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Thursday, November 3. 2011
The "MF" in MF Global does not stand for "Maggie's Farm". But it could stand for "Massive Fraud". What's amazing, as the MF Global story unfolds, is how one of the liberal standard bearers, Jon Corzine, put his future and his reputation on the line to make more money than the tidy sum he already has. He was, after all, known as a risk taker. But he was also one of the Left's golden boys.
There's nothing wrong with making money, and nobody should begrudge Corzine what he earned. However, I was happy to see him removed as my governor, due to the hypocrisy of his rhetoric and his disastrous leadership. His political views, contrasted with his behavior as CEO of Goldman Sachs, were inconsistent. He claims to be a man of the people, seeking to right wrongs and help the poor. He also gave support to, and received support from, unions. As CEO of Goldman during the run up to a public offering, he cut staff, fought unions, and tried to lower wages. In doing so, he oversaw a successful IPO, but was eventually ousted.
It's always intriguing to see liberal hypocrisy laid bare and listen to the spin. After all, it was recently speculated that Corzine might be a Geithner replacement. Few of his Democratic colleagues have jumped to defend him.
Corzine could, and should, have been much smarter about this. After all, MF Global purchased a firm which had executives jailed for exactly the same kind of fund commingling which seems to have just occurred. So it seems reviewing history was not helpful to the management of MF Global. Does a connected politico earn a jail cell for his behavior?
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The left keeps telling us "it's not about the money". They are lying. It is more about the money for them than the rest of us. "the money" is our money and they want it - if not outright, they want control over it (us).
While I don't begrudge anybody his legally acquired money - even Corzine - I do have to chuckle a bit at his predicament.
It seems that Corzine is a bigger chucklehead than Geithner. Hard to believe...
And reports on him tend to leave out the (D) when mentioning he was Governor of NJ, and to which pres**ential candidate he donated $30,800.
Clearly that's of no significance.
Obviously, you're unfamiliar with the first rule of political journalism:
If a pubbie (conservative or libertarian) is in trouble, always make sure you dutifully note his party.
If a lefty is in trouble, always make sure you dutifully forget to note his party.
Life is so much simpler when you have good rules to go by...
Also, if the story involves a Republican or better yet a conservative than they are labeled as 'far right'. If story involves an obviously far left person it is not typically labeled.
Why are any of these investment firms allowed to be structured as a public company? Seems that a lot of our financial issues stem directly from investment banks changing from conservative partner controlled firms to public limited liability corporations making reckless bets with other people's money.
Goldman Sachs' current and prior employees seem to be involved in a lot of mischief.
I have often wondered that myself. The partnership structure that was in place until the 1990's may not have been 'better', but I believe it reduced moral hazard.
It also limited size. The real problem we have today (not with MF Global, but with many other investment banks) is "Too Big To Fail".
The corporate structure has allowed them to become so large, it is perceived that allowing them to fail would bring the whole system down. So the government just institutionalized this philosophy. Which makes moral hazard an even larger problem.
To big to fail is not just about the financial sector - this involves the entire spectrum of American capitalism.
Organic growth in a companies bottom line used to be accomplished by competition which created in kind innovation and improvements of products and services. What changed what that organic growth became much to hard - need a new idea? Buy a company that has that idea.
This eventually leads to the current situation we have now. Companies like Google, just as an example, need to protect the op system (Android) so it needs patent protection - meaning that Google needs to either create new and better ways of protecting their investments via patent or purchase those patents - hence the purchase of Motorola's patents by purchasing the handset division. And the current word on the communications street is that Google is going to go after three smaller companies to obtain even more patents via company purchase.
What happens next? Google will purchase Nokia, Erickson, and so on until only it and maybe HTC and Apple remain. And I wouldn't bet on HTC being able to hold its own.
Eventually these companies become so big that they virtually control all aspects of a particular industry - thus to to big to fail. I remember back when Ma Bell was broken up by court order. How'd that work out? :>)
For what it's worth - take a look at the Google purchase of Motorola Mobility. They don't just make handsets, and while patents are important, I guarantee there is a bigger and more meaningful reason why it was purchased.
The answer is part of another post, which I spoke of elsewhere, that I have just finished and am proofreading. It's about the Future of Media.
Yeah, the patents and technology are important to Google. But Google isn't a technology company. Motorola Mobility has one other product, and in the market it was made for, Motorola now has the largest % saturation. This market has tons of something that Google loves, and thrives on. Can't mention what it is here or I ruin the other post.
I've mentioned it in a previous comment, though.
The reason I mentioned TBTF with respect to investment banks was really because while you mention is very important, it's nothing in comparison to the concentration of capital that is taking place on Wall Street.
