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Guest Post: MF Global: Was It A Hit?

Tyler Durden's picture


Submitted By Lawrence Lepard

MF Global:  Was It A Hit?

Imagine you are Ben Bernanke, or on the Board of Governors of the Federal Reserve.  The time frame is July and August of 2011 and the price of gold is on a tear.  Commodities inflation has been persistent and is breaking out everywhere.  Your prediction that inflation “is contained” and is a “temporary phenomena” are beginning to look absurd.    What do you do?

Simple.  Hint that QE3, the primary drive of inflation, is coming and then fail to deliver at the September FOMC meeting.  That takes care of the price of gold and the gold stocks.  Ah, but those pesky commodities speculators keep making money and trading against what you want the markets to do.  So what is to be done there?   Hey Jon Corzine, how about you tank the largest broker for the small commodities punters in the world, and we let them twist in the wind?  That will serve them right.  Teach them to bet against the government approved scenario.

Think it did not happen?  Well think again.  All of the pieces fit.  It sure is convenient that all those commodities speculators are now out of the box.  Also, who will want to speculate on commodities in the future given customer funds are no longer protected.  Furthermore, commodities speculators are not a very “All American” group.  From the authorities point of view they can say: screw them, who will feel sympathy?  Hell, James Bullard, Fed Governor, in an interview on CNBC yesterday said the MF Global collapse proves that the system works.  Yes it does Jim, for you.  Personally, I have $90,000 at MF Global and I would like to have my honestly earned money returned.  Unfortunately, the odds of that happening any time soon seem slim.  In part because when MF Global entered bankruptcy the judge appointed a Trustee whose law firm has done substantial work for JP Morgan, a deeply interested party.  We will probably never find out what happened here.  But for those of us whose eyes are open the results speak for themselves.

This whole mess stinks to high heaven.  I am with Gerald Celente, if the largest commodity broker in America can go bankrupt and nothing is done, then where can you put your money and expect it to be safe?  I, for one, do not accept that Jon Corzine is stupid enough to lever up MF Global 40:1 and use the proceeds and customer money to bet on European sovereign debt.    This was a hit, pure and simple.  That is why there is no resolution to the problem, and it is just another example of the deeply corrupt US political/financial axis.  It may take money away from a bunch of commodities speculators, and it may cool down the perceived inflation, but it is just another hole in the dike which is The US Financial System.   A dike whose life can probably now be measured in months, not years.


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Fri, 11/18/2011 - 15:51 | 1892133 SheepDog-One
SheepDog-One's picture

Hey I've got it...lets chase every last trader out of the markets forever! 


Fri, 11/18/2011 - 15:55 | 1892156 FaithEqualsZero
FaithEqualsZero's picture

Hunt Brothers Playbook 101

Fri, 11/18/2011 - 16:12 | 1892240 buckethead
buckethead's picture

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
gmrpeabody's picture

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
Pladizow's picture

At best this would be a short term remedy - Physical says fuck you!

Fri, 11/18/2011 - 16:49 | 1892390 kaiserhoff
kaiserhoff's picture

Plad.  What's with the generic icon?  Saving something special for the holidays? ;)

Fri, 11/18/2011 - 17:13 | 1892518 Arius
Arius's picture

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
AldousHuxley's picture

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
bigkahuna's picture

the shit-storm cometh.

Sat, 11/19/2011 - 00:23 | 1893490 jeff montanye
jeff montanye's picture

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
strannick's picture

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
CIABS's picture

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
AldousHuxley's picture

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
Oh regional Indian's picture

Hark, is that farthunder I hear in the distance?

Surely a fecal storm cometh.

A Monster Fecal Global storm.



Sat, 11/19/2011 - 00:17 | 1893498 ToNYC
ToNYC's picture

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
Bwahaha WAGFDSMB's picture

Or sending in one of their boys to take down a competitor from the inside.

Fri, 11/18/2011 - 17:17 | 1892540 nope-1004
nope-1004's picture

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
DiamondDog's picture

Well said.

Fri, 11/18/2011 - 17:20 | 1892544 NotApplicable
NotApplicable's picture

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
Antifederalist's picture

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
kaiserhoff's picture

Something here is passing strange, and nothing sensible is being said. The silence is deafening.

Fri, 11/18/2011 - 17:08 | 1892496 smlbizman
smlbizman's picture

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 i am satisfied

Fri, 11/18/2011 - 17:06 | 1892481 DB Cooper
DB Cooper's picture

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
kaiserhoff's picture

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
FeralSerf's picture

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
trav7777's picture

manhattan doesn't have enough black people to look like detroit

Sat, 11/19/2011 - 03:16 | 1893669 Phaethon
Phaethon's picture

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
Ahmeexnal's picture

Trav, you are a sad infrahuman being.

Fri, 11/18/2011 - 17:23 | 1892559 ltsgt1
ltsgt1's picture

It's indeed very strange that the lamestream media is not on top of it.

Fri, 11/18/2011 - 17:31 | 1892586 NotApplicable
NotApplicable's picture

To them it's a win, as he stole from the Street.

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

Fri, 11/18/2011 - 21:43 | 1893187 Buck Johnson
Buck Johnson's picture

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
HoofHearted's picture

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
Robot Traders Mom's picture

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
Amish Hacker's picture

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
Robot Traders Mom's picture

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
seek's picture

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
Robot Traders Mom's picture

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
ToNYC's picture

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
ziggy59's picture

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
SpeakerFTD's picture

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
Citxmech's picture

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
Robot Traders Mom's picture

@Citfmax and eftian-good points. Agreed completely.

Sat, 11/19/2011 - 01:44 | 1893590 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

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
SamuelMaverick's picture

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
sullymandias's picture

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
sullymandias's picture

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
Robot Traders Mom's picture

+1 on both posts Sully

Fri, 11/18/2011 - 23:34 | 1893418 Zero Debt
Zero Debt's picture

He never advocated or advised against any particular broker. His forecast was higher gold prices.

