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"The Entire System Has Been Utterly Destroyed By The MF Global Collapse"
Zero Hedge ^ | 11-17-2011 | Tyler Durden

Posted on 01/08/2012 6:48:57 AM PST by ak267

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

(Excerpt) Read more at zerohedge.com ...


TOPICS: Business/Economy; Miscellaneous
KEYWORDS: 2012; corzine; holder; obama
(Snip) The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse

(snip) Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global

(snip) I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt.

(snip) any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds...

(snip) the futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity

1 posted on 01/08/2012 6:49:02 AM PST by ak267
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To: ak267

She wrote this 2 months ago; has been posted and discussed here.


2 posted on 01/08/2012 6:57:10 AM PST by HereInTheHeartland (I love how the FR spellchecker doesn't recognize the word "Obama")
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To: ak267

To get a better understanding of how people and his current Wall Street cronies think, one should watch, Generation Zero. It explains quite a bit.


3 posted on 01/08/2012 7:02:21 AM PST by qaz123
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To: qaz123

how people like Corzine


4 posted on 01/08/2012 7:11:33 AM PST by qaz123
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To: ak267

This article is nonsense. For every bettor on the wrong side, there is a winner enjoying their profits. Just as John Paulson took in $6.5 billion by betting on the U.S. housing collapse.


5 posted on 01/08/2012 7:13:27 AM PST by montag813
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To: HereInTheHeartland

Doesn’t concern me about the late time-frame but more about the content (thanks AK267). Some of us are getting up to speed.

I’d heard that Corzine was a slug, but sheesh, I didn’t know it was THAT blatent.


6 posted on 01/08/2012 7:18:42 AM PST by Kolath
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To: montag813

This isn’t about futures markets being zero-sum games. This is about theft of client money by the execs of MF Global, who have yet to face criminal charges even though some $1.2 billion is “missing.”


7 posted on 01/08/2012 7:22:02 AM PST by coloradan (The US has become a banana republic, except without the bananas - or the republic.)
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To: montag813
This article is nonsense. For every bettor on the wrong side, there is a winner enjoying their profits. Just as John Paulson took in $6.5 billion by betting on the U.S. housing collapse.

I listened to a later interview with her on Financial Sense. She thinks it is going to force farmers back into storing their crops on the farm and selling it truck load by truck load..

P.S. Paulson gave it all back this year..

8 posted on 01/08/2012 7:28:03 AM PST by EVO X
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To: coloradan

As the joke went, “Of course I don’t know where the 1.2 billion went, I was a former US Senator and that sort of thing happens every day.”


9 posted on 01/08/2012 7:28:32 AM PST by Kolath
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To: montag813

When are posters like you going to understand the truth about MF Global??

They STOLE their client’s money, the clients DID NOT INVEST their money with MF Global. The clients held positions in futures contracts along with cash. MF Global used THE CLIENT’S MONEY without asking.

This isn’t like Madoff where people give him their money to invest!!!!!!!!!!

Sheesh, still have to point this out! Read for crying out loud!


10 posted on 01/08/2012 7:29:48 AM PST by LRoggy (Peter's Son's Business)
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To: montag813
For every bettor on the wrong side, there is a winner enjoying their profits.

For every robbery victim, there is a robber enjoying their profits.

11 posted on 01/08/2012 7:39:31 AM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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What really irks me is the “clawback” clause. That’s where the liquidators can go back and sue clients who made withdrawals before the fund collapsed (not sure on the time frame...a week?, a month?).

I could understand if someone had “insider information” or was manipulating the market, but what if someone was just completely innocent, lucky, closing out an estate, moving to a new fund, saw long term data which convince him/her to reposition their funds or was just making scheduled withdrawals? They get screwed!!!!


12 posted on 01/08/2012 7:40:37 AM PST by ak267
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To: ak267

I know FR has some financial wizards of sound mind. Question:

What do us suckers in an employer-based 401k (Vanguard) do to protect our money? Mine is in low risk right now, but I don’t see any options in terms of “getting out”.


13 posted on 01/08/2012 7:57:13 AM PST by avenir (I'm pessimistic about man, but I'm optimistic about GOD!)
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To: avenir
I think 401ks may be insured. You might go to the website and see if they address this in writing. Look in the prospectus. As a last resort call them.
14 posted on 01/08/2012 8:42:43 AM PST by BipolarBob (I don't mind you shooting at me, Frank, but take it easy on the Bacardi!)
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To: ak267

The icing on the cake - for bankruptcy purposes, MF is now an equities firm, not a commodities firm.

This means - surprise - that the tens of thousands of commodities account holders go to the end of the line as an “unsecured creditor”, rather than getting their money.

