“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)

——————–

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…

(Josh Brown / RegisteredRep) “There are some stock market land mines that will invariably destroy anyone foolish enough to stand on them for an extended period of time. .. Until you’ve been blown up by a few of these murder holes yourself, it’s hard to recognize them. Below is a list of the dark alleys you never want to wander down for your own future financial well-being. .. These alleys are strewn with various land mines, any of which could become your very own murder hole at any time. You probably won’t listen anyway, but don’t say I didn’t warn you.”

SPACs – “According to Reuters, the last big wave of 57 SPACs that debuted at the height of the credit bubble in 2007 had raised a combined $11.3 billion. That’s a whole lot of “dumb money.” The best thing that could’ve transpired for those 57 companies would have been the return of cash that occurs when the clock runs out and a deal hasn’t been consummated. In fact, there were a few hedge funds involved with some of those SPACs that were forcing that dissolution to occur using the voting power of their stock positions. .. If it weren’t so true, it would almost be laughable how horribly and slowly these things die. And by the way, many of these SPACs have been China-related in recent years. For investors, the China-SPAC combination is like being beaten up after school and then coming home to find that your parents have moved away without telling you. .. And just so you know, the investment banks that make these stepchild IPOs are almost always connected to an aggressive brokerage sales force. How else could $100 million be raised for such a hare-brained scheme?”

Chinese Reverse Mergers – “The short sellers who have attacked and unmasked the Chinese RTO fraud machine have done investors a favor in the long run. I’ve advised people to avoid the entire China stock sector until the companies grow up a bit and start acting like professionals. After all, if the legendary John Paulson can be taken in by these charlatans, what chance do you have?”

One-Drug Biotechs – “The vast majority of drug trials fail to satisfy the FDA, and approvals are the exception, not the rule. .. If you must own biotechnology, try to go with a larger company that has several drugs on the market or in development. It may not produce a 10-fold return, but it also won’t vaporize your portfolio on an FDA setback.”

Private Placements – “So I’ll tell you what happens and what will always happen when retail brokers bring their clients private banking deals. By the time a company is desperate enough to go to broker/dealers for funds, it means that it is already at the end of its rope. The retail brokers are offered a 10 percent commission to show the deal to their clients. They are also promised warrants and stock options should the company end up going public. (It won’t.) This exorbitant compensation for the brokers is a huge red flag. .. The higher the commission or selling concession a broker is paid to sell a product, the worse that product will be for his or her clients. Brokers take note: selling a client a private placement that pays you a tenth of that money back is the same thing as telling your client to go f*%k himself. And by the way, the more interesting the company, the more dangerous the private placement offering.”

Other investor traps to watch out for:

• “Oil and gas limited partnerships. (If you’re being cut in on them, the wells are dry.)
• Principal protection funds. (They always come out after the market’s been killed and cap your upside on the recovery.)
• Insurance brokers selling asset management. (Does your hairdresser also repair the roof on your house?)
• Stockbrokers selling guaranteed-return equity-linked annuities. (Yeah, that’ll end well.)
• Reverse convertibles and other structured products. (They will pit you against both the market and the banker — good luck!)
• Brokers with one day left in their pay period. (They will call you with the news that “we need to rotate and move some things around.”)
• Brokers with thick New York accents and Boca Raton area codes.
• Anyone who claims to have a “system.” (Why? Because there is no such thing, and if there were, you would be the last person to hear of it.)
• Anyone who calls himself a “financier.” (He’s guaranteed to be full of sh*t and probably wears dress shoes with no socks.)
• Financial advisors who self-clear or self-custody client funds. (Always be sure there is another pair of eyes on your money, preferably a large corporation’s.)
• Currency brokers and forex sites. (Nobody knows anything; this is all highly leveraged speculation, and the brokers are actually trading against you when you take a position.)
• Managed futures funds. (The fees are so over the top that your actual return will look nothing like the advertised return.)
• Movie investments. (The latest telemarketing scam; no studio worth investing in is going to unleash an army of cold callers to raise funds.)
• Closed-end fund IPOs. (These funds should only be bought at a discount in the secondary market. Within 90 days of the IPO, the “penalty bid” phase ends and brokers can freely dump shares while keeping their commissions — you will be down 15 percent in a blink.)”

