Sunday, November 6, 2011

More On MF Global - It Gets Worse

We are staring into the dark abyss of our system - Dante's Inferno if you will - but it's being hidden by a veil of deceit and cover-up that may not disappear until the system has incinerated  - Dave in Denver, 11/5/11
I reiterate my call for justice in this situation by giving Jon Corzine a seat in jail in between Bubba and Bernie Madoff.  If this were the 1800's, Corzine would be subjected to a public hanging. I'd pay good money to see that. 

It turns out that several MF customers had requested their money from MF Global several days before MF hit the wall.  Usually you can - at your request - have this money wired.  MF Global sent out checks via the proverbial slow boat to China.  Now the checks have bounced and the money is gone: 
Those checks cut by the folks at MF Global began arriving in customer mailboxes this week, several days after the firm filed for bankruptcy on Oct. 31 in New York federal court. And by the time customers started depositing those checks, they were rejected as having insufficient funds.
Here's the Reuters news story:   LINK

The media is still reporting that only $600 million in customer funds is missing.  I still believe that it will be a lot more than that, if we ever get the hear the truth.  I know that if the rumor-mill is discussing twice that amount, I would err on the side of the rumor mill in this case.  I hope Corzine burns in hell. 

If anyone wants to get together a "ghoul pool" to speculate on which firm is next, I'll have to flip a coin to decide if I would pick Jeffries or Morgan Stanley.


  1. 14,000 Coloradans move $100M into credit unions

    As the social media-sparked Bank Transfer Day approaches, the Credit Union National Association (CUNA) reports that over 650,000 people have joined credit unions in the last four weeks. In Colorado, the group reports 14,000 new accounts and $100 million in new deposits.

    Credit unions nationally have added $4.5 billion in new accounts since the end of September, CUNA says, reporting that four out of every five credit unions affiliated with the group report that the increase is due to attempts by big banks to raise fees on customers or Bank Transfer Day, a movement birthed by social media that will take place tomorrow.

  2. Hit With Big Withdrawals, Fed Sells Assets, Borrows Cash

    Until then, I don't know whether this is some kind of technical adjustment, however big, or a sign that the wheels might be beginning to come off the world financial system. Given what's going on with countries and brokerages going bankrupt and internet coupon companies setting the investing world on fire, it's difficult not to suspect the latter.

  3. About those protesters...hmm..

    At least 2 of the "Black dressed masked protesters" were COPS

    I can't believe this video isn't front and center in any discussion of agents provocateurs, provocateurs in Oakland, better known as the Black Bloc. For those of you without video capability, this shows two men who were dressed in black, participating in the protest, and then (presumably the next day) these same two men dressed as Oakland PD working the scene.

  4. i'm a proud owner of one of those rubber checks. Sent out Thurs before the Monday bankruptcy.

  5. If this guys opening up we probably aren't getting a 1/10th of the story or they found a new way to do EVIL!

    Jack Abramoff Tells Us How Washington D.C. Really Works

  6. QE 3 is the only thing that can save the banking system. All central bank printers MUST be turned on and run hard and fast. Ben has been pumping liquidity since 9-26-11 and he's got nothing to show for it. He's not going to leave the stage before the final act.

  7. Warren breaks financial "Watergate" of 2011-2012 with confirmation that our financial system is broken beyond repair because of legal system is operating at 100% corruption. This proves that we are no better off than were were systemically than 2007-2008 and that the whole system remains a house of cards with companies such as Fideltiy, Blackrock, Merrill, BOA, JP Morgan as fragile as ever with no regulatory or insurance backstop.

  8. Denial, Delusion and MSM Disinformation
    People are in denial or delusional that everything is going to return to normal. I blame this on the MSM and the lack of reporting and disinformation on how bad things really are in the global economy. After one of my stories warning about the coming bad economy (circa early 2008), I was asked off-camera by one of the main CNN anchors if I was ever worried about “causing a panic.” I don’t remember exactly what I said back to him, but it was something like “Telling the truth to the public is always appropriate.” (If you want an example of what I was saying at CNN in March of 2008 before the meltdown, click here.) After the last financial meltdown, people in the MSM sat around and said, “Nobody saw this coming.” I wonder what their excuse will be the next time.

  9. Financial Cancer: Our Financial System Is Intrinsically Fraudulent and Unstable (November 7, 2011)

    Our financial system is like a fast-mutating cancer that evades any control and is still perfecting its ability to game and loot.

    But if that's not enough, there is the structure itself: they aren't doing this with saved capital, but rather with freshly printed and/or borrowed capital. Its all done with 12:1 leverage at a minimum. So only 8.3% of the gambling (optimistically anyway) is actual capital - saved surplus. And if Basel II says it's risk-free, well there's no need for reserves at all. It is just manufactured money, which effectively mean each bet is diluting the actual savings of real people. And if the bet goes bad, the Fed will ride to the rescue with low-cost money. But usually the bet goes well, because ordinarily the number of sources of fraud today is so HUGE, its practically impossible not to succeed.

    Unless of course they get too greedy. Or the debt levels rise so high that large numbers of borrowers default. And guess where we are.

    The financial system is supposed to allocate capital and take a modest skim as reward for helping society to be efficient. When they are doing this, they provide a net benefit to society because it's a win-win proposition. They are making society more efficient, and they thus earn their percentage.

    However, and this is the key point: fraud provides no net benefit to society. Fraud extraction is a zero sum game. For every dollar extracted through fraud, someone in the productive society ends up losing - savings, salary, whatever. This is why fraud is bad.

  10. Talk about supporting markets..what would have happened to their commitment if they weren't bailed out?

    Citigroup Puts $800M in Own Hedge Funds

    Citigroup Inc. (C), the third-biggest U.S. lender, invested about $800 million of shareholders’ money in its own private-equity and hedge funds during the third quarter as regulators seek to curtail the practice.

    The bank invested the money in “Citi-advised” funds while selling $1.1 billion of separate hedge-fund and private-equity assets, New York-based Citigroup said in a Nov. 4 filing.