Sat, 11/19/2011 - 18:42 | 1894635 ToNYC
ToNYC's picture

Lots of narratives will be written with that MF epitaph, way more than actual..a free black hole...sorry!!! MF dog ate your homework...oops!

Fri, 11/18/2011 - 18:52 | 1892826 Dingleberry
Dingleberry's picture

Agreed......Celente (like anyone else with money in a simliar account) believes their money is SAFE AND SEGREGATED, EVEN TO THE POINT OF LIQUIDATION OF THE COMPANY.  This has happened several times before, w/o consequence to segregated accounts.  THE MONEY WAS STOLEN....PURE AND SIMPLE.  You don't "lose" 600 large.  Their is a paper trail, but obviously most believe this is a mini-madoff and a one-off event.  Otherwise, why would a option market exist?

Sat, 11/19/2011 - 19:22 | 1894743 Cathartes Aura
Cathartes Aura's picture

no, sorry, but if you're parking fiat within the system at this late stage, you're asleep at the wheel.

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.

plenty here still letting the big banks use their money, and that's enabling - you gets what you gets for sloppy thinking.

Sat, 11/19/2011 - 15:49 | 1894421 DosZap
DosZap's picture

Robot Traders Mom

Celente was trying to make a lil on the side, while building up enough cash to convert to phys.(HIS words)

Six figures to him is $10.00 to me. Plus most of these people will get their money back, unless it WAS a takedown.

Sat, 11/19/2011 - 18:45 | 1894642 ToNYC
ToNYC's picture

It may be he had a lock on Hillary Clinton's cattle futures guy, and oops!

Sat, 11/19/2011 - 19:23 | 1894747 Antifederalist
Antifederalist's picture

LMFAO.  Have to be an old guy to remember that one.  Yeah, I made $100,000 by reading the Wall Street Journal.  That's the ticket...........

Fri, 11/18/2011 - 16:10 | 1892228 Cdad
Cdad's picture

When this is done, Dog, and the Lear Jet exodus has begun, bankers will be looking around wondering what happened.  And the plain fact is...they have killed their own industry.

There is nothing left but to pick over the bones and await the breakup of the TBTF banks...finally.

Until then, enjoy the Greater American Depression, folks.

Fri, 11/18/2011 - 16:26 | 1892277 GeneMarchbanks
GeneMarchbanks's picture

What Lear jet exodus? This is a departure from your customary soberness. Last year some former Russian central banker was found to have committed massive bank fraud in Moscow. He caught the first jet to London. There's a reason for that.This story repeats.

NYC & London baby. There's is no push-back. Zero, none, and the next GenXer on this board who brings up OWS.... well I'll ...I'll

Fri, 11/18/2011 - 16:42 | 1892359 gmrpeabody
gmrpeabody's picture

I've heard the Russians like to push back. I have it that you may want to watch what you eat, least you become a walking meltdown.

Fri, 11/18/2011 - 16:13 | 1892244 Gohn Galt
Gohn Galt's picture

Hell yes it was a hit.  Big players like Koch cashed out their accounts the month before.  Gold bug's like Gerald doesn't see any of his money nor get and answers for weeks while other accounts went to RJO with no decipherable or fair explanation.  Guys like Gerald is great advertising for the cause and instead of paying Superbowl Prices for advertising they do the Google negative business model and pocket $500m+.

Chase the trader's out of the markets  The one's that get in the way or don't just sit quiet losing money.


Fri, 11/18/2011 - 16:36 | 1892333 tarsubil
tarsubil's picture

First, they came for the commodities speculators, and we did nothing...

Fri, 11/18/2011 - 16:43 | 1892363 Antifederalist
Antifederalist's picture

Brilliant!!!!!!!!!!!!    10+

Sat, 11/19/2011 - 02:04 | 1893613 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

Then they came for the conspiracy theorists...  Wall Street Occupiers...  Ron Paul supporters... 

Fri, 11/18/2011 - 16:50 | 1892399 c'mon man
c'mon man's picture

No Santelli sightings today...very quite at CME....

Sat, 11/19/2011 - 18:49 | 1894653 ToNYC
ToNYC's picture

Quite quiet indeed. Maybe he took a mental health day, after three years they still don't get it and the theatre's still on fire. After Corzine's anarchist-financial molotov cocktail; thus always to nihilists.

Fri, 11/18/2011 - 17:14 | 1892524 rodocostarica
rodocostarica's picture

Just as an aside,  Lawrence (Larry)  Lepard the author of this,  is a Veritable  hero of the Ron Paul tea party movement. He was a strong supporter of Rp in 07 and paid for a full page ad for RP in USA today.  Out of his own funds.

He is a big fan of gold and silver as well.  

Larry...  all of us RP supporters  (from the beginning who  remember you) love you man. Sorry to hear about your fucking over by MF.

Read this link. Larry is here urging people to support the original TEA PARTY money bomb for Ron Paul. This is  a week or so before the Tea Party money bomb which coined the term Tea Party. That fundraiser for RP still holds the one day record for fundraising.  That is where the term TEA PARTY originated for anyone wondering the origins of Tea Party.

I would urge anyone here to read this and it is more important today than it was then.   Don't count Ron Paul out.

Donate $5.00. today. You have seen the recent polls. Ron Paul rocks and Larry Lepard does too.  

Love ya Larry. Be good.  And rock on Good Doctor Ron Paul.

Fri, 11/18/2011 - 21:45 | 1892611 Antifederalist
Antifederalist's picture

Thanks for the support.  Send me an email or pm.  LL

Here are the advertisements.


Fri, 11/18/2011 - 20:34 | 1892997 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Corzine would absolutely do something like this, and why not? He has a history of it, IMO, and worse, he pretty much thinks he can get away with it. Who could blame him--Not One $%^ Banker in Jail?!? This guy can't even bother to wear a seatbelt, WTF would anyone give this guy their money and expect it to be um,,, safe?!?


