Executive Lawlessness

Executive Lawlessness is where we are as a republic in 2014, with our elected president operating outside the parameters of the funding principles of our nation; our rule of law.

We are a nation of laws, not of men, and unless this corrected quickly, the future of our once great nation is in great peril.

With our current president, the first indication of his imperial behavior began with the awarding of stimulus finding to the car companies, shafting the bond holders for the benefit of unions breaking long standing contract law, and authority he does not have.  Sadly, none of those with the power to restrain this illegal action took action to thwart it.

There are numerous instances of the executive branch targeting political opponents. Among those that quickly come to mind are the following:

*The administration going went hard after Gibson Guitar over a small issue involving wood importation that was never before found troublesome.  Gibson continues to fight back, and is actually scoring some points.

*Federal investigators raided Lumber Liquidators, LL:NYSE,  with the search said to involve special agents from the Immigrations and Customs Enforcement, U.S. Fish and Wildlife Service and the Department of Justice. It was suggested the investigation involved its importation of wood products.

*Under the EPA, the administration has embarked on major land grabs without congressional approval.  In addition, extensive action under the false premise of Global Climate Change has been enacted on the citizenry, again, without congressional approval

*The utilization of the IRS by the administration to target conservative organizations through illegal mechanisms hoping to ridicule, hassle and bankrupt, or significantly harm financially, through regulatory action, both legal and illegal.

*Reports have come to light  that Friends of Abe, a conservative group in Hollywood, has been under investigation by the IRS for over two years, underscoring how the bad the environment is for those who dare to challenge the administration.

With the election in full swing, Obama chief advisor Valerie Jarrett publicly claimed she would go after opponents of the administration.  Without fear of being held accountable for such illegal action, the administration has kept its word.

Recently, an indictment was handed down on filmmaker Dinesh D'Souza for campaign fraud.  D'Souza produced an acclaimed movie,  2016; Obama's America, which was not looked upon favorably by the administration, so this is not viewed as coincidence, rather politcal payback. Because of that, D'Souza had to be stopped; hence the felony indictment, which accuses D'Souza of making improper campaign donations.  While I find the work D'Souza has performed as extremely credible, character issues not unlike those of many Americans regarding D'Souza have surfaced, which likely were partially to blame for his recent resignation as president of Kings College in New York. Given the work D'Souza was engaged in, he should have been recognized the need to keep his life clean and more cognizant of the moving targets of campaign finance laws.

If they want to get, they can find a legal avenue to get it done, particularly under the IRS regulations and laws.  Even it your are ultimately found innocent, the financial cost to defend can be staggering, not to mention unmeasurable potentially punitive damage to your or your organizations reputation.

These are just examples of an imperial president who finds Congress a bother, and as an arrogant leader of the political ruling class, governs through executive order against the will of the people, the latter evidenced by the overwhelming unpopularity of the much maligned Obamacare.

While political opponents of Obama are under attack, violators of the the law, seemingly no matter how significant, are not held accountable, not only to the administration, but to our laws. Lois Lerner got promoted after the IRS debacle, but in a travesty of justice, former New Jersey Governor Jon Corzine, who commingled funds and lost customer in foreign currency arbitrage, walks double fisted in the Hamptons after perjuring himself in kabuki theater hearings in Washington.

Charles Krauthammer has had enough, and eloquently hammered Obama in a FOX News essay.  Please take a listen:



While Krauthhammer is completely correct, the problem is regrettably far deeper than the discussion with Dr. Krauthammer and Judge Andrew Napolitano waded.

What is most concerning are the amount of elected officials who appear to knowingly sanction the executive branch rendering the other branches of government essentially either intimidated pawns or or toothless adversaries.  With the balances of power under attack, there is little doubt the Founding Fathers would be appalled at this spectacle of executive arrogance and congressional complicity and or ineptitude.

