Guest Post: MF Global: Was It A Hit?

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Fri, 11/18/2011 - 15:51 | 1892133 SheepDog-One
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Hey I've got it...lets chase every last trader out of the markets forever! 

BRILLIANT!

Fri, 11/18/2011 - 15:55 | 1892156 FaithEqualsZero
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Hunt Brothers Playbook 101

Fri, 11/18/2011 - 16:12 | 1892240 buckethead
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Just reading Ireland/Germany and began to wonder how so much shit could happen so quickly. It seemed convenient for MF and associates (JPM/Fed) to have so much turmoil to distract our attention from their thievery. Good job coming back to this issue.

Fri, 11/18/2011 - 16:35 | 1892322 gmrpeabody
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It all sounds too silly to be anything BUT the truth!

BTW..., was it just me, or did Jim Bullard have a very tough time keeping a straight face the whole time he was talking?

Fri, 11/18/2011 - 16:38 | 1892341 Pladizow
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At best this would be a short term remedy - Physical says fuck you!

Fri, 11/18/2011 - 16:49 | 1892390 kaiserhoff
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Plad.  What's with the generic icon?  Saving something special for the holidays? ;)

Fri, 11/18/2011 - 17:13 | 1892518 Arius
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pure paranoia! corzine is such a genius, being Goldman CEO, senator, governor etc... that he makes no mistake ... it is inconcevable for him to leverage 40:1 ... yeah right ... how about 100:1 ... these people believe they are Gods and they can do anything ... it is called GREED .... awake up ... corzine is just as stupid as blankfein, and the next guy sitting next to him .... the whole idea that everything is under control and the big guys know what are doing is just not true!... these are people, plain people - no gods and YES, they do make stupid mistakes ... you wonder how they made it so far ... well, somebody has to, and like everything else, every good thin comes to an end ... sorry you got the end of the stick, but hey may be somewhere you already had a break ... now, its the other side, dont blame it always on some conspirancy ....

just bad decisions by not so smart, very greedy people ... thats the story of MF Global, and the Goldman Sucks world we all live on

Fri, 11/18/2011 - 18:34 | 1892763 AldousHuxley
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MF Global  = Goldman Sachs killing off their own to stay alive (ie. lehman)

 

they are all parasites....parasites are the largest killers of organisms even more than predators because your enemey is within you.

Fri, 11/18/2011 - 18:48 | 1892819 bigkahuna
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the shit-storm cometh.

Sat, 11/19/2011 - 00:23 | 1893490 jeff montanye
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why there must be a zero hedge: because the icons must be clasted.  well played.

p.s. arius makes a fine point, imo.  the "big surprise" of the next two years will be the impotence of central banks.  again, imo.

these are not incompatible thoughts (hatlo to t.s.).  corzine offered an opportunity to larger predators and their designs.  kind of like keeping lee harvey maybe did for the cia.

Sat, 11/19/2011 - 01:11 | 1893558 strannick
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Then there is the CDS insurance he thought he had. I guess CDS only work ('Greece wasnt a default!) when you actually are Goldman, (AIG, TARP), not if you just worked for Goldman. And it of course helps when the Treasury secretary has lots of Options in your company (Paulson, Goldman)

Sat, 11/19/2011 - 02:59 | 1893648 CIABS
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if you aren't on the inside and you don't know for sure what happened and why, then you have to practice the art of pattern recognition.  let's start with corzine.  he rises to the top at goldman sachs, and eventually they kick him out.  he becomes a senator.  but he gives that up voluntarily when he runs for governor of new jersey and wins.  at that time, four of the last five presidents had been governors, and none of the last eight presidents had been elected while in the senate.  so it looks a lot like corzine is thinking about running for president.  his presidential prospects dim quickly when he loses his re-election bid for governor, after which he becomes a wall street CEO and a major fundraiser for the democratic party.  word begins to circulate that he might succeed geithner as treasury secretary.

now let's look at chris flowers.  he becomes a goldman partner quickly, without bothering to go to graduate school, and takes over the financial institutions investment banking group.  when the decision is made to take goldman public, he is not appointed to the committee that will manage the IPO.  he resigns from the firm.  presumably corzine favored flowers' inclusion on the committee, but hank paulson, the firm's top investment banker, did not.

so we should ask ourselves whether corzine and flowers remained goldman "agents" after leaving the firm, or were they the opposite.  perhaps not quite "enemies", but not members of the network in good standing, and no longer trusted.  another question is whether corzine is someone who, after being ousted by goldman sachs and then becoming a senator and a governor, would destroy his career and his public image in order to take out a presumed competitor to goldman, namely MF global.  i don't think so.

