vlogolution network » commodities

MF Global, now PFG, suicide notes, how many more roaches to go…

Alexander P Morris — Fri, 13 Jul 2012 21:42:58 +0000

“I have committed fraud. For this I feel constant and intense guilt. .. Through a scheme of using false bank statements I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group, Inc. The forgeries started nearly twenty years ago and have gone undetected until now. I was able to conceal my crime of forgery by being the sole individual with access to the US Bank account held by PFG. No one else in the company ever saw an actual US Bank statement. … I had no access to additional capital and I was forced into a difficult decision: Should I go out of business or cheat? I guess my ego was too big to admit failure. So I cheated, I falsified the very core of the financial documents of PFG, the Bank Statements. .. I also made forgeries of official letters and correspondence from the bank, as well as transaction confirmation statements.”

“Using a combination of Photo Shop, Excel, scanners, and both laser and ink jet printers I was able to make very convincing forgeries of nearing every document that came from the Bank. I could create forgeries very quickly so no one suspected that my forgeries were not the real thing that had just arrived in the mail.”

“When it became a common practice for Certified Auditors and the Field Auditors of the Regulators to mail Balance Confirmation Forms to Banks and other entities holding customer funds I opened a post office box. The box was originally in the name of Firstar Bank but was eventually changed to US Bank. I put the address “PO Box 706, Cedar Falls, lA 50613-0030″ on the counterfeit Bank Statements. When the auditors mailed Confirmation Forms to the Bank’s false address, I would intercept the Form, type in the amount I needed to show, forge a Bank Officer’s signature and mail it back to the Regulator or Certified Auditor.

When online Banking became prevalent I learned how to falsify online Bank Statements and the Regulators accepted them without question.”

Full PFG Affidavit (including part of the suicide note): PFG Affidavit (Scribd)

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PFG once again proves that not only is the Sanctity of Segregated Funds “guideline” all but dead, but that it was really just a myth all along. Far be it for regulators to pick up a phone just once over a 20 year period and speak with an actual representative of the bank to confirm the existence of hundreds of millions of dollars.

But perhaps the most frightening thing about all these blowups using client capital, is that by the time this is all over, with so many firms secretly reaching for yield any way they can since interest rates have been stuck at 0%, how many more funds, companies, clearing firms, and brokerage houses blow up before all is said and done. And even if they get away with it for a while, I can’t imagine what hell will break loose once interest rates start climbing again in the U.S. (as they have in Greece, Italy, Spain, etc). Unfortunately, there’s still no way for the average person to tell who’s gonna get caught with their pants down once the tides turn. And while I don’t very much trust the FDIC or SIPC either (especially if many institutions all collapse simultaneously), it’s still better than nothing if regulators want to hold to the claim of actually somewhat protecting innocent customers. Just ask some of Madoff’s ex-clients.

Often times such blowups start with the coverup of a smaller loss (or some kind of “reaching for yield” or “naked hedge” scenario that backfired). The CEO figures he’ll be able to “kick the can” down the road long enough to figure out how to dig out of the hole (hey, the government does it all the time, so why can’t we all)! Perhaps he can outgrow the “discrepancy” over time and glaze it over. Such wishful thinking inevitably leads to even bigger failures and blowups (just like repeatedly lending more money to defunct countries who have absolutely no way to pay it back or even print their way out of it).

But perhaps the government can pass some new laws, rules, and regulations, and create a few new oversight bureaus, to make sure the original oversight commissions enforce the laws, rules, and regulations already in place.

So far, clients of these firms would have likely faced less risk had the government simply told them “caveat emptor”: realize that any firm where you entrust your hard-earned money could disappear with it overnight, so diversify wisely… And if you do get caught up in one of these frauds, hopefully your money went to help some other “poor” politically-connected bankster stay afloat and save the economy while you go back to eating cake…

Mind over Money – Documentary on Irrational Markets

Alexander P Morris — Sat, 01 May 2010 22:23:36 +0000

NOVA recently released an interesting and insightful documentary, “Mind over Money”. How can markets be rational when humans are not? It helps explain why stock in bankrupt companies can still go up 500% before going to zero. The movie presents studies that show how people will emotionally overbid for items even though they know they’re over-paying for it. For example, one study had a man purchase a $20 bill for $28. In another study, a class of traders irrationally bid up an asset they knew would become completely worthless within 15 time periods.

Watch “Mind over Money” free online (about 53 minutes long) at the following link:

Watch NOVA’s “Mind over Money” Documentary

NY Hard Assets Conference Review 2009

Alexander P Morris — Wed, 13 May 2009 12:48:34 +0000

While I didn’t have a chance to get down to the NY Hard Assets Conference in New York City May 11th-12th, Daryl Montgomery of the NY Investing Meetup did attend. Honestly, I counted on him releasing a good summary and review of the conference so that I could focus on trading and managing positions in this crazy market! (did I say that out loud?!) He didn’t let me down, and wrote an excellent summary of the conference on his blog, along with his take of the “experts” in attendance and their “predictions”. It’s definitely worth reading the full article. Some key points are included below:

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ANY PORK IN THIS STOCK MARKET FOR ME?

Alexander P Morris — Wed, 22 Apr 2009 21:53:54 +0000

Video interview and update on the current State of the Markets, as well as the overall State of the Economy with Daryl Montgomery of the NY Investing Meetup (interviewed by Alexander Morris of moMoneyTV and PassMeThePork.com). Watch NOW to learn if there are any opportunities currently offered by the markets. We have the answers for what’s on everyone’s mind, “Is there any room in the stock market for it to PASS ME THE PORK??!”

Saving our Economy by Destroying the Dollar – the Absurdity of Federal Reserve Policy

Alexander P Morris — Wed, 17 Oct 2007 22:00:00 +0000

Another interesting interview with Daryl Montgomery of the New York Investing Meetup (http://investing.meetup.com/21), describing what has happened to the value of the dollar since the Fed cut rates back in mid-September.

The Culprit Behind the Housing Bubble – abridged version

Alexander P Morris — Fri, 05 Oct 2007 22:00:00 +0000

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.” You’ll be shocked to learn that it was actually Alan Greenspan who authored these words, before he became Chairman of the private Federal Reserve Bank. What are the implications of his actions, contrary to his initial beliefs, into the future? We are only beginning to find out…

This abridged version contains only my synopsis, and does not include Alan Greenspan’s article on “Gold and Economic Freedom”. It does, however add an extra bit about 2007′s top performing Stock Market in Zimbabwe! It’s up over 12,000% in 12 months! Of course, the country’s consumer price index was rising (i.e., the purchasing power of currency declining), was also rising at a rate of 1,729% a year. So how much are all those Zimbabwees worth anyway, even in dollars?

The Real Culprit Behind the Housing Bubble – The Truth about Gold and Economic Freedom

Alexander P Morris — Tue, 02 Oct 2007 22:00:00 +0000

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.” You’ll be shocked to learn that it was actually Alan Greenspan who authored these words, before he became Chairman of the private Federal Reserve Bank. What are the implications of his many actions, contrary to his initial beliefs, into the future? We are only beginning to find out…

Protecting Yourself from Inflation and the Credit Bubble with Daryl Montgomery of the NY Investing Meetup

Alexander P Morris — Wed, 26 Sep 2007 22:00:00 +0000

Very interesting interview with Daryl Montgomery of the New York Investing Meetup (http://investing.meetup.com/21) on inflation, the real-estate/credit bubble, where we may be headed, and how you can protect yourself (and potentially profit) from our currently accelerating inflationary environment.