Daily Archives: November 17, 2011

11/17/11

Going Galt Indeed….

To Ann Barnhardt, a tip of the hat in the utmost respect for her actions. The woman has a strong spine. Going Galt Indeed… May we all show such strong resolve. A heroine answers “Who Is John Galt?”

Zero Hedge: Presented without comment, merely to confirm that the market as we know it, no longer exists.

BCM Has Ceased Operations (source)

Posted by Ann Barnhardt – November 17, AD 2011 10:27 AM MST

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.

And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

As for me, I can only echo the words of David:

“This is the Lord’s doing; and it is wonderful in our eyes.”

With Best Regards-
Ann Barnhardt

11/17/11

Media Portray Obama as Reaganesque

By: Cliff Kincaid
Accuracy in Media

President Obama is being portrayed as a “peace through strength” Ronald Reagan Republican as he travels abroad. “With the Obama administration’s high-profile pivot toward Asia this week—pushing for a new free-trade agreement with at least eight other countries and securing military basing rights in Australia—China is feeling at once isolated, criticized, encircled and increasingly like a target of U.S. moves.” So says Keith B. Richburg of The Washington Post.

This propaganda has the effect of playing down China’s military build-up and aggressive moves in the region, while making it seem as though Obama is standing up to the communists.

Before he arrived in Australia, Obama encouraged American business leaders to invest in communist China, telling them, “We should be rooting for China to grow.” This statement was reported by Jackie Calmes of The New York Times but not portrayed as a gaffe in any way.

AP played the same game as the Post, reporting, “Signaling a determination to counter a rising China, President Barack Obama vowed Thursday to expand U.S. influence in the Asia-Pacific region and ‘project power and deter threats to peace’ in that part of the world even as he reduces defense spending and winds down two wars.”

In fact, there was no determination to counter China. And the defense cuts are massive. $450 billion is already being cut from national defense and a deadlock in the congressional “super committee” could lead to an additional reduction of $500 billion.

Rather than being anti-China in any way, Obama’s speech to the Australian Parliament was full of praise for the communist regime. He said, “…the United States will continue our effort to build a cooperative relationship with China. All of our nations—Australia, the United States—all of our nations have a profound interest in the rise of a peaceful and prosperous China. That’s why the United States welcomes it. We’ve seen that China can be a partner, from reducing tensions on the Korean Peninsula to preventing proliferation. And we’ll seek more opportunities for cooperation with Beijing, including greater communication between our militaries to promote understanding and avoid miscalculation. We will do this, even as we continue to speak candidly to Beijing about the importance of upholding international norms and respecting the universal human rights of the Chinese people.”

The latter statement was the only perceived criticism of China, and it was extremely mild and non-specific. He said nothing about China’s military build-up, including a new aircraft carrier, stealth jets, ICBMs, and cyber warfare, and its excessive territorial claims.

Media coverage forgot to mention that Obama’s statement that “We’ve seen that China can be a partner, from reducing tensions on the Korean Peninsula to preventing proliferation” was blatantly false.

On November 16, the day before Obama’s speech to the Australian Parliament, the U.S.-China Economic and Security Review Commission issued its 2011 Report to Congress, citing evidence that “China has continued over the past year to support North Korea despite North Korea’s destabilizing actions.” What’s more, it says, “China has also sought to protect North Korea in light of its continued proliferation attempts over the past year.”

On what basis, therefore, does Obama claim that China is “a partner” in “reducing tensions on the Korean Peninsula?”

In his speech to the Australian Parliament, Obama mentioned North Korea’s proliferation efforts but took China completely off the hook. Our media ignored this curious aspect of his performance.

He said, “…we also reiterate our resolve to act firmly against any proliferation activities by North Korea. The transfer of nuclear materials or material by North Korea to states or non-state entities would be considered a grave threat to the United States and our allies, and we would hold North Korea fully accountable for the consequences of such action.”

There was no stated intention to hold China accountable.

The introduction to the China commission report summed up many problems in the U.S.-China relationship: “For the last ten years the Commission has documented Chinese export subsidies; weapons proliferation; military modernization; resource acquisition strategies; expansion of Chinese foreign policy interests; the Chinese military threat to Taiwan; espionage; and information control, among other issues.”

This year alone, according to commission chairman William A. Reinsch, China has achieved several military “firsts”—flight-testing its first stealth fighter, conducting a sea trial of its first aircraft carrier, and progress toward developing the world’s first anti-ship ballistic missile.

Though it has a reputation for liberal bias, PBS’s Ray Suarez was more accurate in discussing Obama’s approach to China, saying that more than 2,000 American troops are heading to Australia under a new security agreement but that Obama “stopped short of saying that the move is meant as a message to China.”

Suarez went on to note that Obama “refused to make a direct link between Chinese actions and his announcement today.” He noted that Obama said, “I think the notion that we fear China is mistaken. The notion that we’re looking to exclude China is mistaken.”

Indeed, the 2,500 or so troops pose no threat to China. (Only 250 are scheduled to arrive next year and the rest would arrive by 2016.)

Australian Prime Minister Julia Gillard, whose Australian Labor Party is a member of the Socialist International, relies on the U.S. nuclear umbrella but forbids American nuclear weapons on Australian territory. Her party has campaigned for a world free of nuclear weapons.

Australia is now faced with a country, China, which has nuclear weapons that can strike Australia and this threat is growing. North Korea, assisted by China, is also developing nuclear weapons which could strike Australia.

But Obama does not want to single China out for criticism. Such an approach should make the U.S. and Australia nervous. It is the complete opposite of what the Post’s Richburg depicted in his story headlined “U.S. pivot to Asia makes China nervous.”

Cliff Kincaid is the Director of the AIM Center for Investigative Journalism, and can be contacted at [email protected].

11/17/11

Barnhardt Goes Galt

Andrea Shea-King
The Radio Patriot

Wow.

Now I’m thinking I should pull my retirement account out of my brokerage house and stash it in… what? Diamonds? Gold? Food? Weapons? Ammo?

BCM Has Ceased Operations (Part 1)
Posted by Ann Barnhardt – November 17, AD 2011 10:27 AM MST

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

Why did Ann do it?

Rush got a tip about it and brought it up on his show today. Tonight we will too.

Also David Reaboi with the Center for Security Policy joins us in the first hour to talk about Rick Perry and his Islamist connections. Reaboi’s done a lot of research and writing about Texas Governor Rick Perry’s connection to Aga Khan and his Foundation.

Then we’ll find out why our Atlas shrugged and went Galt.

Don’t miss it.  Tonight at 9p ET

The ANDREA SHEA KING Show

http://www.blogtalkradio.com/askshow/2011/11/18/the-andrea-shea-king-show