In Plain Sight

The Gaffmaster, Vice President Joe Biden, is really struggling for friction out on the campaign trail. Recently, his rhetoric has been so far off the mark, Sarah Palin thought he might should be replaced on the ticket with Hillary Clinton and Rudy Giuliani thought he might not have the mental capacity to be President God forbid he should have to. These recent gaffes even have the American Crossroads PAC out with a fresh new ad, which not withstanding the comedy, identifies a very sad situation.

There is no question Joe Biden is not among the critical thinkers of our day, surely is not well read and seems to lack intellectual curiosity, which may be a result of being a lifelong politician.  But is Biden really this idiotic, or is he using distractionary moves complicit in an often utilized Obama administration tool of creating distractions in an effort to conceal the real goings on?

Take a close listen to Biden during his "chains' remark, which set off a major firestorm:



Did you catch what I did? No, it is not that he is talking about the help needed from the crowd in Virginia to help win North Carolina.

Biden described a potential Romney administration would unchain Wall Street, allowing them to write their own rules. One could suggest that this is simply another in a long line of the misrepresentation of the facts, but for team Obama, but that would be masking the truth. After all, it is Obama and the Democrats that are ignoring the rule of law and allowing banks to engage in theft without fear of prosecution.

On the same day Biden was seemingly wrestling with reality, a report surfaced that in aftermath of financial fallout over the bankruptcy of MF Global, formal charges against CEO Jon Corzine and other MF Global executives are not expected. Corzine, the former Governor of New Jersey, Goldman Sachs CEO and high ranking Democrat bungler with strong ties to the Obama administration, is alleged to have commingled account funds with house funds and lost it all betting on European arbitrage.  In other words, he engaged in theft of customer money.

Ann Barnhardt, a former independent introducing brokerage company who shut down her cattle futures business after she deemed integrity in the futures market was lost, has long predicted Corzine would walk away scott free. She was right.

If an enforceable rule of law is not present in our capital markets, which have a major moral component, at the brokerage level, then at some point, perhaps during a crisis, no dollar is safe. It is bad enough that folks in high places like Corzine get away with this type of theft, but to have the administration, who through the likes of Solyndra and numerous examples of crony capitalism has rewarded friends and supporters with tax dollars, run off at the mouth about how it is the Republicans that allow white collar law breakers to escape the grip of the rule of law is farcical and shameful.

While the mainstream media appropriately hammers Biden on his "chains" remark,insensitive at best to our fellow black Americans, nobody seems to have caught the Obama-Biden team in a situation in which they are not simply misrepresenting the truth, but lying to your face about a enforcing the rule of law in an arena that is the center of the financial crisis our country has been languishing in.

Obviously, the Obama administration actions does not match their rhetoric, and the horrendous results that they now fully own are nothing short of abysmal. With nothing to run on or with, you might think they could at least acknowledge some level of truth, but no such luck.

Their lies are right out in front for all of the electorate to see; in plain sight.

Market Mayhem

Investors should be treading very carefully these days in the capital markets. This is not a time for Aunt Mary and Uncle Bob and unemployed day traders. Former FED Chair Alan Greenspan said today that the market may be juiced some 50% due to FED stimulus. While the effectiveness of the stimulus can be argued, the FED cannot operate quantitative easing forever, and at some point, the stimulus will need to be retracted.

Forecasting the extraction of FED injected stimulus is one task, but navigating a market without integrity and rule of law signals a retreat to the sideline. Regrettably, in my estimation, we sadly have reached this point. MF Global is fresh on our minds, and last I saw, Jon Corzine was two fisted with his favorite cocktail cranking around the Hamptons. Meanwhile, his investors remain fighting to retrieve small portions of the investments placed with his frim feared lost.

The events surrounding the MF debacle should have been a major warning sign. In the aftermath, Ann Barnhardt shut down her brokerage firm Barnhardt Capital Management due to lack of confidence in the governance of the cattle futures market. Barnhardt warned of future issues to come, and this week we were greeted with the bizarre goings on at PFG Best. Score one for Ann.

Rick Santelli of CNBC further explains:



It seems clear we have issues at the CFTC and/or NFA, and all capital markets, for that matter. The FED seems to be in bed with the Obama administration, rather than operating with impartial market driven guidance. We have news the LIBOR rate has been manipulated, with Barclays among the first of potentially many banks to be signaled out.  JP Morgan, with problems turning up everywhere these days, reportedly played a role. LIBORgate will become a major financial mess, potentially blowing up every HP12C on the planet as the lawsuits get going. As it turns out, approximately 1 million mortgages were based off this rate, and that could be a huge problem.

