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Stocks were rallying until the afternoon and the FOMC announcement which withheld the QE Christmas candy.
Stocks went down hard led by the banks. Gold was hit very hard by a bear raid sell off down to 1620, while silver maintained some strength.
The stock market rebounded into the close somewhat as did gold. Silver has not confirmed the breakdown by gold out of its symmetrical triangle.
Why is gold going lower, but silver, the metal with a higher industrial component, is proving stubborn? Perhaps it is because the Central Banks don't have any.
"Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."
Alan Greenspan, Congressional Testimony on Regulation of OTC Derivatives, 24 July 1998
The bulls have their work cut out for them.
The MF Global scandal continues to rot and sicken. After the bell the testimony from CME Chairman Duffy to the Senate indicated that Jon Corzine was perjuring himself when he said he had no knowledge of the customer money transfers. Duffy testified that on Saturday lawyers notified him by phone and email that Corzine knew of the transfers of customer funds and that at all times the people doing the transfers were under the authority of MF Global management
Perhaps now would be a good time for Jonny to cut a deal and throw someone else under the bus and not 'take one for the team.'
As noted intraday, JPM and the Trustee are divvying up the MF Global cash account amongst themselves. The Trustee hopes to pay back the customers out of the company assets 'if possible.'
MF Global is more of a crime scene than a simple bankruptcy. What puzzles me is how MF Global was able to transfer all these customers funds and assets without records in the banking system? What happened to all those anti-money-laundering rules on fund transfers? Are they just for the 'little people' too?
And why is the Trustee Giddens, a private attorney whose firm has long ties to the bank, seem to be calling the shots on the investigation of JPM and their involvement?
And is the judge in the bankruptcy really one of the lawyers for the banks in the Martin Armstrong case?
The interests of the customers seem largely under-represented. Where is the CFTC and the Justice Department in all this again?
If Jon Corleone does cut a deal, and then disappears like the missing billion, will Max Keiser put up a documentary titled Where's Jonny for funding?
There was a big intra-day reversal in stocks as Benny failed to provide any QE Christmas Candy in the FOMC stocking today.
The index fell out of its triangle. The bulls have their work before them to save the day and get the Zynga IPO out the door.
So what is MF Global going to do with that $25 million in cash held in their account at JPM?
Presumably it will be used to pay the Bankruptcy Trustees and lawyers who decided that it belongs to MF Global and not the cheated customers whose accounts have been looted.
JPM apparently cut a deal with the Trustee saying they could have the cash if MFG granted JPM a lien on ALL the company's assets.
So much for the superior claim of the customers as asserted by the CFTC.
This whole notion of the 'missing money' is puzzling because with the new banking laws it seems almost impossible that there is not an electronic trail of bank transfer in any size, much less over a billion. What happened to the anti-moneylaundering provisions?
This is not a routine bankruptcy. This is a crime scene.
P.S. After the bell the CME witness contradicted Corzine's testimony saying that an employee told him he knew of the transfers. This will be interesting.
Bloomberg
MF Global Cash at JPMorgan Presumed Its Own, Freeh Says
By Tiffany Kary
Dec 12, 2011 8:39 PM ET
MF Global Holdings Ltd.’s $25.3 million in cash held at JPMorgan Chase & Co. (JPM) is presumed to be its own, the bankrupt company’s Chapter 11 trustee said in response to customer objections to its bid to use the money.
MF Global Holdings should be allowed to use the cash collateral of JPMorgan, trustee Louis J. Freeh said in papers filed today in U.S. Bankruptcy Court in Manhattan. Customers of the company’s failed brokerage, MF Global Inc., had asserted that the money may have been part of the $1.2 billion believed to be missing from their segregated accounts.
“The customers have failed to provide this court with any actual evidence in support of their position,” Freeh said in court papers. MF Global Holdings owns the New York-based bank account with JPMorgan, and under New York law, it is presumed that funds deposited in an account belong to the account holder, the trustee said.
The company has been in talks with JPMorgan, its largest lender, on the use of cash collateral to pay the costs of its bankruptcy, a lawyer for Freeh said last week. U.S. Bankruptcy Judge Martin Glenn said Dec. 9 that he would reconsider the use of cash at a hearing Dec. 14 after customers objected.
JP Morgan, agent to a $1.2 billion loan, agreed at the outset of MF Global Holdings’ bankruptcy to let it use $26 million, subject to an agreement that gives the bank a lien on all of the company’s assets...
On the other hand they can always queue up with the general creditors.
Bloomberg
MF Global Trustee Seeks Creditors’ Money for Customers
By Tiffany Kary
December 13, 2011, 2:11 PM EST
Dec. 13 (Bloomberg) -- MF Global Inc.’s customers will be refunded from the failed brokerage’s general creditors’ estate if necessary, said James Giddens, trustee for the liquidating brokerage, in a prepared statement to the U.S. Senate.
“If commodity customer claims are not satisfied from the segregated commodity account estate, the remaining claim will automatically go against the general creditors’ estate,” Giddens said in the statement. A spokesman for Kent Jarrell, a spokesman for Giddens, said that the general creditors’ estate is the estate of MF Global Inc. only, and not that of parent company MF Global Holdings Ltd. He couldn’t immediately confirm whether the customers would have recourse to any money from the general estate of the parent company.
Giddens has said he intends to return 100 percent of customer funds if possible...
The MF Global Management: I Know Nothing, NOTHING!
Why WERE all these jokers being paid so much?
What did they actually do to earn it?
They weren't involved with the trades, and they weren't involved with the management of billions of cash, and the customer accounts, their most sacred trust.
Have a Futures Account on the CME? Sleep well.
Your money is in the hands of those who know nothing.