Full Story: Staying Out of the Murder Holes (Joshua Brown / RegisteredRep)

And let’s not forget to mention double and triple ETNs (Exchange-Traded-Notes) that will evaporate your portfolio faster than you can say “WTF“?!… 

Full Story: Collateral Damage: TVIX’s Fall Could Have Broader Implications (TVIX, VXX)

Apparently, this is a scam that’s been going around for a couple of years now, and can be especially dangerous for unsuspecting, less computer-savvy target victims. While many of the scam reports I’ve come across seem to have targeted England and Australia, it would appear that the scammers are now targeting more Americans as well. Today, we received one such call. The scam goes as follows:

You get a call from some Indian guy with a generic name such as “Adam Smith” who explains to you in horribly broken English that he’s a registered Microsoft technician and has received a call alerting him that your IP address is the source for serious attacks on their servers due to multiple computer virus infections on your end. If you ask for any information on the source or target IP addresses involved, the person will attempt to deflect the question, and inform you that he/she is unauthorized to provide you that information!

They will proceed to try convincing you that your computer is full of viruses (based on some standard status and error messages automatically generated by your computer), and they try to get you to grant them complete access to your entire computer (passwords, credit cards, everything) via the free “Ammyy Admin” remote desktop control software. If you don’t agree to buy their crappy, useless, and thieving “support services”, they’ll use the computer access you openly granted them to screw up your computer and randomly delete stuff (watch them erasing things off the desktop in this video).

‘Nuff said… BE WARNED, ALWAYS BE WARY, and never fall for some schmuck on the phone trying to con information out of you, or get you to run any type of software on your PC.

Watch the video to see exactly how this scam plays out.

(Barnhardt.biz) “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.”

“I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. ..  I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.” – from Ann Barnhardt’s Client Letter (BCM HAS CEASED OPERATIONS), complete letter follows below…

(TheMarketTicker) “The reason they got caught is the same reason I would have gotten caught if I had been clearing through MF Global: Despite being around the markets since well before the 2000 crash and having successfully negotiated that and the 2008 mess everyone has believed, right up until MF blew up, that customer funds were in fact segregated and thus this risk would never occur. Simply put everyone has now discovered that this assumption is wrong. .. Nothing that has come out of the CME, the SEC or Washington DC that has restored my confidence that MF Global is, in fact, a one-off situation.  In point of fact The Fed is now requiring margin on certain repo transactions where they never did before, implying that there may well be additional snakes in the grass and additional unrecognized and intentionally hidden risks of this sort.”

Full Story: Oh Oh. “Regulated” Derivative Markets About To Blow Up? (TheMarketTicker)

______________________________________________________________________

Entire Letter from Ann Barnhardt to her IBB / Commercial Hedging Clients  (source: http://barnhardt.biz):

BCM HAS CEASED OPERATIONS

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.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.

And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

As for me, I can only echo the words of David:

“This is the Lord’s doing; and it is wonderful in our eyes.”

With Best Regards-
Ann Barnhardt

Source: http://barnhardt.biz/

Ann Barnhardt addendum: “There is some confusion as to what I (formerly) did for a living via BCM. I am not a ‘hedge fund’ or a ‘money manager’. I am an old-school commercial hedge broker specializing in CATTLE and GRAIN. Farmers, ranchers, etc. Actual hedging of actual cattle and grain using futures and options. Very old-school original.”

CBS News’ Steve Kroft reports that members of Congress can legally trade stock based on non-public information from Capitol Hill.  We’ve already discussed this type of corruption in the past, and it’s great to see the issue receive so much more widespread publicity…  You also see by Nancy Pelosi’s attitude how a two-tiered “Rule of Law” is practically considered a “congressional entitlement” at this point.  Hint to OccupyWallStreet protesters, HERE IS YOUR REAL ONE PERCENT!!! (actually, more like the truly thieving and conniving .1% who want you to grant them even more money and power)

(CBS) “The buying and selling of stock by corporate insiders who have access to non-public information that could affect the stock price can be a criminal offense, just ask hedge fund manager Raj Rajaratnam who recently got 11 years in prison for doing it. But, congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it.”