why was it so important to eliminate MF?  to get rid of smaller speculators?  did the supposed urgency of eliminating MF outweigh the severe blow to confidence in the futures markets?  we all know that the futures are used to suppress the prices of gold and silver, and to prop up equity prices, and perhaps also to prop up the prices of treasury bonds and notes and to manipulate energy prices.  isn't continued confidence in the futures markets essential to these operations?

was corzine lured, or lulled, into his big losing wager on european sovereign bonds?  maybe.  did an institution wait to issue its margin call until it knew that MF would fail as a result?  maybe.  did they want to eliminate corzine as a candidate for treasury?  i'd say probably.  was it a "real" margin call by a creditor who feared losing big if it didn't take action?  i'd say so.

that's the pattern as i see it.

Sat, 11/19/2011 - 14:23 | 1894280 AldousHuxley
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some's got to take the bullet.

 

take the new boys out...

Lehman's CEO with NYU cred? take him down.

MF Global? take them out too.

 

Nothing but JP Morgan and Goldman Sachs in the old boys club.

 

 

Sat, 11/19/2011 - 00:45 | 1893534 Oh regional Indian
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Hark, is that farthunder I hear in the distance?

Surely a fecal storm cometh.

A Monster Fecal Global storm.

ORI

final-cut-trailer-01/

Sat, 11/19/2011 - 00:17 | 1893498 ToNYC
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The essence of Creative Destruction on steroids; or rather the Creative Destruction of Work by superior Intellectual Property. Jon Corzine is quite simply the Gold man-Sacker version of the Trojan Horse sent to the last bastion of Fair dealing for freemen in Chicago. After the Shock,Doctrine will roll out with the Gold man-Sackers in charge of the new free enterprise equipped with Gm-S's embeds for the GovernmentS'edge.It's all GoodS. Rave coupon will be involved for the social net and nit workers and drones.

Sat, 11/19/2011 - 00:47 | 1893535 Bwahaha WAGFDSMB
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Or sending in one of their boys to take down a competitor from the inside.

Fri, 11/18/2011 - 17:17 | 1892540 nope-1004
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Sure MF was a hit.  Guaranteed.

The entire financial system is an inside job.  Anything that happens in the extreme, good or bad, is an inside job.

Benocide proved his idiocy when he said rising prices of food staples in developing nations was a result of "more sophisticated diets".  Idiot.  Moron.  LIAR.  Inflation was creeping in - something had to be done.

FU Ben.  FU Geithner.  And princess obummer can take a hike.

No leadership anywhere, just casino rigging.

Shame on you America!

 

Fri, 11/18/2011 - 18:20 | 1892725 DiamondDog
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Well said.

Fri, 11/18/2011 - 17:20 | 1892544 NotApplicable
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Problem is, physical goes into hiding when the paper price is clobbered, effectively destroying the price discovery mechanism of the market. The only remedy is rising premiums, which gets everyone bitching about "greedy" suppliers/speculators, instead of recognizing it's the only way decrease the spread between buyers looking for paper prices, and sellers who would never go that low.

Fri, 11/18/2011 - 16:45 | 1892374 Antifederalist
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Agree,  Bullard was gloating about MF Global.  In fact that is part of what helped me put the pieces together and come to the conclusion arrived at in the essay.

Fri, 11/18/2011 - 16:51 | 1892402 kaiserhoff
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Something here is passing strange, and nothing sensible is being said. The silence is deafening.

Fri, 11/18/2011 - 17:08 | 1892496 smlbizman
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hey, i was talking to gensler and he informed me that as soon as they wrap up the metals manipulation investigation they are going to start planning to plan how they are going to investigate mf globetrotters....than he gave me the pinky swear...so i am satisfied

Fri, 11/18/2011 - 17:06 | 1892481 DB Cooper
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Makes sense too with Corzine seemingly disappearing in witness protection.  Or maybe he's with Jimmy Hoffa.  Otherwise, why aren't the news camera's outside his house?

Fri, 11/18/2011 - 17:21 | 1892550 kaiserhoff
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No end of news about Penn State, a cruel and stupid crime, but going on since the beginning of time.  No systemic risk.  Laws being enforced.  Just a few pervs who need to be shot.

On the other hand, if the banksters want to see Manhattan look like Detroit, they should just keep doing what they are doing.

 

Fri, 11/18/2011 - 20:04 | 1892939 FeralSerf
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Penn State is a distraction.  I wouldn't doubt that it was known about for a while and it was just made public to distract the public's attention from other high crimes and misdemeanors (like this one).

