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"Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of plutocracy."
J. Pierpont Morgan
As you may recall I warned several times over the past two months that this option expiration would get 'hit' because December is a big delivery month.
And so it has.
I am going to reset the upward curve on the gold daily chart to wherever this takedown ends up, after the shenanigans are over.
As you can see on the more detailed gold futures chart, the last low in October was reached a day or two before the option expiration. I am not so sure it will play out that way this time because of the delivery issues and the holiday shortened week. But let's see how the charade progresses.
It says a lot about a society where customers can be openly robbed, and markets can be blatantly rigged, and even more about the people who defend it and hold it up as an ideal for the rest of the world.
This is what the average American mind cannot yet grasp, but those outside the system see it clearly. And it is puzzling to them. How can a reasonably educated and well off people act as such willing fools for those who take such shameless advantage of them?
Well after all, it is a currency war.
“The boom, not the slump, is the right time for austerity at the Treasury.”
John Maynard Keynes, 1937
Light volumes and the markets were in the profit-taking mood on the back of JPM's slam on metals.
Anyone who was surprised in the least by the Super-Committee's inability to reach a deal should not be allowed to roam about without a chaperone, as they might hurt themselves.
The whole point of the Super-Committee was to fail. It's failure is a useful tool for the politicos in the Beltway. It allows them to put military spending cuts on the table and point fingers at each other until next November.
The San Francisco Fed has provided us an online game that is presumably meant to be instructional as well as 'fun.'
After a few tries to test out its assumptions, I have been able to 'win it' pretty regularly, winning being defined as appointed to another term. It is very one dimensional so it gets old rather quickly.
One is hit with various oil and currency and fiscal shocks and surprises, and must adjust to them as you go along in a particular episode.
I imagine the point of this is to educate people to the lags in policy effects, and the dangers of over-reacting to secular events and causing problems for yourself downstream.
At this point I am having some fun examining their assumptions, which are built into the game's algorithms, for what they can tell me about their own thoughts in designing the game. I like to play strategy games on my laptop while the children inflict the latest tweenie programs on me before packing them off to bed.
I was disappointed because there is no option to exercise your role as bank examiner, no metrics for the dollar and trade, and of course, you have no ability to fire Timmy.
Enjoy.
Play The Fed Chairman Game
"The infectiousness of crime is like that of the plague."
Napoleon Bonaparte
Ironically a reader sent me their analysis yesterday that showed that the losses were $1.2 Billion. The twist here is that the Trustee may be accruing those losses to the customers even where there is some discretion.
One would think that the customers should be paid first out of all MF Global creditors. But I suspect that where it is possible, their loss will be subordinated to the unsecured creditors like JPM who have a powerful influence with this Trustee and the courts. The customers of consequence, like the Koch brothers, appear to have been tipped off weeks in advance.
This is the perversity of law without justice.
If that happens, then nothing is safe. If a customer in cash and Treasuries can be robbed, and then be made to stand in line with unsecured creditors, then your 401(k)s are not savings but loans to the custodians of your plans.
Now may be the time to exit all arrangements not specifically guaranteed directly by the government, and bring your money home. And better yet if no guarantees are required, and no parties standing between you and your wealth.
If they steal from one unpunished, they can steal from any and all almost at will. You are not an insider, and there is no honor among thieves. You are prey.
And what are a few customers, and the stewardship of funds, to a group of financiers intent on taking down whole nations and their Treasuries?
Reuters
MF Global trustee says shortfall may be bigger
Mon Nov 21, 2011 11:20am EST
Nov 21 (Reuters) - The trustee liquidating MF Global Holdings Ltd's broker-dealer unit said on Monday that the apparent "shortfall" of customer funds may be larger than the futures brokerage had reported prior to its bankruptcy.
"The trustee believes that even if he recovers everything that is at U.S. depositories, the apparent shortfall in what MF Global management should have segregated at U.S. depositories may be as much as $1.2 billion or more," the trustee, James Giddens, said in a statement. He added that the amount could change.
Giddens also said he expects in early December to transfer 60 percent of what is in segregated customer accounts for U.S. futures positions, pending court approval. He said the transfer would require $1.3 billion to $1.6 billion to implement, exhausting much of the assets under the trustee's control.
MF Global was run by former Goldman Sachs & Co chief and New Jersey governor Jon Corzine before its Chapter 11 filing on Oct. 31. The filing came after the New York-based company revealed that it made a $6.3 billion bet on European sovereign debt. Corzine resigned on Nov. 4.