“So in 2004, Baird and Congresswoman Louise Slaughter introduced the STOCK Act  which would make it illegal for members of Congress to trade stocks on non-public information and require them to report their stock trades every 90 days instead of once a year. .. Kroft: How far did you get with this? Baird: We didn’t get anywhere. Just flat died. Went nowhere. Kroft: How many cosponsors did you get? Baird: I think we got six. Kroft: Six doesn’t sound like a very big amount. Baird: It’s not, Steve. You– you could have– ‘National Cherry Pie Week’ and get 100 cosponsors. When Baird finally managed to get a congressional hearing on the STOCK Act, almost no one showed up. It’s reintroduced every session, but is buried so deep in the Capitol we had trouble finding congressmen who had even heard of it.”

“And former House Speaker Nancy Pelosi and her husband have participated in at least eight IPOs. One of those came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies, began making its way through the House. Undisturbed by a potential conflict of interest the Pelosis purchased 5,000 shares of Visa at the initial price of $44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House.”

“In the past few years a whole new totally unregulated, $100 million dollar industry has grown up in Washington called political intelligence. It employs former congressmen and former staffers to scour the halls of the Capitol gathering valuable non-public information then selling it to hedge funds and traders on Wall Street who can trade on it.”

]]> http://www.vlogolution.com/hot/2011-11-15-congressional-insider-trading-scam-our-rule-of-law-doesnt-apply-to-the-1-who-run-the-government-and-the-country/feed/ 0 http://www.vlogolution.com/hot/2011-11-09-jon-stewart-on-jon-corzine-and-mf-global-the-walking-debt/ http://www.vlogolution.com/hot/2011-11-09-jon-stewart-on-jon-corzine-and-mf-global-the-walking-debt/#comments Thu, 10 Nov 2011 04:00:42 +0000 http://www.vlogolution.com/hot/?p=1596

(JonStewart) “Politician Jon Corzine saw Lehman Brothers as a cautionary tale; financial firm honcho Jon Corzine saw it as a dare.”

I don’t always agree with Jon Stewart, but he’s pretty much got it right on the money on this one…

(TheMarketTicker) “Let us remember that MF Global was just added to the primary dealer list in 2010! The bankruptcy does raise questions, however, about how the Fed picks the primary dealers — especially since MF Global was one of four firms added to the ranks after new, more stringent requirements were put in effect in 2010.”

Full Story: MF Global – Trillions in Bailouts, Loads of New Regulations, yet nothing has changed (vlogolution)

(PeterBrandt) “The media is missing the real story in the sad saga of MF Global. The story is not the big bet in Europe by MF Global that went south. The story is not the risk-taking ways of Jon Corzine.

The real story is the ineptness of federal regulators (so, what’s new). The real story is that speculators may end up holding an empty bag right under the noses of the U.S. government regulators responsible for their protection. The present administration appears unwilling to step up to the plate. The Obama administration bailed out AIG, Deutsche Bank, Fannie, Freddie and a whole bunch of other crooks along the way. But when it comes to protecting the integrity of futures markets, the powers that be (or should be) are MIA.

If segregated account holders of MF Global are stiffed it will be the end of market integrity as we know it. Free market lovers everywhere, do NOT under-emphasize the importance of this matter. The MF Global situation could be the leak in the dike that will flood the financial system as we know it. If segregated account holders in a federally regulated market are not protected, what is next?”

Full Story: Futures traders: Be concerned, be very concerned (PeterBrandt)

(PeterBrandt) “Futures markets and futures commission merchants (FCMs) are supposed to be highly regulated by the Commodity Futures Trading Commission (CFTC). If MF Global’s seg customers are not fully protected, it would be the equivalent of, let’s say, depositors of Chase bank or customers of Fidelity not being protected.