Sat, 11/19/2011 - 00:33 | 1893519 trav7777
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manhattan doesn't have enough black people to look like detroit

Sat, 11/19/2011 - 03:16 | 1893669 Phaethon
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Manhattan (and the rest of New York City) still has a strong Third World feel about it.  Where's the middle class in Manhattan?  I seen the extremely wealthy helicopter from rooftop to rooftop, or at least chauffeured about, and then there's everyone else.  Not lots of blacks downtown, but definitely a ton of third world immigrants picking up the crumbs that the big money leaves.  Could've been in New Delhi or any other third world hell hole.

Sun, 11/20/2011 - 00:21 | 1895214 Ahmeexnal
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Trav, you are a sad infrahuman being.

Fri, 11/18/2011 - 17:23 | 1892559 ltsgt1
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It's indeed very strange that the lamestream media is not on top of it.

Fri, 11/18/2011 - 17:31 | 1892586 NotApplicable
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To them it's a win, as he stole from the Street.

In other news, at least Corzine is finally a millionaire.

http://www.fiercefinance.com/story/corzines-wealth-plunges/2011-11-18

Fri, 11/18/2011 - 21:43 | 1893187 Buck Johnson
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He did, he knew what went down and many in the pits know what happened.  But they can't come out and say it because they would be blackballed and ridiculed out of the profession.  No trust anymore and no justice either.  Our financial system is as bad as any third world banking system.

Fri, 11/18/2011 - 16:04 | 1892202 HoofHearted
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Someone with the balls to say what we were all thinking. Fuck them all. Get physical if you can possibly get your cash back and tell them to go to hell. No more counterparty risk, bitchez!

 

(Oh shit, guess it means I need to take the FAZ bets and JPM, GS, MS, GS, BAC shorts off and get that cash into the shiny stuff.)

Fri, 11/18/2011 - 16:09 | 1892225 Robot Traders Mom
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Why was Celente messing around in Corzine's fund? This makes zero sense. A guy who spends countless hours doing research and he doesn't know who has his money?

Lost a TON of respect for the Celente. A former senator, governor, and Goldman Sachs head doesn't make mistakes like this. He should have known.

Fri, 11/18/2011 - 16:29 | 1892297 Amish Hacker
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I think Celente's account was with Lind-Waldock, a reputable broker with many retail commodities accounts. Unfortunately, Lind-Waldock ended up being operated as a division of MF Global after being acquired in 2000 by Refco, which was later taken over by Mann Group, which spun off its financial arm as Mann Financial Inc. (That's what the "MF" in MF Global actually refers to.)

So I don't see it as Celente's fault, but he did make the same mistake everyone made (and continues to make): he thought segregation of client accounts was bomb-proof, and it wasn't (isn't).

Fri, 11/18/2011 - 17:27 | 1892570 Robot Traders Mom
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Correct, but as much research as Celente does, how did he not know about Lind-Waldock's relationship with MF Global?

Why was Celente even messing around with futures? Because Gold was in backwardization and he wanted to get a slightly better price in December contract delivery? Why would he gamble on futures instead of just owning physical???

I guess my point is that almost all of us are in physical metals and the money we mess around with in the market (IE 401K's we don't want to pay taxes on) is essentially play money. I am completely prepared to see what little money I have in there, magically disappear. Our biggest holdings are physical metals. If we have cash, we go and buy coins or bars. We don't mess around with the futures market or anything run by a Goldman Sachs crony...

Fri, 11/18/2011 - 17:49 | 1892645 seek
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Celente has stated he used futures to increase his cash position to the point he could take cheap delivery.

So basically his personal "trading" operation got hammered, but he has a physical for insurance/investment.

So, like you, it was his play money, but it's at a higher level (I think he indicated six figures.) Just because you or I don't trust the system and are prepared to lose any cash holdings doesn't make it right that MF Global stole Celente's money. I'm also presuming the Celente expected normal saftey mechanisms to work before everything breaks completely.

FYI, a former work acquaintence of mine has in hand a MFG client presentation that spells out accounts that weren't as being SIPC insured -- so there's a fraud aspect to this over and beyond the bankruptcy issue. I've suggested he forward it to TD for publicity.

My takeaway from all of this is that we've ratched up the DEFCON level by one: it's clear TPTB are willing to openly abandon financial promises made to the lower classes -- granted it's a select class now, but it's a sign that either they don't have the resources or willingness to intervene to keep the illusion alive. The hypothesis of this story is that it was deliberate as it helps TPTB, but we need to recognize that while it provides some short-term help to TPTB, undermining confidence is insane -- that's how hyperinflation happens.

