Home / 2011 (page 80)

Yearly Archives: 2011

SHOCK: The Entire System Has Been Utterly Destroyed By The MF Global Collapse

Presented without comment, merely to confirm that the market as we know it, no longer exists.

BCM Has Ceased Operations (source)
Posted by Ann Barnhardt – November 17, AD 2011 10:27 AM MST

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

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.

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. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. 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. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

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. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, 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. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.

And so, to the very unpleasant crux of the matter. 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. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

Read the rest here.

Comments »

ANOTHER COACHING PERVERT! Long-Time Syracuse Basketball Assistant Bernie Fine Under Fire


Syracuse Police have confirmed to CNY Central they are in the very early stages of an investigation into allegations made against Syracuse University assistant basketball coach Bernie Fine.

Police would not elaborate on what those allegations are, but ESPN.com is reporting that those allegations involve molesting a team ball boy. Syracuse Police say the information came to the department today.

According to ESPN.com, the alleged abuse started in the mid-1980s and lasted for more than a dozen years. The alleged victim told ESPN’s Outside the Lines that he was entering the seventh grade at the time it started.

We have put in several calls to the Syracuse University Athletics Department. So far, no calls have been returned.

Comments »

Convenience of Online Dating/Hookups Blamed for Rise in STuD’s

The accelerated pace of cyber courtship is getting part of the blame for an increase in sexually transmitted diseases.

“You don’t have to spend a week in a bar to find somebody your comfortable with,” said St. Louis Health Director Pam Walker, “People are doing it online and they’re doing it faster.”

Walker says 90 percent of the some 400 new cases of gonorrhea and 126 new cases of chlamydia are African Americans between the ages of 15-to-24.

New numbers released today by the CDC also show 18 new cases of syphilis.  Gay men who know they are HIV positive account for the all of the new syphilis cases, Walker said.

“Two people who know their status and know they are positive for HIV feel like they can have sex without a condom, because they’re already infected,” Walker said, “And what they’re doing is giving each other syphilis.”

With syphilis up 46 percent, gonorrhea up 31 percent and chlamydia up three-percent, Walker says none of the increases appear linked to any cutbacks in health department spending.

“I have not cut communicable disease control in the five years that I’ve been director,” Walker said.

Without yet calling forfunding increases, Walker warns that reducing STDs could be an expensive public policy problem.

“If I put 20 disease investigators in the field and they followed those 55 people around who have syphilis, could I probably get rid of it?” Walker asked, “Yeah, but that would cost about $400,000.”

Walker is calling on private providers and community clinics to help her locate the sex partners of people with known sexual diseases.  She points to a new law in the state — the Expedited Partner Therapy law — that allows for clinics to dispense enough antibiotics to a known carrier of gonorrhea , chlamydia or syphilis to give anonymously to sexual partners to treat them.

“If you have gonorrhea, then your partner probably has gonorrhea,” Walker said, “I need to talk to that partner and find out if they have three other partners, or we never break the chain.”  Walker says

Of particular concern among the three STDs on the increase, chlamydia shows no symptoms and if left untreated in women, it can lead to infertility.  Based a national CDC study, Walker estimates that one in three women in the city may be infected with chlamydia.


Comments »

BEHOLD: The 50 Biggest Losers Over the Past Week

No. Ticker 1-week Return
1 ALIM -82.09
2 FTWR -69.53
3 PSDV -65.90
4 HEV -62.96
5 NEWN -58.62
6 RMBS -49.31
7 CERP -42.42
8 CIIC -41.91
9 PERY -37.85
10 MF -35.48
11 TSTC -34.54
12 WHRT -34.48
13 OSN -33.83
14 FFHL -33.20
15 ANX -33.05
16 TPI -32.60
17 FFN -32.43
18 MVIS -32.29
19 DQ -31.75
20 EEE -30.00
21 GERN -28.70
22 MTOR -28.33
23 ATRN -27.75
24 CYDE -26.39
25 GOK -26.35
26 WNR -25.79
27 HSOL -25.54
28 ZOOM -24.27
29 CVI -23.92
30 CRME -23.70
31 HMPR -23.44
32 HEB -23.08
33 LEXG.OB -23.01
34 MRNA -23.00
35 ZBB -22.35
36 ANCI -22.22
37 MOBI -21.91
38 FEED -21.88
39 DK -21.61
40 MCP -21.58
41 IDI -21.49
42 TWER -21.26
43 BONT -21.12
44 AMR -21.10
45 BRLI -21.08
46 NEXS -20.92
47 CTRP -20.91
48 CVO -20.78
49 MGI -20.52
50 JKS -20.33

Comments »

Today’s Biggest Losers

No. Ticker % Change
1 CIIC -38.77
2 PERY -36.43
3 WHRT -20.83
4 XFN -18.00
5 TX -17.94
6 DQ -16.89
7 YOKU -16.20
8 BTUI -14.15
9 TIV -13.59
10 MXC -13.58
11 KEM -13.33
12 TBUS -12.97
13 INVE -12.89
14 OMX -12.81
15 CMRG -12.80
16 FTWR -12.67
17 ANCI -12.50
18 NTAP -12.32
19 MOC -12.09
20 HAUP -11.97
21 CAGC.PK -11.69
22 JSDA -11.67
23 LODE -11.43
24 KV-A -11.19
25 DK -11.18
26 CF -11.13
27 NEWN -11.11
28 RSOL -11.04
29 CIS -11.02
30 WNR -10.80
31 INUV -10.34
32 FFN -10.07
33 CNAM -10.00

Comments »

Bears Maul the Bulls; Tech and Materials Lead the Way Down

Well off the worst levels of the day, but still a mauling for the bulls….it was a light volume day if that means anything.

DOW down 134

NASDAQ down 51

S&P down 20

[youtube://http://www.youtube.com/watch?v=ecuksod41Qk&feature=related 450 300]

Comments »