The failure of MF Global’s segregated account to be made whole would be the biggest financial disaster since 1929 and would spell the end of the futures industry as we know it. Folks in the financial industry should take this matter seriously — very seriously. Do not underestimate the importance of this matter.”

Full Story: MF Global — 2011′s version of 1929 (PeterBrandt)

(GlobeInvestor) “ETNs expose investors to the risk of losing all or most of their principal. That’s because ETNs are set up as unsecured, long-term debt obligations of the issuer, Ms. Pelant explains. ETF investors don’t face the same default risk because ETFs own a pro rata stake in a basket of stocks, bonds, or derivatives held by a custodian in trust and legally separate from the issuer, she says.”

“When Morgan Stanley’s viability came under question in September , its family of Market Vectors ETNs sold off dramatically. ‘The Market Vectors Remnimbi/USD ETN (CNY) plunged more than 25 per cent versus a 1-per-cent drop in a comparable ETF,’ observes Greg Newton, a veteran financial journalist who writes the NakedShorts blog.”

However, if the ETFs don’t actually hold the securities that make up the fund, and instead use synthetics or swaps rather than physicals, investors may also be exposed to much more credit and counter-party risk than they realize. And as Jeffrey Gundlach discussed at the recent DoubleLine Luncheon at the New York Yacht Club, “Never, ever take counterparty risk. It is the one risk you are almost never rewarded for taking. Unless you are running $800 billion dollars, there is no need to use swaps, synthetics or baskets – trade cash markets and avoid any trades that require a counterparty.”

(HistorySquared) “In light of the counter party risks inherent in ETFs, especially those that use synthetic swaps rather than the physicals, there might be an inexpensive way to express a bearish view on some of the European banks.

For example, in 2008 Lehman Brothers had several failed ETNs. ‘The three ETNs were Opta Lehman Commodity, Agriculture and Private Equity. In September 2008, these ETNs halted trading when Lehman Brothers failed. Currently, the final results are being sorted out, but it appears that Lehman ETN holders will receive 2 cents on the dollar from their original investment.’ ”

These are some clever lower-risk trading ideas for expressing a bearish view on the future solvency of a particular counterparty:

“Perhaps there are some far OTM options on some of the Socgen ETFs that are worth a look . Or a less risky trade could be long an ETF with physicals underlying the ETF that is issued by a more secure bank, and short the highly correlated Socgen ETFs. A potentially catastrophic event could be triggered by Deutsche Banks popular x-trackers.”

Full Story: ETFs as Tail Risk Trades (HistorySquared)

(Bloomberg) “ETFs that use swaps to clone stock, bond or currency returns have been criticized by regulators and firms including Fidelity Investors, which say clients risk losing money should the banks writing the derivatives become insolvent. Outflows from Lyxor are another blow to Societe Generale, France’s second-largest bank, whose shares have tumbled this year as the escalating sovereign-debt crisis squeezes lenders’ funding.

‘It’s an issue of counterparty risk related to the financial health of the backing bank,’ said Jose Garcia Zarate, an ETF analyst at Morningstar Inc. in London. ‘Fears over synthetic replication have been building up, and at the same time, fears of banks’ peripheral-debt exposure have grown. Put those two together: bingo!’ ” — Swap ETFs, Lyxor Have Record Outflows (Bloomberg)

(TheMarketTicker) “.. there’s really nothing more-serious than grabbing client funds internally, and it appears to have happened in the case of MF Global…  It’s black-letter wrong, and The ‘mainstream media’ outlets this morning are talking about this being a “risk management” issue. Nonsense. This is a trust issue and Corzine is a former Goldman guy and the former governor of New Jersey.”

“But this much we do know: This is not an issue of a firm that allegedly broke every rule in the book when it comes to the sanctity of customer funds. Rather it is a story of utterly failed regulation and oversight that continues four years after the collapse that initiated in 2007. It is the story of willful and intentional blindness by our government and the instrumentalities within it that are supposed to prevent this sort of crap from happening.”

