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  #1  
Old 11-16-2011, 02:25 PM
Franc Tireur Franc Tireur is offline
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MF Global securities assurances

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Robert Cook, director of the Securities and Exchange Commission's Trading and Markets Division, told lawmakers that regulators are still struggling to verify information from the failed brokerage, which declared bankruptcy on October 31 following risky bets on European sovereign debt.

The Commodity Futures Trading Commission, meanwhile, is the regulator with oversight of the futures accounts where about $600 million of customer money was reported missing.
http://www.reuters.com/article/2011/...7AF1V920111116

It seems like another huge scandal, what do you think about this story?
 
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  #2  
Old 11-16-2011, 02:53 PM
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I wouldn't expect to see a great deal of press coverage on this story unless the MSM can find a Republican to connect to it.
 
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  #3  
Old 11-16-2011, 03:03 PM
Franc Tireur Franc Tireur is offline
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Here is the MSN version http://www.msnbc.msn.com/id/45325740/ns/business/

Same story
 
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  #4  
Old 11-16-2011, 03:06 PM
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It is another reminder, old habits are hard to stop.....be thankful not to have been on the Train.
 
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  #5  
Old 11-16-2011, 03:08 PM
Franc Tireur Franc Tireur is offline
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I guess there is a moral in all these financial stories: Speculation could backfire anytime.
 
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  #6  
Old 11-16-2011, 06:00 PM
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Quote:
Originally Posted by Natural Elements View Post
I guess there is a moral in all these financial stories: Speculation could backfire anytime.
Speculation is not bad by itself...but with your own money.
 
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  #7  
Old 11-16-2011, 06:29 PM
Franc Tireur Franc Tireur is offline
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Quote:
Originally Posted by JakeMoore View Post
Speculation is not bad by itself...but with your own money.
That's right. There are two kinds of speculation:

Speculation like you said with your own money, so that's fair enough.

Speculation used electronically today with short positions, so you don't use your own money (perhaps just some fees) and can speculate. For example the oil went from around $80 not long ago, to now almost $100. This kind of speculation is fraud in my opinion.
 
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  #8  
Old 11-17-2011, 05:36 PM
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Quote:
Originally Posted by Natural Elements View Post
That's right. There are two kinds of speculation:

Speculation like you said with your own money, so that's fair enough.

Speculation used electronically today with short positions, so you don't use your own money (perhaps just some fees) and can speculate. For example the oil went from around $80 not long ago, to now almost $100. This kind of speculation is fraud in my opinion.
There is something of a difference between speculation and what happened at MF Global.

When you speculate, even with the most heavily-leveraged, electronically-traded positions, you're still putting your own money on the line for the entire amount if the position goes bad.

MF Global stole its clients' funds.

Quote:
BCM Has Ceased Operations (Part 1)
Posted by Ann Barnhardt - November 17, AD 2011 10:27 AM MST
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
Excerpt, more at: http://barnhardt.biz/
 
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  #9  
Old 11-17-2011, 07:24 PM
Franc Tireur Franc Tireur is offline
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I see Bob, and thanks for the link, the story is much more precise.

The stock market is like a shark pool, you can lose everything.
 
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  #10  
Old 11-17-2011, 08:27 PM
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Quote:
Originally Posted by Natural Elements View Post
I see Bob, and thanks for the link, the story is much more precise.

The stock market is like a shark pool, you can lose everything.
Yeah, the article pointed out the difference between speculation, which has its own risks, and outright theft.
 
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  #11  
Old 11-21-2011, 09:27 AM
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What happened at MFGlobal was outright theft.

[YT]zsUWcPIlvNQ[/YT]

4 Part interview with Gerald Celente, one of the victims in the MF Global debacle.
 
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  #12  
Old 11-21-2011, 10:52 AM
Franc Tireur Franc Tireur is offline
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Banks Financial Weapons of Mass Destruction have already destroyed many Europeen countries, and it seems like the same names behind it appear again and again and nothing is done to stop it. The EU is in a engineered, controlled financial collapse.

It is just madness...
 
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  #13  
Old 12-03-2011, 11:42 AM
Franc Tireur Franc Tireur is offline
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More news: Exclusive: MF Global mixed funds, transferred abroad

Quote:
Regulators investigating the collapse of MF Global have determined that the firm combined money between securities and futures accounts owned by customers, and transferred funds outside the country to at least one entity, a source said on Friday.
Quote:
MF Global collapsed in late October after the firm was forced to reveal that it had made a $6.3 billion bet on European sovereign debt.
http://www.reuters.com/article/2011/...7B203J20111203

The story started with $600 million, now it is $6.3 billion, WOW
 
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  #14  
Old 12-03-2011, 01:10 PM
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Quote:
Originally Posted by Natural Elements View Post
The story started with $600 million, now it is $6.3 billion, WOW
The $600 million was the amount of client money known to have been stolen. It's not clear that the whole $6.3 billion was the loss that they sustained on the European bet.

