MFing Global

Man, this last 36 hours has been no fun at all. But, at least I don't work for MFing Global. I feel awful for the good employees from the former Lind-Waldock. Sucks. It just plain sucks.

Sucks for me, too. In order to buy some out-of-the-money, 2012 gold and silver calls, I just sent them a check last week. My bank informed me this morning that they can't stop payment because the check has already cleared. Shit. That money is either gone for good or, at a minimum, tied up for a long time to come. For all of you who are clients of MFing Global because you had heard such good things about Lind through this website, I am truly sorry. Of course, none of us could have seen this coming but I feel terrible, nonetheless. I'll be doing some research on this end and, when I decide upon another futures/options broker, I'll be sure to let you know.

That is, IF I decide on another broker. Someone posted this on the previous thread. It's an email sent last night from a commodity broker named Ann Barnhardt and everyone here should take the time to read it:

"From commodities broker Ann Barnhardt:
 
Nutshelling the MF Global Collapse
Posted by Ann Barnhardt - October 31, AD 2011 11:14 AM MST
Yes, I called it late last week and strongly urged MF customers to make a hasty exit stage right, but I absolutely did not see what happened this morning coming. This is utterly unprecedented. The Chicago Mercantile Exchange issued an email circular this morning (I received mine at 8:39 am MDT) stating that all MF Global positions were limited to LIQUIDATION ONLY and all MF employees and brokers and traders were banned from the floor of the exchange.

1. As I mentioned last week, MF Global came to its present form back in 2005 when the then-biggest clearing firm, Refco, imploded and was bought by EDF Man. The new, huge firm was then renamed MF Global. When Refco imploded in 2005, NOTHING like this happened. It was a relatively smooth transition, trading was not interrupted, and most of the Refco employees were absorbed into the new company. There was absolutely NO interruption of customer access to positions.

2. Shutting off access of customers to their floor brokers and limiting them to liquidation-only is UNPRECEDENTED. If a big account did not have multiple clearing relationships, the risk exposure this morning for those firms is terrifying to ponder. I did not see this coming. The whole industry is pretty much in shock.

3. Let's not forget that a whole lot of people have just lost their jobs. All of the MF clerks, back office staff, everyone who worked for MF on Friday is now unemployed this morning. Those people matter. John Corzine views them as meaningless economic units who exist only to serve him and advance his power and increase his personal wealth, but John Corzine is an evil sociopath who should be permanently removed from society and imprisoned for the rest of his life so that he can do no more damage. Fricking jackal.

4. Speaking of Corzine, more info is coming out in the bankruptcy filings. First, Corzine stands to reap a $12.1 million severance package / golden parachute per the bankruptcy filing. But that isn't the worst. Corzine was hired by MF less than two years ago. He promptly went about loading the company up on European bonds. That in and of itself is damning enough. Remember, Corzine is Goldman Sachs. He knew EXACTLY what was going on in Europe and he knew that European paper was junk. But guess which European countries he loaded up on? Greece, Portugal, Italy and Ireland. The four little PIIGs. Corzine intentionally drove MF into the ground so that someone, and my money is on Goldman Sachs, could come in and buy the remains for 30 cents on the dollar or less. Watch the news. Watch and see who ends up buying the remnants of MF. If it isn't Goldman outright, I'll bet it is a "holding company" that is tied to Goldman. As an astute commenter over at ZeroHedge.com said last night, it looks like Corzine never really stopped working for Goldman. He just moved his office into MF Global's suite.