“Let us remember that MF Global was just added to the primary dealer list in 2010! The bankruptcy does raise questions, however, about how the Fed picks the primary dealers — especially since MF Global was one of four firms added to the ranks after new, more stringent requirements were put in effect in 2010.”

“I have to ask: Was that a political addition and where in the hell were the examiners that are supposed to be paying attention to what these firms are doing? If this is the result of “more-stringent” requirements can someone tell me why I should believe that any of the other Primary Dealers are in fact solvent and why I should not believe that they’re all doing the same thing?”

“This is the continuing story, as I lay out in Leverage, of “two worlds” where one has the rule of law (you and I) enforced, where robbing a bank gets you a nice long prison sentence and some cops looking for bank robbers to stop them while in the other, inhabited by politically-connected and powerful men and women you can pretty much do anything you damn well please and nothing happens to you — in fact, you get rewarded with calls from The President of the United States and pick the pockets of the public with essential impunity.”

“There are no checks and balances and the banksters wield their briefcases like John Dillinger wielded his tommy gun.  There has been no reform since 2008.  Dodd-Frank was a joke, Glass-Steagall was not put back in place, and there was no prosecution of those who did wrong.

SEVENTEEN PAGES IN GLASS-STEAGALL – 17 PAGES – KEPT THE BANKING SYSTEM SAFE FOR FIFTY YEARS.

And now we have another collapse that appears to show that there is no regulation, there is no oversight and nobody in the government gives a damn when one of the primary dealers that the government charges with making an orderly market in Treasuries appears to have co-mingled more than half a billion in customer funds with their own trading book.”

Full Story: Can You Survive It Being Over? (TheMarketTicker)

Amazingly, the media has been parroting as to how MF Global proves that the Frank-Dodd bill actually worked!

(Mish) “In spite of that background, (or do I mean because of it), MF Global thought Corzine was a perfect fit. Indeed, those looking for reckless behavior, massive risk taking, and willingness to bet the farm on marriage, in politics, and in life, Corzine represented rare ‘impossible to pass up’ talent.”

Full Story: Regulators Investigate MF Global for Missing Customer Money; MF Global Goes Bankrupt Before Making 1st Interest Payment; Corzine’s Achievement Sheet (Mish)

(Bloomberg) “The Volcker rule, as written in the Dodd Frank Act, had ‘so many different exemptions and exceptions and loopholes that it almost became nearly impossible for the regulators to fashion a rule that can live up to its original intent,’ said Barofsky, a Bloomberg Television contributing editor.”

Full Story: MF Exposes Risk Volcker Wants to Curb (Bloomberg)

If this is accurate, it’s pretty frightening stuff, right along the lines of complete “New World Order” totalitarian domination over all of Europe. Open to hearing any thoughts to the contrary…

(abgeordneten) “EU: Treaty of debt (ESM) – stop it now!” Deputies on Check.de – The EU is threatening to transfer a debt-based Union of turning a liability community. In addition, the fiscal and budgetary powers of national parliaments will be given to an EU-Governors. This is based on the only recently become known to the draft treaty called “European Stability Mechanism (ESM)”, decide on the members of the German Bundestag probably after the summer break of 2011. German tax money to answer for the debt policies of other EU countries. We should work to make the banks any losses. The taxpayer is prescribed compulsory solidarity. The banks are on a voluntary basis here. The citizens of this free will not to admit you. We have to pay. The ESM contract can not therefore pass through the German Parliament”

Key Details of ESM Accord

• Article 8 says “Authorized Capital stock 700 billion Euros”
• Article 9 says “ESM members irrevocably and unconditionally undertake to pay capital calls on them within 7 days”
• Article 10 allows the ESM board of governors to “change the authorized capital and amend article 8 accordingly”
• Article 27 says ESM shall enjoy “immunity from every form of judicial process”. Thus the ESM can sue member countries but no one can challenge it. No governments, parliament or any other body or laws apply to the ESM or its organization.
• Article 30 says “Governors, alternate governors, directors, alternate directors, the managing director and staff shall be immune from legal process with respect to acts performed by them (…) and shall enjoy inviolability in respect of their official papers and documents”

Site Link: Initiative Stoppt EU-Schuldenunion (ESM-Vertrag)!

