Commodity Futures Trading Commission
Derivatives, unlike stocks where the equation has always been murky, are for the most part zero-sum products: one's gain is someone else's loss (net of commissions) unless of course the entire system collapses in a daisylinked chain reaction (think AIG). And MF Global's bankruptcy, by dint of being a derivatives broker, and the resulting massive losses to both shareholders and clients, means that some entity, on the other side of all these failed bets, made off like a bandit. Which bring us to a rather disturbing theory proposed by Walter Burien of CAFR1.com who has floated the rather the chilling idea, and what some may call an outright conspiracy theory, that by scuttling MF, Corzine effectively helped some shell company (or companies) which were controlled by a "cabal" of his closest confidants (we will let readers come up with their own theories who the former CEO of Goldman Sachs may have been close with) to make the offsetting profit that resulted from the accelerated and massive losses borne by MF's stakeholders in the vicious liquidation. As Burien says: "A government and media cover up would just focus on MFG's loss. A true and open investigation would be focused on "who" took the other side of the coin; the profit." And now that we know that Corzine allegedly lied to the Senate, just how much deeper does his transgression go, and did his really hand over the company on a silver platter to some anonymous "Hold Co" by taking on massive risks he knew were going to blow up in his face, albeit knowing the "other" side of the trade would compensate him for it? After all, Corzine's legacy may have been forever tarnished, but if there was one thing the man knew after all those mostly successful years at Goldman, it was risk. So did he really blow up MF on a idiotic risk miscalculation bet within two years of joining, purely by mistake, or is there something more?
CME Executive Chairman Terry Duffy Throws Jon Corzine Under The Bus, Implies The "Honorable" Governor Lied Under OathSubmitted by Tyler Durden on 12/13/2011 16:36 -0500
Following another boring day of hemming and hewing, during which Corzine repeatedly exhibited unbearable amnesia and said he had no knowledge of virtually anything until Sunday night, here comes the CME Executive Chairman Terry Duffy, under oath, with what Roberts said "is a bomb" statement which basically says that Corzine lied under oath. Specifically, according to Duffy's remarks during the Q&A, an MF Global employee, a woman, advised the CME that Corzine had been aware of a $175 million loan made to Euro affiliates just days prior to the bankruptcy: a loan which effectively was that of commingled customer accounts, and more importantly a refutation of previous statement under oath by the man who was "financial advisor" to none other than the vice president of the United States who said he did not know about this until late on Sunday. This was not in his prepared testimony. What was is that "Transfers of customer funds for the benefit of the firm constitute serious violations of our rules and of the Commodity Exchange Act." And now we know that according to the Chairman of the CME, the MF Global head lied about the timing of the disclosure. And where it gets worse, is that MF Global was well aware of this, it told the CME to it knew about the segregated account money, and most importantly, it told the CME to stop looking for the segregated account money! Because being the firm of Obama's handler apparently makes you equivalent with the law.
Continue watching the hearing here as it is i) getting interesting and ii) the first perp walk of an ex-Goldman criminal may finally be approaching - link
Watch Jon Corzine's Follow Up Testimony On The MF Global Bankruptcy, Accompanied By MF's CFO And COOSubmitted by Tyler Durden on 12/13/2011 10:15 -0500
Even though he has had several days in which to "review his notes", the follow up testimony by former MF Global CEO Jon Corzine to the Senate Agriculture Committee starting momentarily will be replete with "I don't recalls" and "to the best of my knowledge" and will be largely devoid of all content, suffice to say it was not his intention to break the main law of broker dealers- no commingling. It will be even worse because today he will be joined by MF global's CFO and COO as well, all of whom will be completely clueless once again, and needless to say, shocked, SHOCKED, that they stole billions from their clients. Watch the full webcast below.
Will the Senate step up and ask the tough questions, like why is a futures firm being liquidated under securities law and by someone with no experience with futures, whose firm shares MF Global's auditor?
Eric Sprott Fights PM Manipulation Fire With Fire: Calls Silver Producers To Retain Silver Produced As "Cash"Submitted by Tyler Durden on 12/10/2011 02:14 -0500
In what is likely the most logical follow up to our post of the day, namely the news of the lawsuit between HSBC and MF Global over double-counted gold, or physical - not paper - that was "commingled" via rehypothecating or otherwise, we present readers with the monthly note by Eric Sprott titled "Silver Producers: A Call to Action" in which the Canadian commodities asset manager has had enough of what he perceives as subtle and/or not so subtle manipulation of the precious metal market, and in not so many words calls the silver miners of the world "to spring to action" and effectively establish supply controls to silver extraction to counteract paper market manipulation in the paper realm by treating their product as a currency and retaining it as "cash". To wit: "instead of selling all their silver for cash and depositing that cash in a levered bank, silver miners should seriously consider storing a portion of their reserves in physical silver OUTSIDE OF THE BANKING SYSTEM. Why take on all the risks of the bank when you can hold hard cash through the very metal that you mine? Given the current environment, we see much greater risk holding cash in a bank than we do in holding precious metals. And it serves to remember that thanks to 0% interest rates, banks don’t pay their customers to take on those risks today." And the math: "If silver miners were therefore to reinvest 25% of their 2011 earnings back into physical silver, they could potentially account for 21% of the approximate 300 million ounces (~$9 billion) available for investment in 2011. If they were to reinvest all their earnings back into silver, it would shrink available 2011 investment supply by 82%. This is a purely hypothetical exercise of course, but can you imagine the impact this practice would have on silver prices?" And there you go: Sprott 'reputable' entity to propose to fight manipulation with what is effectively collusion, which in the grand scheme of things is perfectly normal - after all, all is fair in love and war over a dying monetary model. Who could have thought that the jump from "proletariats" to "silver miners" would be so short.
