MF Global, Gary Gensler, both had worked for Wall Street titan Goldman Sachs. More than that, Corzine had been the boss of Gensler at Goldman Sachs.

MF Global is the giant financial derivatives broker that went bankrupt a month ago, after making a disastrous $6.3 billion bet on European sovereign bonds with some of its clients’ money.

Obama with Jon Corzine


New York-based MF Global was led by Jon Corzine, a Democrat who was New Jersey governor (2006-2010), U.S. senator from New Jersey (2001-2006), and Chairman and CEO of Wall Street titan Goldman Sachs (1994-1999). Corzine has participated in meetings of the secretive Bilderberg Group, a network of the world’s leaders in the fields of politics, business, and banking, from 1995–1997, 1999, 2003 and 2004.
In 2010, Barack Obama campaigned for Corzine’s reelection to be New Jersey governor. Corzine lost to Republican Chris Christie and so, in March 2010, became the CEO of MF Global instead.
The Commodity Futures Trading Commission (CFTC) and other regulators are investigating whether the firm used money from clients’ accounts for its own purposes as its financial condition worsened. That would violate securities rules. The FBI is also investigating whether MF Global violated any criminal laws.

Gary Gensler


Gary Gensler is the chairman of the CFTC.
After graduating with an MBA from the Wharton School of the University of Pennsylvania, Gensler spent 18 years at Goldman Sachs, making partner when he was 30, becoming head of the company’s fixed income and currency trading operations in Tokyo by the mid-’90s, and eventually the company’s co-head of finance.
In 2008, Gensler first served as a senior adviser to the Hillary Clinton campaign and, after the Democratic Primary, the Obama campaign. Obama rewarded Gensler by nominating him to head the Commodity Futures Trading Commission.
In March 2009, Senator Bernie Sanders (I-VT) tried to block the nomination because Gensler “had worked with Sen. Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of AIG and has resulted in the largest taxpayer bailout in US history.” Sanders also accused Gensler of working to deregulate electronic energy trading, which led to the downfall of Enron, and supporting the Gramm-Leach-Bliley Act, which allowed American banks to become “too big to fail.”
In early November, Gensler stepped aside from the CFTC’s investigation of MF Global  because of his longstanding ties to Corzine.
The Associated Press reports on Nov. 29, 2011, that Rep. Randy Neugebauer (R-Texas), who heads the House Financial Services oversight subcommittee investigating MF Global’s collapse, asked Gensler to provide documents related to the agency’s oversight of the brokerage. Neugebauer also asked Gensler in a letter to explain his personal involvement in supervising MF Global.
Neugebauer noted that Corzine reportedly personally lobbied Gensler and his staff this year in opposition to a possible CFTC rule that would have affected MF Global. Neugebauer asked Gensler why he didn’t remove himself earlier from MF Global matters, so Corzine wouldn’t have been able to lobby him.
In his exclusive-to-subscribers post of Nov. 28, 2011, investigative journalist Wayne Madsen claims that his sources in Chicago say  that the collapse of MF Global is merely the tip of the iceberg in commodities trading fraud, especially in gold, and that a major cover-up of the extent of the fraud by the Obama administration, including by Attorney General Eric Holder, is currently underway.
Madsen also notes the timing of Massachusetts Democrat Rep. Barney Frank’s recent announcement that he is retiring after 16 terms in Congress. Frank, of course, is the former  chairman and a current ranking member of the House Financial Services Committee, the House’s oversight body over Wall Street and Chicago commodities trading.

~∞~

There is some good news for MF Global’s clients.
James Giddens, the court-appointed trustee overseeing the firm’s liquidation asked that an additional $2.1 billion be released from frozen customer accounts. It would be Giddens’s third transfer of funds to MF Global customers since the brokerage filed for bankruptcy protection on Oct. 31. That would bring the total distributed so far to about $4.1 billion.
With the proposed $2.1 billion distribution, all MF Global commodities customers would have retrieved two-thirds or more of the money they had in their accounts. Giddens has a goal of eventually returning 100% of all funds to customers — if the missing client funds are recovered.
~Eowyn

Please follow and like us:
error0
 

Missing Dollars of MF Global's Clients Are Gone

Here’s a follow-up to my post “Why the Collapse of MF Global Should Frighten You.”

