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Millions of dollars lost from ag accounts

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And the Wallstreet GREED rolls on!

Trading company's collapse traps Montana farmers


By TOM LUTEY Of The Gazette Staff The Billings Gazette | Posted: Thursday, December 1, 2011 6:11 pm | (15) Comments

.The collapse of MF Global, a trading company that made bad bets on European debt with customer money, has crippled American farms, including some in Montana, according to U.S. lawmakers.

Farmers, through no fault of their own, have lost millions of dollars. Bankruptcy trustees are scrambling to find $1.2 billion missing from customer accounts but have produced little after a month of searching.

The Senate Agriculture Committee questioned federal regulators Thursday at a hearing in Washington, D.C., about how customer trading accounts that were supposed to be off-limits were apparently gambled away on foreign debt.

“It’s just a bunch of greed without adult supervision,” said U.S. Sen. Max Baucus, D-Mont., who presented federal regulators with the losses of Marty Klinker, a Fairfield farmer who has $231,000 tied up in the collapse.

“And here’s a case where Marty, for example, has lost a lot of money,” Baucus said. “He trusted the system, and the system let him down. How is he going to get his money back?”

Gary Gensler, Commodities Futures Trading Commission chairman, told the committee that it wasn’t clear whether Klinker and others could be made whole.

MF Global’s October collapse — now the eighth-largest bankruptcy in U.S. history — grabbed headlines last month both for its size and its celebrity CEO Jon Corzine, a former New Jersey governor, senator and one-time Goldman Sachs executive.

The collapse has not only damaged MF’s clients, said Sen. Debbie Stabenow, D-Mich, but it has also shaken investor confidence in the nation’s ability to trade commodities.

In a letter to Stabenow, the Agriculture Committee chairman, and other senators, the National Association of Wheat Growers, American Farm Bureau Federation and 16 other key agriculture groups implored Congress to restore trust in the markets.

“Many farmers and grain merchandisers are being deeply affected by the MF Global bankruptcy,” the groups said. “We have always believed that the risk to customer funds when trading on exchange was virtually zero. Now we see that is not the case.”

Grain elevators with assets trapped in the bankruptcy may not have money to buy wheat. Farmers unable to recover hundreds of thousands of dollars have seen their life savings diminished overnight.

At the Montana Grain Growers Association convention this week in Great Falls, nervousness over the MF Global ordeal was palpable.

“There are guys who have hundreds of thousands of dollars in margin money that they can’t get out,” said Gary Brester, a Montana State University economist who attended the convention. “It’s like a bank going under, except there’s no backing.”

Commodities futures contracts are not backed by insurance, unlike stocks or bonds that are secured by $500,000 in coverage.

“I hope all these people get their money back because most of these people never did anything wrong,” said Brester, who specializes in agricultural marketing. “That’s the real tragedy. Many of them were trying to manage risk.”

Farmers used MF Global as a conduit to sell grain for future delivery, allowing them to lock in a sale months ahead of harvest. Those types of contracts have given American farmers financial stability for more than a century.

The accounts farmers used to make those transactions were supposed to be segregated, meaning MF Global couldn’t dip into them without customer approval.

Klinker told The Billings Gazette that he had no idea money was being taken from his account until it was too late. The bankruptcy locked up Klinker’s accounts and roughly 50,000 others. Shortly thereafter, a bankruptcy trustee announced the missing $1.2 billion, saying MF Global might not have enough assets to make every client whole.

Klinker said MF Global never should have been allowed to drag its customers’ segregated accounts into the bankruptcy.

“It was as if the town of Billings ran out of money in their budget and had to declare bankruptcy,” Klinker said. “Then in their filing they declared every house in the city, as well.”

Klinker had roughly $336,000 in liquid assets and $108,000 in open trades at MF Global when the bankruptcy went down Oct 31. Two weeks later, the bankruptcy court approved a distribution of $520 million, or 60 percent of the $869 million in cash accounts that had been frozen since the bankruptcy.

But the Fairfield farmer has received only $12,000 of his $108,000 in open trades, and $201,000 to cover his liquid assets.

Klinker faults not only MF Global, which is based in New York, but also the Chicago Mercantile Exchange, the private market that the federal government allows to “self-regulate.” The exchange was ineffective in making sure the segregated accounts were secure, he said.

The watchdog role over segregated accounts is crucial, senators said Thursday. For lack of insurance, policing the accounts is the only way to assure traders that their money is safe.

Investigators now suspect money began disappearing from segregated accounts after MF Global’s own $6.3 billion investments in European sovereign debt went bust.

The FBI is probing the MF Global case to see if crimes were committed. Gensler said the Commodities Futures Trading Commission is investigating whether segregated accounts were raided, which would be a securities violation.

