Trustee Sells the MF Global Customers' Gold and Silver to Jefferies and Company

Who says that Wall Street does not take care of their customers.

The clients didn't have to do a single thing for themselves. They didn't have to decide when to sell, or to whom, or at what price. And they did not even have to hire a trustee to liquidate their assets.

This is what they call 'end to end' customer service.

WSJ
Jefferies to Buy MF Global Precious-Metals Assets
By PATRICK FITZGERALD
March 14, 2012,

Investment bank Jefferies Group Inc.'s commodities arm has agreed to buy the gold, silver and other precious-metals assets from the trustee liquidating MF Global Holdings Ltd.'s brokerage business.

James Giddens, the trustee overseeing the liquidation of MF Global's brokerage's commodities business, said in a court filing Monday that an offer from Jefferies Bache Financial Services Inc. is the "best available opportunity" to sell the remaining physical property under his control.

Jefferies is buying the warehouse certificates—not the actual gold and silver bars—of MF Global's former commodities customers. At current market prices, those customers would get about $14.5 million from the sale of the certificates, a value of more than 99% of the aggregate current futures value of the metals underlying the certificates.

The trustee, who worked with futures-market exchange CME Group Inc. to shop the certificates, said no other buyers stepped forward.

The sale therefore represents an "attractive opportunity" in a market environment in which other means of liquidating the certificates are unlikely or would be subject to a "far greater liquidation haircut," Mr. Giddens said in court papers.

A hearing on the sale, which requires court approval, is slated for April 2 in U.S. Bankruptcy Court in Manhattan...

CFTC Charges MF Global Trader With 'Banging the Close' - Four Years Ago

Bart Chilton and the CFTC have charged an MF Global Trader with 'banging the close' in the palladium and platinum markets, four years ago.

Four years is a long time. That is about the time they started their intense investigation into the silver market manipulation that has been slow cooking like a pork shoulder in a smoker. We can't hardly wait.

Not to appear too cynical, but this sounds like the local sheriff shaking the doughnuts off his shirt and arresting a graffiti artist when people start complaining about the wide open graft and corruption plaguing the county in drugs, gambling, prostitution, and murder.

Banging the close? A couple of the Big Banks have been banging the metals markets like rhinos in heat almost every day.

I am sure this action will frighten Wall Street into righteous compliance with the law. And the muppets may be heartened by it.

Or at least that is what those whose minds are in the Beltway culture think.

Reuters
Ex-MF Global trader charged with manipulation
By Christopher Doering
Mar 14, 2012 6:25pm EDT

(Reuters) - The U.S. Commodity Futures Trading Commission said on Wednesday it charged a former MF Global broker with attempted manipulation of palladium and platinum futures prices during a two-year period on the New York Mercantile Exchange.

The CFTC complaint alleges that Joseph Welsh, while working for the firm, used a manipulative scheme commonly known as "banging the close" between at least June 2006 through May 2008 on no fewer than 12 separate occasions to alter prices.

Banging the close occurs when a trader acquires a substantial position leading up to the closing period, and then offsets the position before the end of trading to try to manipulate closing prices.

"We have some new manipulation authority" under the Dodd-Frank financial reform law enacted in 2010, said Bart Chilton, a Democratic CFTC commissioner, speaking at the Futures Industry Association annual meeting in Boca Raton.

"We're looking at all our authorities, including our new manipulation authority, and we're going to use them as aggressively as we can," continued Chilton, who was not speaking directly about this case...

Gold Daily and Silver Weekly Charts - Bonus Army and Business Plot

Another bear raid.

As a reminder this is the big 'triple witching' option expiration for stocks this week. The miners are fair game.

As you may recall, there was a significant amount of civil unrest in 1932, which was a presidential election year.

The Bonus Army of WW I veterans occupied Washington until they were forcibly dispersed by the US military led by Douglas MacArthur. The veterans had been encouraged in their peaceful occupation by Smedley Butler, Major General of the US Marine Corp.

Butler later testified in 1934 that he had been approached by several powerful industrialists who asked him to bring the Bonus Army back to Washington and take the government by force of numbers from then President Franklin Roosevelt, in a scheme that was known as The Business Plot.

This reminds me of the co-opting of the Tea Party, which started as a protest against TARP and the bank bailouts, by today's monied interests.

Fortunately our modern day Herbert Hoover is not so much the liquidationist as his business friendly predecessor.

Obama understands the need for bread, and Wall Street supplies the circuses.

But if history rhymes once again, this could be a long, hot summer.

SP 500 and NDX Futures Daily Charts

Just another glorious day in the Pax Americana.

At least we have the Republican primary for comic relief. 

I heard one of the funniest lines of the season so far from Chris Matthews.

"When you watch footage of Mitt Romney on the campaign trail in Mississippi and Alabama, he looks like Prince Charles on a royal tour of New Guinea."

It is remarkable how the Party and their Media ignore Ron Paul. I don't think he has the traction to run as a Third Party candidate, but there is always room for hope.