5. And now, ONE MORE TIME regarding the financial industry regulators in this country. Guys, they are evil, corrupt and incompetent. The regulatory bodies are run by evil, evil people at the top who are complicit in these goings-on. There is NO POSSIBLE WAY that MF Global could have passed any honest audit with the amount of exposure it was carrying in the European bond market. By the way, MF Global's audit would have fallen under the jurisdiction and oversight of the Chicago Mercantile Exchange itself AND the Commodity Futures Trading Commission on the Federal level. It is just impossible that the CME and the CFTC didn't know MF's position and risk exposure all along. The second tier in these regulatory agencies are a combination of evil, greedy and incompetent bureaucrats who could very well be classified as "useful idiots" who will do anything, say anything, or overlook anything just so long as their salary check clears the bank every month. The third tier are full-blown useful idiots - and by that I mean totally, completely and astoundingly unqualified and incompetent "foot soldiers", many of whom are affirmative action hires. When things like this happen (and there are other examples of massive ponzi schemes being ignored in recent history, like the Sentinel Management Group fiasco) what these regulatory bodies do is lay the blame for "missing" the red flags at the foot of the affirmative action hires who are the on-site auditors and who are made to sign off on the audits. Do you see this? Do you see the evil we are dealing with here?

6. And now here is a paragraph that everyone in the financial industry, but most particularly the futures industry, should send viral. Every Introducing Broker and Futures Commission Merchant in the world is being targeted for extinction by the megabanks. They want you GONE. Goldman, Citi, JP Morgan, etc. They are working with and through the financial regulatory bodies and with the Federal Government via such legislation as Dodd-Frank to force out of business every FCM and fold all of that business into the megabanks. IBs like me are also a target, but we IBs are meaningless guppies compared to whale-sized FCMs.

Corzine was SENT into MF Global with the objective of collapsing it and rolling the remains into Goldman (presumably). And he was paid eight figures to do it, AND promised SEC TREAS after Geithner. If you had said six months ago that the largest FCM in the U.S. would be taken down, everyone would have laughed in your face, but here we sit. The only question is, who is next? How long will an FCM like ADM last before looking at Dodd-Frank and saying, "Screw this. We're selling our clearing operations and we'll just go back to straight-up product merchandizing." Why shouldn't they? If the FCM profit center is made impossible by the government and the corrupt regulatory bodies, why would they continue to operate an FCM? Why not sell to Goldman or one of the other megabank entites and then do their exchange-traded hedge business through them as a customer? When will the old Chicago boutique firms be similarly forced out, either through regulation that makes their business impossible, or through outright sabotage as with Corzine and MF? None of you FCMs are safe. THEY WILL COME AFTER YOU AT SOME POINT. You have been targeted for extermination. Either you wake up to this fact and expose these regulatory bodies, megabanks and the Federal Government and fight them, or you are going to end up like MF, being bought by Goldman or one of the other fascist government-connected megabanks for pennies on the dollar. You have been warned.

7. This MF Global collapse is a small-scale (yes, that's right, SMALL-SCALE) foretaste of what is going to happen to the entire system. When I say get your money out of the market, out of paper instruments, and turn it into something real that is physically located on your property, that you can then stand in front of with an assault rifle and physically defend, I'M NOT KIDDING.

**Just for the sake of clarity, I clear exclusively through Penson right now. I have previously cleared RCG, and worked in an RJO branch office which RJO purchased from LFG in 2000, before starting my IB in 2006. That is the extent of my FCM relationship history."

Yikes. This is some bad shit and it's a long way from over. If you are attempting to trade, first of all, you're nuts. Way, way, way too much uncertainty at the current time. However, if you are giving it a go, please be very careful. I would be quite reluctant to trade aggressively and I would not hold anything overnight. It's just not worth it. That said, below are two charts that are somewhat encouraging. We spent over a month observing the price action in the metals below the resistance area I labeled "Max Q". Once the metals finally broke higher through Max Q, a rally looked to be forthcoming. It still may be. Up or down, one thing that invariably happens when something breaks out of a sideways range is a re-test of that range. Remember, what was resistance becomes support and vice versa. Specifically in this case, gold had resistance from 1680-1705. It broke out last week and is now testing that level as support this week. So far, so good. Gold tried and failed to hold the top end at 1705 but today's waterfall selloff climaxed at 1681 and now we're back to 1717. Again, so far all is well. In silver, the old resistance was 32.35 - 33.60 and we bottomed today at 32.11 and have rebounded to 33.15.

paper_11-1pmgold.jpgpaper_11-1pmsilv.jpg

So, we've reached a critical point in the rally and you need to watch these levels very closely. From here, gold will either move back higher and extend through last week's highs or it will collapse through 1680. Whichever happens next holds the key for the price action for the remainder of the year. Same thing in silver.