Corzine, is Obama Re-election fodder. What a great way for Obama to say: hey we are prosecuting one of my best bundlers, a former Governor and Democrat--No One is above the law! See?. SEE!!!


All nice and wrapped up in a package.


Fri, 11/18/2011 - 15:51 | 1892134 Fortunes Favor
Fortunes Favor's picture

The MF Global story of fraud and corruption has disturbed the delicate confidence of professional money managers and traders.  The bastardization of the haloed ’segregated’ account has rocked market professionals to the core.  The COMMON SENSE reaction to this disturbance in the force is to withdraw liquidity.

Fri, 11/18/2011 - 15:52 | 1892137 kato
kato's picture

no idea what you mean by "This was a hit, pure and simple."

Fri, 11/18/2011 - 16:01 | 1892175 Antifederalist
Antifederalist's picture

Corzine and others decided to tank MF Global on purpose.  That is what I mean.  It takes small commodities speculators out of the game.  If it was theft why did they only stop at 10% of customer assets, why not take 90%.

Fri, 11/18/2011 - 16:08 | 1892217 Azannoth
Azannoth's picture

Makes perfect sense, and than you have Celente coming out with his 6 figure loss in public and you get 1 million small time speculators scared shitless, will definitely cool the prices down a bit over the next few months, at least till QE3

Fri, 11/18/2011 - 16:36 | 1892331 Mesquite
Mesquite's picture

I thought one of the qualifying characteristics of terrorism was:

maximum results/response for application of measured input/action..


Fri, 11/18/2011 - 19:49 | 1892922 Fred C Dobbs
Fred C Dobbs's picture

You have reached the truth or are almost to all of the truth.  These are smart criminals.  They keep thinking of crimes that I could never imagine.  They are so good no one but you saw what they had really done.  It looks like they are getting desperate to me.  Thank you for posting this at zerohedge.  

Obama and Eric Holder will do as they are told.  The criminals in government, the Fed and Manhattan have nothing to worry about.   Where did America go?  

Sat, 11/19/2011 - 02:40 | 1893550 Oh regional Indian
Oh regional Indian's picture

Where did America go?

What if it never arrived in the first place?



Sat, 11/19/2011 - 18:56 | 1894674 ToNYC
ToNYC's picture

When BOPOTUS needed a place to be held, he called on Eric Holder to be his man Eric, place Holder.

Fri, 11/18/2011 - 20:36 | 1893011 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Celente or anyone else that kept money with that fool were soon parted. And Celente should have totally known better. Shame on him! (Sorry Gerald, but total facepalm dude)

Sat, 11/19/2011 - 15:42 | 1894408 DosZap
DosZap's picture


I think this is a great deal  potentially for the PM mkts.

This will turn specs into physical holders/ buyers, IF they have any brains left.

Fri, 11/18/2011 - 16:11 | 1892237 Sam Clemons
Sam Clemons's picture

Heard that Bear Stearns was also long gold substantially when they were put under.

Fri, 11/18/2011 - 16:48 | 1892385 FatFingered
FatFingered's picture

I have been suspecting this since I heard Celente, Bill Fleckenstien, and Turd Ferguson all lost money.  It's becuase the Comex was not going to be able to deliver all of the standing contracts in December so...Bam...easy peasy...just bankrupt Mfin' Globalls and pay all the insiders off and leave anyone standing for silver or gold delivery in December out to dry.  I would love to hear more stories of the others that lost out.   If you follow Harvey Organ every day there is certainly some fishy sounding crap more often than not over at the Comex.

Fri, 11/18/2011 - 17:38 | 1892613 Sam Clemons
Sam Clemons's picture

Those in power will do whatever it takes to retain power.  There is pretty much nothing that I won't believe.

Hungry individuals can do messed up things.  Corporations do worse to protect their bling.

Sat, 11/19/2011 - 19:02 | 1894688 ToNYC
ToNYC's picture

This is a post-Lehman version of 'liquidation only' and the rules committee gets it right large as in the final phase of 1980 silver bubble & collapse. Henry Jarecki etal. came out of that rather well. When the first guy gets a painted brick, he immediately looks in earnest for the second guy.....lather, rise, repeat.

Sat, 11/19/2011 - 01:26 | 1893581 jackinrichmond
jackinrichmond's picture

wasn't there a rumour back in springtime about blythe threatening a futures trader that if he insisted on taking his contract that 'they' would go backrupt and pay them last ?  it may have been a wynter benton-related story.

Fri, 11/18/2011 - 16:04 | 1892176 Antifederalist
Antifederalist's picture

duplicate removed

Fri, 11/18/2011 - 16:16 | 1892258 loveyajimbo
loveyajimbo's picture

You sound as dumb as the O.J. Kato... are you?

Sat, 11/19/2011 - 18:52 | 1894663 ToNYC
ToNYC's picture

Thanks for showing up, kato. Clouseau's in the basement with Miss Gambarelli.

Fri, 11/18/2011 - 15:52 | 1892138 Godisanhftbot
Godisanhftbot's picture

 Im not a big fan of commodity speculators. They force the public to pay more.  I prefer to pay less.

Fri, 11/18/2011 - 16:06 | 1892210 Greater Fool
Greater Fool's picture

I wouldn't be a fan of commodity speculators either if what you said were true.

Fortunately, it isn't.

Fri, 11/18/2011 - 16:49 | 1892386 tickhound
tickhound's picture

Buy Netflix and you're a "patriotic investor."  Buy commodities and you're an "evil speculator."

Soundbytes for the dumbed-down.

Fri, 11/18/2011 - 16:07 | 1892211 HoofHearted
HoofHearted's picture

Hey dumb ass, it's the FED that is the problem. Whether I speculate or not has so little of an impact on you. What matters is that the Bernank is destroying the dollar to high heaven, and now the Super Mario Brothers want to do the same. Mean ol Merkel is saying no so far, but they'll twist her balls and get her to do it. (Yes, I know what I wrote, and she has the biggest balls of them all...thank you AC/DC.)


Kyle Bass said it so well..."Don't blame the mirror because you're ugly."

