Revolution: Corzine in Prison? And, Denninger on the Fed.

EB's picture

Nearly two years later, why now? [Jump in at 2:12 to see our interview with James Koutoulas.]

That's the question we pose to the CFTC and DOJ (and Mr. James Koutoulas, above) regarding the recent suit against Jon Corzine.  According to John Roe, another founder of the Commodity Customer Coalition, the Department of Justice needed to issue an "OK to proceed" prior to any such civil suit.  Any criminal charges would need to be brought by the Eric Holder-led[/damaged] agency.  (And let's not forget that the former head of the DOJ's FBI, one Louis Freeh, was [until recently] the trustee in the MF Global bankruptcy case -- watch out BP :->).

Just a thought experiment: the CFTC is demanding a jury trial.  Would a jury of Mr. Corzine's "peers" inlude Jamie Dimon and Lloyd Blankfein? (Maybe doing God's work actually gets you out of jury duty.)

But a suit against Corzine could have been brought as soon as weeks or months after MF Global's October 31, 2011 bankruptcy.  They were not.  The head of the CFTC (and former employee of Jon Corzine in the late 1990's), Gary Gensler, recused himself after four days of excrutiating inaction, in which traders could not so much as close out market positions.  And, a recent Office of Inspector General report concluded Gensler's retreat was not even unnecessary.  

According to the Chairman himself, Gensler may leave his post at the CFTC this month.  Is he preparing for a revolving door move to a shadow regulator, such as Promontory Financial Group (which, by the way, signed off on MF Global's "risk controls" prior to the firm's blow-up)?

Another question: why Jon Corzine and Edith O'Brien?  

These are the two named in the CFTC suit.  Maybe the recent too-big-to-jail outrage will result in the biggest little fish disgourging his Goldman Sachs IPO windfall.  

Edith O'Brien was responsible for managing MF Global's customer cash (which, in part, was wired to JP Morgan), which according to numerous trustee reports, she managed on Excel spreadsheets and in her noodle (we know how that worked out for Mr. Iksil.)

Why not Laurie Ferber?

Ferber (another ex-Goldman Sachs employee, who, by the way, manipulated energy markets ahead of the 2006 mid-term elections), was MF Global's general counsel and the go-to regulatory manipulator for MF Global.  

When MF Global wired $175 million to JP Morgan using customer funds just prior to the firm's blow-up, JP Morgan demanded a comfort letter that the money did not belong to customers.  Ferber stalled, demanding Edith sign off on responsibility, which she did not.  

Then, on the day of the bankruptcy, Ferber sent a letter to regulators, including the SEC and CFTC that customer money was missing.  Curiously, the very next day in court, Kenneth Ziman, the bankruptcy attorney for MF Global said there was no such shortage. CFTC attorney White decided not to contradict him. 

The entire bankruptcy and liquidation was riddled with lies, manipulation and outright deception.  So, with customers slated to (finally) receive 100 cents on the dollar (without interest), the only relevant question left is: will we see a Corzine criminal conviction? 


And speaking of rotating chairmen, we talk to Karl Denninger about Fed policy, interest rates, and Bernanke's replacement...right here:

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dumpster's picture


you can'tave sex with gold .. or eat it ..

at 600 gold ... he has the brain of a genius and the imagination of a zombie

one of many who made millions in the dot come .. and sold in time to leave others with bleeding accounts just business you little trolls lol i am the king of logic and in 40years of life realize now twinkies are not good food.. but lots of bread and piled high with processed meats good

just kidding dennenger is some one to take home to mother ..


Joebloinvestor's picture

You can forget any Corzine conviction.

JP made all the victims "whole" so the argument is gonna be made that no one was "injured".

I would really like to see the JD/NSA reveal all phone conversations between him, Edith and that little fuckwad Gensler.

Motorboat's picture

How could anybody take Denniger seriously when he can't even admit Corzine is yet another high level criminal Jew (what are the odds)?  Try pointing out a simple fact like this on his site, and he'll act as if you're the problem.


moneybots's picture

I haven't seen Denninger say anythiing nice about Corzine.  Leave religion out of it.

crtune's picture

Right.  Anti-semites don't seem to track various participants of other religions or sects, and never do any sort of statiscially valid analysis.  Perhaps they are afraid of finding out that they are simply anti-semite creeps.  Dunno.

