This page has been archived and commenting is disabled.
MF Global: A Despicable State of Affairs
MF Global: A Despicable State of Affairs
Courtesy of Jesse's Americain Cafe
Much of the financial press picked up this story from the Wall Street Journal, Money From MF Global Feared Gone.
"Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.
.
As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation."
And as we have heard, quite a bit of that money was also diverted in the last few days into the pockets of MF Global's bank, JP Morgan, which still reportedly holds much of it. Now whether they are legally entitled to keep that money is another matter. But this entire charade has been cloaked with a public relations campaign using terms like 'missing,' 'vaporized,' and 'mystery' to describe the customer assets as if no one really knows where the funds had gone, which the CFTC has explicitly stated months ago is not the case. And that the handling of the bankruptcy and the method of ordering customers with creditors is in violation of the rule 190 and precedents which established it.
What the press apparently has not yet heard or is not reporting is that vulture funds are now contacting the MF Global customers, however they may have obtained their names, and are offering them 85 cents on the dollar for their claims. Most of the claim holders are reported to expect or to have been payed 72 cents on the dollar as things now stand. The Wall Street Journal certainly casts gloom on their prospects for a full recovery and hopes of justice, based on the report from an unnamed source.
This is creating a difficult position for these much abused customers because of the need to settle their income tax obligations for 2011. Until they can prove the funds are not 'recoverable' they bear the responsibility for their tax obligations on the full amount. But if they settle with the vulture funds they can take the loss and move on, capitulating to the despair and the anxiety of having been cheated and abused by the partnership between government and Wall Street.
Obviously customers can ask for extensions on filing their taxes and hope for a settlement at some point. But the issue is the odd manipulation of the bankruptcy in the courts, and the uncertainty and fear fostered in the customers caused by the management of this situation through rumour and innuendo and the canard of the 'missing money' from almost day one.
Remember that the customers were not speculators who lost money on their bets, as the bailed out banks had been, but in many cases depositors who had cash and precious metals held on accounts in a firm that was one of the Fed's primary dealers and a major player at the CME. And the money was taken twice. First by MF Global, and then by the financial institutions that seized the money and then manipulated the courts and the press to hide it and keep it.
The theft of customer funds was bad enough, but the manner in which the exchange, the regulators, the court, the Congress and the Obama Administration have dealt with the aftermath of this is truly despicable. Throughout the financial crisis the character of the dealings with the financial sector has been dominated by of opacity, obfuscation, misuse of influence, and fear.
If I have ever seen the opportunity for those in the government to take a heroic stand in defense of the people against the predations of powerful financial interests this was it. And so whatever they say from this point is at best a shallow mockery, with the ring of untruth, and the hollowness of hypocrisy. And this is why the American people turn away from their corporate-branded presidential candidates with righteous disgust and revulsion.
They must have no sense of justice, or of proportion, or history, and apparently they have no shame.
»
- ilene's blog
- 3551 reads
- Printer-friendly version
- Send to friend
- advertisements -
The only thing really shocking about the MF Global affair is that 'we' are still capable of being shocked.
Forget about the POZI, Congress, the TBTFs, the banksters, the (non) regulators and the Fed etc. What does this say about us?
It says "we" are either unable or too inept as a people to protect ourselves from legalized theft of our money.
And TPTB set this all up in the 90's - with the repeal of Glass-Steagall...head nod to Slick Willy!
Indeed, CD, this is the pinnacle of modern society. This is the best we have to offer. The system sucks because *we* suck. Even more frightening to me is the idea that we may look back on this time fondly in 50 years because of how much worse it will have become.
"They must have no sense of justice, or of proportion, or history, and apparently they have no shame."
The Parasite Club members are pathalogical liars and social cheats... truly deranged by the endless persuit of power, scheming and stealing (other peoples) wealth
There's no way of reasoning with human parasites
if significant amounts of (others peoples) money are held by JP Morgan one has to ask what the hell are they doing with it?
No trader (like Gerald Celente) passed title of their money to anybody else no matter what John Corzine did with it or what JP Morgan thinks it's doing holding it
Wether other peoples money was hypothicated or not makes zero difference to the title and ownership of that money.. it remains the clients. Period.
..and the filing of the MF Global bankruptcy under Chapter 11 (rather than the correct Chapter 7) gives further hard evidence of a clear trail of client money theft (the liquidator himself is now a criminal party)
Round up all the MF Global key staff, put them in jail, and don't let the scum out until they've made a clear statement of who and where client money was siphoned off to... money needs humans to make decisions to move money ...there's a paper trail and there's a human trail, it's piss easy
..the "it just fucking disappeared" line is a blatant in-your-face lie and should add 10 years to the crook Corzines et als sentances
..the alphabet soup of incompetent 'investigators' is just a clown show ...they are laughable (as always)
While it is true that hypothecation is not a transferrence of ownership, it still is, in fact, a hypothetical or even actual change of control. Possession is 9/10 of the law in collateral just as much as in other things. There are claims to said collateral all over the place, but money center banks are the access points. Enter JP Morgan, if they are indeed the money center of record for these claims. They "have" access to the "money", and they must be compelled in court to distribute it to the claimants by a trustee. Until then, it's theirs, and off to court we go. To the victor go the spoils.
When I gave my money to Interactive Brokers to hold my positions, I knew how collateral worked and that the money was no longer mine, even though I "owned" it. Corzine and these other cock smokers may very well speak the truth about it just "disappearing", because, to them, it did. They are in charge of all this shit, and they don't [appear to] know how money works. Unfortunately, being an ignorant dick is not a crime, unless it is willful/negligent. Maybe we'll see some indictments along those lines.
Collateral swims around in dark pools, kind of like piss in a hot tub. The "money" doesn't just sit in an account somewhere, it always has velocity. If you want to know where the money is, the answer is easy. It is everywhere and nowhere, like an electron in its orbital shell. It is easy to [re][re][re]hypothecate, but not such a simple matter to just take it out of the system, when there are multiple claims that are in conflict. So, actually, "vaporized" is a pretty good word for what happened to the money, except that it did so in the beginning, when it became collateral in the first place.
It is likely that MFG clients, MFG unconsolodated subsidiaries, MFG's creditors, and MFG itself all have claims on the same collateral. Barring any fraudulent conveyances, why is this so scandalous? The real crime was allowing MFG to file for bankruptcy as an investment bank. That was the day their clients were fucked.
If this were 100 years ago, it would be a slam dunk that the principal parties involved in the transfer of investor funds would be facing court orders suspending their business activities. Since JP Morgan benefited from the bankruptcy fallout, those assets should be frozen and liens filed against their company assets. Since the TBTF comprise the tail that wags the dog, that isn't likely to happen.
http://georgesblogforum.wordpress.com/
Heroic stand....ummm what country do you think you are talking about...
Frisk Jamie Dimon, Lloyd Blankenfein, and George Soros for the fleeced cash, they had it stuffed in their shorts. Now all we need to do is stuff it up their backside and take it out their mouths.