Thursday, November 3, 2011

Just Another Day In Our (Corrupt) Paradise

“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see money flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self sacrifice - you may know that your society is doomed.” (Francisco D'Anconia, "Atlas Shrugged")
I use that quote quite frequently but every molecule of thought embedded in it describes the state of condition of our economic and political system with 100% precision.

Hopefully, if there is a hell, Jon Corzine will burn there.  A good friend of mine back in NY who is plugged into the Wall Street "whisper" news affirmed that the scuttlebutt about the real number in the MF Global missing funds case is $1.5 billion, not $700 million.  Not only that, but that the internal control systems had been designed to prevent regulators from detecting the illegal activity.  This means that both Corzine and the CFO should go down hard.  Unfortunately for the CFO, he was never CEO of Goldman Sachs or Governor of New Jersey, so he will likely go down in flames while Corzine skates away in shame because of this hidden code in our system:  "when you see money flowing to those who deal, not in goods, but in favors."

The Wall Street Journal ran an article questioning the CFTC in the MF Global abortion.  Here's the LINK  Here's what they don't question and examine:  What is the link between CFTC Chairman Gary Gensler and Jon Corzine?   I'll tell you what the link is.  Corzine became the CEO of Goldman Sachs in 1994 and it was in the mid-90's that Gensler, a Goldman partner, was elevated to the head of fixed income and currency trading in Japan and then co-head of finance, the second highest position in the firm after CEO.  Corzine worked his way up through Goldman as a fixed income guy.  If you don't think there was a very close relationship between the two of them then you are either naive or a moron.  Given the way Goldman's culture operates, it's possible they even happily slept with each other's wives.  They are both obviously highly placed in the Democratic party.  It's pretty clear to me that Gensler was tied tightly to Corzine because Gensler's  path to being CEO was clearly derailed when Henry Paulson shoved Corzine out of power.  With this trail of evidence, there is no question in my mind that Corzine was able to use his relationship with Gensler to deflect any scrutiny of MF's books:  "when you see money flowing to those who deal, not in goods, but in favors."

It will be interesting to see how all of this unfolds.  Unfortunately, I believe that Corzine will be able to wield enough influence with the key people in the Obama administration, specifically with Eric Holder - the scumbag who wrote the pardon letter for tax-evader Marc Rich - in order to facilitate the burial of the real paper trail that leads to proving the facts of this tragedy.  As I mentioned earlier this week, the Taxpayers will be handed the bill for the cost of replacing customer funds that were illegally used by MF and likely most of JP Morgan's counterparty exposure, which is in the billions.
Update on the ongoing wealth transfer in housing:  Freddie Mac just reported a huge loss and has asked for ANOTHER $6 billion from the Taxpayers LINK .  That the Government allows this to continue is completely appalling.  There is no question in my mind that this money is ultimately bailing the big banks out of their billions in losses on mortgage paper (see the deal Bank of America cut with Fannie Mae, with the help of Geithner).


  1. CFO looks like a fall guy

  2. But if you apply SOX, CEO and CFO both are signing off documents and both go to JAIL.

    Hope I understood SOX correctly.

  3. We all know what ails us...but how do we kill the beast?

    Our Fragile "Hothouse" Economy (November 3, 2011)

    Does this strike you as a robust, flexible, transparent system? Of course not. Rather, it is a "hothouse" financial sector, one that needs constant injections and a carefully controlled environment just to keep it alive.

    And since the U.S. economy has been fully financialized, it is now dependent on financial machinations and skimming for its "growth," profits and the debt expansion that fuels everything else, including the metastasizing Savior State, a gargantuan aggregation of an unaccountable National Security State with crony-capitalist cartels and a dependency-inducing Welfare State.

    Without the debt conjured into existence by the Fed, Treasury and the financial sector, even the mighty multi-tenacled Savior State would quickly starve.

    As a result of our dependence on financialization and exponential debt, our entire economy has become a weak, sickly "hothouse" economy which can only survive in a narrow band of temperature, debt injections and opaque manipulations of data and what's left of the nation's shriveled markets.

    America's (and the world's) financial sector is a fragile, sickly hybrid which will shrivel and expire the moment it is placed in the real, dynamic world. And because the global economy has become dependent on the slouching beast of financialization, it too is fragile and sickly, sensitive to the slightest perturbations and exquisitely vulnerable to any disruption of the constant life support offered by central banks and Central States.

    It is neither capitalism nor socialism, but a twisted hybrid of the worst traits of each.

  4. With all that you know Dave it's a wonder that you can still verbalize the specifics of each occurrence. I'm fed up with the criminals in every facet of the market, politics, government to the point that I hold all those unaware of this in complete contempt.

  5. That's why we get what we deserve "anonymous". Although they are but shadows and dust, the corrupt have a greater presence than the righteous... the righteous sleep while the corrupt steal our republic.

  6. No one signed up for corruption...they just force feed it to all of us...but hey at least they jail those big bad OWS protesters...everybody should be rallying behind them...the only thing that could purge this corruption is an act of god...and this is coming from an atheist! They're(scumbags in charge) all Mf'ers...


    Credit Derivatives and Leverage Sank Jon
    Corzine’s MF Global

    Credit Derivatives and Leverage Sank Jon Corzine’s MF Global
    “Repo to Maturity” Transactions Are in Substance Total Return Swaps, a Type of Credit Derivative.
    Fallout Is Worse Than Lehman For the Exchange-Traded Futures Markets.

    MF Global Admitted “Diverting” Money from Segregated Accounts
    What isn't usual is diverting money from segregated customer accounts. It’s too late to blame
    “sloppiness, bookkeeping, or accounting,” MF Global admitted it “diverted” money from customers’
    segregated accounts.
    The fact that MF Global was exposed to default risk and liquidity risk because of its “repo-to-maturity”
    transactions and that the risk was- linked to European sovereign debt was disclosed in MF Global’s 10K
    for the year ending March 31, 2011, a required financial statement filed with the SEC. The CFTC and
    other regulators had the information right under their noses, but it appears they didn’t understand
    that they were looking at a leveraged credit derivative transaction that could lead to margin calls that
    MF Global would be unable to meet.
    Even if all the money can eventually be recovered, it doesn’t change the fact the MF Global took
    impermissible steps.

  7. It seems as though we are long past the mark where American citizens should all go out and start robbing banks ! After all shouldn't we follow the examples that our Government , Central Banks , and Wall Street have all clearly proven ot it's people that it's the right thing to do !