OK, that's it for now. I apologize again for my inability to post this morning. I was able to post regular comments on the previous thread so I hope that everyone was able to follow along there. I'll try to have another post later this evening.    TF

276 Comments

Avocado Lover's picture

1st ?

1st

cpnscarlet's picture

Not Unprecedented I Think

Isn't that exactly what was done to the Hunts - Liquidation Only? That's what actually broke them in the technical sense.

@jbcat - Sorry, but my humor watching all this is a little morbid.

Larry's picture

Markets have a way of speaking...

For the second day, all currencies down except the US Dollar. Everything else is down except the "safe haven" Ponzi Treasury paper . Now, we see another sector up: hogs and cattle.

All are being fattened up for the slaughter. Just one of those coincidental financial metaphors of 2011.

Shill's picture

Sorry to hear of this Turd.

Sorry to hear of this Turd. This racket is fast becoming unglued folks, best to have all your ducks in order before you go dipping the Big Toe into the pond scum which is the US and global markets.

But make no mistakes this is all being done in a very coordinated way, cash on hand and metals of various types is a must, as is of course the bare essentials of life are need as well.

Stay vigilant.

ewc58's picture

Thanks Turd

Yes MF sucks and who knows the other dominoes to fall. Being in the dark here is another wonderful outcome of no real transparency and captured regulators.

I'm very sorry to hear that check could not be stopped bro. I hope it doesn't hamstring you to any great extent.

GoldMania3000's picture

Anohter thought

RMB Group-Richard Maybury has recommend them and i've used them. Sue rustan. Top notch human being--really top notich
An introducing broker to R.J. O'Brien 

Kevin C's picture

Yikes!

Yikes! indeed.  Thanks for the great info.

Dr G's picture

All this MFing Global thing

All this MFing Global thing does is remind me that I should try to hold things that have no counter-party risk. ​That way, I've removed a lot of crap from the equation. If things go bad, I can only blame myself. 

Hmm, what things have no counter-party risk?

I can't think of them right now, but I'm off to the store for some food, water, maybe buy another gun, probably need some ammo, and I might as well pick up some gold and silver while I'm out. After that I need to head over to my property and check on how those weeds are growing.

If I remember the answer to my counter-party risk question, I'll be sure to pop in and post it.

survivalwstyle's picture

MFing Powerful stuFF

thanks mrF. cashed checks are MF'd up. let us be bleSSed with the phyZZ and continue our charge if we get the oPPortunity to aDD on a dip. afteraLL, it was payday yesterday and have a few extra FRN's to let rip! 

DeltaCharlie's picture

Sad state of affairs - and

Sad state of affairs - and sympathy goes out to the innocent folks at MF Global... Let's see if anyone goes to jail for this. If not, it only confirms how rigged the whole system is. 

Turd, appreciate your caution. Strangely the gold/silver miners are doing rather well (not what you'd expect). Is this good action, and portends a change of sentiment towards gold/silver as a true safe haven?

Shill's picture

DOW bounces off the days low

DOW bounces off the days low for the save lol what a joke.

YAWN!

Economical Disaster's picture

This is what happens when you

This is what happens when you play with

 
Paper Mache
GoldMania3000's picture

Get out of the market...?

"When I say get your money out of the market, out of paper instruments, and turn it into something real that is physically located on your property, that you can then stand in front of with an assault rifle and physically defend, I'M NOT KIDDING."

Does that mean get out of gold stocks, etc. 