While witnesses for the CFTC and federal Securities and Exchange Commission were guarded in their assessments of whether MF Global acts were criminal or even warranted fines, Senate Agriculture Committee members were more pointed.

“They made very bad bets, and now the money is gone,” said Sen. Mike Johanns, R-Neb. “They basically took the money and played like they’d play in Vegas.”


Read more: http://billingsgazette.com/news/state-and-regional/montana/trading-company-s-collapse-traps-montana-farmers/article_420b6361-a777-5201-a1f1-ebb4b0a9564f.html#ixzz1fQ0jspSL
 

Mike

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Jon Stevens Corzine (born January 1, 1947) is the former CEO of Goldman Sachs[2] and of MF Global, and a one time American politician, who served as the 54th Governor of New Jersey from 2006 to 2010. A Democrat, Corzine served five years of a six-year U.S. Senate term representing New Jersey before being elected Governor in 2005. He was defeated for re-election in 2009 by Republican Chris Christie.[3] In March 2010, Corzine was named chairman and CEO of MF Global Inc., a financial services firm specializing in futures brokerage that filed for bankruptcy protection in October 2011.[4][5
 

Texan

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This is hilarious, Oldtimer. Remember all of the crap you've posted about how Phil Gramm was John McCain's presumptive Treasury Secretary at one time? About how unethical Gramm was? And you used that to try to demonize McCain? Do you remember doing that?

Well, guess who considered Jon Corzine for his Treasury Secretary before choosing Tim Geithner instead? And up until recently, guess who considered Jon Corzine to replace Tim Geithner?

Come on, Oldtimer....just guess. I'll give you three guesses. :lol:

From August:

http://www.nj.com/news/index.ssf/2011/08/speculation_of_us_treasury_sec.html
 
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Anonymous

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Texas-- there were plenty of Repubs too involved in the Wallstreet fiasco that brought on the Bush Bust...
This isn't a Repub or Dem issue-- its a bunch of crooks issue...

A bunch of crooks that continue to prove they can't be trusted without government supervision and babysitting ...
 

hypocritexposer

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Oldtimer said:
Texas-- there were plenty of Repubs too involved in the Wallstreet fiasco that brought on the Bush Bust...
This isn't a Repub or Dem issue-- its a bunch of crooks issue...

A bunch of crooks that continue to prove they can't be trusted without government supervision and babysitting ...


you are advocating for government to supervise corrupt government reps.? :lol: :lol:


More regulations will surely fix things up...... :roll:
 

Texan

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Oldtimer said:
Texas-- there were plenty of Repubs too involved in the Wallstreet fiasco that brought on the Bush Bust...
This isn't a Repub or Dem issue-- its a bunch of crooks issue...

A bunch of crooks that continue to prove they can't be trusted without government supervision and babysitting ...
So, do you share with President Obama the feeling that Jon Corzine would be a good Treasury Secretary? Yes or no, please. :lol:
 

Texan

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hypocritexposer said:
you are advocating for government to supervise corrupt government reps.? :lol: :lol:


More regulations will surely fix things up...... :roll:
He advocates for government being the answer to everything while simultaneously denying that he's a big government liberal.
 
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Anonymous

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Texan said:
hypocritexposer said:
you are advocating for government to supervise corrupt government reps.? :lol: :lol:


More regulations will surely fix things up...... :roll:
He advocates for government being the answer to everything while simultaneously denying that he's a big government liberal.

Wrong- but unlike the radical right I don't want to throw the baby out with the bathwater- and throw out/oppose all government/regulation... Rules and laws- and regulation and policing is necessary to exist in a civilized society... Especially the complex world of today- where $ Billions of dollars can transfer hands and be half way across the world in less than a second....

I'll bet those farmers that are losing millions having their crops contracted thru Chicago Mercantile Exchange and MF Global wish we had some more regulation and the CFTC and the SEC weren't undermanned on investigators/regulators...

Same with the ranchers that went broke when their entire years calf crops checks from Eastern Livestock bounced- and they lost a year or twos production... Even the NCBA is calling for stricter regulations and more oversight to keep such from happening in the future...

Unlike what some of you want to think- most these regulations didn't come about because someone was just sitting around twiddling their thumbs and looking for something to do... Most have a history of nasty events happening- and were brought up to try and prevent it from happening again...
 

hypocritexposer

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Looks to me like the regulations and rules were already there.....what will making new rules and regulations do, if you can't trust people to follow them

The Senate Agriculture Committee questioned federal regulators Thursday at a hearing in Washington, D.C., about how customer trading accounts that were supposed to be off-limits were apparently gambled away on foreign debt.
 
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Anonymous

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hypocritexposer said:
Looks to me like the regulations and rules were already there.....what will making new rules and regulations do, if you can't trust people to follow them

The Senate Agriculture Committee questioned federal regulators Thursday at a hearing in Washington, D.C., about how customer trading accounts that were supposed to be off-limits were apparently gambled away on foreign debt.