(Mish) “There are no independent reviewers and no existing laws apply. Thus Europe’s national budgets will be in the hands of one single, unelected body that is accountable to no one and immune from all legal actions. Is this the future of the EU or will the German supreme court and other governments put an end to it?”

Full Story: Treaty of Debt – An Eye Opening Video on the ESM Bailout Mechanism (Mish)

(Mish) “Klaus Regling, head of the European Financial Stability Facility has proposed European Bailout Fund Could ‘One Day’ Issue Bonds in Yuan. Financial Suicide – Issuing bonds in another currency risks financial suicide. Currency movements add to the already massive potential risk of huge fluctuations because of leverage. Argentina blew up when it could no longer hold a peg in US dollars. While not a peg, imagine the losses on long-term bonds on a leveraged fund were the Yuan to rise by 33% vs. the Euro.”

Full Story: Financial Suicide: Head of EFSF says Bailout Fund Could One Day Issue Bonds in Yuan (Mish)

“This video is looped and then slowed down and it clearly identifies a police officer tossing the flash-bang directly at the disabled vet on the ground when the protesters attempt to come to his aid. It detonates literally right next to him. None of the protesters are committing any act of violence – they are assisting a man who has just been shot with a rubber round in the head.

THERE IS NO EXCUSE FOR THIS ACT. EACH ACT OF EACH PARTY STANDS ALONE – NO PROTESTER CHARGED THE FENCES OR OTHERWISE ASSAULTED AN OFFICER. THIS WAS A PREMEDITATED ASSAULT BY THE POLICE UPON A PRONE AND INJURED MAN AND THOSE ATTEMPTING TO ASSIST HIM.” – Dateline Oakland: FELONIOUS ASSAULT By Police? (TheMarketTicker)

Perhaps Sergeant Shamar Thomas, a decorated Marine who stood with the “Occupy Wall Street” protest, said it best when he directed the following discourse towards police officers: “It takes a coward to harm an unarmed civilian…This is not a war zone, these are unarmed people. It does not make you tough to hurt these people… If you want to go fight, go to Iraq and Afghanistan… Leave these people alone, they are U.S. citizens…Why are you doing this to our people? I’ve been to Iraq 14 months for my people and you come here to hurt them, they don’t have guns… It doesn’t make any sense… How do you sleep at night? There is no honor in this…you’re here to protect them, protect us.You’re all walking around in riot gear like this is a war, these people don’t have guns.” Semper Fi, Sir!

One can only hope there is a special place in hell for police officers, judges, prison guards, and prosecutors who have sworn an oath to protect and serve the people, yet choose to use their “special powers” not only for the simple motive of personal gain, but even worse… to inflict tyranny over those they swore to defend, as if they get thrills from pulling the wings off a helpless fly…

And as Benjamin Franklin has said, “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” Those who wish to trample over another group’s rights and succeed, better know that it’s just a matter of time before they’re next in line…

Historically, all empires eventually fall due to the corruption of the “Rule of Law“. All accumulated wealth can be attributed to the fair and balanced application of the Rule of Law. If people don’t know what to expect because laws are selectively applied or perverted by the government, there will be flight of capital. In America, the judicial branch is considered untouchable even by the senate. Our justices are unelected officials who are held to no standards. They are immune from prosecution, and hold their positions for life.

If you’ve ever fought a speeding ticket and you know you were in the right, you’ll know that “Rule of Law” is blatently disregarded. Martin Armstrong’s written about it for years from prison. Good luck figuring out what his crime was – so much for a trial by jury. And just a few years back, could you imagine the outrage and outcry we would have seen over an agent groping children at an airport? Look at the ruckus caused just by Don Imus saying “Nappy-headed Ho” (2007 seems like oh so long ago)… “Lock up those damn pedophiles, and throw away the key” would have been the mantra of the day. Today, it’s “business as usual”…

And now, there have been so many outright disgusting and disgraceful acts of unneccessary violence perpertrated by police during the “Occupy Wall Street” movement it’s mind boggling. I myself have been threatened and harrassed by police for standing in front of my own apartment building in NYC — the night before the Thanksgiving Parade no less. While I may have been left feeling helpless and disheartened, these “minor” incidences don’t hold a candle to the violent video footage captured during peaceful protests. The policemen know they’re being recorded, yet they couldn’t even care less anymore – they know they’ll be “protected”.

