MFing Global

276
Tue, Nov 1, 2011 - 3:36pm

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.

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

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  276 Comments

Avocado Lover
Nov 1, 2011 - 3:44pm

1st ?

1st

cpnscarlet
Nov 1, 2011 - 3:45pm

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
Nov 1, 2011 - 3:51pm

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
Nov 1, 2011 - 3:51pm

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
Nov 1, 2011 - 3:52pm

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
Nov 1, 2011 - 3:52pm

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
Nov 1, 2011 - 3:53pm

Yikes!

Yikes! indeed. Thanks for the great info.

Dr G
Nov 1, 2011 - 3:54pm

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
Nov 1, 2011 - 3:58pm

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
Nov 1, 2011 - 4:00pm

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?

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

Key Economic Events Week of 8/5

8/5 9:45 ET Markit services PMI
8/5 10:00 ET ISM services PMI
8/6 10:00 ET Job Openings
8/8 10:00 ET Wholesale Inventories
8/9 8:30 ET Producer Price Index

Key Economic Events Week of 7/29

7/30 8:30 ET Personal Inc/Spending & Core Inflation
7/30 10:00 ET Consumer Confidence
7/31 8:15 ET ADP employment
7/31 2:00 pm ET FOMC Fedlines
7/31 2:30 pm ET CGP presser
8/1 9:45 ET Markit Manu PMI
8/1 10:00 ET ISM Manu PMI
8/2 8:30 ET BLSBS
8/2 10:00 ET Factory Orders

Key Economic Events Week of 7/22

7/23 10:00 ET Existing home sales
7/23 10:00 ET Richmond Fed Manu Idx
7/24 9:45 ET flash Markit PMIs
7/25 8:00 ET Count Draghi/ECB policy meeting
7/25 8:30 ET Durable Goods
7/25 8:30 ET Wholesale Inventories
7/26 8:30 ET Q2 GDP first guess

Key Economic Events Week of 7/15

7/15 8:30 ET Empire State Fed Index
7/16 8:30 ET Retail Sales and Import Price Index
7/16 9:15 ET Cap Ute and Ind Prod
7/16 10:00 ET Business Inventories
7/17 8:30 ET Housing Starts and Building Permits
7/18 8:30 ET Philly Fed
7/19 10:00 ET Consumer Sentiment

Recent Comments

by vonburpenstein, 6 min 10 sec ago
by vonburpenstein, 24 min 7 sec ago
by Mickey, 28 min 57 sec ago
by vonburpenstein, 1 hour 23 min ago

Forum Discussion

by ancientmoney, 33 min 39 sec ago
by argentus maximus, 58 min 49 sec ago
by atarangi, 4 hours 8 min ago
by atarangi, 4 hours 40 min ago
by atarangi, 4 hours 59 min ago
by atarangi, 5 hours 46 min ago
randomness