Imagine if your bank failed, and the FDIC said that leveraged derivative traders were senior to you and your checking/savings account.

Now that I think about it, this is probably the case.


15 posted on 01/08/2012 8:49:07 AM PST by Freedom4US
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To: BipolarBob

Thanks.


16 posted on 01/08/2012 8:52:21 AM PST by avenir (I'm pessimistic about man, but I'm optimistic about GOD!)
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To: avenir

The company may not be able to steal the 401K, but the administration has been eyeing them to beef up Social Security.

The last proposal I read suggested taking the 401Ks, rolling the money into SS, and guaranteeing you a “robust” 3% return.

I don’t trust them, I cashed mine out, we paid off our bills and bought “commodities”.


17 posted on 01/08/2012 8:53:26 AM PST by FrogMom (There is no such thing as an honest democrat!)
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To: avenir
What do us suckers in an employer-based 401k (Vanguard) do to protect our money?

Past results are not a guarantee of future results. Here is what happened with a few Vanguard funds in my plan during the last crash. The money market fund survived and didn't break the buck. The S&P 500 index fund tracked the market down. The intermediate bond fund principle lost about 10% when everything was selling but rebounded nicely.

18 posted on 01/08/2012 8:54:22 AM PST by EVO X
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To: avenir; BipolarBob

My understanding is, if the brokerage house steals your positions, SIPC insurance will return them to your account, but if they lose value that value will not be. If cash is taken from your account, that cash will be replaced, but at least some 401ks (such as my own) can’t hold cash, the money must be invested in a money market fund.

But wait! Money market funds have debt paper, such a government bonds, including European government bonds. Those could lose half their value in a day in Euroland implodes, and that’s considered a safe investment! Bonus question: how much are you being paid to assume that risk? 0.01%, which come to think of it is probably less than the fees the money market fund charges. A lot less.


19 posted on 01/08/2012 8:59:04 AM PST by coloradan (The US has become a banana republic, except without the bananas - or the republic.)
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To: FrogMom

Thank you. I’m 49 so I cannot cash out yet. The government schemes you mentioned are my concern.


20 posted on 01/08/2012 9:01:16 AM PST by avenir (I'm pessimistic about man, but I'm optimistic about GOD!)
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To: coloradan

Yikes. Looks like they’ve got us surrounded!


21 posted on 01/08/2012 9:07:40 AM PST by avenir (I'm pessimistic about man, but I'm optimistic about GOD!)
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To: HereInTheHeartland

Ann Barnhardt...without teleprompter. Best 40 minutes (and scariest) you’ll spend:
http://www.youtube.com/watch?feature=player_embedded&v=hGl3QPfB084
Then, watch “Why No Brokerage Account Is Safe”:
http://www.youtube.com/watch?v=GMI6JYX2e0Q&feature=relmfu

THEN, get your money OUT and take some TUMS.


22 posted on 01/08/2012 9:19:33 AM PST by Mortrey (Impeach President Soros)
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To: BipolarBob
I think 401ks may be insured.

The purpose of insurance is to protect someone against an instance of failure. There isn't enough money to protect against total system collapse.

23 posted on 01/08/2012 9:22:21 AM PST by Stentor ("All cults of personality start out as high drama and end up as low comedy.")
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To: Freedom4US
Now that I think about it, this is probably the case.

Bank of America Deathwatch: Moves Risky Derivatives from Holding Company to Taxpayer-Backstopped Depository

24 posted on 01/08/2012 9:29:38 AM PST by Stentor ("All cults of personality start out as high drama and end up as low comedy.")
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To: EVO X
P.S. Paulson gave it all back this year..

Paulson gave back $1.3 billion in 2011. He made $6+ billion in 2008-9.

25 posted on 01/08/2012 9:33:55 AM PST by montag813
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To: coloradan; LRoggy
This isn’t about futures markets being zero-sum games. This is about theft of client money by the execs of MF Global, who have yet to face criminal charges even though some $1.2 billion is “missing.”

$1.2 billion is NOTHING. Chump change. the "system" is not "destroyed" by an amount that Mike Bloomberg's 401k gains or loses every 3 months. Give me a break.

26 posted on 01/08/2012 9:36:41 AM PST by montag813
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To: ak267

Precedent was set with GM bond holders.


27 posted on 01/08/2012 9:54:50 AM PST by aldabra
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To: montag813
Paulson gave back $1.3 billion in 2011. He made $6+ billion in 2008-9.

I didn't see any exact numbers, but the reports I saw implied he lost more than that. His 2 big funds lost somewhere around 50% and were supposedly around 11B to start the year.

28 posted on 01/08/2012 10:40:53 AM PST by EVO X
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