Economical Disaster's picture

Wait until the new 1% GLOBAL

Wait until the new 1% GLOBAL financial transactions tax comes into place, then you will really see a stock market collapse. GOLD and SILVER will probably skyrocket overnight.

HAIL "THE PAPER"!

D E's picture

Justice Delayed is Justice Denied

I'm hearing MF Global is not paying out customer accounts yet, but still Corzine remains a free man, with no fear of the Dominique Strauss-Kahn treatment. Seems to me he should be cooling his heels in the hoosegow, at least until the customers get their money back.

Anyone hear anything from Eric Holder's Justice Department?

New York State Attorney General Eric T. Schneiderman?

New York County District Attorney Cy Vance, Jr.?

Didn't think so. I understand the preference for not revisiting the French Revolution--but you can't always get what you want. Some people want their $12 million for tanking their company and stealing from their clients; others end up with the NEW executive severance package:

"Dr. Guillotine, I presume!"

"Dr. Guillotine, I presume!"

Zoltan's picture

JPM/Silver Price Cross Over

Silver price is back above the JPM share price.  Hope it is to stay.

Z

Turd Ferguson's picture

You'd have to ask this Ann

MODERATOR

You'd have to ask this Ann Barnhardt.

Green Lantern's picture

Truly sad for the workers and

Truly sad for the workers and the clients!!!frown  Everybody is forewarned.  Your jobs are not safe and your FRN's are not safe.   Last week, we saw a bunch of bullish traders loose most of their hard earned money due to the manipulation in the markets.  This week thousands of well intentioned American's now have had their money taken from them by an evil man!!!  ENOUGH!!  I don't want to see another Turdite hurt by the insidious games of the EE.  We know GLD and SLV are another sheeple trap.    The words Prepare Accordingly just took on a whole new meaning.  It's not enough to know that gold and silver are your protection.  We have to begin anticipating their end game and NOW.   Time for everybody to put their own greed aside and become a fear investor.  I would prefer to say prudent investor.   More Banks, brokerage houses will be closing.   Maybe the answer is small independent brokerage houses are the only safe ones run by free thinkers not connected to the evil machine.   And we probably haven't seen the last of many good trader's loosing their shirt being seduced into these markets.   Let's get smart, watching each others backs, and make sure we don't leave any stone unturned in regards to risk.  If you go in the water without lifeguards, you are on your own!!

At EWC

"Look Nothing in this hand, and nothing in this hand.  Now you understand my husbands economic policy."

ivars's picture

Collected short term forecasts-day 37 I think it is

Being averse to short term, unable, nevertheless, knowing its what every one is looking for, I made some 1 month ago and in between, and here they all are, now I check them with lower frequency, and more to remind myself in one place what I have committed myself to- I look for mistakes!

a)Brent Crude oil September 26th:

http://www.tfmetalsreport.com/comment/61397#comment-61397

It says ICE Brent crude 105 (later I added +-10) - valid through the 1 month period, today: 108, 38 USD

b)Silver and gold short term on September 27th:

http://www.tfmetalsreport.com/comment/60954#comment-60954

1) Silver may fluctuate around 30 USD (+- 3?) for 1 month or so (except very short sharp peaks, perhaps) , then move up sharply about 5 USD to 35-40 and drop again, now to little higher level of 33-35 +-5, and not change much anymore this year. So the bottom will be kind of close from time to time during October.

We are entering move up sharply after 1 month or so from Sep 27th.

2) Gold, on the contrary, seems to be posed for relatively steady growth till 1800 in November, around which level it should fluctuate for few months (+- 50 ?) ;No real  problems here -still time, direction seem to be OK despite today.

