Thursday, November 17, 2011

Afternoon Delight 11/17/11 - Time To Get Serious

I'll get to the market news in a bit - this stuff is just too hilarious not to cover.

Well with Reuters tweeting that the House has passed a bill that would fund the government thru December 16th, at least we don't have to worry about government shutdowns till the week before Christmas. That's the good news. Actually if you can call the government having to pass debt spending on a monthly basis cause they have not had a budget for over 900 days now and are $15 trillion in debt (excluding FRE and FNM) good news, then how bad are things?

Of course if you vote to simply have unlimited spending authority that would just end all the suspense - GOP House Will Vote on Balanced Budget Amendment That Permits Unlimited Federal Spending |

Of course the super committee is doing their job, doing nothing, waiting on the 11/23 deadline to pass so the cuts that come into effect will be blamed on .... no one. Brilliant! Well the SC is actually doing something (I thought they were formed JUST to handle the debt issue not other stuff), "That this is all being done without open debate in Congress, and without any public scrutiny of the actions of the 535 members of Congress is yet another disturbing sign that the very fabric of power in America is being deliberately destroyed and re-concentrated into the hands of the few — the “global elite” who now consider themselves kings who rule over the slave masses." » Illegal “supercommittee” pushes secret farm bill that will cost billions Alex Jones' Infowars. Seriously scary stuff.

Glad to know that our representatives are working so hard for us. They should get paid handsomely for the fine job they are doing running this country into the ground and instituting the police state. Since they are so grossly underpaid they simply take to making millions from their position of power and knowledge. STB pointed out earlier this week about the blatant insider transactions that our representatives are using to corruptly enrich themselves. If you missed the 60 minutes special this week you can watch it here. » Explosive ‘60 Minutes’ Report Reveals Widespread Washington Corruption.

Now the really (very) serious stuff - 

OK, none of this is funny anymore. We're broke (who isn't?) and have a corrupt government and Federal Reserve trying their damnedest to cover up reality like a cat in a catbox. If they had just let it all blow up in 2008, we'd actually be in a real recovery now, not some sham created by trillions in stimulus money that has done nothing but benefit the big banks.

STB has been telling you to focus on liquidity for months now. Guess what just ran out? You have to read thisOh Crap in [Market-Ticker] "They're lending your so-called "margin deposit" out to someone, making the entire premise of depositing margin against your position a bad joke and guess who the joke will be on if anything goes wrong?"

After the O-MFG event last week everyone's ears should have perked up. Close to a billion in client funds disappearing is usually not a good thing. The fact Corzine is still walking the streets is amazing. Do you want to know how and why and what the broker dealers can do with your funds? Do you think you are at Merrill Lynch and are immune to such actions? Read this - it will BLOW YOUR MIND.

"The banks, however, pushed the CFTC to expand the investment options that would allow firms to practice “internal repo.” In this scheme, money is taken from customer accounts and invested short-term in a variety of securities, with the futures brokers reaping the not- insignificant financial rewards from their customers’ money." Tiny Rule Change at Heart of MF Global Failure: William D. Cohan - Bloomberg

As a result you get the most astounding news of the day -

"The Entire System Has Been Utterly Destroyed By The MF Global Collapse" - Presenting The First MF Global Casualty | ZeroHedge. "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."

Reading further you find the meat that says it all - "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."

Are you getting this? This HAS TO sink in. This dude closed his whole brokerage business because the system is rigged, corrupt and NO LONGER SAFE for investors. You are NOT SAFE at any broker dealer. Did you read that Bloomberg article above? If not go click on it and read it.

Other links - 

"I think we have maybe a few months -- it could be weeks, it could be days -- before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it." Citi Chief Economist Willem Buiter: A Spanish Or Italian Default Could Happen In A Few Short Days | ZeroHedge

Ex-out the implied backstop by the monetary authorities, and liquidity is now locked up more than ever in the history of capital markets. The liquidity crunch explains why everyone is liquidating the one asset that is performing best YTD to procure much needed dollars - gold. Global Dollar Liquidity Freeze Leads To Pervasive Sell Off | ZeroHedge

"“The lost money is sort of like a lost child,” said Bart Chilton, a Democratic member of the Commodity Futures Trading Commission. “Every day that passes is more and more concerning, and there’s less and less hope.”" With MF Global Money Still Missing, Suspicions Grow -

Sorry for the short post LS 1 and 2 start basketball tonight and you know who is coaching. That is probably a good thing - this post was going to get a lot worse. I'll get some charts up tonight.

GL and GB.

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