Shorter Term SP 500 Futures Daily Chart

This is a well known chart formation, the low volume, trend channel boogie-woogie. Was on, was off.

A self-absorbed up and down motion which I am sure is familiar to most of these traders. Turning Japanese.

The objective is to keep the market in a mild uptrend, which is necessary to lure the money in, while sweeping it back and forth, sometimes violently, to wring some coin out of the shorter term, and often skittish, speculators whose blood pressure falls and rises with every wiggle on the charts.

Let's see if we get a real move in these markets, or if we stay in a loose drift higher with a regular channel 'sweep.'

This is Wall Street, with the adults off in the Hamptons.

PFGBest: F to the R to the AUD - Wasendorf 'Faked Bank Records For Years'

"The commercial world is very frequently put into confusion by the bankruptcy of merchants, that assumed the splendour of wealth only to obtain the privilege of trading with the stock of other men, and of contracting debts which nothing but lucky casualties could enable them to pay; till after having supported their appearance a while by tumultuary magnificence of boundless traffic, they sink at once, and drag down into poverty those whom their equipages had induced to trust them."

Samuel Johnson: The Rambler, January 7, 1752

The regulators are clueless and conflicted, the self-regulators are careless and complicit, the industry is enmeshed in cronyism, and fraud is broadly tolerated as way of doing business, a droit du seigneur of the elite over customer funds and assets, pricing and all other forms of news and information.  It has every character of an advanced form of control fraud.

And as for the politicians, one might conclude as the Parliament had done with Mr. Bob Diamond, that they are either incompetent or indirectly complicit as well, in the manner of a credibility trap.   It seems hard to explain it any other way.

The culture of privilege and corruption through the mispricing of risk and outright fraud in the Anglo-American financial system is pervasive, stuffed with phony paper. No outrage seems too extreme, too great, and therefore nothing can be said to be safe.

Reuters
Exclusive: Iowa futures broker forged bank records for years - source
By Ann Saphir

Jul 10, 2012 7:23pm EDT

CHICAGO (Reuters) - Russell Wasendorf Sr., the sole owner and chairman of stricken futures broker Peregrine Financial Group, Inc., intercepted and forged bank documents for more than two years to cover up hundreds of millions of dollars in missing money, a person close to the situation told Reuters.

The National Futures Association on Monday froze the funds of the Iowa-based brokerage, which does business as PFGBest, after discovering an estimated $220 million shortfall in PFGBest's customer accounts. The NFA had said in an affidavit that Wasendorf "may have falsified bank records."

Wasendorf, 64, is reported to be in a coma after a suicide attempt Monday morning, according to a complaint filed by the Commodity Futures Trading Commission on Tuesday that accuses Wasendorf and Peregrine of fraud.

The source offered new details on how Wasendorf allegedly carried out the deceit, which involved the forging of confidential documents that the NFA uses to verify a broker's cash balance with its depository institution.

Wasendorf intercepted these documents after they were mailed by the NFA, the broker's first-line regulator, to U.S. Bank, where PFGBest had said it had well over $200 million on deposit, the person said. The NFA has said the account actually held just $5 million this week.

Wasendorf had set up a post office box in Cedar Falls, Iowa, according to a second person involved in the matter. It was to that post office box that NFA sent the documents, which were addressed to the bank.

The post office box was neither in Wasendorf's name nor registered to the bank, the second person said.  (That is, it was a 'blind PO box, something that would not be acceptable to even eBay. - Jesse)

Wasendorf then forged signatures and fabricated bank balances on the documents and simply mailed them back to the Chicago-based NFA, the person said.

Calls to spokespeople for PFGBest and NFA were not returned. A woman who answered the phone at the home of Wasendorf declined to comment...

Read the rest here.

Just Between Friends: The DOJ's Handling of MF Global and America's Culture of Cronyism

It has all the hallmarks of a Third world banana republic. The economic hitmen have truly come home.

MF Global is a prime example of crony capitalism at work, and the capture of the political process by the easy money of the Fed supported financial system.

Perhaps capture is not the right word anymore. It is more like a marriage of corruption, sealed with a credibility trap of mutual self-destruction should the naked truth appear.

MFGFacts
Just Between Friends
By Nick Knight
July 7th, 2012

When facts, data and information are gathered, dots can be connected to reveal relationships and new information as patterns emerge.