This is the first major crack in a very big, very old, and very unstable dam of the banking system. This tells me we are much closer to a systemic collapse than we were three months ago. In the summer I though we had 3-5 years left, now I am not so sure, it could very well be less than two.

 

Fri, 11/18/2011 - 18:05 | 1892693 Robot Traders Mom
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Good response. It is just hard for me to stomach that I guy I trusted would let himself get caught with his pants down. He shouldn't have expected normal safety mechanisms when all he talks about is fraud.

Liquidity is definitely drying up, I agree we are close to something.

Sat, 11/19/2011 - 00:21 | 1893505 ToNYC
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Actually the segregated accounts are still there if the authorities were to Water-board rather than Air-board the perps as in Bubble-Wrapped.

Fri, 11/18/2011 - 16:29 | 1892301 ziggy59
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He wasn't.. the firm he was involved was owned by MF Greedy. He also said he would always take possession when his futures contract was expiring

Fri, 11/18/2011 - 16:30 | 1892307 SpeakerFTD
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I don't think you can blame Celente for this one.   Theoretically, if your account at MF Global was in pure cash, you should have slept as soundly as you would with a checking account at any major bank.   For MF to cross the line and dip into customer accounts is, without any ambiguity, completely and totally illegal and incredibly shocking.   Someone at MF will go to prison for this, or maybe I am just so naive as to believe some rusty core of our criminal justice system can still churn through a blatant case like this.

Fri, 11/18/2011 - 17:00 | 1892446 Citxmech
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I'll give Celente shit for this. WTF? He's been yelling from the top of his lungs about how all the white-shoe boys are thieves and to buy physical PMs, etc. and he does business with Corzine?

Sorry, but this is just like hearing that Max Kieser has all his money in Berkshire Hathaway and Marc Faber has his in GLD.

Fri, 11/18/2011 - 17:24 | 1892563 eftian
eftian's picture

Celente said he likes to take delevery of a gold futures contract which I assume is a 400oz bar. Exactly how much can he really be saving on that 400oz bar over purchasing one from apmex or monex or kitco or wherever?? To risk 6-700k to save a percent or two?? Really? 

Fri, 11/18/2011 - 17:33 | 1892604 Robot Traders Mom
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@Citfmax and eftian-good points. Agreed completely.

Sat, 11/19/2011 - 01:44 | 1893590 Bwahaha WAGFDSMB
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Probably a lot more than that.  By buying on margin in the futures market he locks in whatever the price was when he bought the contract.  Can you lock in today's price from kitco or apmex then pay and take delivery in a year or two?  I don't think so.

Sat, 11/19/2011 - 12:48 | 1892881 SamuelMaverick
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Celente had options  for gold that he intended to take delivery on. He had enuf cash in his account to pay for delivery. When MF Global went bust, the fucking bankruptcy trustees gave his options to a new broker, but did not transfer any of his account cash to the new broker. The new broker gave Celente a margin call, and Celente told them he had enuf money to take delivery, they replied, what fucking money, there is no money..  Trustees have not accounted for MF Globals clients cash, it is all gone.  He refused to cover the margin call because he should not have had to ..    Pure and simple theft of clients cash, and an effective way for TPTB to shithammer commodity prices to pretend that inflation is not exploding------ at least for a few weeks. 

Fri, 11/18/2011 - 23:27 | 1893411 Zero Debt
Zero Debt's picture

One big fat red for you.

If all money in Bank of America was stolen by its owners, would you be out screaming shit on all its naive customers?

 

Fri, 11/18/2011 - 17:35 | 1892607 sullymandias
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OMG all these comments saying you can't blame Celente! WTF! "Considered by many to be the top trends forecaster in the world??" He had hundreds of thousands in COMEX futures contracts and doesn't even know the firm he is holding them with is run by Corzine? He can't background check the company that he gives hundreds of thousands of dollars to? What is he doing in the COMEX at all? His hundreds of thousands in the COMEX hurts ALL OF US - more paper money for them to play their damned paper games with! We all know the drill: buy phys, hold it. Celente let us all down, and came out looking like a fool in the process.

Fri, 11/18/2011 - 17:37 | 1892610 sullymandias
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Personally, Celente's KWN comments saying he only had money in the COMEX for a December delivery sounds like an attempt to save face to me.

Fri, 11/18/2011 - 18:06 | 1892698 Robot Traders Mom
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+1 on both posts Sully

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