Jesse has single-handedly kept this story alive. The MSM is bought and sold by the criminal Wall Street oligarchs. The lies and propaganda are so blatant it is laughable. The money stolen from MF Global did not vaporize. It is in Jamie Dimon’s pocket. Ask Obama.
MF Global: A Despicable State of Affairs
Much of the financial press picked up this story from the Wall Street Journal, Money From MF Global Feared Gone. Much of the mainstream media in the US and the UK these days is just a conduit for sound bites from the monied interests.
“Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.
As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.”
And as we have heard, quite a bit of that money was also diverted in the last few days into the pockets of MF Global’s bank, JP Morgan, which still reportedly holds much of it. Now whether they are legally entitled to keep that money is another matter. But this entire charade has been cloaked with a public relations campaign using terms like ‘missing,’ ‘vaporized,’ and ‘mystery’ to describe the customer assets as if no one really knows where the funds had gone, which the CFTC has explicity stated months ago is not the case. And that the handling of the bankruptcy and the method of ordering customers with creditors is in violation of the CFTC’s rule 190, as is evident from the precedents and intentions which established it.
What the press apparently has not yet heard or is not reporting is that vulture funds are now contacting the MF Global customers, however they may have obtained their names, and are offering them 85 cents on the dollar for their claims. Most of the claim holders are reported to expect or to have been payed 72 cents on the dollar as things now stand. The Wall Street Journal certainly casts gloom on their prospects for a full recovery and hopes of justice, based on the report from an unnamed source.
This is creating a difficult position for these much abused customers because of the need to settle their income tax obligations for 2011. Until they can prove the funds are not ‘recoverable’ they bear the responsibility for their tax obligations on the full amount. But if they settle with the vulture funds they can take the loss and move on, capitulating to the despair and the anxiety of having been cheated and abused by the partnership between government and Wall Street.
Obviously customers can ask for extensions on filing their taxes and hope for a settlement at some point. But the issue is the odd manipulation of the bankruptcy in the courts, and the uncertainty and fear fostered in the customers caused by the management of this situation through rumour and innuendo and the canard of the ‘missing money’ from almost day one.
Remember that the customers were not speculators who lost money on their bets, as the bailed out banks had been, but in many cases were depositors who had cash and valid title to precious metals and treasuries held on account in a firm that was one of the Fed’s primary dealers and a major player at the CME. And the money was taken twice. First by MF Global, and then by the financial institutions that seized the money and then manipulated the courts and the press to hide it and to keep it.
The theft of customer funds was bad enough, but the manner in which the exchange, the regulators, the court, the Congress and the Obama Administration have dealt with the aftermath of this is truly despicable. Throughout the financial crisis the character of the public’s dealings with the financial sector has been dominated by of opacity, obfuscation, misuse of influence, abuse of power, and fear.
If I have ever seen the opportunity for those in the government to take a heroic stand in defense of the people against the predations of powerful financial interests this was it. And they have failed miserably. So whatever these politicians now say seems at best a shallow mockery, with the ring of untruth, and the hollowness of hypocrisy.
And perhaps this is why the American people are turning away from their corporate-branded presidential candidates and Congressional representatives, whose approval ratings have fallen to 9%, in righteous indignation and revulsion, in disgust at their craven betrayal of their sacred oaths and trust.
They must have no sense of justice, or of proportion, or history, and apparently they have no shame.
The Watchdog says:
Denninger’s on it too. Same with Ann Barnhardt, Max Keiser, Gerald Celente and the folks at ZeroHedge. It’s no use. The sheeple are asleep.
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30th January 2012 at 10:33 pm
Persnickety says:
I’ve been ranting about this theft to various friends and relatives with almost no effect… even when you explain that it’s farmers and other non-rich people getting screwed, people just aren’t listening for whatever reason. They’re in for a shock when the ATMs stop working and the bank tells them they can’t withdraw any money in any way.
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30th January 2012 at 10:48 pm
TeresaE says:
This shit is living proof of what happened in Germany and how evil rose to popular power.
We have been so screwed, so many times, that we now don’t even blink an eye when it happens again. Remember the outrage about Enron? Seems we wasted all our outrage a bit early in our demise.