Kind of suggests may be more commodities will have relatively flat period from Oct-Nov till the end of the Year. Not checked

c) EUR/USD on October 5th and 12th:

http://www.tfmetalsreport.com/comment/70046#comment-70046

what I have predicted on October 5th is , that USD per EUR will go up from 1,325 to 1,40-1,425-1,45 till the end of the year 2011. We see the first week of this movement already (of course, it will not move up in straight line, with hiccups, the line is to thick, but the general trend is clear). It has gone up from 1,325 allright, but now only at 1,37

d) About DJIA on October 24th, where I said:

http://www.tfmetalsreport.com/comment/75843#comment-75843

I predict that :

DJIA index maximum seen in this week and next - will be the highest  for next 2 months till January 1st, 2012.

There are  still 3 days time to check it out. Next week ends on November 4th.

e) There should not be any other "short" term predictions I have made, except what are present in the long term charts. I do not feel very ashamed of the accuracy so far, but i do recognize it  is mainly beginners luck. What I like about them though is, they are all my own 100%. And I am learnign perhaps to see shorter term connections, but may be not.

GoldMania3000's picture

It just plain sucks

"I feel awful for the good employees from the former Lind-Waldock. Sucks. It just plain sucks."

It's bad out there in all industries.  In my industries many people are getting fired. some have been with companies for 30 years in one industry. What are these people going to do? It's all they know.  They have kids, mortgages, etc.  When people suffer at the hands of leadership, it's a terrible thing...especially when the leadership walks away with many $$$s.  The blue and white collar workers are all suffering.   Greed will eventually get us all..even if we haven't been greedy.  This is why we are sinking into deep waters. We lost our values..we lost the vision...we lost the passion because we were greedy.  We need to go back to simplicity. 

Simplicity will make us great again, but we won't go back this because it's all about the $. We send jobs overseas because it's cheaper, we don't make anything anymore because it's cheaper elsewhere....

We need vision and passion again...but it's not there..it feels all lost.  My heart goes out to these people that need to feed their families.   

boatman's picture

ann barnardt

is quite a fiesty lady if you google her up.....gives out her address to radical islamists who want to kill her.

i like her...tougher'n nails

and no damn BS- fiat- printing- rob- the- old- ......commie

you go girl

thesandbox's picture

JP Morgan (JPM) seeks a lien

JP Morgan (JPM) seeks a lien on all MF Global holdings assets - according to a filing with the US bankruptcy court

- firm seeks to limit MF Global’s use of the bank’s cash collateral

http://ransquawk.com/headlines/181084

¤'s picture

Thanks T

Thanks for updating us.

That's what a thought last night also about Corzine running MF into the ground also. He's too smart and connected to individually have just started making all of these risky and foolish PIIGS investments. Someone big better go to jail on this one and I hope it's the straw that breaks the cartels backs.

Hang tough with the "check in the mail" stuff.   Whew!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Pretty positive day after all in the PM's despite the gloomy outlook early this a.m.  Gold seems to be enjoying some solid support and the floor keeps creeping up as $1680 seems solid and $1700 not that far away from becoming the new floor.

Incremental works for me. 

Green Lantern's picture

You non-finance guys are

You non-finance guys are probably going to find this pretty dull, but man oh man what a blood-letting Jon Corzine has caused! It’s a thousand points of darkness – little tiny flickers of the financial sector which have all now been snuffed out by regulators and creditors. It hasn’t hit the major papers yet (imagine my surprise) but while Jon Corzine may have been politically savvy enough to get to the top of Goldman Sachs, when he got into a firm small enough that politics was no longer a path to the top, he turned out to be an imbecile at actually running the company.

Zerohedge is really the best place to learn about what happened. There is this story, and this one, and this one, and if this one is true, then we may get to see one more former NJ governor do a perp walk. We really should have seen that coming. I wonder if he did it all because he’s a ‘gay American’?

I didn’t tell many people this, but I was approached about going to work for MF Global last June. I told the person who approached me that I wanted a 3 year guarantee and a hefty pay or play minimum comp that would protect me against the day that an infantile liberal like Corzine discovered my politics and wanted to purge me from his sight. I didn’t really want to go to work there, so I figured I’d only do it if the deal were great. (I didn't tell anyone because I didn't want to look too stupid to my friends if I ended up unemployed for an extended period.) Now it looks like other issues got in the way and distracted them from either agreeing to my lofty demands, or telling me to go ‘touch myself in an impure manner’.