From the article you linked:
Quote:
Investigators such as the Commodity Futures Trading Commission have been scouring the company's books, described as messy and unorganized, for the fund shortfall that has been estimated as much as $1.2 billion by the liquidating trustee.

However, regulators have been at odds with the trustee, believing that figure is too high.
 
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  #15  
Old 12-03-2011, 01:52 PM
Franc Tireur Franc Tireur is offline
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Quote:
Originally Posted by Bob Barr View Post
The $600 million was the amount of client money known to have been stolen. It's not clear that the whole $6.3 billion was the loss that they sustained on the European bet.

From the article you linked:
Sure IMO they played with the customer's money and lost. The thing that doesn't sound right to me is they bet much more than they had, how it can be possible? Where are the regulators

Here another link regarding this story with now $11.5 billion http://www.bloomberg.com/news/2011-1...rd-balked.html
 
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  #16  
Old 12-03-2011, 02:14 PM
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Again, there's a huge difference between a firm's position and its liability for that position. Yes, the $11.5 billion was the position taken. With hedges, though, the firm's liability wasn't for the full amount.

From the linked article:
Quote:
He used the hedges, or offsetting trades, to cut the net risk reported to shareholders to $6.4 billion, according to an Aug. 3 regulatory filing by the company.
While that's still a potential disaster-in-the-making, it's actually half the disaster that the $11.5 billion figure makes it appear to be.

<added>
With rounding to the nearest $100 million (We all do that, don't we? ), the $6.4 billion exposure reported here lines up pretty well with the $6.3 billion figure you quoted from the earlier article.

Last edited by Bob Barr; 12-03-2011 at 02:20 PM.
 
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  #17  
Old 12-04-2011, 11:15 AM
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Quote:
Highridge Futures Fund LP, a customer of the MF Global Inc. brokerage, said its $50 million account with the defunct company is “missing.”
...
http://www.bloomberg.com/news/2011-1...fund-says.html

Quote:
...
If the clearing system fails then you have nothing whatsoever. God help you if you are a farmer hedging your crop or livestock if you the farmer have nothing whatsoever due to a broken clearing house. You are insolvent regardless of the fact that your hedge may have been perfect for the needs of your operation.

Unless MF clients are made whole in every way the system is broken.

People did not realize then and some even now that the failure of Lehman broke the technical procedures (mechanism) for the functioning of the OTC derivative and for that reason broke the Western world’s financial system for which we are paying dearly today.

MF is a Lehman Brothers, but worse. OTC derivatives have always been a fraud but could have, before Lehman failed, been globally netted to practically zero.

The lack of faith in the clearing house system breaks the mechanism of the marketplace, even for legitimate transactions. This leaves gold in your possession as the asset of last resort. ...
http://www.jsmineset.com/2011/12/02/...f-all-markets/

Bird in the hand is worth two in the bush. The time for playing games with margin is over. Real counterparty risk is at hand as dominos wobble on the table.
 
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  #18  
Old 12-05-2011, 09:23 AM
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Buy and hold physical metals.
No counterparty risk. No betting. No frozen assets. No digital theft.
 
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  #19  
Old 12-13-2011, 10:39 AM
Franc Tireur Franc Tireur is offline
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Corzine testifies as Senate probes MF Global

Quote:
The search for the missing money at bankrupt brokerage MF Global continued on Capitol Hill Tuesday with a hearing before the Senate Agriculture Committee.

Former MF Global CEO Jon Corzine returned to the hot seat, this time flanked by two former colleagues from the brokerage's parent company, MF Global Holdings: Chief operating officer Bradley Abelow and chief financial officer Henri Steenkamp.

Also among the 10 witnesses set to testify are James Giddens, the trustee overseeing the brokerage's liquidation, and Dean Tofteland, a Minnesota farmer and former MF Global customer whose commodities account has been frozen since the firm's bankruptcy in late October.

For Tofteland, MF Global's failure has left him unable to access more than $200,000 of his own money. He has been forced to delay seed purchases, leaving next year's harvest uncertain.

The plight is a common one for farmers who rely on the commodities market to protect against volatility in crop prices, posting cash collateral in their accounts when they lock in contracts to deliver crops in the future at a set price.

"These funds were not an investment in MF Global. These funds were not a loan to MF Global," Tofteland told the Committee. "These funds were simply collateral required by the exchange as a guarantee for my promise to deliver the bushels I had priced."
http://money.cnn.com/2011/12/13/news...x.htm?iid=Lead

It will be interesting to hear them, but is it just a show like we have seen before with no consequences for what they did.
 
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  #20  
Old 08-16-2012, 03:01 PM
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Looks like Jon Corzine is going to walk.

http://dealbook.nytimes.com/2012/08/...-at-mf-global/

Amazing! You can disappear 1.6 billion dollars as long as you have the right friends.
 
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