The normalcy bias is in full living color right now. People are just used to it. Hell, people LOVE it.
Tell me lies, tell me sweet little lies.
Doesn’t bode well for how we “come out” of this fourth turning, does it?
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30th January 2012 at 10:53 pm
Nonanonymous says:
No doubt it’s the new “normal”. It’s not just the theft of ordinary investors money, but the really big investors were warned about the collapse in time to get their money out.
That money should be recoverable, too, and distributed equitably.
The deafening silence in the halls of power when a crisis hits is a certain sign the matter is being discussed at the highest levels. And there is never a right or just announcement at the end of it, which we still haven’t heard in the case of MF Global, and may not, only a public statement that distorts the truth and hides the ulterior motives of those in power. It isn’t that they can’t do what is right, they simply refuse, and worse, the corruption increases as more and more in Congress and elsewhere want their piece of the pie.
The information age works both ways, for both good and evil. This is also the history of civilization, one of conquest and man rising against oppression. The 4th turning is going to be a bitch for those in power.
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30th January 2012 at 6:38 am
Mary Malone says:
You know, I can understand it if the average Joe doesn’t flip out. After all, most Americans are simply not impacted (on a micro level) from MF Global threat.
But the silence from business execs is deafening. These guys who run companies know the system is based on trust. That trust has been violated and Corzine’s crime is egregious. It will come back to haunt all CEO’s in the financial sector – as well as those in all other areas of business.
Yet crickets.
That is the biggest surprise for me. I know that sounds incredibly naive (because it is) but I really believed that people in business, who had built and benefit from capitalism system, would stand up and defend our way of life. I really believed they would get Obama in a back room and tell him to knock it off.
But time after time – from Obama’s defiance of bankruptcy laws in GM takeover, to MF Global heist, they have stood silently by while the Rule of Law is being completely trashed.
No public statements, no behind-the-scenes tactics to cut Obama off at the knees. No apparent resistance at all.
America’s “elite” the privileged class is completely and totally corrupt. Obama’s power is virtually unchecked at all levels – Congress, and the private sector.
We need a miracle.
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30th January 2012 at 7:41 am
Anon-a-mouse says:
“Obama’s power is virtually unchecked at all levels – Congress, and the private sector.”
OMG, what rock did you crawl out from under? You think Obama has any power at all? Obama is a pathetic finger puppet dancing to whatever tune the Big Money Boyz play. As was Bush. As will be the next president.
Face it. A war was fought behind the scenes between Wall Street and the rest of humanity and Wall Street won a crushing and decisive victory. It is pretty much over now. Unless OWS manages to throw enough flesh into the gears to stop the machine, the march to debt slavery is now a foregone conclusion.
Telling yourself it is all the Democrats’ fault or the Republicans’ fault and everything will be set right when we get OUR guy in office is the game they want you to play. It keeps you from rebelling.
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30th January 2012 at 9:59 am
Kill Bill says:
I see the medias crowing craniums, wall strippers and DC polititutes dont care about the MF investors or the 84%
Im shocked, I say, damn shocked.
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30th January 2012 at 10:02 am
Kill Bill says:
Soon prisons will be full of debtors. Well, only the little debtors, not big debtors like Whorezine and company, but thats called wealth when you take what isnt yours and pretend it somehow went into a haywire transporter aboard the Star Trek Enterprise. Investing is a risk, you see. Suckers.
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30th January 2012 at 10:06 am
Mary Malone says:
Anon-a-mouse: OMG what rock did you crawl out from under?
None. I walk perfectly upright. I never implied the corrupt system was one party or one candidate’s fault – never.
But I did expect there would be checks and balances on Obama’s power when he won. I was in the minority and could clearly see that he was a revolutionary – before one single vote was cast.
Obama is George Bush on crack. He is the Imperial President. He has defied Congress, the Constitution and the Rule of Law to a degree that has not been experienced – since FDR.
This breakdown in the rule of law is not a rant against Obama. The point of my post was that I had the expectation (which I said was naive) that powerful interests in business would stop Obama’s fundamentally transforming America from a representative republic to a banana republic.
My bad.