Fri, 11/18/2011 - 16:16 | 1892260 Willzyx
Willzyx's picture

Fighting the fed's inflationary policy by buying commoditites isn't really speculating.  We all know the effects of inflation

Fri, 11/18/2011 - 16:50 | 1892400 SHEEPFUKKER

If you buy commodities as a hedge against rampant government money printing, you are a speculator.  If you buy a home with zero money down on an interest only loan, you are an investor.  Great society. 

Fri, 11/18/2011 - 16:29 | 1892300 adr
adr's picture

really? If you speculate on something like a commodity with no actual plans to use said commodity other than hoping to sell the contract later at a higher price then, yes you are part of the problem and do have an impact on every ordinary person by making a commodity more expensive. Now you could be shorting the commodity hoping for a price drop but again are causing more of a problem as shorting in the current environment has actually caused prices to increase as the price drops have not occurred before the expiration of the contracts causing massive short squeeze price rallies.

What bearing does the Fed have on any of your speculative decisions? Or is it still 100% the Feds fault that oil is around $100 a barrel, grains are 300% higher than the historical average, etc. QE whatever did have an effect on prices but not to the extent the market has driven them to. The Fed has only added fuel to the fire of massive speculation, it is not the root cause. Much of the commodity tear went on before the Fed embarked on its massive stimulus programs. I don't remember QE during the mass commodity speculative boom before the 2008 crash.

It is fairly simple and straightforward solution to ban revolving contracts and force delivery of commodities once the contract expires and the price is settled. If you are speculating in gold, I'm sure you wouldn't mind taking delivery of every bar you place an order on. If you are speculating on grain or oil, you better have a warehouse or silo. If I am wrong then changing these rules will have no effect on prices and they will continue to rise. I don;t think I am wrong because this move will more likely kill the volume in the commodity exchanges as no one will want to be left holding the bag if a giant truck tries to deliver 100 tons of corn to a 5th ave address.

Or does the fact that over 250k corn contracts are traded every day when the average volume a couple years ago was less than a few thousand seem normal? No speculation doesn't have anything to do with price. Buying something you have no use for and couldn't ever use is always a sound investment. Well it is if you can just trade a piece of paper that says you own something without ever having to see it, that you can sell a couple days later for a profit.

Fri, 11/18/2011 - 16:36 | 1892337 Hedgetard55
Hedgetard55's picture



     The speculators are using cheap FED money.

Sat, 11/19/2011 - 19:06 | 1894705 ToNYC
ToNYC's picture

HFT transfer the volume/buzz into a nano-extraction game, punctuated by the inherent flash crashes. With the denominator close to Zero as in ZIRP funds, the leverage is two spoons to the moons.

Fri, 11/18/2011 - 16:48 | 1892384 Stoploss
Stoploss's picture

Is this post the result of a gigantic government cock parked in your ass??

Fri, 11/18/2011 - 16:52 | 1892409 rex-lacrymarum
rex-lacrymarum's picture

This is just complete nonsense, to put it very politely. Speculators fulfill an extremely important function in a market economy. In fact, without them, there can not be a market economy.

Speculators risk their own capital, so only those who regularly make the correct decisions will survive. They are the people whose activities let other participants in the market economy know where shortages and surpluses are, and thereby enable the rational allocation of scarce resources. I repeat: there can not be a market economy without speculators.

Fri, 11/18/2011 - 19:25 | 1892861 jmc8888
jmc8888's picture

You are under the assumption that stopping the ability to have forward contracts with no plans of delivering it is somehow pushing all the 'speculators' out of the market economy.  He said quite simply, there was never a need for it for it to exist in our market economy.  Look people, it's quite simple, the way it works NOW, is HELLA DIFFERENT, that how it was say pre 1960.  Last I checked, commodities were traded before 1960, and people speculated on them...just not in the CURRENT, OVER THE TOP way.

As always, if you want gold, buy physical.  Physical speculation is as natural a barrier as a 32 oz cup cannot hold more than 32 oz.  We have a commodity market where you have the motherfucking of all Big Gulps, with 5000 oz of Dr. Pepper fitting inside a 32 oz cup.   That's not a market, it's a living imbalance.

Our monetary system is a complete fucktard anti-american system, that we've acquired from our former masters that we shed off in a revolution, and then we exported around the world as 'it's good enough for america' routine. The belief in the goodwill of America, fucked the world, as America, turned monetarist.

We live in a fucked up world when excessive speculators (this isn't an attack on's an attack on ANOTHER screwjob in a monetary bizzaro world economy that is FULL of screwjobs), can cause the food price of a few billion people to double in no time, ensuring an additional few hundred million hungry mouths, all because we allowed a system of sophistry called monetarism, to flood the world to pay off fraudulent bankster debt....and only the smallest portion of it. 

Just because the federal reserve and other monetarist central banksters is paying off all banksters in a fraudulent manner and diluting everyone, does NOT make it legitimate to make a few hundred million more people hungry in order to preserve some of your wealth.   It doesn't.  Anybody that thinks so is a fool.  It's legal, so you can't say it's illegal.  But it shouldn't be legal.

If anything it allows the whole thing to have a greater chance to continue on.  It diffuses the pain from the speculator class by stealing more from the poor of the world to eat.  Or to fill up their tank.  Or whatever commodity.  That's what it does.  Although the stealing actually comes from up high, it still sucks through the mechanism into the direct result being higher commodity prices lead to higher food prices for the world.  The pain by the speculator is bypassed and passed on to the lowest on the totem pole.   Since we have free trade idiocy (anti-american) policies, this means the food (and other) the world buys is tied to these commodity prices, and thus people who make a dollar a day, and spend 50 cents on rice, now have to pay 1 dollar, or 1.50.  Well that kind of fucks them over.  Then when you think they monetized about 1 percent of the fraudulent debt....where does one think this leads to?