We ran a blog post a few months back discussing market mayhem, eloquently described First Principles Capital Managements Doug Dachille, which we will present again below.



These market manipulations are quite complex difficult to get your arms around. However, when you couple the imminent implosion of the European Union with market manipulation and The FED gaming the system it becomes exponentially difficult to properly measure risk. In addition, the rewards of potential gains versus the risk exposure within tainted and manipulated markets seem not worth the effort. Although seemingly safe in large big caps positions, investors should keep a very tight leash on any investments.

Do you know who is running the casino? Are their friends being rewarded at your expense? Corruption is everywhere! There is market mayhem, being controlled by those who are not ashamed to be helping you lose your money. Trust and rule of law are absent. It is most unfortunate it has come to this, but in my view it clearly has.

Caveat Emptor!

Five Forgotten

When Glenn Beck left FOX News Channel after smashing rating numbers for the 5PM EST time slot, FOX rebounded nicely with the new show The Five, with five rotating panelists discussing the events of the day. This show is outstanding, with excellent co-hosts Eric Boling and Kimberly Guilfoyle. Anything that puts the lovely Guilfoyle in front of the camera will be a ratings success.

Even so, this week I was following five stories, or in the case of Rick Santorum's sweep, variations of, that The Five did not cover. As good as this show is, and as good as FOX is, many very important stories do not get proper coverage, if they get covered at all.

Below are five that I focused on this week, and I wonder is any of the readers knew about these stories. They are important, so have a look

NANEX

I was over at Zero Hedge and found an alarming story on high frequency trading. On the day Uncle Sam was downgraded back in August, a staggering increase in high frequency trading ensued and has continued since. Check out the story and the chart over on Zero Hedge HERE.

It seems to be that algorithmic trading between computers is taking place at a highly increased level, and while there is a place for such trading, this type of activity is dangerous. You got any ideas about what is happening?

RICK SANTORUM

Rick Santorum had a big night this week, winning Minnesota, Missouri and Colorado. They picked Rick! Although the pundits discussed the momentum perhaps gained by Santorum, and the problems perhaps exposed by his opponents, I focused on his outstanding victory speech.

Santorum spoke truths about the Obama administration, that they seek to rule over the people rather than listen to them, that they wish to rule over them and run their lives with a lengthy list of central planning programs because they think they know better than you.

Obama really does look down on the people, with soaring rhetoric about helping the people while actively reducing the freedom of the people. Santorum has the right message, and it would do America well to hear him!

BORDER CALAMITY

On GBTV, Glenn Beck presented an incredibly alarming program on the activities taking place on the border. Although there are a handful of Americans who have some level of understanding about the high level of national security issues taking place along the border, most have no clue how serious this problem is. Unfortunately, the problem is worse than ever, and our government, on both sides, is for the most part sitting it out. Why, I do not know.

Although I could not get elected dog catcher in my community, if I were President, with a thorough understanding of the severity of the problem, I would have the US Military seize the day immediately, using any force necessary.

Hearing the facts presented is a depressing indictment of the failures of our government, but unfortunately, something you must become knowledgeable about. The video is not for the faint of heart, so viewer discretion is advised. However; knowledge is power, so have a look on Glenn Beck HERE and HERE.

HOUSING PLAN

Stupid is as stupid does. President Obama has yet another plan to punish banks and reward bad behavior in an effort to boost the housing market. Jimmy Petholoukis leaked that Obama was ready to release the plan, hitting banks with punitive punishment and forcing them to refinance some home owners. Should the banks fail to comply, a newly appointed Czar will seek them out for punishment. Of course, costs force upon the banks will be passed on to the consumers. This will raise the cost of capital, reduce the amount of mortgage activity and prolong the crisis.

Obvious to just about everyone not involved with wealth redistribution, this program will only hamper any recovery in the housing market. As we have repeatedly said, for the housing market to improve, a growing job market must be in place allowing free market principles, free from government interaction, to form an efficient market where buyers compete with sellers in arms length transactions. Under such a market, price will be established a normal market can resume.

Obama will not allow this to take place, as his principles center around wealth redistribution directed by a government who picks winners and losers. This creates an inefficient market, is not free market capitalism, and will restrict the pace of any recovery.

CME GROUP

On Wednesday, the S&P cut the CME Group Inc.'s credit rating in the aftermath of the debacle involving the collapse of MF Global. The has been under fire since MF files for bankruptcy. Under normal market conditions, this news would some kind of spook the markets.

Be advised there is much more here than meets the eye, and the fallout could be mind boggling. Customer funds were stolen, and with this type of activity taking place, the integrity of the market is zero. Ann Barnhardt, of Barnhardt Capital Management, has been leading the way in covering the real story going on here from a birds eye view.

