Chris Whalen talks about MF Global and JP Morgan (Morgan has much of the 'missing' $$'s , SURPRISE!)

[stockholmer]

VIDEO:

http://video.msnbc.msn.com/cnbc/46514149#46514149



Chris Whalen: JPM and the Banks Have the MF Global Money And the Status Quo Is Protecting Them

http://jessescrossroadscafe.blogspot.com/2012/02/chris-whalen-jpm-has-mf-global-money.html

But please, to our friends in the Big Media, could we stop saying that we don't know the location of the missing $1.6 billion of client funds from MF Global? The money is safe and sound at JPM and other counterparties. As with Goldman Sachs et al and American International Group, the banks have been bailed out at the cost of somebody else. And the various agencies of the federal government are complicit in the fraud...

The effort by former New Jersey governor and MF Global CEO Jon Corzine to save his firm by stealing customer funds seems to warrant further discussion, yet instead we have silence... So why is it that the Large Media have such trouble reporting this story? The fact seems to be that the political powers that be in Washington are protecting JPM CEO Jamie Dimon from a possible career ending kind of stumble with respect to MF Global."

Chris Whalen at The Institutional Risk Analyst lays out the entire MF Global scandal in a few plain words, taking the Wall Street demimonde to task in the process. It is nice to see that someone who occasionally appears on the mainstream media can tell the truth on this. Usually one has to look for sources overseas, small cafes, and the occasional economic maverick to hear what really happened.

But in quiet whispers, the Street knows the truth, that the money was stolen, not once but twice. And even these hard cases are shocked. The first time by MF Global and from the very top, and then afterwards in the courts and the regulatory bodies that used the bankruptcy to take the funds from the customers and give them to the creditors. And it does stink to high heaven. But the clean up men are giving the evidence a thorough scrubbing while justice waits, Chicago-style. It has placed a chill on those trading in the US markets. Even they are frightened of such lawlessness. They can't help but wonder, who's next? And how far will they go?

snip

Chris Whalen Bio (he is one of the top bank analysts in the world)

http://www.tangentcapital.com/team/whalen.html

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How JP Morgan And George Soros Ended Up With MF Global Customer Money

http://www.clearingandsettlement.com/2012/01/how-jp-morgan-and-george-soros-ended-up-with-mf-global-customer-money/


In recent testimony before a Congressional committee, MF Global’s former chief Jon Corzine as well as other MF Global executives said repeatedly the didn’t know where the failed brokerage firm’s $1.2 billion of missing client money was. In fact, MF Global executives knew exactly what happened to the money, as do the regulators who oversaw the firm’s bankruptcy. The so-called segregated customer funds were repeatedly, and legally (through re-hypothication), used as collateral for MF Global loans for 100:1 leveraged bets on European sovereign debt.

snip

A substantial portion of MF Global’s commodity clients cleared their transactions through the Chicago Mercantile Exchange and Comex, owned by CME Group (ticker: CME). The question now looming over CME’s stock is whether the company will be liable for customer losses, as the Commodity Customer Coalition, a group that says it represents some 8,000 investors—including many hedge funds–with exposure to MF Global are not going down without a fight.

Rather than being treated as a bankruptcy of a commodities brokerage firm under sub-chapter IV of the Chapter 7 bankruptcy law, MF Global was treated as an equities firm (sub-chapter III) for the purposes of its bankruptcy, and this is why the MF Global customer money in so-called segregated accounts “disappeared”. In a brokerage firm bankruptcy, the customers get their money first, while in an equities firm bankruptcy, the customers are at the end of the line, meaning MF Global’s creditors, namely J.P. Morgan and other trading counterparties, got their money first, just as AIG’s CDS (credit default swap) counterparties (mainly Goldman Sachs) got their money first when the U.S. government bailed out AIG. To add further insult to injury for MF Global clients, the firm reportedly unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs, and others, who then reportedly flipped these securities within a day to George Soros funds.

What the debacle implies is that nothing has really been learned from the 2008 financial crisis, and that there really is no safety in any paper investment when push comes to shove. Brokers and investment banks are effectively running leveraged ponzi schemes running in the trillions of USD with your collateral then refuse to offer you liquidity on the collapse of the trade because they won’t face a brokerage This has very wealthy individuals as well as non-too-big-to-fail market participants seriously reconsidering the risks of regulatory malfeasance during such systemic “black swan” events. In such cases, be prepared for commodities and equity brokers, investment and commercial banks to “freeze” your funds, enforced by central banks or other regulatory authorities–i.e., a de facto banking holiday, while not only will your purchasing power be reduced by currency devaluations, but you will also be asked to again bail out the banksters with your tax money.


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[Hotler]

1. It's so fucking sad. all one can do is shake their head.

And to add, Rick Santelli is an ass.

[AnneD]

2. To those of use that knew....

how short JP Morgan was and is with silver etc., this comes as no suprise that they would commit such a theft. Call it what you like but it was a theft. They just did it with some key strokes instead of a gun. The fact that Jon Corizine and the heads of JP Morgan are not doing a perp walk in handcuffs right now exposes the level of corruption in our Judical and Legislative branches. Where is the US AG on this. The buck does eventually stop at Obama for Holden's appointment.