We have traffic laws too-- but can't trust people to follow them... Thats the reason we need folks watching for those trying to fudge on the speed limit- or the trading rules...
If greed is making all these folks dishonest to where they can't play by the rules- then they need stiffer laws and more babysitters/policemen to make them honest...
 

hypocritexposer

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Oldtimer said:
hypocritexposer said:
Looks to me like the regulations and rules were already there.....what will making new rules and regulations do, if you can't trust people to follow them

The Senate Agriculture Committee questioned federal regulators Thursday at a hearing in Washington, D.C., about how customer trading accounts that were supposed to be off-limits were apparently gambled away on foreign debt.



We have traffic laws too-- but can't trust people to follow them... Thats the reason we need folks watching for those trying to fudge on the speed limit- or the trading rules...
If greed is making all these folks dishonest to where they can't play by the rules- then they need stiffer laws and more babysitters/policemen to make them honest...


Maybe a lack of honesty, morality and ethics, is the reason. You might have a point, maybe a new law to make people like you attend Church weekly might cure you of your dishonesty and immorality.

Maybe it is not the stiffness of the laws, but a lack of enforcement or resources on the part of the "babysitters"

What you are experiencing, is the result of 30 years of liberalism.....







Ann,

I just listened to your interview on financial sense. I am a retired FBI White Collar Crime Supervisor who supervised a Securities Fraud Desk, in the {city name redacted} Division, prior to retiring in {year redacted}. Your analysis of the CME, the Obama Administration, and the sad state of our republic is right on the money. In addition, your 8(a) minority, affirmative action hire comment could not be more true. The effectiveness of federal law enforcement has been jeopardized by the politically correct hiring practices ongoing since George Herbert Walker Bush was elected President in 1988. My squad was responsible for the investigation of complex, white collar crime investigations (primarily securities fraud and corporate fraud). My career in the FBI spanned 24 years in five field divisions including New York, and FBI Headquarters. When I began my career, hires and promotion were merit based. The quality of agents working complex white collar crime investigations was high, most having worked for big eight accounting firms or brokerage houses prior to hire by the FBI. By the time I retired, minority and female agents were being assigned to my squad with no pertinent qualifications, and no apparent talent, dedication, work ethic or experience. As a result, senior agents had to double up on complex investigations, and my minimum threshold for initiating investigation was dramatically increased to assure the greatest offenders were addressed adequately. Needless to say, cases that should have been addressed were no longer addressed due to the lack of qualified agents capable of successfully investigating and taking through trial, complex white collar crime cases. After 9.11 the FBI all but abandoned complex criminal investigations, and transformed itself from the premier law enforcement agency in the world to a fourth rate domestic spy agency more concerned with violating citizens constitutional rights in the name of "protecting the general public from terrorism" than in completing its primary mission, enforcing Title 18 of the US Criminal Code.

http://barnhardt.biz/
 

Larrry

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Yep by golly I think he has it figured out. Just one more law and they will automatically start obeying the law. Yep just one more law and then we have utopia.
 
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Steve said:
the coffee break continues..


Now in GOP crosshairs: Commodities
Pressure on the CFTC comes as donations from the securities industry tilt to the GOP.
| Reuters
CloseBy DAVID ROGERS | 11/30/11 11:43 PM EST Updated: 12/1/11 11:31 AM EST

Leery of mounting a frontal assault on Wall Street reforms, House Republicans have opted for a guerrilla-style war on the Commodity Futures Trading Commission even as it struggles with a new mandate to regulate the famously rich and wild swaps market.

Just Wednesday, the House Financial Services Committee approved the latest in a series of legislative efforts to challenge the CFTC’s rule making on trading in derivatives. Despite its new responsibilities, the agency’s budget has been effectively frozen at the insistence of the House GOP. And amid the MF Global investigation, Republicans wrote CFTC Chairman Gary Gensler on Monday, demanding that he turn over a broad array of relevant records as early as Wednesday.

All this comes as political contributions from the securities and investment industry, with a major stake in the derivatives market, have tilted dramatically to the GOP. And among the lead beneficiaries is House Speaker John Boehner (R-Ohio), who collected tens of thousands of dollars from Wall Street partners in just a few days last June.


Campaign data collected by the nonprofit Center for Responsive Politics show that in the 2010 election cycle, securities and investment donors split their money almost evenly between congressional Republicans and Democrats. But the latest data reported by the center for the 2012 election cycle, show Republican congressional candidates already have collected $14 million from the industry, with donations to Democrats trailing at $9.2 million.

Boehner’s enhanced status as speaker partly explains the recent increase in his donations. But in many cases, he’s now getting help from Wall Street firms that gave little or nothing to the Ohio Republican two years ago.

