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The Entire System Has Been Utterly Destroyed
  • Vitaliy_KiselevVitaliy_Kiselev
    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.

    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.



    Via: http://www.zerohedge.com/news/entire-system-has-been-utterly-destroyed-mf-global-collapse-presenting-first-mf-global-casualty
  • 18 Replies sorted by
  • Vitaliy_KiselevVitaliy_Kiselev
    Generally, it is very easy to predict crashes now.
    Yesterday it had been as usual, bond auction.
  • stoneystoney
    "easy to predict" is fallacy. One day auction doesn't really mean much.

    Even today there was a balance. It's important to see both sides of argument. In this case upside argument and downside argument. I wanna listen to both sides and I don't like such catch phrase like "The Entire System Has Been Utterly Destroyed." Let's rephrase it to "The Entire System Will Be Destroyed Unless Fed Saves Us Again." That "if" condition gives the upside argument. Believe it or not it is a valid argument. I'm not saying it's a good solution though. Many times those saying such catch phrase are betting exactly against what they are preaching. See Goldman Sachs.
  • Vitaliy_KiselevVitaliy_Kiselev
    @stonebat

    It means much if it repeats constantly :-)

    I know your affection with TA.
    How about making predictions using it and predict such market drops, without FA ?
  • stoneystoney
    I can't predict anything with or without TA. I can only guess. Haha.

    I'm just saying such catch phrase can be a contrarian sign. Let's wait and see. Fed might save the system again so that we can have a merry x-mas. More shopping!!!! Seriously it's hard to imagine a crash when everyone would wanna take vacation in December.
  • Vitaliy_KiselevVitaliy_Kiselev
    Generally she is not talking about crash in November or December.
    She is just telling that market is no longer functions normal and hence it is very risky.
    I fully agree with her.
    Each "Fed save" will make system more and more unstable.
  • brianlucebrianluce
    @Vitaliy
    Why do you consider her a credible source? Don't you know her background? Do you really take financial cues from right wing religious ideologues?
  • Vitaliy_KiselevVitaliy_Kiselev
    @brianluce

    I just agree with her.
    Try to read whole thing and spend some time researching subject, including MF GLobal issue.
  • oniononion
    I agree with her too. This isn't about predicting a crash. It's about having confidence that money you have invested/ traded in the futures market is secure. MF Global tells us the US financial system has become entirely lawless. I suspect the UK where I live is worse.
  • brianlucebrianluce
    @onion
    MF Global tells us the US financial system has become entirely lawless.
    ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
    No disrespect, but come on, it should be pretty common knowledge by now that the global financial system has feet of clay. Banks own everything, including the politicians, especially the politicians.
    About MF Global, it's peculiar, Corzine was already a billionaire, hard to believe he was acting out of malice -- but of course, I don't know what it's like to be a billionaire, maybe it makes you want to become a *multi* billionaire.
  • TheNewDealTheNewDeal
    Any smart investor knows you are either betting with these liars, or betting with those liars. Those that do well, are simply betting with the best liars this week.

    Best business advice I ever received: "If someone is wearing a tie, they are lying to you. If you can figure out why they want you to believe their lies, you now have the upper hand..."
  • johnnymjohnnym
    She's right about the rule of law. I wouldn't want to an Arab living in her street though. :)
  • oniononion
    In the case of MF Global, the direction of the bet didn't matter. You lost money because MF Global stole it for their own proprietary bets. That there has been no law enforcement action is shocking.

    Nothing like this happened before MF Global. This is new. It means you cannot guarantee others won't steal your money once you place it with a brokerage. The end result will be a run on brokerages.

    I am closing out my positions and account with my spread betting firm.
  • driftwooddriftwood
    All it means is, once we could cream you, now we no longer can, I'm out.
  • bwhitzbwhitz
    @brianluce
    "Do you really take financial cues from right wing religious ideologues?"

    Well, that's a pretty close-minded generalization. It's not a good idea to dismiss people because they may be affiliated with a certain groups or ideas. There are dumb and smart people on both sides of the political spectrum. Only a truly ignorant person would to subscribe to one ideology for ALL situations, while dismissing everything else.

    For example, I generally believe that while Democrats have better views on social issues... they're terrible with economic ones. So in terms of finances... I would actually take "right wing" advice over a dem. I won't discredit someone just because they happen to be religious while I'm not... unless they start saying crazy things like "god will save the economy, don't worry about it".

  • LPowellLPowell
    @bwhitz - "...unless they start saying crazy things like "god will save the economy, don't worry about it".

    http://www.youtube.com/watch?feature=player_detailpage&v=quVmg1c99HY#t=37s
  • johnnymjohnnym
    Currently left and right are united in their grievances against the corporate state, which is the very subject of this discussion. I probably disagree with this woman on a lot of issues, but i think here she has a point.
  • brianlucebrianluce
    @bwhitz
    Only a truly ignorant person would to subscribe to one ideology for ALL situations, while dismissing everything else.
    ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

    A perfect summation of Barnhardt and why it's astonishing anyone would impart her any credibility whatsoever.
  • bwhitzbwhitz
    @brianluce

    "A perfect summation of Barnhardt and why it's astonishing anyone would impart her any credibility whatsoever."

    True. That's why I usually don't listen to people like her... but even a broken clock is right two times a day. ;)
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