Banking Shore Leave

For those out working every day to stay afloat, a review of the daily news put forth by the drive by media reveals an economy slowly emerging from stability, albeit with anemic growth. The worst is over. Everything is fine, nothing to see here.

But if you look closely at what is really happening, there is major economic trouble lurking about all over the place. Much of the focus has been on Europe, as they struggle to escape a collapse. A European collapse would certainly be a major problem for US financial markets, which are in real trouble.

In particular trouble are the banks. As has been noted repeatedly, banks are borrowing at next to free from The FED and can lend to customers at approximately 5%, which would command high profit levels. But little lending is taking place, as lending for the housing market is extremely difficult to command, credit lines are evaporating and small business loans are rare. In fact, now loans to small business are being called.

The Los Angeles Times details a story of a small business owner having his loan called by Bank of America. He has the option of paying it off or restructuring at a new increased rate. Fox Business Network's Gerri Willis discusses this situation.


What motivation would the banks have to alienate customers in this fashion? Well, there are much bigger issues the banks are facing, and Economist David McAlvany outlines the problems to FOX Business's David Asman. Take a listen:



Under extreme duress, at what level will the banks stop in attempting to call loans and restructure loans not called at substantially higher interest rates? Most people are barely surviving now, so restructuring of this kind will bankrupt many with the banks seizing whatever assets they can. Seems far fetched I know, but did it just happen in the MF Global saga?

Ann Barnhardt thinks so. Barnhardt joins Warren Pollock to discuss this situation and what may be coming.


While portions of the forecasting going on may be worst case scenarios, it is clear that the economic standing of Uncle Sam is not on sound footing. Contract law is being broken, as evidenced by the auto bondholders, and the transformation of wealth (theft) is taking place. Banks are attacking customers, and the raising of credit card interest rates is a small example.

It is going to be an interesting time as we move through the 2012 election, and you should take steps now to secure your financial footing if possible. Should Obama, who has demonstrated his disdain for the rules set forth by our Constitution by his eagerness to bypass Congress to implement his ideas, be re-elected, a top down governmental dictatorship may be our future.

It will be the end of America as you once knew it; no longer a nation of laws, but a nation of men.

Crony Corruption Could Collapse America

Several months ago, astonishingly, former New Jersey Governor Jon Corzine was thought to be the leading candidate to replace Timothy Geithner as Treasury Secretary. Both President Obama and Vice President Joe Biden were very fond of Corzine, a former Goldman Sachs CEO, and his economic knowledge and leadership.

That was before MF Global, the commodities boutique Corzine was CEO of went bankrupt and is missing 1.2 billion of customer funds.




Oh, the company that you keep.

Corzine failed miserably as Governor of New Jersey, blowing a hole the size of the Meadowlands in the Garden State checkbook. Residents there, who gathered their senses and elected Chris Christie to clean things up, are witnessing a telling turn around.

But it is Corzine's latest failure that will ultimately have a ripple effect that will engage each of our tax paying citizens. Ann Barnhardt, CEO of Barnhardt Capital Management, Inc., a small independent introducing brokerage, has been some kind of spot in analysis of this case, and recently shut down her operations due to a lack of trust in the commodities futures market. MF Global has exposed what many had feared; that the rule of law in our capital markets can be absent at any given time, and a lawless entanglement with uncertainty is toxic for any investor.

Few think Corzine is an idiot, so the concept that, as he testified in front of Congress, he has no idea how the money went missing is beyond laughable. This money is not mistakenly misplaced; it was stolen. As as George Bailey astutely pointed out, there should be a bank examiner, if not the FBI, with a warrant for the arrest of the firms officers. But surprisingly, perhaps due to the close relationship Corzine has with Obama, there is not. The thought that this event was orchestrated has crossed many a mind, and swamped with supporters of Cloward and Piven in Washington, it gains validity.

As Ms. Barnhardt points out, customer money is gone and the MF Global "trustee" has begun seizing customer assets who traded in precious metals and housed the investment collateral through contracts brokered by MF Gobal.

A form of retracing through the chain of investors, bankrupt or not, to recover losses can be referred to as part of hypothecation. Zero Hedge has been covering the recent emergence of this action like Deion Sanders covering a hobbled tight end. The term was originally making the rounds with respect to a potential collapse of the Euro, but it plays with any loss of collateral where re-pledging has occurred. Sadly, it creates the opportunity for investors on the outside to suffer huge losses, with little legal recourse.

