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

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  276 Comments

Shill
Nov 1, 2011 - 4:00pm

DOW bounces off the days low

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

YAWN!

Economical Disaster
Nov 1, 2011 - 4:01pm

This is what happens when you

This is what happens when you play with

GoldMania3000
Nov 1, 2011 - 4:02pm

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
Nov 1, 2011 - 4:09pm

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"!

Zoltan
Nov 1, 2011 - 4:09pm

JPM/Silver Price Cross Over

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

Z

GoldMania3000
Nov 1, 2011 - 4:11pm

You'd have to ask this Ann

You'd have to ask this Ann Barnhardt.

D E
Nov 1, 2011 - 4:12pm

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!"

ivars
Nov 1, 2011 - 4:14pm

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:

https://www.tfmetalsreport.com/comment/36482#comment-36482

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:

https://www.tfmetalsreport.com/comment/36189#comment-36189

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:

https://www.tfmetalsreport.com/comment/42642#comment-42642

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:

https://www.tfmetalsreport.com/comment/46449#comment-46449

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.

Green Lantern
Nov 1, 2011 - 4:14pm

Truly sad for the workers and

Truly sad for the workers and the clients!!! 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."

GoldMania3000
Nov 1, 2011 - 4:21pm

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.

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