Ironically, it may very well be these most blatant injustices that will fuel this rising movement more than any other. People can only be pushed and taken advantage of so far, and those in power know this.* The less people feel they have to lose, the more likely they are to take to the streets. And no where else has it been so blatant that those in control now completely follow their own set of rules.

“I don’t care if you hail from the left or right, or what your particular view of the “Occupy Wall Street” movement is.  The fact of the matter is that we no longer have the foundational principle of this nation underlying our nation: The Rule of Law. ” – Well, We Know Who The Felons Are – They Wear Badges (TheMarketTicker)

“Restore the Rule of Law. We’re a Constitutional Republic, not a Democracy. In a Democracy the 51% enslaves everyone else. Are you black, hispanic, or some other minority? In a democracy you’re a slave. Recognize this or make a huge mistake supporting any such move. A Constitutional Republic is governed by the Rule of Law, which says that nobody gets to infringe your fundamental liberty interests, no matter who they are: Rich, poor, white, black or Martian. Everyone who breaks the law is punished and for like crime one gets a like sentence. If I rob you of $50,000 whether I do it with a gun or briefcase is immaterial. Whether I take it one penny at a time or all at once is immaterial too. In each case I must go to prison for doing it and what I stole must be returned to the maximum extent possible.” – The Bottom Line On All The Frauds (TheMarketTicker)

* “I think he knows what Rome is. Rome is the mob. Conjure magic for them and they’ll be distracted. Take away their freedom and still they’ll roar. The beating heart of Rome is not the marble of the senate, it’s the sand of the coliseum. He’ll bring them death – and they will love him for it.” – Gracchus (movie Gladiator)

Best summed up by this comment by black swan on the BusinessInsider post:

“@Tom Hunter: ‘indicating that they will use additional asset purchases to help bring actual nominal GDP back to trend over time’

translation: this ship is sinking and we want to stick the taxpayers with trillions of dollars more of our impaired financial sewage, like we did with QE1, AIG and the GSEs, before we get stuck with it and go down with the ship. Allow us to sail away in our own ship, loaded down with looted treasure and flying the Jolly Roger, to the land of offshore accounts.”

In his latest US Economics Analyst note, Goldman’s Jan Hatzius offers up his suggestion for the next phase of Fed policy:

“With short-term interest rates near zero and the economy still weak, we believe that the best way for Fed officials to ease policy significantly further would be to target a nominal GDP path such as the one shown in the chart on the right, indicating that they will use additional asset purchases to help bring actual nominal GDP back to trend over time. The case would strengthen further if deflation risks reappeared clearly on the radar screen.”

Full Story: Goldman Advises The Fed To Go Nuclear, And Set A Target For Nominal GDP (BusinessInsider)

Isn’t it amazing how, no matter at what level, it always seems to boil down to a small group of “elites” trying to control all the money, all the power, all the “stuff”, and all the other people…

(NYMag) ” .. we’ve had issues with the drummers too. They drum incessantly all day, and really loud.’ Facilitators spearheaded a General Assembly proposal to limit the drumming to two hours a day. ‘The drumming is a major issue which has the potential to get us kicked out,’ said Lauren Digion, a leader on the sanitation working group.”

“But the drums were fun. They brought in publicity and money. Many non-facilitators were infuriated by the decision and claimed that it had been forced through the General Assembly.”