David Buckner got with Glenn Beck to attempt to provided an example of how this could impact the economic system, and it could make your ears bleed. Take a listen:



Fast and Furious, Solyndra and the Chevy Volt are many of the scandals of the Obama administration, but the The MF Global collapse is a canary in the coal mine, and the scandal is much deeper than you know. The MF Global players are part of the crony capitalism set up by the Obama administration. While JP Morgan Chase and George Soros are snapping up the fallout at handsome profits, it seems more likely every day investors will not get their money back.

It has been stolen, by a cast of crony capitalist thieves, with full backing of the corrupt leaders in Washington. More is sure to follow in this case, and the lack of trust in the capital markets Ms. Barnhardt spoke of is growing. Technocrats, in many cases, are in control, operating against the will of the people and the rule of law.

Should a catastrophic economic collapse hit our shores, will your assets be protected from hypothecation from government owned banks? I have often been cited as a master of stating the obvious, but the time to keep your investments on a short lease is staring you in the face.

Find Light As Darkness Approaches

An honest broker. Our country has a great example of this in George Washington, the Indispensable Man. Honesty is vitally important as a virtue, but it is equally important in commerce, by individuals, corporations and market makers adhering to contract law.

When contracts are broken, it throws mistrust and uncertainty into the marketplace, creating chaos. Regrettably, the Obama administration, in their efforts to transform this divinely inspired nation, altered the rules of contract law right out of the gate upon taking office in the form of shortchanging the automaker bond holders during the auto bailout. And don't get me started on the sun-setting of the famed Pontiac brand of General Motors!!

While Congress has become seemingly irrelevant and scandals are mounting while the media cheers on the socialist agenda, the stock market, although having ups and downs, is higher than it was in the aftermath of the 2008 crash. With a 9%+ unemployment rate, small business getting clobbered, taxes and regulations increasing, restricted credit and market uncertainty, one has to wonder how the market remains so high.

During the Great Depression, folks with jobs made out fair to midland, but it was those on the outside looking in who suffered the most. Unlike that period, the FED has injected massive levels of cash into the system, and when coupled with governmental stimulus, corporations and unions on the inside have been able to maintain profitable revenue levels. But it is not real, for when the cash influx is removed, the true levels of markets will be identified, and those levels are far lower than present closing ranges.

Not only are the current market levels manufactured, but economic measures of employment, inflation and debt are fabricated. In addition, in part due to the crony capitalism, investors are uncertain of false market indicators, significantly increasing the risk associated with capital investment.

And then, there is the rule of law. The collapse of trading firm MF Global, whose CEO was former New Jersey Democrat Governor Jon Corzine, has lead federal investigators to uncover that the company seems to be missing about 1.2 billion on customer accounts. A Congressional Panel is seeking to question Corzine, who if the allegations prove true, should take up long term residency in the gray bar hotel. Although while Governor Corzine blew a huge hole in the wallet of New Jersey, few think he is dumb enough to get himself in this situation, which leads some to think this is an orchestrated hit.

One could think another Wall Street firm blowing up has little impact on the average American, but this well may. Much of the investor money is currently stuck as investigators sort through the wreckage, but investors may only get back about 40% of their potions and they are far from happy. While this is most unfortunate, far more significant issues concerning the lack of trust in the commodities market, where MF Global provided the market to hedge futures contracts, and the contagion to follow, could severely impact our capital markets.

Investors have signaled the lack of trust in the market, perhaps highlighted in a letter by Ann Barnhardt, a cattle commodities broker, who due to the lack of trust in the market place and an "abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies", ceased operations of her firm, Barnhardt Capital Management. Please read the letter that she wrote, as Barnhardt speaks a truth you are unaware of and need to be up to speed on.

Investors Business Daily does not care much for Corzine, and neither do I, but there is a much more serious problem brewing here. Trust in the capital markets is essential for investors, and without that you have inefficient markets at best. With the DOW artificially pumped, many thought the commodities markets were where realistic evaluations could be identified.

Not anymore. Perhaps this leads to a market crash, or maybe it is just another in a long line of birth pangs we have been having. If the allegations of malfeasance are true and investors are not made reasonably whole due to the theft by this firm and it's principals, most notably Obama crony Corzine, these folks need to become instant jailbirds.

If they don't, and the rule of law remains absent, the birth pangs will quickly turn into a contraction and the official birth of utter chaos in the US financial markets, something many contend is orchestrated from within the White House, will emerge. Serious as that is and factoring in the EURO fix that won't work, the FED is war gaming worst case scenarios with new stress test of our major banks forecasting potential unemployment levels of 13% and a DOW at 5600.

Reality is a mirage under this administration, and your investment dollars must be protected. As Ms. Barnhardt accurately pontificated, investment is most vulnerable under the socialist and evil regime running our country at present, and hopefully November 2012 will intercept us from the generations of darkness Ronald Reagan warned us about.

Pray we make it that far!