Senator Ted Cruz, R:TX, who historically has fought for the Constitution against any and all who seek to execute outside its parameters, joined Glenn Beck this morning for an extremely relevant and timely discussion on the absence of rule of law under the Obama administration.  Please take a listen:
The issues surrounding Obama and his imperial presidency, the abuse of power and executive lawlessness are staggering, and are an imminent threat to the survival of our country.  Abuse of power in this regard should be swiftly dealt with by the people, no matter which party it happens under, evidenced by Sen. Cruz defeating President George W. Bush in court.

Although President Obama was reelected, if the public were able to decipher all the lies misrepresentation he put forth, coupled with extensive abuses of power, there is little doubt he would currently be president.

The principles given us in our founding documents are those we are governed by, not by the whims of an arrogant leader who aims to implement the dreams of his father against the will of our citizenry.

The rule of law is on life support, if not already dea. Sadly, few seem to care, and the executive lawlessness continues.

Breaking the Boardwalk

There were such high hopes.

I became aware of Chris Christie from his frequent guest appearances on CNBC's Squawk Box and was thrilled when he announced he would run against incumbent New Jersey Governor Jon Corzine. After his tenure with Goldman Sachs, Corzine had run Jersey into the ground, and given both Obama and Biden often sought his economic council, is it any wonder our country is in economic peril. A wonderful opportunity to implement free market principles in a blue state exisited, and Christie was just the guy to take it on.

Christie understands free markets, and has no patience for the unions and their interference in the marketplace.  His tenure as Governor has brought New Jersey new found prosperity, even against the backdrop of the stagnant if not recessionary national economy.

The fever pitch for Christie came as the 2012 presidential approached.  Would Christie get in?  An exemplary speech at the Reagan Library brought a high level of enthusiasm, but Christie threw in behind Mitt Romney and would sit it out.

Since that point, it has been downhill slide for Christie and his relationship with those on the GOP right. Christie spoke at the GOP convention, but rather than explaining why Mitt Romney was the properly experienced person to lead this country, Christie discussed his own successes and fell far short in touting those of Romney.

Then, New Jersey was hit by Hurricane Sandy, and shortly thereafter came a visit by President Obama.  Christie was far too welcoming to our sitting President, whose economic policies were combative to the goals set forth by Christie.  In the days after, Christie praised the leadership of Obama on his commitment for assiting the region, elevating his declining stature among the nations voters.  The compliments for Obama far exceeded what was required, particularly because there was no actual leadership implemented or enacted by Obama.

With much of the hurricane ravaged area still reeling, President Obama returned to attend a ceremony on the Jersey shore as the famed boardwalk re-opened for the summer.  Christie gleefully awaited Obama with open arms, and before the love fest was over, we pondered if Brokeback Boardwalk would become a movie sequel.

Obama, who media elites tell us would likely be playing in the NBA if he were not doing the heavy lifting in Washington, missed in four football tosses in embarrassing fashion.  Have no fear, as a blushing Chris Christie hit the target, winning Obama a stuffed bear a four year old would cherish. Oh, what a day?

Meanwhile, Frank Lautenberg (D), a long sitting New Jersey Senator, passed away the other evening, opening up his seat.  For someone not trying to score political points, the opportunity to appoint a republican to this seat should be promptly taken.

One would have to go back a long way to find a more critical time for the GOP, with our republic practically hanging in the balance.  There is the attack on the second amendment, potential immigration legislation, the train wreck of Obamacare, Islamic terrorism, nuclear weapons and God forbid the potential replacement of a supreme court judge.  While it is only one seat, that one seat can make a huge difference.

So with Christie throwing open the seat, in conjunction with the recent series of actions by the Gov, we can conclude that he is not all that worried about the destruction to the country his new found boyfriend is engaged in.  In fact, odds favor he is a progressive republican with many of the same controlling big government ideas of Obama.

For those who champion liberty and freedom, any opportunity to legally thwart Obama from achieving his goals should be exercised with precision.  With Christie failing to act in this regard, we have learned all we need to know prior to 2016.  Sadly, he is not one of us.