As a result, his donations from individuals in the industry already top $568,000 — more than double what he received for the entire 2010 election cycle. His office refused to discuss what appears to have been a major Wall Street fundraising push in June, but the center’s reports show about $167,000 in June contributions from dozens of individuals associated with Goldman Sachs, Cantor Fitzgerald, Paulson & Co. and Moore Capital Management.

Smaller and less attached to Wall Street, the CFTC is an easier target for Republicans than the Securities and Exchange Commission. And when the Dodd-Frank financial reform law assigned the CFTC its new role in the derivatives market — worth hundreds of trillions of dollars — it became a lightning rod for those who had opposed the law.

As early as June, the House voted to cut the agency’s 2012 budget to $171.9 million — less than it had received in 2011 and just $3.1 million more than in 2010, before the reforms were enacted. And while the deal reached last month restores these funds, it was structured in a manner that could still force staff cuts unless further adjustments are made by Congress.

“Because it’s politically untenable to call for repeal of Dodd-Frank, they are going under the table to try to prevent its enforcement,” Rep. Jim Himes (D-Conn.) told POLITICO. And Rep. Barney Frank (D-Mass.), the chief House author of the reforms, said he has been astonished by the tactics and GOP’s success in carrying out its agenda without a lot of public attention.

“It’s complicated, and people don’t see the different pieces,” Frank said. “But what they are doing is finding the weakest links.”

Wednesday’s markup before the House Financial Services panel illustrates this strategy. And by their own admission, the goal for Republicans is less to pass legislation than to pressure the CFTC commissioners.



Read more: http://www.politico.com/news/stories/1111/69490.html#ixzz1fRdy1nxM

Yep- your right Steve...Just like with GW- the Repubs still don't want any oversight put on their Fatcat donors..... :(
 

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Read the rest of your article OT. :roll:

Proponents argue this will increase competition and bring down costs. But it also opens up a regional battle over what platforms are best — a fight that divides even Democrats who supported the reforms.Read more: http://www.politico.com/news/stories/1111/69490_Page2.html#ixzz1fTThptmg
 

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Mike said:
Read the rest of your article OT. :roll:

Proponents argue this will increase competition and bring down costs. But it also opens up a regional battle over what platforms are best — a fight that divides even Democrats who supported the reforms.Read more: http://www.politico.com/news/stories/1111/69490_Page2.html#ixzz1fTThptmg

oldtimer has very selective reading skills, even more selective cutting and pasting skills.....ANY thing he cuts and pastes is suspect for having parts left out that are contrary to his warped way of thinking,,,,that has been proven many times, :roll:
 

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Oldtimer said:
[


We have traffic laws too-- but can't trust people to follow them... Thats the reason we need folks watching for those trying to fudge on the speed limit- or the trading rules...
If greed is making all these folks dishonest to where they can't play by the rules- then they need stiffer laws and more babysitters/policemen to make them honest...

so, are you trying to grow govt. by adding a lot more police, or is the average Joe, supposed to watch over and report you, like in "1984", or possibly you want a system like Hitlers Brown Coats....

you are not a Liberal jackass any more...you seem like a Communist...just like the crook in the White House....
 

Lonecowboy

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jigs said:
Oldtimer said:
[


We have traffic laws too-- but can't trust people to follow them... Thats the reason we need folks watching for those trying to fudge on the speed limit- or the trading rules...
If greed is making all these folks dishonest to where they can't play by the rules- then they need stiffer laws and more babysitters/policemen to make them honest...

so, are you trying to grow govt. by adding a lot more police, or is the average Joe, supposed to watch over and report you, like in "1984", or possibly you want a system like Hitlers Brown Coats....

you are not a Liberal jackass any more...you seem like a Communist...just like the crook in the White House....


excuse me, oldtimer calls himself a libertarian- :roll: :roll:
 

hopalong

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oldtimer belongs to no cults, other than the know it all cult of Montana membership ONE :wink: :wink: :wink:
 

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Lonecowboy said:
jigs said:
Oldtimer said:
[


We have traffic laws too-- but can't trust people to follow them... Thats the reason we need folks watching for those trying to fudge on the speed limit- or the trading rules...
If greed is making all these folks dishonest to where they can't play by the rules- then they need stiffer laws and more babysitters/policemen to make them honest...

so, are you trying to grow govt. by adding a lot more police, or is the average Joe, supposed to watch over and report you, like in "1984", or possibly you want a system like Hitlers Brown Coats....

you are not a Liberal jackass any more...you seem like a Communist...just like the crook in the White House....


excuse me, oldtimer calls himself a libertarian- :roll: :roll:
he calls himself a LOT of things....have yet to see him prove one of them.
 

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