MF Global started out as the back office of London hedge fund giant Man Financial group. My Ex-Caxton buddies already know this, but this is what happens when you let the back office run the whole firm. Risk management is a skill that you can’t learn in school and takes decades for even the smartest of us to absorb. It’s a shame that this is the way that people need to figure this out, but it’s not as easy as it looks.

UPDATE:

Squawk Box is NOT ignoring the story - which means that the dam has burst and the odds of a perp walk are growing by the minute. MF Global owes CNBC for 845K in advertising - the ultimate major media sin. All the special deals that Corzine got all across the industry (and why wouldn't he - the former Democrat governor of a deep blue state) will now probably be reexamined, and there will be political fallout. One more 'Solyndra' style deal for the Democrats running for office to explain away.

All those remaining Democrats (who universally believe they are exempt from the rules that limit the rest of us) will probably be angry for the way he ruined the cushy post political life for the rest of them, so no one will be on his side. It's always that way with a sinking ship - the rats are first off.

Larry's picture

@Peace Silver

Was hoping you'd get a bit more of an answer... or at least a bit of clarity from your question about whether to immediately get out of gold stocks. I wonder that myself. For just a bit more insight, just got an email blast from Sinclair, a portion of which says,

"What is good for gold (QE) is also good for general equities so be careful on those that see doom everywhere. 

Playing any one currency today is hard. Better hold a spread and seek to maintain buying power only. Competitive forced devaluation is the tool of strong currencies making it hard for exports in that currency. This is another example of making the Western world economic problems worse by curing the strong currency using liquidity to weaken it.

What today's economic managers don't know is Titanic in nature. There is no practical solution to the economic problems of today making gold in all forms desirable long term.”

Regards,

Jim

I’m pretty heavy in G&S mining shares. I think they’ll be the piano player at the brothel when it gets busted, but will go down less and get out of jail pretty quickly to come up fast. That, and like Santa says, all equity boats rise with the QE tide. And I'm a firm believer that QE will we massive. PM’s should, in my humble opinion, rise better, faster, higher. But what do I know. Would love to see some other opinions on this.

tmosley's picture

Yup, this is exactly the sort

Yup, this is exactly the sort of thing that can happen to traders.  All the profits in the world aren't going to help you if you can't get to them upon paper collapse.  This was a fairly unexpected version of that, as I was thinking the exchanges themselves would collapse, but there you go.

Go physical gold and silver, and own no paper you don't want to lose.

Turd Ferguson's picture

I would continue...

MODERATOR

...to hold miners but I would not hold them in "street name", i.e. in a brokerage account. I would take delivery of the stock certificates and put the certificates in a safe. 

I actually address this in part 6 or 7 of the Time Monk Radio interview.

Response to: @Peace Silver
ewc58's picture

Nice one Green Lantern!

I started a caption contest using that pic at the very end of the last thread...

Anyone else have a good line? Post it!

GoldMania3000's picture

@Peace Silver

I tend to agree with your assessment Larry.  I think that the QE to infinity has gold/silver and G/S equities locked in to be better performers.  anytime i see an analysis, "get out of stocks" it does make me think..what could happen.  I've been trained buy value and let an event (i.e. discovery) drive a gold silver stock vs. a market event.  That's why when rick rule talks about all the stocks out there that are worth 0. and you have to buy people plays and be a pawn broker.  Buy something low that you beleive will go higher longer term.  Patience is golden.

beardeus's picture

From Bill Fleckenstein

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/1_Fleckenstein_-_One_or_Two_Year_End_Game_for_Money_Printing.html

"Tomorrow the Fed is probably going to bring QE3".

Couldn't let this image sit idle for too long.

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