To me Corzine is simply a criminal.  I'm not interested in what he does when he's not stealing.

el Gallinazo's picture

"So, with customers slated to (finally) receive 100 cents on the dollar (without interest), the only relevant question left is: will we see a Corzine criminal conviction? "


Huh?  Double huh?  Corzine in prison?  April 1 was a couple of months ago.  So they finally brought a civil suit.  That and a five spot will get you a coffee.  How does this translate to 100 cents on the dollar?  I'll give you even odds it comes to next to nothing.  Wonder if someone like Gerald Celente (who lost a bundle in his segregated accounts trying to pick up a little honest physical - he always took delivery on his future gold contracts)  would agree with your optimistic prognostication?  Even if they win, you think Jonny is going to fork over $1.5 billion in loose change just cause he has a judgment against him?  California dreaming.  Is his buddy, Obomba, going to send a naval task force to the Grand Caymans to relieve Jonny of his ill gotten gains, or the scraps that Jaime let him have?

q99x2's picture

Oh God. I watched that on the 4th of July. I feel sick.

blindman's picture

on the question of public financing election the question
is who owns the channels of the communications and the
answer is the people, all of them, therefore charging them
for the use is redundant. charging the people "money" for their own
property sounds so "capitalistic" .

Totentänzerlied's picture

Off Topic, but did Denninger get some kind of serious systemic Iillmess in the last 3 years? Holy hell he looks nothing like he used to.

Everyman's picture

Karl is a pretty smart cookie.  He has been running, getting rid of the processed sugar from his diet, and cutting WAY back on bad carbs. 

Getting healthy IS an issue.  Just look at all the expense in being "sick" and having to take "pills" to be better when all it takes is losing some weight, and getting off the couch.

Renfield's picture

I read his blog a lot. He's been on some kind of running/health/diet program of his own. Writes about it often, boasts about how healthy he is and all the weight he's lost. Says it's about staying healthy so that he don't have to rely on Barkycare or a bankrupt medical system as he gets older.

I haven't really paid any attention to those so I have no idea if it's a healthy (i.e., supported by doctors/nutritionists) program or not. (I'm only there for the direct financial stuff so there's a lot he says that I have no opinion on.)

I'm glad he's happy with it, and that's all I can say about it.

Socratic Dog's picture

"I have no idea if it's a healthy (i.e., supported by doctors/nutritionists) program or not"

Umm, that's sarcasm, right.  If it's not, you need to wake up my friend.  Taking dietary advice from doctors and nutritionists will land you in an early grave.

Try reading some of Gary Taubes' stuff.

Tijuana Donkey Show's picture

Whoever down voted you is a donkey in my show. Taubes is right, avoid pills and sick care whenever possible. Anyone take lipitor? If you read Taubes, this makes perfect sense.


XitSam's picture

This will be a show trial. Usually show trials are held before the accused is found guilty. This one will be to find Corzine not guilty. Why else would the CFTC want a jury trial? The jury will consist of enough TV watching Americans to be baffled by financial bullshit leading to enough reasonable doubt and a pleasant verdict for Corzine. Then Corzine will go on CNBC and cry about the awful people oppressing him.

Bay of Pigs's picture

I didn't even know Bob English had his own show. Hard to keep up everything these days.

Wasn't he a Tyler here at ZH at some point as well?

Peter Pan's picture

If you can answer why it took so long to take action against Corzine then you can also answer the following:

Why did the US continue to fight a war in Iraq for so long after the trigger of weapons of mass destruction were found to not exist?

Why Afghanistan was deemed to be the culprit for 911 when most of the hijackers were Saudi nationals?

Why fines against banks are always less than the profit they made from their questionable/ illegal behaviour?

Why the government can borrow on a long term basis for half the cost that a homeowner can borrow despite not providing any collateral for the borrowings?

Why it's not OK for OWS to do what it did, but it's OK for Turks in Taksim square and Egyptians to be protesting?

The list can go on forever, but the answer is always the's not about the's about maintaining power and control and profit at the expense of innocent and weaker segments of society.

Why governments can take social security contributions and give IOU's in return, while other employers do not have the right to do this?

kchrisc's picture

"But charges against Corzine could have been brought..."

What charges?! A suit is not "charges."

Charges involve cuffs, bail and bunking with Tyrone.

Now I must go and do maintenance on my guillotine.

ATG's picture

The Fed was signed into law with a 99-year Charter in 1914.

