Posted on 11/17/2011 12:06:57 PM PST by Attention Surplus Disorder
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.
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.
But she is now closing down her fund because (due to MFGlobal) she perceives that markets are no longer integral, that customer funds can be stolen and tied up in BK procedings.
This (not her, obviously, but the voluntary action she is taking) is a whole new frontier in fraud, my FRiends.
What evidence do you have that she is a conservative?
What evidence do you have that she isn’t?
She has a blog post with what appear to be very impressive conservative credentials.
HER WORDS FROM THE ARTICLE:
knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies
I DON’T THINK A LIBERAL WOULD SAY THAT ABOUT obama.
Go to her web site at Barnhardt Capital Management, its pretty clear from her writings.
What a joke. Investment adviser pretending to be a conservative to get your money. LOL
The picture of her in abusiness suit standing in front of an american flag holding a hello kitty ar-15.
Proof enough for me.
That’s the .biz site, yes? [snort]
I’m not sure what to make of your response. Are her own words not enough?
I don’t know if she’s pretending...but she DOES have the Crazy Eyes.
If it's the same Ann Barnhardt, she's made a number of videos that have showed up on FR from time to time:
“...I announce that Barnhardt Capital Management has ceased operations.”
Doesn’t sound as though she’s looking for anyone’s money . Wall St. is less trustworthy than Atlantic City’s casinos during Obama’s reign, and it is admirable of her to warn against investing until he and his henchmen are gone.
Frankly, no. Unless you also consider her decision to fold her tent.
If she is a conservative, I'm not very impressed with her admission that she cannot do her job.
She's been an outspoken advocate of the removal of polically correct behavior in the media.
She's had to withstand personal threats from Islamicists.
I first heard of her, right here; but the search engine here I have no faith in.
So, she is an investment adviser that blogs about politics? That looks like a sure recipe for success. Oh, wait a minute . . . .
“Wall St. is less trustworthy than Atlantic City’s casinos during Obama’s reign”
The dumb money (like your 401K) is going down with the ship.
Little guys at first, like ETFs and mutuals.
The final act will be pension funds across the nation suddenly, all at once, realizing they are toast. That will probably occur in one, horrific 24 hour (or less) event ending in indefinite market suspension and bank holiday.
There is no faith left in the markets, the liquidity is fast drying up, and the people in the know are running for the exits.
Under Obama, it’s become a game of “GRAND THEFT NATION!”.
Corzine’s MFGlobal fiasco is just the canary in the cage of Democrat Corruption.
You are apparently ignorant and acting like a freaking troll.
The S is presently hitting the F in the financial world, and all you can do is be rude.
Barnhardt is backed up by Karl Denninger at Market-Ticker.com; the whole futures and options market sector is imploding because of the MF Global collapse changing all the rules about customer funds being untouchable.
Read and get a clue, and stop acting like a troll.
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