Again, it allows it to continue, because instead of the investor/speculator class saying NO to bankster fraud, they get their twenty pieces of silver to shut up (or lower the tone) by being able to ratchet up everything. Now some people will still bitch, and that's good.  But to say people are equally or even 1/10th as pissed off when they protect their gains, utilizing the broken structure, would be incorrect.  It also when it comes to food, the worst product of everything on the markets, for this sort of pain shifting to be allowed.

Is the person who starts the bar fight at fault? Or everybody that threw a punch? In reality EVERYBODY.

The smart thing to do, is to either notice a fight is about to break out and move or leave...or do so once it does, even if one gets bumped.

For us, the biggest thing to do, is to stop the monetary madness from happening, thus 'speculators' aren't in a position to also be in the wrong, and contribute to the overall fucked up-ness of the world, and squeeze more out of the majority of the planet.

For things like corn, we not only have THIS, we also have the ethanol disaster.  So there are many factors, but man, we could literally feed half the hungry people on this planet, just with the corn that goes into ethanol.  That's fucked up.  Especially when the estimates of hungry people range in the 1-2 billion and somewhere around 400-750 million people can be fed by corn that goes to ethanol.  Then the rest, have to deal with Bernanke et al printing, and uber speculators trying to cover their own ass.  How many middlemen and imblances are necessary to make a functioning market? How about none of these are necessary!   

A corn market that has to deal with ethanol, uber-speculators, and central banks, is a broken market indeed.

Everyone knows that ending alot of this crap, doesn't stop people from speculating in the markets or commodities.  It just doesn't allow the EXCESSIVE kind to take place.  If the futures markets are supposed to be about physical delivery of the product being sold, then yes, they should be limited to people that actually want to take delivery.  The rest really is just a market imbalance.  People cannot be against imbalances, and for this excessive uber-speculation to take place.  (well they can be, they are just dismissing reality, and become part of the problem).

How many 'speculators' would be even more pissed off and ready to mutiny against the fed and all central banksters (not to mention their MONETARISM) if they were NOT allowed to do THIS sort of uber-speculation?  If you couldn't send corn to 100 bucks an ear, then yes, alot more would be concerned with the fraudulent debt the world is drowing in.  If the fed and other central banksters keeping printing, then yes...we will see 100 bucks an ear, and no it's not legitimate...even if the fed is printing. (although it is of course understandable if that is legal in the system...but it IS the wrong thing to do).

How is this uber-speculation any different than HFT?  Normal trading is fine.  HFT is an imbalance.  Normal commodities specualtion is fine.  100x what is ever deliverable, much of it by banksters by the way, is just like an HFT imbalance.

Here's a nice quote from a larouche article a bit ago.  Notice the extremes of the positions.  Who is making the market?

"Southwest Airlines was renowned for its hedging: its futures contracts, the most for any airline in the world, were 43,000 long and 2,000 short positions. Northwest Airlines had 602 long and 5,000 short positions.

Among British corporations, Barclays Bank had 277,000 long and 277,000 short positions. British Airways: 1,000 long and 3,000 short positions. Britain's Virgin Atlantic Airways, 239 long and 3,000 short positions"

So Southwest Airlines, who were absolute KINGS as it turned out with hedging their fuel costs....and actually WANTED delivery...and got lucky...because it turned out that way (but anyone that saw this whole shitshow coming knew was coming)....had 43,000 long and 2,000 short positions.  The next biggest in all of the airlines? Had 602 long and 5,000 short positions.

But....what did the big banks who NEVER had ANY intention other than the create and imbalance and frontrun everyone?

Barclays had close to 600k contracts.  That's 15x a company that went all in regarding hedging their fuel costs and actually took delivery.

Here's a quote of more of this sort of frontrunning....making the a product they supposedly own, but never actually purchase.

"Number one in the chart is Goldman Sachs, with 452,000 long and 419,000 short positions,— one single company controlling 32.5% of WTI open interest, according to calculations reported by Izabella Kaminska on FT/Alphaville on Aug. 18. Among the other Wall Street crooks, Morgan Stanley held 313,000 long and 320,000 short positions; JP MorganChase 200,000 long and 245,000 short; Lehman Bros 155,000 long and 146,000 short; and Merrill Lynch 115,000 long and 122,000 short."

So even if we made the futures markets about what the future markets are supposed to represent....there will still be plenty of speculation to be had.  Remember...anytime you actually get a futures contract.....your ARE way or another, because at the time of the purchase of the forward contract is a different time, inventory level, etc as compared to when it is delivered.  In other words.....and it IS very simple....when you purchase a forward contract for delivery sometime in the future...THAT IN OF ITSELF IS SPECULATING.  This is FINE.  But when you do it with no intent of delivery, that participation is a distrotion in the market, and excessive.  Up or down.  Although with MONETARISM, we know where it is heading, except when it doesn't and drops like a rock, before regaining the trend upwards.

Finally the most important thing is the hardest thing to grasp.  The most important thing isn't protecting your own wealth via trading, speculating, whatever....(that comes 2nd).  The first point, is to make sure you don't have to. 

That's #1.  If you fail at #1, you will fail at #2.  Because no one can go it alone and be better off then if we took care of #1.   A million ounces of gold, and no toilet paper...and the world is a rotting cesspool.  Or we do #1, get the structure right (don't believe the idiots who say it's isn''s only hard for the corrupted who want to continue tithing to the worthless bankster class), you own some gold, you have toilet paper, and the world is not a rotting cesspool. 

It isn't speculating that's's excessive speculation as a reaction to bad policy...that only slightly mitigates some of the destruction that comes as a result of bad policy (temporarily...and only to the winners that speculated on it...a very few), at the expense of everyone else.  When it comes to food that everyone else, encompasses billions, and it impacts them HUGELY.  

The policy problem, is that every economist just about, is a MONETARIST.  Ron Paul is a monetarist.  Barack Obama is a monetarist.  The BANKSTERS ARE ALL MONETARISTS.  Monetarism is sophistry, passed off as fact, righteous, and the only way America or the world economy can run.  Bull-fucking-shit. America was formed to NOT be monetarism, monetarism is not righteous, it isn't not fact, and it IS NOT the only way America or the world economy can run.  We imported this bullshit, and somehow believe this is what America is all about.  Bullshit.