I suspect natural forces will tear that apart at some point, but TBTF is designed to forestall those natural forces and give the government broad powers to assist in maintaining the concentration.
Technically, if you want to give it a name, it's Fascism. Crony Capitalism works, too, but Fascism is the real economic model which describes this best.
That last one is a good point. Just folks don't realize it.
Without bogging you down with a hundred links:
When the investment banks started going private in the mid-90s, Mitsui Sumitomo of Japan bought 12.5% of Goldman's IPO, becoming its biggest shareholder.
Mitsui is the bank that the postwar Japanese govt, as part of an effort to compartmentalize its vast array of problems, winked and nodded to the dangerous and un-war-damaged Yakuza that it could 'have' Mitsui Sumitomo, in return for keeping some veneer of law-abiding business going.
Goldman was then led by Robert Rubin, who soon left for Citigroup and made the first (Traveller's Insurance) of the sequence of acquisitions that made Citi the first ''TBTF''.
He soon left Citi to become Clinton's Sec Treasury, where he and his Summers & Geithner & Gensler team supervised USG "TBTF" work-outs of several huge Soros-involved currency./financial collapses, notably the 1998 Asian ("Thai Baht") Financial Crisis but also Mexican Peso, Russian bonds, and LCTM collapses.
While at Citi, he bought the Phillips Brothers London-based oil trading business ("Phibro"), run by Marc Rich, who about then left to go indie as Glencore --leaving a cadre of loyal staffers running Phibro. One of these staffers moved to Moscow and set up a Caspian-specialist oil-trading firm, "Milio". At the same time, Mitsui set up a similar company, Arcadia, which then began joint-venturing with Milio.
Cut to Spring 2008 (understand please that this comment for brevity is chainsawing and discarding vast slabs of pertinent info) and a group of ''dark pool'' hedge funds (see Gary Gensler's Commodity Futures Modernization Act of 2000 to savvy why his Sarbox rules to solve his Enron tools made no-known-custody dark pools ''necessary in order that America stays competitive'') began a very well-organized attack on the oil futures mkts, driving the pump price of gasoline, in the months before the 2008 election, not only high but unprecedentedly so in the 2nd Derivative. Shocked American voters/fuel buyers then come August watched Putin invade Georgia, get over the mountains and onto the plains a day's easy tank drive from the trans Georgia BTC pipeline supplying Europe from the Caspian, come September watched the Lehman Bank Panic lose 70% of the stock value of the Big Five TBTF banks in less than ten trading days, mostly due to illegal phantom-shares ("naked short") selling so vast that the govt hasn't touched it --tho it has the tapes and knows who was doing it (search 'Penson Financial sales volume' --note it is managed by the Genovese crime family, the same outfit for whom Nancy Pelosi's dad ran Baltimore).
Credit freezes, and unemployment in USA vaults thru October and November (the month Obama is elected) and in December reaches 700,000/mo.
January sees Obama come in with ''the mandate'' to stop the jobs hemorrhage --even tho the credit freeze is only part of the jobs-shedding, the rest being the coming of Obama himself, after two years already of Reid/Pelosi.
Anyhoo, two of the oil manipulators, it's now known, were Arcadia (being sued at this moment, in a wrist-slap CYA maneuver by Gernsler) and Phibro.
Obama's new ''pay czar'', Ken Feinberg, noting that a Phibro trader had made a hundred million bucks over the previous year, uses his hour of power over 'tarped' Citi to --blindingly fast --force Citi to sell Phibro --to Occidental, and at a shareholder-rapine price of 30 cents on the book value.
(At this point, please search 'occidental gore Kremlin' -- and perhaps 'armand hammer lenin gore family green agenda' and note the vast plethora of respectable sources in high dudgeon over this situation. Occidental also had a rig platform fire in the North Sea which put the Thatcher-killed British far-left unions back together, as well as purchased Hooker Chemical just long enough to be the willing patsy for Love Canal before taking its wrist slap and selling the unit, in a biz that Occi isn't even 'in' --leaving the Carter-led USA with the new and future untold-billions cost of environmental superfunds and the thousand politically-connected green toxic cleanup companies spawned and now and forever busily deriving new biz while the Greens busily forbid/retard/Lawfare-into-oblivion American energy production)
(now search 'BP occidental joint ventures' and take a look at two global joint-venture companies which tho full of decent employees have been seized at the top by NWO cultists and/or plain old Soviet agents, as you'll surmise by adding the word 'accidents' to the search. Also, for fun, that BTC Pipeline, search it with 'BP' and/or Lord John Browne and see who wanted it put there)
Back to Arcadia, helping panic American driver/voters in Spring/Summer 2008 --at that time Mitsui had sold it to John Fredriksen in 2007 --Fredriksen is a Norwegian oil tanker fleet owner who plies the world but not the Gulf of Mexico, and who owns a giant fishery that competes with the Gulf of Mexico fishery. Fredriksen is in a spot of trouble for buying 'oil-for-food' (the scandal that Saddam and Marc Rich designed) style below-market oil --for unknown reasons --from the Yemeni oil minister. Yemeni AQ terrorists are the ones that Eric Holder's law firm, Covington Burling, immediately latched onto following 9/11 and through vast forward work on their behalf (most of Gitmo is Yemeni) has developed quiet and secretive ties all over the country's governing structure.
