Where is the US economy headed?

That agenda is not unbiased and objective journalism, if you bear that in mind when watching it you shouldn't go too far wrong.

How are things going in the monarchy today?

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.

How are things going in the monarchy today?

Do you seriously think izzy that a man like me needs to be advised on matters like that? They all have an agenda.

Quote:

How are things going in the monarchy today?

I was not paying full attention with my previous answer to that. It turns out that Her Gracious Majesty's husband was releasing stories to the press to the effect that "wind farms are absolutely useless" while Her Majesty was watching the gee-gees.

Although he is not really proper monarchy.

Wow...
An idiot article..

Thank GOD that woman got out of managing other people's money. I just hope those people idiotic enough to invest with her don't find out she stole from their accounts, which seems likely based on her confusion about how client funds are company funds.

U.S. Stocks Fall as GDP Data Overshadows Bets on More Stimulus

By Rita Nazareth - Nov 22, 2011 11:30 PM GMT+0200 .

U.S. stocks fell, driving the Standard & Poor’s 500 Index to its longest slump in almost four months, as slower-than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus.

Alcoa Inc. (AA) and Bank of America Corp. (BAC) slid at least 2.1 percent to pace losses in the Dow Jones Industrial Average. The Dow Jones Transportation Average slumped 1.1 percent. Campbell Soup (CPB) Co. decreased 5.3 percent as the world’s largest soup maker’s sales trailed projections. Netflix Inc. (NFLX), the video- streaming and DVD subscription service, sank 5.4 percent after agreeing to sell $400 million in stock and convertible notes.

The S&P 500 declined 0.4 percent to 1,188.04 at 4 p.m. New York time. The gauge lost 5.6 percent in five days. The Dow retreated 53.59 points, or 0.5 percent, to 11,493.72 today.

“Economic growth remains slow,” John Carey, a Boston- based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about $220 billion. “The evidence is not there that the actions of the Fed and the fiscal stimuli have really helped much. Investors remain concerned about Europe. People are getting concerned as they look into next year and wonder what happens to Europe and what happens here.”

Stocks fell as revised Commerce Department figures showed that gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate. Equities briefly turned higher as some Fed officials said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting.

‘New Bazooka’

Benchmark gauges also rose earlier today after the International Monetary Fund revamped its credit-line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, as European leaders fail to end their debt turmoil. Michael Meister, finance spokesman for German Chancellor Angela Merkel’s Christian Democratic party, said “we haven’t any new bazooka to pull out of the bag.”

“The IMF has realized there’s an unresolved issue and they are trying to do what they can to keep this from reaching a liquidity crisis,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, which oversees $14.5 billion of assets, said in a telephone interview.

The Morgan Stanley Cyclical Index dropped 0.8 percent amid concern about economic growth. The KBW Bank Index (BKX) retreated 1.3 percent. Bank of America lost 2.2 percent to $5.37. Alcoa declined 2.2 percent to $9.26.

Campbell Soup lost 5.3 percent to $31.84. The company reported fiscal first-quarter sales of $2.16 billion, trailing the average analyst estimate by 2.4 percent, according to Bloomberg data.

Zero-Coupon

Netflix sank 5.4 percent to $70.45. Technology Crossover Ventures will purchase $200 million in zero-coupon senior convertible notes due 2018, and T. Rowe Price (TROW) Associates Inc. funds will buy $200 million in stock. The transactions suggest Netflix’s cash squeeze may last longer than it had anticipated, said Michael Pachter, an analyst with Wedbush Securities. The company needs to spend more to make its streaming content stand out against a growing list of competitors, he said.

Hewlett-Packard Co. slipped 0.8 percent to $26.65 after losing as much as 6 percent following profit forecasts that missed analysts’ estimates. Meg Whitman, who took over as chief executive officer two months ago, used her first earnings conference call to tell investors they need to lower their expectations. The first-quarter profit forecast (HPQ) and full-year earnings outlook both missed estimates -- a sign the company is still reeling from a technology-spending slump.

More Losses

The recent retreat in U.S. stocks, led by banks and brokerages, is signaling more losses through the end of the year, a period in which the S&P 500 usually performs best, according to Bank of America Corp.

Financial shares have posted the worst return (SPXL1) this month among the S&P 500’s 10 industries, dropping 9.9 percent through yesterday. The weakness in the group and the benchmark gauge’s decline below 1,200 suggested the index is at risk of sinking to this year’s intraday low of 1,074.77, said Mary Ann Bartels, Bank of America’s head of U.S. technical and market analysis.

“A seasonal year-end rally will likely turn into a Christmas Bah, Humbug,” Bartels wrote in a note to clients yesterday. She sees a 50 percent chance of “a European meltdown” that would send the S&P 500 to as low as 935.