About time to elect candidates who will close it down:

NotApplicable's picture

Not that written laws have any value, but the charter has been made permanent since then.

optimator's picture

There is no way the FED members and their families would give it up.  Would you if you were in that position?  Poor, Honest, Dr. Ron Paul never had a chance at the Presidency, but even the little chance he did have scared the S--t out of thema all.

StarTedStackin''s picture

Coreslime= the Obowel Movement's top campaign donation bundler.......



Can't have charges before the Presidential election can we, but now the Obowel Movement will look like they are doing something about corruption........just in time for the midterms.

CheapBastard's picture

Maybe yank Ferber's law's the least they can do. She even gives lawyers like Jake "The Hammer" Weinstein (plaintiff lawyer and sleeze bag ambulance chaser) a bad name.

Renfield's picture

It's about time these questions were asked. Thanks for beginning the discussion.

ZerOhead's picture

"Why two years late?"

Probably something to do with a statute of limitations escape hatch somewhere perhaps even for someone else...

duo's picture

If Corzine had worked for Monsanto, he would have had a cabinet post by now.

ToNYC's picture

You must be thinking of de mon rummy, "By His Own Rules" in hard cover, pictures  with deputy dick chainy in tow by G. Ford in mid 70s large and in charge only to reappear in act 2 with bush 43. Who needs a cabinet when you make the rules for the master?

icanhasbailout's picture

Corzine was very nearly Geithner's replacement as Secretary of the Treasury.


Pinto Currency's picture


Denninger has gone from kind of interesting to flake:



sherryw's picture

Care to explain yourself? I read the link. Karl seems like one smart guy to me. Maybe you just don't like the conclusion he came to.

DarthVaderMentor's picture

IMH Karl is a book smart, not street smart public and political personna. An established public figure who dabbles in a variety of topics, mainly investing, economic, technology and politics. His core competency is a quick and correct grasp of the fundamentals of any one topic, but he doesn't have the ability to integrate people and networking connections to his resulting predictions and trends and has a tough time deviating from an established opinion of his once he's developed one on a topic. He also seems to have a tough time hearing and accepting other positions than his, so his blog is famous for all the banned users he's thrown out for seemingly minute deviations to his line of thinking and personal dogma. The predictions he gives out have a technically solid background, but the timing always is off, because he can't read the nuances of people in power and appreciate that his conclusions may not be the only options available as well as accept that markets aren't as logical as he thinks they should be. His arguments are all perfectly logical and make sense, but they never hit the mark accurately because he forgets to take into consideration the variability of the individual, the markets, corruption and the ability of these to find other ways around the laws of economics and politics. For example, if you followed him strictly you would have not invested except for some trades in the equities market and would've missed the great run-up until now. He has also been a big long on RIMM, which logically should be a good performing stock but it's been a disaster until now. Personally, I think RIMM might be bought out at a discount from the market very soon.  In any case, as like a clock, he will be right at least once every 5-10 years or so. Don't ask him about the temporary viability of other possibilities for electrical nuclear power generation except for the Thorium cycle. He's right technically, but so judgemental and dogmatically rigid in his thinking that he misses out on what actually happens. 

The blog is clearly Karl's personal forum to run as he sees fit and he's clear in that he won't tolerate opposing ideas and doesn't have the patience to educate those who can't seem to understand his position. He also routinely goes off the reservation, so to speak, on topics not related to or about the capital markets, but that's his right and you must agree to it in the TOS (where specifically you give up all IP use rights to him) before you can post on his blog.

Successful investing is not only about the technical fundamentals, but about timing and his timing record for market predictions is deficient IMHO because he won't listen to opposing views and accept them as a possibility, but that's Karl. For me, he's just one data point in an ocean of other public figure "market experts" like him. Smart as a whip and logical but with limitations, a spotty record, an inability to put himself in the shoes of one who carries an opposing or different view and a lot intellectual baggage.

Dingleberry's picture

Say what you want about Karl, but the man was WAY ahead of his peers before this shit storm hit the fan. I have been listening to him from the begininng. He sometimes gets too techie for me, but hey, he became a multimillionaire building his own tech company, AND knew when to get out. Not many of you reading this could do either. Almost none of you could do both. I know I couldn't. 