It might be all for naught, as by the time 2016 comes around, Rush Limbaugh would not be surprised if Christie ran as a Democrat.  Maybe former Florida Governor Charlie Christ could be his running mate.

Theft Is Sadly An Option

The DOW and NASDAQ were clobbered again today in higher volume and the markets look to be entering a downtrend at a minimum.  What was the catalyst for such a move?  Take your pick among many market driven and geopolitical events.

Among the market analysts whose opinions I take under advisement is Karl Denninger over at The Market Ticker.  While investors have been fixated on the collapse of gold and silver, this morning, Denniger astutely pointed out a complete break of support by copper.

WAKE UP!

In my capacity as a collateral risk real estate appraisal analyst, I vividly recall most of the vacant homes I appraised were minus the outside A/C unit, as thieves found the copper within most valuable.  In fact, in some cases, all the copper in the improvements was ripped out and stolen.

But the price of copper has collapsed, signaling, as Denninger points out, "because it's a measure of industrial demand -- that is, industrial production on a global basis."

Denninger is correct to point out that Europe, more specifically the EU, is living on borrowed time. First, Greece came to light as essentially bankrupt, and the bailouts began in earnest. They would only provide a temporary respite, with the wheels of collapse spinning a wider web as the days go by.

Additional bailouts have taken place in effort to prevent total insolvency, but they won't work.

Recently in Cyprus, the situation was so bleak that the government resorted to the unthinkable; theft of portions of the monetary holdings of its citizens.  Although a stunning development, the sad truth is that the action will not fix the issue.

What will be the next move of the elitist technocrats, or criminals; and is anybody awake to call the thieves out?

Nigel Farage is, and delivered yet another verbal tongue lashing today at a European Parliament meeting, well worth a listen:



Farage, and Denninger for that matter, has been on this issue for several years, but sadly, few are listening.  Although the bailouts will continue without long term success, eventually, the bubble will burst and the EU will blow up.

Alarmingly, America will not be immune from the destruction, for much of the same market distortion, bailouts, data propaganda, crony capitalism, fraud and deceit we have seen overseas is taking place here.

Don't think these things can't happen here in America?  A Cyprus style theft of deposits has already taken place here in the United States, an action which has completely unpunished, with the malfeasance over at MF Global.  Under CEO Jon Corzine, the former New Jersey Democrat governor and an individual Obama and Biden seek out for financial advice, the company went bankrupt evaporating all the firms cattle rancher deposits along the way.

At a minimum, it should be noted the US economy is in very poor shape, the EU is insolvent and destined for failure, China is an untrustworthy economic enigma and your government is masking the truth in astonishing levels of propaganda, most notably associated with unemployment.

These are not the ingredients of healthy market, and not conditions worthy of your investment, unless you are a very serious professional with rocks in your stomach.  For me, I'll be golfing when the collapse happens unable to get out, a chance I am not prepared to take given all the uncertainty.

Everyone is essentially insolvent and simply playing a shell game.  Bernanke has our printing presses in high speed pursuit in effort to stay ahead of the oncoming bubble burst, creating an a series of positions most difficult to painlessly unwind.

I am not sure where to hide, as a government starving for solvency will leave no stone unturned in their quest to acquire cash. As we have sadly witnessed, theft is now an option.

Dangerous People Indeed

Are you familiar with Nigel Farage?

Farage, flying against strong headwinds, has been a very vocal leader in opposition to the European Union as freedoms of the citizenry diminish due to incompetence of central planner and bankers.

Become acquainted with him in the following video of approximately three years ago as he lambastes in stunning fashion the EU Parliament for their incredible arrogance.



Farage absolutely nailed it in his address, calling out the technocrat elites who seek control over the masses and, as Farage appropriately put, are very dangerous people indeed. That was three years ago.

It won't, and has not, worked, as evidenced by the continuous bailouts of bankrupt countries which make up the EU, often referred to as the PIIGS.

Movement along bailout boulevard led to event this past weekend which should send shivers down the spine of not only investors in foreign markets and currencies, but the average citizens right here across the fruited plain.