The debts are unpayable, they are fraud, they are an attempt to control, to set an agenda, and all of this is illegitimate.  The best way to tackle the illegitimacy, isn't to profit off it at the expense of others. It's to actually go after the illegitimacy of the whole thing. 

It's not gold at 4000 that will break the central banks, it's the people when they rise up to shed off the tyranny and demand better candidates for office who will end the bad policies, and start the real ones that will.  It is already happening, but slowed by propaganda, as people keep thinking this shitshow is the only way things can be, and if we change it, we're somehow not American, or insert any country. 

Some people seem to think the only way people can become knowledgable and outraged enough to change things, is if everyone is unemployed, starving to death, gold at 10,000....corn at 100 bucks and ear....gas at 25 bucks a on and so forth.  No, people are pretty much there now...if the bad policies are continued...well just go through hell for no reason, and risk everything breaking down and screwing a few generations over, let alone risk nuclear war....all about a problem that we created through bad policy.  That is known to be bad policy.  Where it is KNOWN that alternatives already exist.  There is no need to put the world through hell, and risk everything, to end a problem, we already know how to end.

People have lost track of what is extreme.  If speculation is good, ANY kind of ANY amount is good.  That is a fallacy.  Speculation in legitimate forms, is fine.  Speculation to create an imbalance, as a consequence of a policy of printing imbalances, is just stacking imbalance on top of imbalance, where an actual market that speculation was a legitimate part of, once existed.

It's not anti-speculator, as speculation is already embedded in futures contracts...when one simply WANTS to use them a contract to be delivered.  It's excessive speculation, legitimized by our inability to notice extremes, which is occurring today.  Meanwhile the fed and other central banks know, that if this was cut off, and they continue to print, the pressure upon them will multiply.  The float, just allows people to be compensated, for monetarism's central bankster idiocy.  At an extreme cost.  

So in a very real sense, if you are for the imbalance of futures contracts without delivery, then you are quasi-for the fed and other central banks printing, because you will happily take profits based on the rise of rice because of central bank idiocy, and thus not be as motivated to end this shitshow.  Not everybody, but as long as your protection is part of the banksters schemes, how can you ever break free of them?

I've always said, in the end, the banksters biggest friends, (those that are still around), will be the biggest holders of precious metals. 

We need to END MONETARISM, not just go through hell so Monetarism Mark Whatever can be born. 

That's why we need Glass-Steagall, not printing...cutting...taxing...selling precious metals or other order to pay off FRAUD.

That's why we need an American Credit System, based off of money as a tool, not as money as wealth. 

The world has some real problems ahead, and monetarism ensures destruction and possibly the extinction of the human race.  Without monetarism, the universe is ours...or something like that.

Oh I'll finish with a nice quote from the same article earlier quoted from on what Glass-Steagall would do with derivatives...and you can guess whether or not this leads to a market that is more broken, or less. 

"Glass-Steagall limited banks' securities and derivatives trading to less than 2% of their assets, in case such trading might be necessary to help service customers' accounts. Then-Fed Chairman Alan Greenspan raised these limits first to 5%, then 10%, then 25%. When Glass-Steagall was repealed in 1999, all the limits went out the window, a process also furthered by Phil Gramm's so-called Commodities Futures Modernization Act of 2000, known as the "Enron Bill," which totally deregulated derivatives."   Yep Phil Gramm....aka Rick Perry's Butt Buddy, mentor, path trailblazer, and whose enablers are the same fascist fucktards.


Fri, 11/18/2011 - 23:46 | 1893441 Zero Debt
Zero Debt's picture

Ron Paul is a monetarist? For seeking to legalize competing currencies and let market set rates?

Sat, 11/19/2011 - 00:54 | 1893544 trav7777
trav7777's picture

hungry people who can't feed themselves but get food aid end up having exponentially more chldren who they then can't feed.  It's like a stray dog population

Sat, 11/19/2011 - 19:09 | 1894713 ToNYC
ToNYC's picture

There is no population limit with an intelligent species.

Sat, 11/19/2011 - 19:54 | 1894824 Cathartes Aura
Cathartes Aura's picture

indeed, when the females are educated, they can become aware and able to take more control & care over their fertility, and the birthrates go down, every time.  if they let the males selfishly use them repeatedly as sex objects, with scant regard for resultant pregnancies, (zero condom use) too many mouths always results.

Sat, 11/19/2011 - 00:50 | 1893539 Element
Element's picture

So more and more speculators, means a more efficient markets then?

Sorry, that's called a bubble.

Fri, 11/18/2011 - 17:24 | 1892564 Chingalay
Chingalay's picture

They produce ethanol on 5th avenue?

Fri, 11/18/2011 - 18:14 | 1892718 tickhound
tickhound's picture

It's called price discovery, or what's left of it.  And I think the price of bullshit just went up. 

Fri, 11/18/2011 - 18:48 | 1892815 chunkylover42
chunkylover42's picture

Actually tickhound, the price of bullshit just went down because there's a ton of it after this guy's post and it's fucking everywhere.

Fri, 11/18/2011 - 19:59 | 1892932 tickhound
tickhound's picture

you're right.  you can't eat bullshit.

Fri, 11/18/2011 - 22:05 | 1893245 jekyll island
jekyll island's picture

Yes you can, it's just not very nutritious.  

Sat, 11/19/2011 - 01:15 | 1893570 FeralSerf
FeralSerf's picture

A  new Japanese process is changing that.  Le cuisine de merde:

Fri, 11/18/2011 - 21:16 | 1893124 Philidor
Philidor's picture

"you are part of the problem and do have an impact on every ordinary person by making a commodity more expensive"

ADR, I would just point out to you that commodities futures contracts have zero net supply, and for every transaction there is both a purchase and a corresponding sale (which does not change the fact of zero net supply).  There is really no reason to suppose that the purchase side of the transaction has more influence on price than the sale side does (or vice versa).  Maybe you need to brush up more on some basics...

