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« The Day The Government Seized Americans' Gold | Main | The Hammer Gets Hit By A Tree »
Tuesday
Apr092013

Trader Loses Everything In MF Global Theft

Give this two minutes.  Corzine gets annihilated.

Start watching exactly at the 6:45 mark.

A trader talks about having his life turned upside down by account theft at MF Global, and whether accounts anywhere are safe.  Cyprus, anyone?

 

Update:

BOMBSHELL: Eric Holder Was Partner In Firm That Represented MF Global

 

 

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Reader Comments (3)

"Cyprus, anyone?"

Why, yes, at least anyone mentally retarded enough to still have an account with JP Morgan, Bank of America, Wells Fargo, or Citi.

When the MF Global story broke on October 31, 2011, it was so over-the-top that I quickly forgot the outrage that had immediately preceded it, namely, Bank of America's transfer--with Bernanke's blessing of course--of $22 trillion in derivatives exposure to a unit with FDIC backing. That transfer upped BofA's taxpayer-backed derivatives exposure to $75 trillion.

This is a crusher for bank depositors. Why? Derivatives counterparties, as secured creditors, have legally superior claims to those held by unsecured creditors--WHICH IS WHAT BANK DEPOSITORS ARE and have been since the bankruptcy "reforms" of 2005.

Thus, American bank depositors are actually in a WORSE position than the Cypriot depositors who got shafted. Yves Smith has a really outstanding post explaining all of this from last month:

http://www.nakedcapitalism.com/2013/03/when-you-werent-looking-democrat-bank-stooges-launch-bills-to-permit-bailouts-deregulate-derivatives.html

That post discusses BofA's October 2011 derivatives transfer. Yves (who's pretty reserved in her choice of words) described that move as an "evil" and "Machiavellian" play designed to ensure that Congress would be forced to bail out the banks again when the time comes because if it didn't do so, ordinary depositors would be 100% screwed under the creditor priority rules noted above.

I find myself wondering if Cyprus, like so much else that happens first in Europe (e.g., drone killings) was a kind of test case used by TPTB to see how a similar case might play out in the U.S.
Apr 10, 2013 at 2:08 AM | Registered CommenterCheyenne
Professor Rose in the chemistry department at the University of Washington used to proclaim, "There's no such thing as a free lunch!" in speaking of activation energies and ensuing exothermic or endothermic reactions. Investors, know what you are investing in. There is no such thing as a free lunch. High velocity trading is vampirism.
Apr 10, 2013 at 2:20 AM | Unregistered CommenterHoward T. Lewis III
No sympathy here. You lay down with dogs, you get fleas (or coerced). Was this guy asleep when Glass-Steagall was repealed? He might consider getting a job that actually produces something. Shuffling paper and calling it wealth only works for so long. He gambled in a rigged casino and lost. He obviously doesn't know the history of the moneychangers. Live by the sword, die by the sword.
Apr 10, 2013 at 12:59 PM | Unregistered Commenterrobertsgt40

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