Chainsaw ahead to April 20, 2010, Earth Day, Hitler's Birthday, and Macondo Blowout Day. Guess who is a ten percent partner with BP on the well? Mitsui Sumitomo, erstwhile parent company of Arcadia.
Guess what else Mitsui is doing? The upcoming Olympics, in Sochi, Putin's special project to showcase his central Asia front, needed much improved access, mountain roads and tunnels, and, despite Russian industry in sore need of just such a huge project, yep, Mitsui Sumitomo got the contract.
Guess i'll quit for now --tho haven't even got to the craziest part --the name 'Macondo', its symbolic significance in the 'movement' novel by Gabriel Garcia Márquez, ''One Hundred Years of Solitude", in which colonialism is deeply excoriated in favor of the arcadian life --so much so that 'arcadia' refs are all over the book --including the middle name of the antagonist capitalist who is in the end executed by the peoples' firing squad.
But that's not the crazy part.
The crazy part is that the town of Macondo is modeled after the author's hometown of Aracataca, in Colombia's Medellin region (the regional base of the communist narcoterrorist FARC, who is in position to terrorize a cash cow joint-venture (since split up) BP & Occidental oilfield, but instead protects said field and vastly-vulnerable jungle pipeline network.
Aracataca is site of a 'Chiquita Banana' plant, just as a banana plant coming to Macondo is what triggers the ambition and capitalism of the natives, traits which in the book soon trigger the destruction of Macondo by the wrath of nature.
Some few years ago, in response to competitors moving onto their turf, Chiquita (the former United Fruit Company), says the courts, began smuggling weapons to the FARC to terrorize the facilities of the competing interests. But --apparently in order to keep FARC from getting too powerful, or perhaps to destabilise the area even more that it could become the political power broker in the regional fruit industry, Chiquita also began smuggling weapons --military weapons, like those OF 'fAST & fURIOUS' --to a FARC rival gang, the 'right-wing' AUC. The resulting 'banana war' killed some 600 to 800 mostly innocents over the next years, until the military intervened.
IOW, the Banana Massacres tho less extensive looked a lot like the drug war on our border with Mexico, and most especially so in the feature of one well-heeled entity (Chiquita in the one case, the government of the United States in the other) arming BOTH sides, and showing either nefarious, or simply a lack of, interest in the stability of the area or the lives of innocents in the crossfire.
Anyway, Chiquita, charged in courts in Colombia as well as now (currently in session) by families of victims in Miami courts, had throughout enjoyed the services of a perfectly-adapted-for-such-work mouthpiece consigliare, until new president Obama appointed him, Eric Holder, pardoner of Marc Rich, Manhattan ANC terrorists and Waco Reno apologist extraordinaire, to the office of Attorney General of the United States.
Finally, it is pertinant that in the three major USA accidents BP has had since 2005, a change in the political wind followed. When pressure was building to expand US refining capacity, the Texas City refinery explosion stopped it cold. When pressure was building to drill the Alaska wildlife preserve, a big BP pipeline oil spill stopped it cold. When pressure was building to expand US oil production (at odds with the administration's pet one-world enabler and tax-enslaver of future humanity 'cap and trade', which BP authored, for John Kerry to scrawl his 'X' under), the Macondo blowout, despite the 45,000 wells drilled since WWII in Gulf waters with no such accident, stopped it cold.
But don't believe me, on ANY of this. Turn it over to your favorite search injun. I like Bing, but clothespin-my-nose and use the quasi-totalitarian Goo Gle also too.
Fox Biz News reported yesterday that the collective net worth of congress is up 25% since 2008. Of course, depends on what part of 2008, heh, as to whether or not 25% means anything more than that old dead cat we all experienced.
BTW, the NY Fed licenses all Primary Broker / Dealers. MF Global got its license just last year.
As far as the CFTC, also at fault due to MF Global's futures trade, i challenge you to read Gary Gensler's bio/CV (wiki if it hasn't been scrubbed) and not be astounded at his Forrest Gump-from-hell-ness.