Fri, 11/18/2011 - 16:07 | 1892212 sabra1
sabra1's picture

then, you get the hookers mother, instead of the hooker!

Fri, 11/18/2011 - 16:30 | 1892311 shortus cynicus
shortus cynicus's picture

Just call them leveraged savers, sound much better !

Fri, 11/18/2011 - 19:04 | 1892849 Dingleberry
Dingleberry's picture

Notice how shit got fucked up when we let those WITH NO LEGITIMATE REASON OR INTEREST, like "investment banks"--how fucking laughable to speculate in the futures market for food, oil, etc.....and now look at the shit. Lies, deceit and manipulation abound.  And to make matters even worse, we have obscene leverage to boot.  Anyone that says todays futures/options market are to create "efficient markets" has a vested interest in this fucked up system. And is deluded.  We've had about 30 years of experimentation to see the results.  Oh yeah, I forgot, they provide "liquidity" and are doing "God's work".  Thanks a's nothing but a rigged casino.  I heard an interview recently about water futures.  Even the traders know that if we fuck with water the way we fuck with oil and food, there will be a bloodbath.  Apparently even they are smart enough to know not to fuck with that.  That justs proves what we HONEST people know already.....speculation benefits a few, the rest of us take it in the ass.

Sat, 11/19/2011 - 00:01 | 1893472 Zero Debt
Zero Debt's picture

In principle, speculation in itself is legitimate and part of free markets, and in a free society one can't just go out and say that this or that should be done or not because there is a "legitimate" reason determined by holier-than-thou. Also, on a pragmatic level, not all speculators make money, it takes two parties to make a trade.

The imbalance (or perhaps, injustice) arises when the speculative positions, short or long, are funded by credit creation out of thin air, effectively high-power yet counterfeit money, because then the speculation is not so much a speculation in the fundamentals of the underlying itself but more of a directionality play on the size of the monetary base. Cue central economic planning in general and central banking in particular.

Fri, 11/18/2011 - 15:52 | 1892140 spartan117
spartan117's picture

Add in illegal naked shorting of gold/silver stocks, and this piece is a winner.

Fri, 11/18/2011 - 16:04 | 1892200 Stoploss
Stoploss's picture

Illegal naked shorting of gold/silver stocks, BY THE GOV'T.


Fri, 11/18/2011 - 15:53 | 1892142 Vergeltung
Vergeltung's picture

interesting thesis.


Fri, 11/18/2011 - 15:53 | 1892145 GeneMarchbanks
GeneMarchbanks's picture

40:1 ... for now. When the skeletons come out it'll be 100:1

Fri, 11/18/2011 - 16:09 | 1892223 SeverinSlade
SeverinSlade's picture

Meanwhile the Fed is leveraged to what, 51:1?  Hmmmm...

Fri, 11/18/2011 - 16:16 | 1892259 GeneMarchbanks
GeneMarchbanks's picture

51:1 as far as we know... again.

Fri, 11/18/2011 - 15:53 | 1892146 kito
kito's picture

very interesting theory, very interesting. commodities have sure been tanking lately..........

Fri, 11/18/2011 - 16:46 | 1892377 Stoploss
Stoploss's picture

And PM's are STILL holding up after being liquidated, shorted, shit on, not to mention you are an unpatriotic mofo for even implying that Pm's are the real 'money', in the face of all of this! Hell, no one realizes the eurotards are dumping euro's and gold, to buy dollars.

Fri, 11/18/2011 - 15:54 | 1892148 MGA_1
MGA_1's picture

Something truly fishy about the whole MF global thing - why would this guy leverage up to purchase Euro debt....

Fri, 11/18/2011 - 16:06 | 1892207 magpie
magpie's picture

Designated bad bank together with Dexia for the Grease default ? who will ever know.

Fri, 11/18/2011 - 16:11 | 1892233 Porkbellytrader
Porkbellytrader's picture

Because he is an idiot who's reach far outdistanced his grasp, and he wanted to prove to Goldman that he was better than his treatment. 

Fri, 11/18/2011 - 18:15 | 1892720 lotsoffun
lotsoffun's picture

porkbellytrader - probably correct assessment.  and i was at goldman in 1998 when they were inches from going under and their fixed income prop desk almost took them under.  and what was their largest speculations?  currency futures and bonds and russian default almost tanked them.  and years later, i now realize that corzine was the gambler behind that, and that's why they pushed him out, for almost taking the partnership under.  and - he wasn't allowed back onto the street for almost 11 years.  and then what did he do?  EXACTLY the same thing again.  i hope everyone sees and understands this.  it is not a 'hit'.  it's corzine ego, greed, and probably gambling addiction.

Fri, 11/18/2011 - 18:53 | 1892831 A Man without Q...
A Man without Qualities's picture

Interesting, but was the problem for Goldman that they had these prop positions or was it that they were the counterparty for LTCM?  Interestingly, it was big losses at Citigroup on Russian trades that pushed Jamie Dimon out of Citigroup.  I was working on the Russian bond desk for another of the big firms at the time, and the whole market was completely mad.  There were people who had made theoretically big profits shorting Russian GKOs, but they couldn't get any to close their Repo trades.  LTCM showed how interconnected the system was when they basically had to close the entire fixed income market to buy time to understand who had what and with whom.

Frankly, someone with the experience of Corzine should have known that these sorts of "low risk low return" trades, that require massive leverage to be worth the effort actually become highly risky because of the leverage effect of small factors, i.e. margin hikes.  However, what I had learned is these sorts is they are all big ego and big picture.  We may want to see a wider conspiracy, but this is partly our desire to imagine the powerful are evil, rather than incompetent.  


Sat, 11/19/2011 - 01:40 | 1893587 chindit13
chindit13's picture

Wow, I am delighted to see some of the silent majority speak.  No doubt it is my own confirmation bias, but I tend to gravitate first toward incompetence, then toward arrogance, next toward desperation, and maybe if all that fails, I might consider conspiracy.