The government of Cyprus, absolutely bankrupt and seeking contingency operations, attempted to make a move which many thought may be the catalyst to European collapse; the application of an mandatory tax on the countries bank depositors of a minimum of approximately 7%.

In many areas, such as the US government and our mainstream media, you were informed there was nothing of relevance to found by further investigating the tentacles of the story.  Nothing to see here, move along.

However, after the story blew up on social media Saturday, many alternative media outlets flexed their muscle and alerted the world to the evil ripple effect of the proposed action. 

At Market Ticker, the move is labeled "direct confiscation".  Zero Hedge  offered top notch analysis of The Rape of Cyprus. At Monty Pelerin's World, Cyprus and The Risk of Bank Runs is examined.  Over at The Burning Platform, the question is asked if theft of this nature already happening here?

Investors Business Daily notes a new low in arbitrary power grabs, and even leftist columnists are worried.  Kevin Freeman over at Global Economic Warfare has a great piece, noting government surveillance of our financial accounts.

Don't think for a moment if cannot happen here.  In fact, violations in the rule of law took place immediately into the Obama administration when contract law regarding the positions of bondholders was violated in the auto bailouts.  In my mind, they continued with the 3.8% investment tax we found in the Obamacare legislation when we got around to reading it.  One can argue the artificial intervention in interest rate levels is stealing investment returns from those, particularly the elderly, who hold investments in seeking returns in interest.

Then there was the sordid affair of malfeasance and theft over at MF Global, where Jon Corzine, former Democrat Governor of New Jersey and Goldman Sachs president, allegedly used funds in customer accounts to arbitrage on European currencies and lost big, causing MF to go bankrupt.  As of today, the depositors have not been made hole and Corzine is chasing skirts in the Hamptons.

Russia Today caught up with Farage for commentary on Cyprus and where we the EU stands on the boulevard to bankruptcy. Go:



The EU is destined for collapse, and as Farage noted back three years ago, we should all hope the market collapses before the citizens are robbed to pay off, as Freeman put it, the excessive debts of profligate governments.

Once the lynch pin is pulled, these governments, run by elites who lack respect for the rule of law, will stop at nothing to preserve their power.  This includes theft and robbing the citizenry of their freedom and independence, collective action in many a regard.

Time is precious for the United State to avoid similar economic issues given the immoral spending by our government.  However, we elected the wrong guy if fixing these issues was on the agenda. They are not, and truthfully, the actions of this administration point to nudging the masses to assist in crashing the system in the vision of Cloward and Piven.

With cheap money seeking the highest level of return, the stock market is artificially pumped significantly above standard levels of relative strength and at some point soon, the casino of choice will crash to the level where buyers and sellers are in legitimate competition finding an equilibrium point influenced in future movement by speculation.

Should a catastrophic event occur in the capital markets, the action of the confiscation of funds has already been established.  The United States would not be exempt from such action under similar duress.  Gold was confiscated under FDR, and the Obama administration has been investigating how they can gain access to the 401K accounts of the citizens.

In the aftermath of an event, action will be embarked upon by government "for the good of the people", which translate to your loss of freedom and assets for the preservation of power of the progressive elites and ruling class.

Shore up your investments promptly, avoiding Shore Bank, before you wake up one morning and find portions of them confiscated, prompting a global bank run.  That will conclude the greatest heist in history.

Tacking Tangible

The market indexes have been on quite some run.

If I could get a handle on all the lines of action going on on Wall Street, not only would I be a ventriloquist, I would be beyond wealthy. I am not.

The FED has increased the money supply by engaging in monetizing the debt, otherwise considered printing money, and that has resulted in excess money chasing too few assets, pushing the asset prices higher.

Due to the abysmal housing market, which cannot gain ground due to a horrendous job market and extensive regulation through Dodd-Frank, real estate investing has not been the avenue of choice for investors.  Gold and the stock market has.