” ‘They’re imposing a structure on the natural flow of music,’ said Seth Harper, an 18-year-old from Georgia. ‘The GA decided to do it … they suppressed people’s opinions. I wanted to do introduce a different proposal, but a big black organizer chick with an Afro said I couldn’t.’ ”

” To Shane Engelerdt, a 19-year-old from Jersey City and self-described former ‘head drummer,’ this amounted to a Jacobinic betrayal. ‘They are becoming the government we’re trying to protest,’ he said. ‘They didn’t even give the drummers a say … Drumming is the heartbeat of this movement. Look around: This is dead, you need a pulse to keep something alive.’ ”

“The drummers claim that the finance working group even levied a percussion tax of sorts, taking up to half of the $150-300 a day that the drum circle was receiving in tips. ‘Now they have over $500,000 from all sorts of places,’ said Engelerdt. ‘We’re like, what’s going on here? They’re like the banks we’re protesting.‘ ”

“All belongings and money in the park are supposed to be held in common, but property rights reared their capitalistic head when facilitators went to clean up the park, .. ” (For those supporting Communism, it always seems like a great idea ’til someone tries to take your stuff)

“In response to dissatisfaction with the consensus General Assembly, many facilitators have adopted a new ‘spokescouncil’ model, which allows each working group to act independently without securing the will of the collective. ‘This streamlines it,’ argued Zonkers. ‘The GA is unwieldy, cumbersome, and redundant.’ ”

Full Story: The Organizers vs. the Organized in Zuccotti Park (NYMag)

Between government-sponsored “Green-Energy” fraud-laden projects such as Solyndra, SolarReserve, and Fisker Automotive, the conflict-of-interest laden PORK-FEST continues… and when they fail, it’s called a “BET” gone BAD.  Nice to see that our government is in the business of gambling with taxpayer dollars by investing huge sums (that we already can’t afford) in entities that always seem to directly benefit a few politically well-connected folks, from Al Gore, to Nancy Pelosi’s brother-in-law Ronald Pelosi, among many others. Why don’t more people talk about hanging THOSE “rich” folks out to dry? Or how about all the “rich” bankers who continue to receive interest-free capital loans at the expense of little old ladies? And once their principal is wiped out on expenses, the banks can steal the rest by charging 30%+ APRs on credit card debt that costs them 0% to loan out courtesy of the Fed. Nice gig if you can get it.

And they wonder what the protesters at “Occupy Wall Street” are upset about…

“An electric car company that received more than a half-billion-dollar Obama administration-approved loan is reportedly now assembling its first line of cars in rural Finland, rather than in the United States. What’s more, the car company, Fisker Automotive, is funded by a venture capital firm whose partners include former Vice President Al Gore.” – Obama Admin Gave half-billion dollar loan to Gore-Connected electric car company to build cars in finland

“The SolarReserve project is backed by an energy investment fund where the Minority Leader’s brother-in-law Ronald Pelosi is second in command.” – Nancy Pelosi’s brother-in-law is given $737m of taxpayers’ money to build giant solar power plant in middle of the desert

“A group of Democratic operatives have formed an investment company called U.S. Renewable Energy Group, or US-REG, which seems to exist for the sake of buying green-tech companies, and then helping them get subsidies. In at least one case, US-REG appeared to be a U.S. beard for a Chinese company seeking U.S. dollars to make wind turbines in China.” – Green subsidies: A breeding ground for corruption

“A senior Energy Department official pushed hard for the government’s $535 million loan to the now-bankrupt California solar energy company Solyndra even after he had disclosed that his wife’s law firm represented the company and he had promised to recuse himself from matters related to the loan application, according to e-mails provided to Congressional investigators by the administration.” – E-Mail Shows Senior Energy Official Pushed Solyndra Loan

]]> http://www.vlogolution.com/hot/2006-06-30-how-a-20-bank-credit-card-charge-can-cost-you-100-bucks/feed/ 0 http://www.vlogolution.com/hot/2006-06-30-watch-out-for-nasty-jury-duty-phishing-schemes/ http://www.vlogolution.com/hot/2006-06-30-watch-out-for-nasty-jury-duty-phishing-schemes/#comments Thu, 29 Jun 2006 22:00:00 +0000 http://www.vlogolution.com/hot/?page_id=35