The great enlightenment comes when one nears the top of the mountain and realizes there isn't any god or guru up there;  there isn't anybody in charge, nobody so clever that he can control the other seven billion.  A man at the top might try to stake out his ground, but there is always another hungry soul who wants to knock him off.  I suppose it is more comforting to believe in a cabal, even an evil cabal, because one then can believe a deal is possible or else somehow, some way the cabal can be cleared away and the world made an Eden.

Fri, 11/18/2011 - 15:56 | 1892150 c'mon man
c'mon man's picture

CME says don't worry investors:

Fri, 11/18/2011 - 15:55 | 1892151 donsluck
donsluck's picture

The lesson is clear. Get physical or get out of the game. Paper systems are breaking down.

Fri, 11/18/2011 - 16:03 | 1892198 alien-IQ
alien-IQ's picture

If TPTB were ever to decide to go with a Gold backed currency, you can fairly safely bet the farm that they will be confiscating the gold that is not in "approved" hands. And if you are wondering who these "approved hands" are...just remember the words of the late great George Carlin:

"It's a big fuckin club..and you ain't in it"

Nothing is safe.

Fri, 11/18/2011 - 16:14 | 1892249 XitSam
XitSam's picture

Yeah, I'm going to take delivery on my oil, pork bellies and cotton. Physical FTW!

Fri, 11/18/2011 - 17:06 | 1892480 donsluck
donsluck's picture

It's been done. Oil, in the form of gasoline, is in constant small scale arbritrage, by people who wait to buy on dips, like me! I don't drive much. Cotton is certainly stable and can be warehoused. I'd stay away from pork bellies.

Fri, 11/18/2011 - 15:55 | 1892154 stopcpdotcom
stopcpdotcom's picture

Always remember: Cui bono?


Seems to me that they are trying to totally change the system.



Fri, 11/18/2011 - 15:55 | 1892155 devo
devo's picture

I really don't think that's what happened. This author is clearly biased...he has 90k in MFG.

Fri, 11/18/2011 - 16:08 | 1892222 Mutatto
Mutatto's picture

"had" 90k in MFG.

Fri, 11/18/2011 - 16:31 | 1892314 Everybodys All ...
Everybodys All American's picture

90K would not be enough to make a futures trader biased. The fact that the securities rules and possibly criminal behavior by a prominant democrat fund raiser for the president would make anyone seethe. This smells so bad it will make Solyndra look like a success story.

Sun, 11/20/2011 - 19:01 | 1896705 Papasmurf
Papasmurf's picture

Solyndra was a success story. (met all the goals)

Fri, 11/18/2011 - 15:56 | 1892159 slaughterer
slaughterer's picture

"where can you put your money and expect it to be safe?" farmland, physical, guns, surveillance

Sat, 11/19/2011 - 09:37 | 1893852 Waterfallsparkles
Waterfallsparkles's picture

Rental Real Estate.  You do not see Le Frack who is frequently on CNBC complaining.  Or Donald Trump for that matter.

Fri, 11/18/2011 - 15:57 | 1892161 blu
blu's picture

Interesting thesis. Hard to prove either way, but that doesn't make it crazy-talk.

If the author is right then we can expect to see these shots across the bow every few months or so. Coupled with more 800 point flash-crashes will leave the markets largely in the hands of the oligarches and their HFT minions, and just another arm of the 24/7 propaganda machine.

Fri, 11/18/2011 - 16:10 | 1892232 XitSam
XitSam's picture

If Corzine goes to jail ...   If you were a former Governor, former US Senator, what would you charge per year of jail?

Fri, 11/18/2011 - 16:20 | 1892267 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I think the premise is half-right. The fact that it discourages so-called "speculators" (i.e. those who go long on gold), but mostly by having a failure to deliver (of sorts). I listened to Celente's interview on Russia Today, where he stated he was building up his acct to take delivery. He didn't say how much he was taking, but it had to be a fair sum since he mentioned he had "6 figures" in his acct and was looking to take delivery in December. If he wanted delivery on 100-1000 oz (and there was none to be had) AND MFG didn't want undue bad PR (whilst trying to sell itself) on bonking on delivery, maybe this was a way around that.

Please note, this doesn't mean I don't think Corzine isn't a lying, thieving bastard, but merely that the true nature for all of those lies hasn't been revealed.

Fri, 11/18/2011 - 16:45 | 1892370 Hearst
Hearst's picture

If the author is correct then the Fed is more desperate than I thought.  Anyhow commodity prices cannot be managed forever.  All manipulations end.  This is just more extend and pretend until Europe explodes and the Fed can safely point their finger over seas at their beloved scapegoats.

Fri, 11/18/2011 - 15:57 | 1892162 alien-IQ
alien-IQ's picture

Interesting speculation. I'm not saying you are right or wrong...but you're gonna need more than speculation to win this battle.

Evidence exists and you shall find...of course, if you do find may find yourself the victim of an unfortunate plane crash, car accident...or find yourself on the receiving end of an involuntary suicide...because, and let's face it...they roll like dat.

Fri, 11/18/2011 - 15:57 | 1892163 Let them eat iPads
Let them eat iPads's picture

This is giving a lot credit to a bunch of incredibly incompetent and stupid people.

Fri, 11/18/2011 - 16:01 | 1892184 FeralSerf
FeralSerf's picture

It's even more stupid to underestimate your enemy.

Corzine is not stupid.

Fri, 11/18/2011 - 16:16 | 1892245 blu
blu's picture

It goes both ways. Corzine might have got clumsy, or made an enemy.

I read where a Financials insider once say that these "people" (whoever they really are) are like infants; they only know what they want, will stop at nothing to get it, will happily and without hesitation destroy anything or anyone in their way, and outside their narrow fields are as dumb as a sack of hammers.

I see things going on, and I think of that image. Of being really limited and at the same time driven mad with desire.


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