A review of the NASDAQ after the close today shows the index increasing five year highs, and this has been a great run if you have been along for the ride. Take a look, but note the market level variance from the relative strength:



Weekly NASDAQ chart/Investors.com

While markets are forward looking and do not always reflect the current status of the economic realities on the ground, given our economy, it is reasonable to conclude the stock market should not be lurching into a parabolic assault on historical highs.  With an employment participation rate having retracted to levels not seen since the Reagan administration, a manipulated unemployment rate parked at levels not witnessed since The Great Depression, governmental assaults on small business, class warfare on the wealthy and putrid growth in the Gross Domestic Product, one has to wonder why the dichotomy between the capital markets and the reality on the ground.

As the excellent blog Zero Hedge accurately pointed out, many economic measures are breaking down, and while the Case Schiller Housing Index has shown signs of life depending on how you analyze the data, even though a shadow inventory remains, the housing market remains bottoming.

If housing is improving, with the state of the economy, one must conclude rising investor participation as first time home buyers are scarce.  If investors are becoming more interested in real estate, what market has fallen into disfavor and why? The stock market?

Indications are yes.

In fact, as BloombergBusinessweek reported, some $114 billion US Bank deposits have been withdrawn, at the fastest pace since the September 11, 2001 attacks. 

Apparently, few know why.

Paul Miller, a bank analyst with FBR Capital Markets, cautions against reading too much into the Fed’s weekly data. “It’s a noisy database,” he says.  No kidding.  With a media complicit in propaganda, and the FED intervening in market action in unprecedented levels, it is most difficult to accurately value equities.  It is the FED behind the curtain who is crowding banks out of the mortgage origination market and setting unreasonable credit requirements for lending practice, handicapping the housing market even with manipulated easy money.

But is there a correlation between rising housing investment and what looks to be a topping out of the DOW and NASDAQ?  Further, in anticipation of a market collapse, would tangible assets such as real estate become the favored investment?

Without government interaction, even though they have been replenishing their balance sheets borrowing free money from the Fed, banks could not withstand a major economic collapse.  Further, unwinding the hypothecation would be catastrophic.  If the clients of Jon Corzoine at MF Global are any indication, get your money while you can.  Maybe investors are.

No matter what market developments lay in store for us, a few things are certain in my view.  The housing market remains broken and cannot recover without a recovering job market. The market has been compromised and true evaluation is not possible. And, unfortunately and most notably, the rule of law and trust of the marketplace, integral for the survival of a free market capitalist system, has been violated.

As I have previously mentioned, until the rule of law is reestablished with the government becoming a bystander, allowing the FED to resume normal open market operations, the market place will remain compromised and a playground for the crony crowd.

Given the increasing turbulence, while I don't know what I am having for lunch tomorrow, I sense a major storm brewing both port and starboard. Caveat Emptor.

Pushing A String

Unfortunately, we have an extremely serious economic problem that is a massive ball and chain on the ankle of American commerce. In addition, President Obama not only knows this and is not informing you, but he is complicit in orchestrating it.

The markets are currently rigged, with the politicians in charge, most notably President Obama and Massachusetts Senatorial candidate Elizabeth Warren and advocate for the creation of Consumer Financial Protection Bureau, running at the mouth about how we need further market regulation.

Of course, under Obama's crony capitalism, we are not enforcing current laws when it comes to the financial markets and are allowing thieves to abscond with billions. See former New Jersey Governor, and Democratic bundler for Obama, Jon Corzine, of MF Global.

Although they say they are not, the FED is monetizing the debt, punishing savers. Banks are flush in cash, and are not lending. They sense something bad coming, and do not want risk extended in the upcoming environment.

Doug Dachille of First Principles Capital Management joins Joe Kernan on CNBC's Squawk Box to discuss QE3, the mortgage market and price distortion. Take a listen:




The FED should raise rates immediately and effort to strengthen the dollar, and quit pushing a string of failing central planning programs.  As Reagan said, government is not the solution to the problem; government is the problem.

