Insider information.

Evidence that the problem is government:

BCM Has Ceased Operations
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

Pay careful attention to what and who she blames. Those arguing that what we need is more regulation, should take notice. All that regulation we just got is basically doing nothing but help destroy wealth, and whatever wealth they are not destroying, the leftists, like Corizine, are stealing, with a wink and a nod from Team Blue and the Community Organizer in Chief. Don’t expect the LSM to report any of this, or if they are forced to do so, watch them then call her partisan or not mention Obama, Team Blue, or Corizine.

Find here the response of the Keynesians: Regulations don’t kill jobs, They create them! Insane. And this comes along with things like this. Of course I will be told that my focus is narrow and I do not have the nuance to comprehend something far more complex than I make it out to be. Yeah, sure.

Comments are closed.

  1. Seattle Outcast

    Corzine’s resume on Wikipedia looks like a justification for a summary execution on the principle that he’s guilty of SOMETHING….

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  2. CzarChasm

    Alex, not sure if you were familiar with Ann Barnhardt before you ran across the above letter to her clients, but I am very familiar with her. There is something for just about everybody around here to hate about her. Well, except for me, and maybe you Alex, not sure about that. She has caused Muslim’s heads to explode with the below video(s):

    Part 1

    Part 2

    Part 1 is just her talking. Make sure you watch Part 2 for the “action.” Fair warning though; she makes me look like a fence-sitting moderate. LOL

    She’s a dedicated “fundie.”

    She’s single, and seems quite believable to me when she says she’s still a virgin.

    She doesn’t seem to have any particular *need* for a man to protect her. A few weeks ago a Musloid who saw the above videos sent her a YouTube PM threatening her life. Her very public response was hilarious, and to these ears, just as credible as it was funny. From her site:

    Shariyah4pakistan has sent you a message:

    Subject: you should be killed.

    To:annbarnhardt,

    you should be killed in a bad way ..u have been mislead to path of corruption and distortion.

    Ann’s reply:

    Re: you should be killed.

    Dear Shariyah4pakistan,

    My name is Ann Barnhardt and my address is 9175 Kornbrust Circle, Lone Tree, CO 80124. I am a 35 year old single female who lives alone. Here are driving directions to my home from the Denver Airport. There are daily direct flights to Denver from both Heathrow-London and Frankfurt, so you could be here within 24 hours quite easily. After arriving at Denver and passing through customs, you will need to catch the shuttle to the rental car facility. Once in your rental car, take Pena Boulevard to I-225 south. Proceed on I-225 south to I-25 south. Proceed south on I-25 to Lincoln Avenue which is exit 193. Turn right (west) onto Lincoln. Proceed west to the fourth light, and turn left (south) onto Ridgegate Boulevard. Proceed south, through the roundabout to Kornbrust Drive. Turn left onto Kornbrust Drive and then take an immediate right onto Kornbrust Circle. I’m at 9175.

    You are more than welcome to come to my home, or to send other musloids here in the U.S. that you have recruited, to try to “kill me in a bad way”. Please do. I have multiple weapons systems that I would like to try out in a live tactical engagement. There are several mosques in Colorado. Here is the contact information for the main mosque here in Denver, which is not terribly far from my home. Please feel free to contact this mosque, or any other, and recruit jihadis to come and “kill me in a bad way”.

    Masjid Abu Bakr
    Imam Karim Abu Zaid
    2071 South Parker Road
    Denver, CO 80231
    Phone: 303-696-9800
    Email: denvermosque@yahoo.com

    In fact, if you are a devout musloid, you are absolutely required by the koran to do just that, and if you don’t, then your belief in and devotion to the fake pagan moon deity “allah” and the pedophile cult-leader mohammed (pig diarrhea be upon him) is in question. Are you REALLY a muslim? Or are you so terrified by a young, single Christian woman in the United States that you have been driven by your own trembling fear into apostasy?

    It has been almost seven months since I burned my koran on YouTube, and not a single musloid has made even the slightest attempt to punish me. Every day that I live is another day in which the people of the world stand and LAUGH at islam. How weak and impotent islam is! Every single muslim man on earth PUT TOGETHER can’t even stand against ONE Christian female, alone, carrying the Banner of Christ.

    I will never, ever, ever submit to islam. I will fight islam and expose it as the satanic evil that it is until either I am dead, or islam has finally been exterminated from the face of the earth. There is no third option, so you see, it truly is going to have to be either you or me. This world isn’t big enough for the both of us.

    Cruce, dum spiro, fido, Deo duce, ferro comitante-
    Ann Barnhardt

    LOL!!!!

    She’s very popular at the forum that I frequent the most. I have personally seen her get at least three semi-serious marriage proposals. LOL. My Gorgeous Wife (GW) told me a few months ago that if anything ever happened to her, I damn well had her permission to go to CO and court Ann. HA! Man, I got lucky with GW!

    Y’all ought to go poke around her YouTube channel a bit. Love her or hate her, you won’t get bored! LOL.

    CC

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  3. Mississippi Yankee

    Loved Ann Barnhardt for the first time I ever saw her. She’s entitled to her religious belief but when I saw,
    1) crazy eyes
    2) bacon strips for Koran bookmarks
    3) love of firearms

    It caused a premature ejaculation.
    Never knew she was a virgin, obviously not a problem for me it seems ;)

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  4. CzarChasm

    HA! Yeah man, she’s one of my folk heroes.

    I think it was the “islamic sexuality” series of four vids at her YouTube channel where she said something about being a virgin. If you haven’t watched it, make sure you’re not eating if/when you do. It’s pretty graphic.

    CC

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  5. Mississippi Yankee

    Day by Day is probably the most consistently well written political comic out there today.

    Chris Muir is a genius and he definitely draws women, especially redheads, extremely well.
    Think Jessica Rabbit with sass!

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  6. davidstvz

    Yes the government is the problem, or rather the lack of government in the interest of the people.

    But where does that problem come from? People are intellectually lazy and/or uninformed, greedy corporations are allowed to buy congress persons (and presidents), and central banks are allowed to set fiscal policy without oversight.

    I’m seriously starting to believe that the mainstream republican and democrat polarization is a deliberate distraction from the real problems. Yes, the fiscally conservative positions (advocated on this blog and elsewhere) would be the best, but it’s not the position that has been enacted by real-life elected Republicans (at least not lately).

    I’m seriously starting to believe in the theories of banking conspirators.

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