Session has resumed
And now the one we've all been waiting for...
Gold and Silver Mining Stocks Offer the Best Value of any Sector in the Stock Market By Far and By a Wide MarginSubmitted by smartknowledgeu on 12/07/2011 07:07 -0500
Today, gold and silver mining stocks offer the best value by far of any sector in any stock market anywhere in the world. Due to the recent massive volatility that bankers have introduced into the PM stock sector, and the fact that commercial investment advisers worldwide have erroneously re-educated millions of people with the concept that volatility equals risk, the majority of people worldwide will miss a massive opportunity in gold and silver mining stocks over the next several years due to their misguided belief that gold and silver mining stocks cannot escape the throes of banker manipulation.
Because they had had neither the facts nor the law on their side, lawyers for Wall Street trade groups made up stuff in their complaint to overturn new regulations on speculative position limits.
It's official - the man who has been more invisible in the past month than Slimer the friendly ghost, aka former Goldman and MF Global (and let's not forget New Jersey) CEO Jon Corzine, is now officially on the Thursday, December 8 docket, of witnesses to tesitfy at the House Agirculture Committee hearing examining the MF Global bankruptcy. In what could be the most popular televized hearing out of Congress since Carl "Shitty Deal" Levin went to town on Lloyd and Vini, the entire world will be watching with baited breath first whether Corzine will even appear, at which point things get tricky of the Obama administration, best known recently for using Corzine as a distinguished financial advisor, and secondly, his explanation of just how it is that buying Italian bonds in zany off-balance sheet schemes while commingling billions of client funds to mask capital deficiency is legal.
BOMBSHELL: Damning SEC OIG Audit of SIPC Raises Conflicts of Interest for MF Global Liquidation Trustee James. W. GiddensSubmitted by EB on 12/06/2011 08:27 -0500
Why did the CFTC abdicate its congressional mandate, pushing a futures broker into the jaws of SIPC where a trustee with no futures experience could rack up exorbitant fees?
In the aftermath of the MF Global fiasco, popular anger has understandable been focused on the complete lack of any response (let alone prevention) by regulators, in this case by Goldman's Gary Gensler, currently head of the CFTC, who quite comically had to recuse himself from an MF Global investigation due to his previous ties to Jon Corzine. So today, in a unanimous vote, "The U.S. futures regulator approved on Monday a rule that puts tighter limits on how brokerage firms can use customer funds, a measure that the now-bankrupt MF Global had encouraged the agency to delay." In other words, while before commingling client accounts was assumed to be a clear violation of every logical fiduciary imperative, now it is set in stone. For real. The CFTC means it. Said otherwise, clients can now rush back into the rigged casino and put their money because as of today illegal activity on behalf of futures dealers will really be illegal. Or else. And one wonders why there has been relentless outflows from anything remotely resembling retail capital in the past two years.
Gold and the dollar are Bank of America Merrill Lynch’s top currency trades for 2012. The second-biggest U.S. bank by assets after JPMorgan Chase & Co. said that investors should buy gold versus the euro as the ECB engages in quantitative easing to contain debt turmoil. David Woo, global head of rates and currencies in New York at the Bank of America Corp. unit, told clients in research note that “the ECB will be buying more government debt and doing QE, so buy gold against the euro.” “The second major theme is U.S. fiscal tightening is about to come and the U.S. economy will slow, and this will be very good for the U.S. dollar.” “The general theme for the year ahead is pretty negative for the risk environment,” Woo said.
Psychopaths flew financial weapons of mass destruction (derivatives) into the twin towers of our economy, the housing market and the stock market. Ten trillion dollars of wealth imploded in a cloud of dust. Ninety-nine percent of the economic experts – financial planners, economists, economic professors, brokers, and investors – missed the largest bubble in history as well as the systemic risk that the bubble posed. The National Board of Economic Research (NBER) (who is responsible for declaring a recession) was 9 months late calling the worst recession since the Great Depression.
Washington D.C. is filled with souless hacks. Such men and women reduce themselves to be nothing more than instruments of others.