There is a pattern. Scratch just below the surface of who is who and we find the intricate network of power players and patterns of events circling the MF Global crimes. I am not talking about Governor-Senator Jon Corzine, but Eric Holder, Edith O’Brien and Reid Weingarten. Who is Reid Weingarten? “Defense attorney Reid H. Weingarten is a Washington fixture,” Brook Masters of The Washington Post writes.

Weingarten, a long time close freind of Eric Holder is also Edith O’Brien’s defense attorney. O’Brien is apparently seeking immunity from Holder’s Department of Justice because she, and she alone, holds the threads in the investigation of the illegal use of customer funds at MF Global, Inc. and Holdings. To date, after eight months, she has not received immunity. (Yet notably the DOJ has already granted Barclay’s Bank immunity from prosecution for cooperating in its Libor-gate investigation.)

With time, evidence becomes stale to a prosecution. The longer she is kept off any witness stand and the longer DOJ waits to uncover all evidence, the weaker discovery becomes. Putrefying the evidence through delays and time decay is a tried and true practice. So it is reasonable to ask if there even a desire by the DOJ to uncover all the facts of the plundering of over 1.6 billion of private funds and build a case of wrong doing?

O’Brien can blow open the investigation

It was Edith who clarified to CFO Christine Serwinski that a shortfall of over $1 billion (depending on how it is counted) resulted from messy and hastily carried out transactions in the days before the bankruptcy filing. O’Brien made the transactions, she knew where the money came from and where it went. Very early on, it was known that an-mail from O’Brien noted that one major transfer was done “Per JC’s [Jon Corzine's] direct instructions.” Yet to date, we hear nothing from her, nor are there charges against her.

It was Edith O’Brien who was asked by MF Global general counsel, Laurie Ferber, to sign a letter to JP Morgan confirming that no customer funds were being sent to the bank. Even under pressure of Executive staff, she refused to sign the overly-broad, bogus statement Ferber asked her to sign. It is of note to remember that JP Morgan’s chief risk officer, Barry Zubrow personally called Jon Corzine asking him to verify that no funds transferred belonged to customers. Barry did not call Edith O’Brien.

Recall that under oath, Corzine pinned O’Brien by name as the one who provided assurances to him that all transfers were legal.

Eric Holder’s friendship with Edith’s attorney is very close, goes back years

When the DOJ is on your back, friendships and access goes a long way.

The personal and professional relationship between Holder and Weingarten go back decades: As young attorneys, they worked together in the Public Integrity section of the DOJ in the late 1970’s. There, as reported in Main Justice, they became “best friends.” In the 1980’s, Reid left the DOJ for the rich pastures of partnership with Steptoe & Johnson.

In 1997, Weingarten and Holder raised money together to launch a non profit foundation in the District of Columbia. Weingarten’s bio states that “He is the chairman and co-founder, along with US Attorney General Eric Holder, of a non-profit program, See Forever Foundation, which is designed to assist juvenile offenders in rehabilitation to prevent recidivism.”

As Weingarten was in the private sector, Holder remained with the DOJ only to come under investigation in 2001 for what was determined to be his inappropriate influence on the final approval to pardon fugitive, Marc Rich. Here, it is agreed by many that Holder massively blundered when he overstepped White House legal counsel opposition and gave a DOJ seal of support for the pardon. This was said to have “significant impact” for the final green light on the Marc Rich pardon fiasco.

When Holder came under investigation for his heavy hand in the Rich’s pardon, Reid Weingarten was his personal and strong-armed defense attorney as reported by Eric Lichtblaue and David Johnson of the New York Times in 2008.

More recently, and shortly after Holder took over the reins of the Department of Justice, he hired Weingarten’s son, Ross Weingarten for a job with the DOJ as a press staffer...

Read the rest here.

PFGBest Is MF Global All Over Again: Gambling and Living High With Customer Funds

And another failure of self-regulatory industry groups and the inept CFTC.

Once again I must turn to Lauren Lyster on RT for the in depth look into US financial fraud coverage.

The mainstream financial news networks in the States are an extended infomercial for Wall Street. And their coverage of economic news and issues might make even Rupert Murdoch blush.

And so many watch these official Wall Street channels with the volume turned low, for just the numbers and any headlines, and turn to alternative sources for the real news, judging from the ratings reports.

Increasingly surreal, as life imitates Orwell.