MF Global's CEO Jon Corzine, with Obama who had campaigned for Corzine's failed bid to be reelected NJ governor

On October 31, 2011, MF Global, a huge global financial derivatives broker, declared bankruptcy. In so doing, it became the largest Wall Street firm to collapse since the Lehman Brothers incident in September 2008, and the 8th largest bankruptcy in U.S. history.
John Carney reports for CNBC, Nov. 18, 2011, that hundreds of millions of dollars of customer funds missing from MF Global are probably “just gone.”

Carney received word from a lawyer briefed on the progress of the investigation being undertaken by various government regulators that investigators believe MF Global used customer money to make trades, such as buying sovereign debt securities.
Earlier there had been hope the money would turn out to be held as collateral in an account with one of MF Global’s creditors, such as JP Morgan Chase or Deutsche Bank. But that does not now seem to be the case.
Instead, the lawyer says, “What the investigation is focusing on now is who, if anyone, knew it was client money.”
MF Global used customer funds in a variety of ways, he says. In the futures business, MF Global was allowed to use “idle” cash in customer accounts to make investments on its own behalf. It would buy bonds and keep the coupon on them. The higher the coupon, the more profitable this was for the company.
The firm would also “borrow” from its clients accounts, posting collateral such as U.S. Treasurys. But as the New York Times has reported, the firm stopped backing the loans from customer accounts sometime in October.
Put bluntly, MF Global simply stole the cash.
Carney concludes that if that’s what happened, “it is probably impossible to recover the missing funds.”
~Eowyn

Please follow and like us:
error0
 

Why the Collapse of MF Global Should Frighten You

I try to not do apocalyptic posts because I do not want to unduly alarm our readers. But I can’t dodge this one because I believe the subject is genuinely disturbing.
I apologize for springing this on you all at Thanksgiving — a time when we should all be enjoying being with family and friends, instead of worrying about our finances and the condition of our country’s economy.

MF Global's CEO Jon Corzine with his buddy


On October 31, 2011, MF Global, a huge global financial derivatives broker, declared bankruptcy. In so doing, it became the largest Wall Street firm to collapse since the Lehman Brothers incident in September 2008, and the 8th largest bankruptcy in U.S. history.
As a financial derivatives broker, MF Global provided exchange-traded derivatives, such as futures and options as well as over-the-counter products such as contracts for difference (CFDs), foreign exchange and spread betting. MF Global was also a primary dealer in United States Treasury securities.
The Wall Street Journal reported that MF Global filed for Chapter 11 bankruptcy protection after its misguided investment of more than $6 billion in sovereign bonds issued by some of Europe’s most indebted countries. That is bad enough. But it gets worse.
MF Global broke its (and the U.S. government’s) rules on keeping customer money separate from its own trading accounts, and used some of its clients’ funds to invest in sovereign bonds issued by indebted European countries. When that investment went bust, leading to MF Global’s bankruptcy, lost too are the clients’ assets the brokerage wrongfully had used for its investment.
Here’s a timeline of what happened:

  • On August 31, 2011, MF Global had $7.3 billion in customer assets, according to Commodity Futures Trading Commission (CFTC) data.
  • On October 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds.
  • In response, Moody’s and Fitch cut the company’s credit rankings to junk. 
  • Through the weekend of October 29/30, the firm’s board met in New York to consider options including a sale to avert failure, according to a person with direct knowledge of the situation. MF Global’s CEO Jon Corzine, — a Democrat, former U.S. Senator, former New Jersey governor, and former Goldman Sachs chief executive — reportedly tried, unsuccessfully, to find a buyer.
  • MF Global was stopped from doing new business with the New York Fed until it showed it was able to fulfill its responsibilities as a primary dealer, according to a statement on the regulator’s website. Trading in MF Global’s stock was halted.
  • On October 30, 2011, MF Global filed for bankruptcy.
  • That same day, Oct. 30, one of MF Global’s units reported a “material shortfall” (translated: “missing cash”) in customer funds — a shortfall estimated by James W. Giddens, the trustee overseeing the wind-down of the brokerage, to be $1.2 billion.
  • That same day, the parent company froze customer accounts with $5.45 billion. It is feared that MF Global Holdings Ltd. may have moved hundreds of millions of dollars from its futures client accounts to other accounts before its Oct. 31 bankruptcy.
  • One of MF Global’s clients who lost money is Gerald Celente, the founder and publisher of The Trends Journal. Celente revealed that he has lost his gold futures funds (valuing more than six figures) that he had with Lind-Waldock, a commodities futures brokerage owned by MF Global.
  • In papers filed in U.S. Bankruptcy Court in Manhattan, MF Global listed debt of $39.7 billion and assets of $41 billion. U.S. regulators have subpoenaed MF Global’s auditor, PricewaterhouseCoopers LLP, for information on the segregation of assets belonging to clients trading on U.S. commodity exchanges. The company is being investigated by regulators for money missing from client accounts. The U.S. Securities and Exchange Commission is also reviewing trades in MF Global Holdings Ltd. convertible bonds to determine whether some investors sold the debt based on confidential information before the firm’s demise.
On the subject of whether some investors had insider info before MF Global’s demise, Lew Rockwell writes on Nov. 16, 2011, quoting Gary North:

“Both the Commodity Futures Trading Commission and the Chicago Mercantile Exchange were charged with overseeing MF Global, their clearing member. If we are to believe them, they had no idea of any difficulties within the firm before customer accounts went missing just a few days before the collapse. But someone clearly knew of the cratering positions and imminent collapse of MF Global, as billions of dollars of accounts were “coincidentally” withdrawn, writes Huffington Post’s Daniel Dicker, noting how funds in accounts owned by the billionaire Koch brothers were withdrawn just in time, clearly suggesting that big players got a “heads up” that MF Global was going down.”

Gerald Celente


All of which led Gerald Celente, speaking to Eric King at King World News, to issue this warning to the public:

What’s the take away from this? It’s to make sure you have every penny in your pocket. Because just like MF (Global) screwed everybody else, you’re also gonna get the shaft, I don’t care who it is. What’s gonna happen when you get a message from your brokerage, from Fidelity or somebody… You have ETFs [Exchange-traded fund]? Oh, there’s a little error over here, we don’t have your money. We don’t have your positions…. So the takeaway is to make sure you have every penny in your possession.”

Ann Barnhardt


The MF Global bankruptcy also prompted Ann Barnhardt, the president of Barnhardt Capital Management (a cattle and grain hedge brokerage), to take the unprecedented and heroic step of shutting down her firm and liquidating all customer brokerage and options accounts, so as to prevent losses in what she says is a system that 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.”
In a letter to her clients, Barnhardt calls the MF Global bankruptcy nothing other than theft of customer cash by Jon Corzine. She warns:

“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.

Karl Denninger


Karl Denninger was the CEO of MCSNet in Chicago, one of the area’s first Internet providers. He is a founding contributer to conservative blog, The Market Ticker, and was one of the early members of the Tea Party movement. He now supports the Occupy Wall Street movement, and is the author of Leverage: How Cheap Money Will Destroy the World, November 2011. In his Market Ticker of Nov. 22, 2011 (h/t FOTM’s Joseph!), Denninger wrote:

“We’re done folks.

CNBC is reporting that there are now clients running out of the markets entirely because they do not believe their customer funds are safe.

That’s the end of it. The belief that there are more MF Globals has now taken hold. The thieves have pushed it too far and now we’ve got the start of a global liquidity run, and with good reason.