[stockholmer]

3. it is a toss-up for worst appointment between Holder, Cass Sunstein, and Lawrence Summers

All three bring a unique stench to the table. Holder has the most power so he is the biggest threat/disappointment, Sunstein is the creepiest, and darkly sinister http://www.salon.com/2010/01/15/sunstein_2/singleton/ , and Summers (at least he is gone) has an atrocious track record of financially disasterous policies and bankster-enabling, plus is a bully misogynist.




and a

[Hotler]

4. Stench is right. I can smell it all the way here in Colorado, or is...

that our own AG, he rolled over for the mortgage banksters with the rest of them, I can't seem to tell.

[stockholmer]

5. if you havent seen it, here's an excellent documentary from PBS, Summers is crucified (justly) in it

http://video.pbs.org/video/1302794657/ (extra's here)

[banned from Kos]

6. Why should Corzine be indicted for JP Morgan's "theft"?

Seriously, do you ever think about this stuff?

[stockholmer]

8. If you think that Corzine was not in on it (co-mingling of customer accounts) from the beginning

of MF Global's hyper-leveraged derivative trades going pear-shaped, then you are ignoring most of reality (in regards to MF Global). Corzine was a fanatical micro-manager, he was defo aware of what the firm was doing. He also has huge dirt (IMHO) on the rest of the 'public faces of US bankster control', going back to his days as CEO of that pack of vipers otherwise known as Goldman Sachs.

MF Global was partially cobbled out of the carcass of Refco, after that firm self-immolated in a huge scandal http://www.nypost.com/p/news/business/sins_of_past_trades_Ixlj5YYj8GDglL3pcl7KQJ in the mid-2000's, so corrupt corporate DNA was baked in the cake.

Corzine is as dirty as a hog left in the mud for decades.

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Corzine Knew Of Fund Transfer

http://online.wsj.com/article/SB10001424052970204026804577100652741274594.html

Former MF Global Holdings Ltd. Chief Executive Jon S. Corzine testified Thursday that he knew about an overseas transfer of funds that has come into focus in recent days as regulators and Congress seek to find out what became of an estimated $1.2 billion in missing customer cash.


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MF Global Employee Indicated Corzine Knew Loans Were Made From Customer Accounts

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Is Jon Corzine “Too Big to Indict”? Part VII

http://www.businessinsider.com/is-jon-corzine-too-big-to-indict-part-vii-2012-2


Four full months have passed and MF Global customers are still out a reported ~$1.6 billion. How are these individuals and entities surviving? Will they ever see a return of their funds? Will the public ever learn what truly happened in those fateful days and hours when this firm went down the tubes?

Don’t hold your breath.

In a not unsurprising manner, we receive word on a late Friday afternoon that the investigation into the MF Global demise may be little more than a case of sloppy controls and compliance. Is this to be believed? Let’s listen to Wall Street’s top financial investigative reporter Charlie Gasparino:

Watch the latest video at video.foxbusiness.com

One question is screaming to be addressed. Has MF Global’s assistant treasurer Edith O’Brien been granted absolute immunity?


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Investigators Scrutinize MF Global Wire Transfers

http://dealbook.nytimes.com/2012/02/26/investigators-scrutinize-mf-global-wire-transfers/

Federal investigators examining the final days at MF Global and how customer money went missing are poring over scores of wire transfers in and out of the brokerage firm, including the possible movement of $325 million that may have belonged to customers, according to people briefed on the matter.

The suspicious transfer, which until now has not been made public, was first discovered in the early hours of Oct. 31, the day the firm filed for bankruptcy. Initially, the firm attributed a shortfall of more than $1 billion in customer money to an “accounting error,” records show. But after hours of searching, executives acknowledged to regulators in the firm’s offices in Chicago that the shortfall was real — and may have been caused in part by the $325 million transfer, said one of the people briefed on the matter.

It remains unclear where that money went, or even if it belonged to customers. But it is one of many significant wire transfers that federal authorities — including the Commodity Futures Trading Commission and the Federal Bureau of Investigation — have spent months reviewing to piece together MF Global’s final days.

snip

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Former MF Global official says he warned Corzine

http://www.cbsnews.com/8301-505245_162-57370451/former-mf-global-official-says-he-warned-corzine/

(AP) WASHINGTON — A former executive at the collapsed brokerage MF Global testified Thursday that he warned then-CEO Jon Corzine a year before the company went under about the risks of making large bets on European government debt.

Michael Roseman, who was chief risk officer for the company, told a House oversight subcommittee that he raised the concern in October 2010, as the company's bets on European debt approached $4 billion. Roseman said Corzine, a former governor of New Jersey, "allowed me to express my opinion in the board meetings. ... Within the room, there were certainly differences of opinion."

At another point in the hearing, Roseman said his analysis of the risks that the company was taking was "challenged as being implausible." He did not specify who challenged it. Roseman said he was told in January 2011 that he was being replaced, and he suggested to the subcommittee that his views on MF Global's risk-taking played a role in the decision. Some of the lawmakers agreed.

"It almost looks like they took Mr. Roseman out and they replaced Mr. Roseman with a yes-man," said Rep. Stephen Fincher, R-Tenn.

snip

[AnneD]

9. Jon Corizine's being...

a CEO at Goldman Sachs is a red flag. He knew what was going on and he is as guilty as if he pulled a gun to hold up investors.

I may not know if it came from a Hereford or Angus, but I still know bull shit when I see or smell it.

[dixiegrrrrl]

7. So, how many pension funds are sitting in Brokers and investment banks

which "are effectively running leveraged ponzi schemes running in the trillions of USD with your collateral then refuse to offer you liquidity on the collapse of the trade"?