More MF Global and What it Means

02-Feb-2012 - Yahoo http://finance.yahoo.com/news/exclusive-mf-global-triggers-regulatory-220755040.html CFTC Considering extensive changes to how it regulates and reviews commodity trading institutions:

"Under the current regulatory system, the CFTC does not examine any futures commission merchants such as MF Global itself and instead is reliant on self-regulatory organizations such as CME to oversee them. Gensler has said it is not an ideal system."

"The CFTC changes being proposed would be divided into three groups.
The first batch would include changes to internal policies and procedures, and would most likely not be made public. A second group would involve changes to CFTC rules, and would need to be put out for public comment. The third group would result in changes to the law and would require action from Congress."

28-Jan-2012 ZeroHedge - 3 Months after MF Global Bankruptcy, investigators think the money vaporized.



11 Dec 2011 Unambiguous Wealth 2 – The MF Global Chronicles http://fofoa.blogspot.com/2011/12/unambiguous-wealth-2-mf-global.html

01 Dec 2011 Unambiguous Wealth: http://fofoa.blogspot.com/2011/12/unambiguous-wealth.html

Let's just see what are the objectives of the regulators of the USA, shall we?

SEC - The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.


CFTC - "The CFTC's mission is to protect market users and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives that are subject to the Commodity Exchange Act, and to foster open, competitive, and financially sound markets."


CME Group, which is composed of four Designated Contract Markets (DCMs) or Exchanges called the CME, CBOT, NYMEX, and COMEX, Although all four exchanges have been merged to form CME Group, each exchange remains a separate self-regulatory organization. Although the individual exchange rulebooks have been substantially harmonized, important differences remain.


Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.



US Dept of Treasury

Federal Reserve

FINRA

Merry Christmas 2011 and Happy New Year 2012

Fed Christmas Video: http://www.youtube.com/watch?v=Xk4AJHJuxUo

Twas the Night Before (Eurocrash) Christmas

Bull in a China Shop: http://www.youtube.com/watch?v=Nk_zpMory-0

China Gold Bull in Huaxi: http://www.youtube.com/watch?v=vC-NQ2tHiE8

Ron Paul 2012

I had a nice big sign (about 2 ft x 4 ft) on my front lawn "Ron Paul for President 2012".

Someone stole it.

My message is: "The United States has a Constitution and a Bill of Rights, and the First Amendment states: 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.'. 

I fight for your right to free speech.

Why don't you respect my right of free speech?"

I think I will replace the sign.

Measurement Moron

Here is a funny story.  

The other day I went to the bagel shop deli to pick up some breakfast.  I asked for a dozen bagels and 6 oz or so of sliced Lox.  The girl came back after a few minutes with a puzzled look and asked "6 oz of Lox is barely one slice, do you really want 60 oz?"

Incredulous at the idea of geting nearly four pounds of Lox, I said "No, I want about 6 oz, just slightly less than one-half of a pound."

Acting as if she knew what I wanted, she said, "Oh, OK" and flitted back to the weighing machine.

After I bought and paid for my items, I looked at the package of Lox.  It said exactly 0.60 lbs. 

What do you think happened?  

I guess the deli scale reads in decimal measures of pounds, rather than pounds and ounces. 

And it seems obvious that she did not know the difference between ounces and hundredths of pounds and probably didn’t know there are 16 ounces in a pound.  She may only vaguely realize that pounds is a unit of weight.

Here is my reconstruction of what probably happened behind the deli counter.  Originally, when I asked for 6 ounces, she started putting Lox on the scale.  After the first slice, it probably read 0.06 or more which caused her to come back to me to clarify what I meant by "6 oz".  After I said "slightly less than half a pound", something clicked in her head so she must have known that "one half" was a reading of 0.50, but she still went back to the scale and gave me 0.60 pounds of Lox.

She probably doesn’t even know what she doesn’t know.  She certainly did not ask me, "Ok, I don’t know about 6 oz, do you know what that is in pounds or how many slices?"

SAD, VERY SAD – It seems our educational system is failing our youth in some subtle and not so subtle ways. 

