Monday, January 30, 2012

Banking/Government Racketeering

I hope Romney gets the Republican nomination because it will create priceless entertainment watching the Democrats shred Romney's track record and background.  If Gingrich gets the nod, he'll try to make policies and issues as the front and center topics of debate and slur and that would be intolerably boring...
Many of you by now have read excerpts from the Wall Journal article on MF Global and the disappearing $1.2 billion in customer funds.  Here's a link to the partial article from the NY Post, which is the longest freebie posting:  LINK

It really blows my mind that there's even any discussion about what happened to the customer funds because it should not matter.  The customer's should be getting every penny of their money returned, whether it comes from the MF Global bankruptcy trust, the CME, the banks who received customer assets illegally as collateral and/or from the estates of MF Global's management.  Seriously. 

It's clear that JP Morgan was the biggest beneficiary of illegally hypothecated customer collateral.  And it wasn't the only bank.  These entities should be required to contribute to the full restoration of the missing customer funds.  Same thing with the CME.  And, quite frankly, upper management starting with Jon Corzine should be thoroughly investigated and, if illegal actions can be proved, they need to come up with restoration funds as well. 

Where is the CFTC on this?  How come Obama has not intervened and forced Attorney General Eric Holder to appoint an independent investigative team to get to the bottom of this?  You're telling me that our Government can locate and freeze $10's of billions in Libyan and Iranian assets anywhere in the world but they can't come up with the electronic trail of $1.2 billion (or more) of missing customer funds from a regulated securities business that operates in Chicago, New York and London? 

My friend and colleague "Jesse" wrote an insightful and compelling commentary which should be read by everyone:  LINK  The only observation I would add to Jesse's comments is that what we are witnessing here with MF Global is truly a case of racketeering.  Normally racketeering is associated with mobsters and teamsters and longshoremen, etc.  Organized crime.  But what we have here is collusion among private banks, the court system and Government - otherwise known as fascism - in an effort to steal $1.2 billion from the rightful owners of that money.  Racketeering.

Gary Gensler's name has been floated as a possible replacement for Tim Geithner.  I guess it would be fitting for Obama to appoint someone who is a potential defendant in a RICO lawsuit - Gensler aided and abetted with MF Global's effort to hijack the customer assets before he "recused" himself from the situation - given that Obama appointed Geithner even after he was caught dodging taxes.  Great country, huh?


  1. I think they ought to be lynched. Screw that whole court thing.


  2. Michael Hudson, “In America and Europe, Crime has been Decriminalized”

    Meanwhile, governments and banks are still in bed together – tangled up in their illicit love affair three years after the financial crisis began. We know the drill and we’re sick of it. We are sick of socializing losses. We are sick of fraudulent accounting. We are sick of hostage crises that force us to give ever more of our future earnings and ever more of our current purchasing power to a group of elitist bankers who don’t have to play by the same rules as the rest of us.

  3. So Why Hasn’t SEC Enforcement Chief Robert Khuzami Resigned? SEC Only Now Investigating CDOs Created on his Watch at Deutsche Bank

    Why is there probably less here than meets the eye? For this investigation to be taken seriously, SEC enforcement chief Robert Khuzami would have to resign. He was the general counsel for the fixed income area at the time when the deals in question were undertaken (contra Der Spiegel, START was a program of synthetic CDOs, not just a single deal, just the Goldman Abacus trade that was the focus of an SEC lawsuit was actually just one of 25 Abacus trades). It would not be sufficient for Khuzami to recuse himself from this investigation. Staff would still be concerned about how the probe might affect their ultimate boss.

  4. The Impending Undeclared Default Of 5 Major US Banks

    The following interview with Ellis Martin of covers in detail the impending undeclared default of 5 major US banks this week by the International Swaps and Derivatives Association.

    This even has the potential to cause a second financial crisis that would require significant financial intervention. If you have time to spare, listen to this interview.

  5. Keiser Report: Starving the Economy

    In the second half of the show, Max talks to Ned Naylor-Leyland about the silver, gold, backwardation, manipulation and more.

  6. MF Global Funds “Vaporized”? Another Blow to Investor Confidence

    The House Financial Services Committee will continue grilling the ratings agencies this Thursday, but is unlikely to produce anything to assuage investors already skeptical of Wall Street being a den of thieves living off the money of the unsuspecting masses. Breakout welcomed Hank Smith, CIO of equity of Haverford Trust to explore the issue of investor confidence and the MF debacle.

    "This is really quite a disgrace," says Smith in the attached clip. Speaking specifically of former MF Global head Jon Corzine Smith says, "You're talking about an ex-Goldman (GS) CEO, ex-U.S. Senator, New Jersey Governor taking a company and playing roulette with it."

    Noting that the "lawyered up" Corzine is likely to lay low for as long as possible, Smith speculates that Corzine was "trying to take a fledgling company and essentially rolled the dice" in an effort to make MF a player in financial circles.

    "Did Corzine do anything illegal? I'm not sure. Was he bad manager? I'm 100% sure of that," says Smith.

    The concern here about MF isn't making sure a bad guy gets caught. Criminals go free all the time; even on Wall Street. The issue is one of trust in financial markets. Without trust you can't have markets and it's getting ever more difficult to defend this system against accusations of rampant corruption.

    Obama-Corzine Were Wrong

  7. Wall Street Journal Credibility Vaporized - Via MF Global

    Instead of using the word "Theft" or "Misappropriation" of segregated or custodial funds; the Wall Street Journal decided to run a hit piece that money has simply vaporized. "The findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation." This FALSE statement could not be further from the truth. Culpable parties would like to see the money trail vaporize and that is in fact the effect of this Wall Street Journal Story. By the way this false-flag-story has been parroted on Zerohedge, Alex Jones, New York Post, and the Huffington Post.