Monies and Positions Not Safe in the Futures and Options Markets


Barnhardt Capital Management –   Below are key quotes in a very brave and honest letter from Ann Barnhardt of BCM which has ceased trading as a result of no confidence in the futures and option markets.

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.

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.

…. oh shit, MF Global tip of the iceberg

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.

…and a very dangerous sign ahead

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.



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.

full letter can be found on Ann Barnhardt’s blog.





Asia spurn German Bonds


As reported today by Ambrose Evans Pritchard in the Telegraph, Asia investors and Central banks have begun to sell off German Bonds. This is the first sign of Asia pulling out of the Euro zone and losing fate in the Euro.

Andrew Roberts, rates chief at Royal Bank of Scotland, said Asia’s exodus marks a dangerous inflexion point in the unfolding drama. “Japanese and Asian investors are for the first time looking at the euro project and saying `I don’t like what I see at all’ and fleeing the whole region.

“The question on everybody’s mind in the debt markets is whether it is time to get out Germany. The European Central Bank has a €2 trillion balance sheet and if the eurozone slides into the abyss, Germany is going to be left holding the baby. We are very close to the point where markets take a close look at this, though we are there yet,” he said.

Jean-Claude Juncker, Eurogroup chief, fueled the fire by warning that Germany is no longer a sound credit with debt of 82pc of GDP. “I think the level of German debt is worrying. Germany has higher debts than Spain,” he said.

“It is comforting to pretend that southerners are lazy and Germans hardworking, but that is not the case,” he said, slamming France and Germany for their “disastrous” handling of the crisis.

German Bunds have already lost their status as Europe’s anchor debt. The yields of non-euro Sweden are now 20 basis lower for the first time in modern history. Danish and UK yields are higher but have closed most of the gap over recent months.

It was reported by Reuters on Wednesday of Junckers worries on Germany.

“I consider the level of German debts to be a cause for concern,” Juncker said.

Germany has higher debts than Spain,” he added. “The only thing is that here (in Germany) no one wants to know about that.”

So there you go Germany, you are well able to throw your weight around and point fingers but you are not so perfect yourselves. After all, the bailouts for Greece, Ireland, Portugal was to pay back your banks that were in trouble 😉

Dutch ditch euro? Netherlands ‘Neuro’ plan

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As reported on Russia Today (, the Dutch prime minister worried but its rising costs has propsed a new euro.

“The worst day yet for the euro” is how one banker called news that the Netherlands, considered the second-strongest economy in the single currency, has seen its borrowing costs raised by the markets to new highs.

The Dutch prime minister was forced to react, on concerns the debt problem is spiraling out of control.

Premier Mark Rutte has said he would like to be able to push countries out of the euro, to put out the fire as he called it. This is raising fears that states will be forced to leave the single currency in order to stop this crisis spreading.

The new Northern Euro is to be called the Neuro

Neither Greece nor France has a place in the “Neuro”, a new Northern Euro only for prudent states proposed by a top Dutch ruling party official last week. Experts think just three countries actually deserve to stay in.

According to economist Ivan Van De Cloot “Only Germany, the Netherlands and Belgium can share the same currency without having economic costs.”

The Netherlands currently pays more per person into the EU coffers than anyone else. But growing numbers now say “Nee” to going Dutch with their southern neighbors.

Derivatives – what happens when the SHTF

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Of $250 trillion of outstanding derivatives a mere 5 banks (and really 4) account for 95.9% of all derivative exposure.

 The top 4 banks:JPM with $78.1 trillion in exposure,

Citi with $56 trillion,

Bank of America with $53 trillion.

Goldman with $48 trillion, account for 94.4% of total exposure.

What happens when the SHTF ? according to

The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008.

The Euro crisis is by design and their goal is for an eventual one world currency

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An interesting article from the Daily Bell in which the Sovereign Crisis may be a phony one, created by the banking elites to help construct an even larger one-world currency.

The debt crisis in Greece and Italy presents itself as an opportunity for the Global Elite to gain an even tighter grip on the economies of every country within the European Union. The crisis is by design and their goal is for an eventual one world currency. In the face of these troubling times national sovereignty will be under attack as the international banksters attempt to consolidate their power.

It explains that a collapse of the euro zone would be defeat for the elites that created it, instead

It is the idea that the powers-that-be put in “their” men to solve the situation, thus reinforcing the idea of the competency of a technocratic global banking elite.



Below is a video from outlining their opinions


Default/Debasement Ahead – Buy Physical Gold (thanks to yesterdays discount)

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After the gold price collapsed yesterday by over 3%, now is a perfect opportunity to buy your discounted gold. As Euro countries debt to GDP ratios approach 90-100%, their ability to service their debt is fast diminishing. Couple this with rising bonds prices, slow economic growth and the lack of the market to invest in risky european soverign debt, gold is looking more attractive.  

As outlined by Michael Pento there exists only 2 possibilities.

“The country can declare bankruptcy and default on the debt outright—which is the smartest route to take.  The other option—and the one that all fiat currencies take—is to monetize the debt.  However, this default by means of inflation doesn’t solve the problem, it only extends and exacerbates the default process.

 Since it has been made clear on both sides of the Atlantic that an inflation led default will be deployed, it makes sense to avail yourself of the best protection against the ravages of a crumbling currency.  That is why gold is a buy, especially when you are fortunate enough to get a pullback.”



Nigel Farage on the Euro – “Who is in charge?”

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 As always, absolutely brilliant from Nigel Farage holding the EU to account . “Who is in charge ?”

There is hope for democracy in the EU when we have guys like this 🙂

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