US Federal Reserve (THE FED)

21 Dec 2011 - Fed proposes rules to tame Wall Street risk-taking
Fed gives banks another "pat on the back, job well done".  Although Dodd-Frank bill was advertised as putting tough new rules on banks, the Fed now shows its hand: the rules will not be any tougher than agreed international rules (Basel III).  Meanwhile, two days ago the price of Bank of America sank below $5/share on a closing basis- below the minimum price level that some funds have for their equity holdings.  Until banks go back to showing bars of gold in their vaults, why should anyone trust them?

MF Global

Does anyone really believe the MF Global executives when they say the "have no idea" what happen to over $1.2 billion of customer funds? This is such a bald-faced lie that I cannot imagine our Congresspeople and investigators cannot see through this scam.

MF Global is a fraud and a criminal enterprise. They have been lying about their misappropriation of customer funds for use in their own proprietary trading schemes in every deposition and so-called "investigation". Claims of ignorance and shoddy record keeping are nothing but a smoke screen.

Logic calls out for a different interpretation. I know from vast experience of building such electronic marketplaces that all electronic trading systems are designed with a series of audit trails and logs such that every order, every action, and every trade is captured with virtually 100% accuracy. The systems know to the penny what each customer account is worth at every second of every day, within small differences only due to fluctuating prices of assets. In addition every electronic funds transfer is logged with meticulous accuracy and attention to detail. And 99% of all that information is flowing through the computer systems without ever being touch by human hands.

So the question about the “missing customer money” should be turned into a series of technical questions:

• Do you have systems to track the flow of funds?
• Do you have systems to track the orders and trades executed by customers?
• Do you have similar systems for your proprietary traders?
• How accurate are these systems?
• What percentage of assets and funds transfers must be manually reconciled at the end of each trading day?
• Do the systems ever cross each other?  In what way?
• Are you required by regulators such as FINRA and the SEC / CFTC to maintain records?

In my estimation you will see a technical picture of amazing attention to details -- with obvious places to look for the $1.2 billion dollars, which I assure you did not simply vanish into thin air!  Yet the picture that the MF Global senior management is trying paint is one of complexity, confusion, irregularities, and ignorance. 

13 Dec 2011 - MF Global Conflicted Interested Parties (Tough Questions for MF Global, Conflicted Trustee Giddens & SIPC President Harbeck): http://www.zerohedge.com/contributed/tough-questions-mf-global-conflicted-trustee-giddens-sipc-president-harbeck

13 Dec 2011 - Second Senate hearing on MF Global bankruptcy: http://www.reuters.com/article/2011/12/13/us-mfglobal-hearing-highlights-idUSTRE7BC1AV20111213 

14 Dec 2011 - MF's Corzine said to know of customer fund misuse:
http://www.reuters.com/article/2011/12/14/us-mfglobal-hearing-idUSTRE7BC1AE20111214 
 
So you can begin to understand quote like these:
 
CHAIRWOMAN DEBBIE STABENOW ON FRUSTRATION OVER LACK OF ANSWERS:



"It's now been a month and a half since the firm collapsed and customer money is still nowhere to be found. This isn't the Dark Ages. MF Global didn't keep their books with feather quills and dusty ledgers. The rules about keeping customer money segregated are pretty straightforward. That it's been over a month, and teams of lawyers and forensic accountants still can't figure out what happened, raises very troubling questions."

LOTS, LOTS MORE on MF Global is here http://barnhardt.biz/index.cfm

Let's pray for the farmers, investors, and other people who had money tied up in MF Global that justice is eventually served and the criminals are punished.  Write your congresspeople and demand that justice is served and the rule of law is upheld!

21 Dec 2011 - E-Mail Clues in Tracking MF Global Client Funds "Ms. O’Brien is considered an expert of sorts on the protection of customer money at futures firms."  yet she, a treasurer at MF Global, appears to be directly implicated in the transfer of customer money to JP Morgan. [...] "Since MF Global’s collapse, Ms. O’Brien has been working for the trustee overseeing the liquidation of the firm’s brokerage unit, helping lawyers and accountants understand the firm’s operations.".  How convenient!  Sounds like we are letting the criminals themselves investigate the crime scene.  She should be behind bars or in the witness room surrounded by forensic accountants and tape recorders.