The authorities both in the regulatory side and on the prosecutorial side have refused to put a stop to the thievery and now the risk factors have turned into realized risk.

The market is done folks. You can be right but if you make your bet in the markets, are right, and then get screwed anyway when someone steals the money and nobody goes to jail there comes a time when people begin to understand that it can happen to them and will unless they depart the market.

We’re there folks.

Oh sure, there will be rallies and there will be selloffs. But there is no longer a market, there is no longer a thing to trade, and there is no longer a reason to believe that superior analysis will lead to profit or even safety.

This isn’t just about speculators – it is also about farmers, shippers, airlines, manufacturing concerns, everyone in business who has a need to hedge.

More than four years ago I said that the government had to step in and demand that both off-balance sheet games be ended permanently and in all forms and that all derivatives had to be put on an exchange, without exception, and that every dollar of underwater position had to be backed by an actual dollar of capital in real money, held and known to be safe.

The regulators refused and now it appears that what was put up on a regulated exchange was effectively stolen.

Well folks, then none of your investment accounts — not your IRA, 401k, not even your bank account — is safe.

Diversification is a strategy but the risk remains. It is up to you to decide how much you’re willing to risk losing to a crook. If the answer is “none” or you cannot reduce the at-risk portion of your assets to what you’re willing to lose to fraud then you can no longer participate in the market at all, in any form, nor even do business with a bank.

That sucks, but it is what it is and if this meme spreads — and it will until it’s stopped — we run the risk of a “sudden stop” economic event.

I hope you’re ready for it — I am to the best of my ability, and you ought to be.”

+++

What this all means is the following:

  • The contract between financial corporations like MF Global and the people is broken.
  • The “little people” entrust their hard-earned cash to the corporation to manage, for a handsome fee. But, instead of stewarding their clients’ money, the corporation takes that money to invest in dubious vehicles, such as government bonds issued by heavily indebted countries — without their clients’ knowledge, much less permission. Put bluntly, this is theft.
  • Our government is supposed to regulate and supervise the financial corporations’ activities. But the regulators, as in the case of Bernie Madoff, didn’t and do not do what taxpayers are paying them to do.
  • The corporation’s investments go bust. It declares bankruptcy. Its clients’ monies have disappeared or are “frozen” (which means the same thing: You can’t withdraw your money from the institution).
  • Bankruptcy means the corporation’s total debts are more than its total assets, which means there is no money to pay the clients. And since the various financial instruments offered by brokerages such as MF Global are not government-insured, this means the clients cannot recover their money, unless Congress decides to step in with a bail-out, which only means even more debt for an already broke United States of America.

This is not the first time a large financial institution has robbed and lost the money of its clients. Think the S&L crisis of the 1980s, the Madoff investment scandal in 2008. and the Lehman Brothers bankruptcy of 2008.
Nor is this the first time government regulators failed to do their job.
When institutions — financial and government — violate their compact with the people, basic trust erodes. But societies, especially highly complex societies like ours, cannot operate without a certain level of basic trust. In its place, we increasingly see short-sighted selfishness and rapacious greed. It’s every man for himself….
I’m not a financial adviser and I’m not offering any financial advice here. But if you have any money invested with brokerages, get professional independent financial advice. Better yet, learn about the various investment vehicles by reading and listening to financial advisers on talk radio. It’s not really that complicated. Then, THINK FOR YOURSELF.

Updates:

On Nov. 23, 2011, a judge ruled that MF Global’s clients won’t be allowed to form a committee to represent their interests in bankruptcy court.
Gary Gensler, the head of CFTC — the federal government agency that’s supposed to oversee MF Global — just so happens to have worked under Jon Corzine when both were at Goldman Sachs.
Jon Corzine, who has been publicly silent since his brokerage’s spectacular collapse, has been asked to appear before the Oversight and Investigations Subcommittee of the House financial Services Committee on 15 December. Read about his hearing, here.
~Eowyn

Please follow and like us:
error0