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30th January 2012 at 10:10 am
Kill Bill says:
You think Obama has any power at all? -Anonamouse
I bet he can leap tall buidings in a single bound and burn holes thru walls with laser beam eyes. A bastion of good that promotes integrity and truth able to fly at super luminal velocities.
Dont believe me? Just look under his suit. Leotards. Only super zeroes wear then.
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30th January 2012 at 10:51 am
AWD says:
“The theft of customer funds was bad enough, but the manner in which the exchange, the regulators, the court, the Congress and the Obama Administration have dealt with the aftermath of this is truly despicable”
A perfect example of how criminals would handle a criminal situation. Why is anyone surprised?
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30th January 2012 at 12:05 pm
Administrator says:
“Silence in the face of evil is itself evil: God will not hold us guiltless. Not to speak is to speak. Not to act is to act.”
Dietrich Bonhoeffer
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30th January 2012 at 1:53 pm
Hal (GT) says:
I have a feeling things are about to get a lot worse for the regular guy too. You all need to go listen to the Ellis Report’s interview of Jim Sinclair. He makes now of MF Global:
The Impending Undeclared Default Of 5 Major US Banks
http://www.jsmineset.com/2012/01/30/the-impending-undeclared-default-of-5-major-us-banks/
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30th January 2012 at 4:36 pm
Administrator says:
MF Global Customer Funds Were Not “Vaporized” – Stanley Haar Takes WSJ to Task
Submitted by EB on 01/31/2012 14:42 -0500
by Stanley Haar
As a individual trader and CTA whose accounts are owed several million dollars by MFGI, I would like to express my shock and disappointment with [yesterday's] front page article; I expected better from the WSJ. Your article gives the appearance of having been ghost written by Andrew Levander and/or the JP Morgan legal department. Among the key errors/omissions:
• Client money in segregated bank accounts was not “vaporized”; it was stolen via illegal transfers to support MF’s proprietary trading positions and to repay creditors such as JP Morgan. Those transfers are and always were illegal…….even “under rules at the time”. Your use of that irrelevant and misleading phrase twice only serves to deflect attention from the criminal acts committed by Corzine, Abelow, Steenkamp and Ferber. Your own article goes on to state that “rules require customer funds to be set aside and kept safe”. Even Gary Gensler and Jill Sommers have testified that customer funds needed to be segregated at all times. The failure to do so is a clear violation of the Commodity Exchange Act; “intent” is not an element of this criminal act.
• Although you correctly cite the difficulty in recovering the stolen funds, you fail to explain the main reason for this difficulty: the highly suspicious and irregular way in which the bankruptcies of MFGI and MFGH were implemented. Under a properly executed FCM bankruptcy process, customer segregated funds always have absolute priority over all other creditors. Instead, MFGI was placed under a SIPA liquidation, even though 98% of the accounts were commodity accounts not covered by SIPC protection. Compounding this bizarre step (apparently orchestrated by key general creditors such as JP Morgan and Goldman Sachs without resistance from the CFTC), the assets under the control of MFGH were not frozen and that entity was allowed to continue operating under Chapter 11 bankruptcy rules. This allowed unknown billions in assets to be dumped into the hands of George Soros, JP Morgan and various hedge funds at bargain prices (as reported by your newspaper), thereby locking in realized losses on those positions and moving assets out of the reach of the MFGI trustee.
• The bottom line is that customer funds were stolen twice: first by the illegal looting of segregated accounts by MF management, followed by the fraudulent way in which the bankruptcy was structured so as to circumvent the priority status of customers in the distribution of MF assets. This is the real story and scandal of MF Global, and perhaps one day your paper will decide to cover it.
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30th January 2012 at 7:21 pm
Mary Malone says:
Admin, we went to a young reporter at WSJ over a year ago and laid out the whole – there are no mortgages to back MBS story.
He nips at the edges of the story, but never writes the story with the headline in 72 pt. type.
We also went to him in August with the Eric Holder – Covington & Burling – MERS connection. Again, no pursuit of the story.
It may be above his pay grade to tell the truth – but the senior managers of WSJ are complicit in the fraud as far as we’re concerned.
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30th January 2012 at 10:47 pm