With a Romney victory, the FED will promptly effort to pull back the extension of capital within the market, puncturing the propped up market averages. At this point, real value will be learned, improper market manipulation by The FED should cease with Bernake being fired and risk can be measured adequately.

We might have DOW 8000, but it will be real and we will have a solid basis to operate from. This will be much better than the crony capitalism and market manipulation we are currently dealing with.

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!

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!

Jail The Looters

In the aftermath of the greatest financial crisis in a half century, progressives who seek additional governmental control jumped at the chance to increase financial regulatory instruments. Never let a crisis go to waste, you will recall.

Charged with crafting such policy were two Congressional members, both of whom should be investigated for their role in the collapse, Senator Barney Frank, D:MA and Congressman Chris Dodd, D:CT. Exactly what our corrupt government needed, inmates running the asylum.

With the Democrats holding super majorities in both Houses, the Dodd-Frank Bill became law. The basic purpose of the law is to prohibit fraud and chicanery in the financial system.

Someone forgot to tell former New Jersey Governor Jon Corzine, who was recently under consideration by the Obama administration as a potential successor to Treasury Secretary Timothy Geithner. After losing the governors race, Corzine, a Democrat, became Chairman of MF Global, and under his leadership, the company has filed for bankruptcy and is the subject of an FBI investigation. In short, the money is missing.

Bart Chilton, CFTC Commissioner who is on the circuit promoting his new book Ponzimonium, chats with The Squawk Box Crew; Becky Quick, Andrew Ross Sorkin and Joe Kernen, and guest host Mario Gabelli, on the recent increase of Ponzi Schemes and the goings on at MF Global. Take a listen:

The situation over at MF Global is very troubling and funds cannot be properly accounted for. Many investors appear out a lot of money, including Trends Research founder Gerald Celente, whose gold has seemingly turned to dust. The company cannot make investors whole, and Chilton says it is "suspicious as heck".

It should noted that existing regulatory agencies and the new far reaching Dodd-Frank bill, a job killing beast smothering business, failed miserably to prohibit Corzine and this group from crashing to bankruptcy, allegedly for the misappropriation of funds.

Remember in "Its A Wonderful Life" when the money went missing. George Bailey, upset with Uncle Billy, angrily quipped 'someone is going to jail, and it ain't gonna me me". Well, back in the day, folks did go to Sing Sing when money went missing.

It will be interesting to see, provided the allegations result in malfeasance and charges, if Democrat darling Corzine is prosecuted to the fullest extent of the law. You know how George Bailey would feel about it, but good guys are not winning these days.

Market Trick

Halloween was not kind on the corner of Wall and Broad today, and with good reason.

While traders were receiving treats last week from the news of a Euro fix, it really is nothing short of a trick. We have been down this road before, and we will go down it again, and as we pass each exit for a real fix, the pain forthcoming gets deeper.

FOX Business' Judge Andrew Napolitano speaks with Nigel Farage, who has been on this story from the get go. Take a listen:



As traders woke up to learn of the impending blowup of MF Global, headed by former New Jersey Governor Jon Corzine, they found the futures in the negative. It should not have come as a surprise that Corzine, who blew an 8 billion dollar hole in New Jersey Chris Christie is now cleaning up, would fail miserably at MF Global. Fail at running the company yes, but apparently not in securing cash for himself, typical for Democrats in these positions. To think as recently as August Corzine was being considered by President Obama as a the new Treasury Secretary should indicate the level of complete incompetence leading this country.

This evening, Clusterstock reports of "hundreds of millions of dollars missing", which cannot be good for the markets, propped up by false fundamentals and already spooked by a myriad of issues, including on the domestic side a continuous mortgage meltdown.

But further concerns over the supposed Euro fix is what really what spooked the markets. Good money is being put after bad, bailing out entitlement expenditures which cannot, and should not, be sustained. As Farage put it years ago, the fixes won't work and we can only hope the markets derail this before things get really bad, as if they have not already.

Restated; they will soon run out of everyone else's money. Invest accordingly.