So for those that think he doesn't have market or common sense, you are delusional or only follow him when it fits you. RIMM is one stock. He predicted chapter and verse what was going to happen with Obamacare (the young won't play), student loans (reading about that everyday now), gold falling, snon-prosecution of banksters due to staute of limitations (which will happen), and frequently makes good calls on day trades, particularly when the gov changes a rule or something.  I doubt he is losing money. He articulates arguments like a lawyer, and arrives at sound logical conclusions. He shows trading charts where a blind man can spot manipulations.  His anger may get the best of him from time to time (me included) and he may go on tilt. But so can any of you. He is passionate and fucking pissed off with all the lies, manipulations and collective idiocy of the masses.  So am I.

I personally have learned more about this psuedo market from him than anyone else save perhaps Chapman or Keiser. He broke things down to a level that us intelligent, non-financial types could understand. Namely, exponents and debt. That's all modern economics is. Period.  End of story.

For that I am grateful.

But he doesn't suffer fools.

Which is good. We have been doing that for the last two decades plus.

We don't have time for that anymore.


DarthVaderMentor's picture


Karl is a very smart guy. He has clearly done a good job in polishing and improving his public personna as an emerging figure for years. Although he may never admit it, he was one of my vendors when I ran a fair sized IT shop in Chicago for a few years. I retired to do only the things that interested me at age 56 and I found his blog by chance in 2007 as he was starting up. He is quite skilled as a technologist, but if you follow the TF you may recognize one of his earliest posters calling him out and he refusing to answer or getting somewhat nasty, so you know he's not perfect, as none of us are. I was among the first dozen of so on the TF in 2007, and have continued to lurk there despite his threats of banning me several times over the years. He may ban me at any time he so chooses, that's his prerogative.

Karl has evolved over the years. I remember when I posted items which were not flattering to the GOP while Bush was still in power he'd attack me. Fortunately, he's grown out of that into a more balanced and more mature and aware political blogger. I think the Tea Party and the 3rd party experiences have helped him very much as a public figure and blogger. Heck, just go back and look at his old videos and notice his progression into nicer clothes and a more fit body over the years. He's improving and evolving, which is very good since the other blog personalities you've mentioned became static and then turned into ranting, predictable flakes, even though in principle they are still on the right path.

He has made mistakes, but we all make them. Don't forget his "Condition 1" has been called out several times. I did mention the BBRY experience because it's a great example of where his technical side can creep up and overtake his common sense. True, he is a great presenter in the vein of a lawyer and a good educator. On the other hand, as with any internet expert, you've got to keep an eye out for abberrations and his are that once he takes a position (as the INFJ personality trait that IMHO he has) he won't ever look back even if he's wrong, thus inducing the possibility that he could take others down the rat hole with him.

As I said, Karl has an excellent grasp of fundamentals in certain areas and does always make an excellent case. On the other hand, as an investing public personna in the blogsphere, his timing record has been less than stellar, not unlike others. He didn't really call it the last time as accurately as you think, check the posts of 2007 and early 2008 and you'll see what I mean.

Everyone who is a trader has lost money, and Karl is the quick to admit that, right after his usual "I'm not a registered financial advisor so don't listen to me because you might lose it all" disclaimer. Anyone who is constantly making money is suspect, as he has said many times. Just cause he participated in taking MCSNet as one of the investors that took it public and he did well doesn't mean that he'll always bat 1000. BTW, when has he actually said he is a multi-millionaire? There are some poster in the TF who are truly multi-millionaires who have actually stated on the TF that as a fact, but I don't recall Karl stating that as a fact in the last 6+ years, although I could be wrong.

Karl has played pied piper to many who he has suddenly abandoned. Just think of ARF, for example, and the fiasco of the DMCA when he essentially stuck it to his posters by readily serving them up for prosecution had anyone wanted their heads. Like Machiavelli, he doesn't suffer fools, but he without any compunction will stab any of his closest posters and customers if he feels it necessary (with maybe the exception of Pik-a-steph and Asimov maybe), so be careful, you've been warned, and read the TOS and if you don't understand it, give it to a lawyer to explain it to you.

BTW, this isn't a market. Not even a pseudo market. It's a casino for the politically connected and as Carlin once said, you and I ain't part of the politically connected. Karl makes great sense, and one day, maybe even soon, some of the effects of his predictions will come to happen, but unfortunately, until then, his record from a timing, not logic perspective has been less than stellar.   


Pinto Currency's picture


Now if you still do not understand the imminent harm that citizens face when their government freely violates the constitution, you are about to learn very shortly.


Boris Alatovkrap's picture

Bob "English" on Russian Times. LOL, is not real name!

"Good day, Ivan Toby Russian is your anchor"

Russia media is, how you say, so full of cheese!