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http://peterlbrandt.com/how-george-soros-ended-up-with-mf-globals-client-money/

How George Soros ended up with MF Global's client money

 

 

As the old saying goes, to find out what really happened you need to … "Follow the money trail"

A warning to former MF Global segregated account holders: If the news has already been more than you can bear, please do not read this post — it may really push you over the edge

While the congressional hearings have been interesting, at times shocking, at other times even quite entertaining, Congress has yet to connect the dots. So I will do it for them.

In short, when the dots are connected, a significant portion of the $1.2 billion (some say more, some say less) of segregated account money illegally stolen by Jon Corzine's MF Global (with the CFTC driving the get-away car) has landed in the pockets of George Soros.

Let's go through this step-by-step:

1. Jon Corzine figured out a brilliant trade in the European debt market.

While I won't go into the details, Corzine would have made a fortune if the trade could have been held to maturity of the debt instruments. The money was NOT lost because Corzine made a bad trade.

2. Corzine leveraged the trade to the hilt. He had the trade on with uber leverage. In fact, MF Global ended up with a $6.3 billion trade.

3. The Greek and Italian bonds tanked (rates went higher) over concern about a possible default.

The spike in rates would not have affected the final profitability of Corzine's trade, but did put the trade on margin call after margin call. MF Global used every last penny of cash reserves to meet the margin calls, knowing that if it could survive the margin calls the trade would have made money at maturity. MF Global was unable to secure additional loans to meet the margin calls because it was leveraged to the max on the trade it .

4. MF Global illegally took segregated customer funds out of J.P. Morgan to meet margin calls in an attempt to survive the trade. It was the legislated responsibility of the U.S. government to protect this from happening.

5. MF Global's clients (without their knowledge or permission and as an illegal manuever) became the default counterparty to MF Global's trade. This is a fact Congress has not yet figured out.

6. MF Global puked about $1.5 billion of the trade, but it filed for bankruptcy when it was finally unable to meet further margin calls.

The remaining $4.8 billion trade was taken over by KPMG LLP, MF Global's bankruptcy administrator in London. REMEMBER FROM POINT #5 ABOVE, MF GLOBAL'S SEGREGATED CLIENTS REMAINED A COUNTERPARTY TO THE TRADE BY DEFAULT.

7. KPMG peddled perhaps half (or more) of the trade to George Soros. The actual amount reported was $2 billion, but at a discount.

Remember, this trade was a guaranteed winner at the maturity of the bonds, so Soros was locked into a profit. Also, with his deep pockets ,Soros knew he could withstand interim margin calls if necessary.

Final point #8: MF Global's segregated account holders became the default counterparty to Soros' trade.

The profits that Soros has locked in represent, in large part, the segregated money previously belonging to MF Global clients that had been safe and secure (at least that is what the CFTC's responsibility was) at J.P. Morgan.

Let me conclude by emphasizing that George Soros did nothing illegal in this manuever. The great speculator/shark simply smelled blood in the water and had the money to buy a distressed trade that was a guaranteed winner.

But in the process, the profits Soros will realize will in part (or in whole) be the segregated funds of MF Global's clients. Technically, and legally, these funds belong to Soros because they were laundered through the complex process of rehypothication. But make no mistake about it, this is the money that previously belonged to MF Global's clients.

So the dots are connected. MF Global's clients (by default) became the counterparty to George Soros' trade. MF Global's client' money, while illegally taken, legally became George Soros' money.

And, Congress seemingly has no hint this money trail exists; the CFTC takes no responsibility for this ugly episode in history; and the Administration and the Fed would rather spend their time hearlding the $180 billion-plus money it gave to AIG.



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New post on Fellowship of the Minds

Achmed the Terrorist Santa

by sage_brush

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fox reporting now

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New post on ThinkMarkets

The Intellectual Disaster of American Conservatism (Liberalism)

by Mario Rizzo

by Mario Rizzo

I watched a rather good debate this morning on the ABC News program This Week. The participants were journalist George Will and Congressman Paul Ryan (on the "right") and Congressman Barney Frank and former Labor Secretary Robert Reich ("on the 'left"). You can watch it now or simply read the transcript. The topic for the debate was "There is too much government in my life."

I thought the "right" handled the economic questions very well. I was especially impressed (because I don't know him as well) by Paul Ryan's knowledge and debating skill. But I kept wishing that George Will was in one of his libertarian moods because the "left" exposed some glaring inconsistencies on matter of social and military policy. For whatever reason, Will played the good conservative in the debate (perhaps to avoid causing splits on the "conservative" side of the debate).

I think the "left" (mainly Barney Frank) played an excellent card. Read more of this post

Mario Rizzo | December 18, 2011 at 6:36 pm | Categories: political philosophy, Regulation | URL: http://wp.me/pmseG-1jR

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Date: Sun, Dec 18, 2011 at 11:01 AM
Subject: Bill and Melinda Gates's Foundation Helps ALEC Undercut Public Education
To: Rick Blaine <rblaine@ownmail.com>


From what we've seen, ol' Bill, while most likely a computer & perhaps business genius, suffers from altruist/collectivist/statist BS (Belief System), apparently instilled by his socialist lawyer Dad, along with the usual State-controlled schools & media.  However, if what you say here is somewhat true, Rick, perhaps there's still hope for "Billy Boy", as you so cleverly label him.
 
What you call "Public School" is 100% State Indoctrination, 100% funded by theft, which you call "taxation".  Theft is taking property without the owner's consent, regardless of what you call it.  Calling it taxation does not give me, or my "government" the right to take your property, Rick.
 
We must have must have separation of education and State [http://www.schoolandstate.org/home.htm], health care and State, child care and State & economics and State, as we should have separation of church and State ... and for the same reasons.
 
Let's replace our coercive State with the "Natural Republic", in which all humans have 100% control of their lives and property.  To do that, there must be a group of humans who thoroughly understand the solution.  Please help as many of your thinking friends as possible purchase and listen multiple times to at least the first four sessions of Jay Stuart Snelson's V-50 lectures ... and preferably, the whole course .. available at http://www.cdbaby.com/Artist/JaySnelson.
 
Government is the  great fiction, through which everybody endeavors to live at the expense of  everybody else.

-- Frederic Bastiat,  French economist(1801-1850)

--bob & lou
www.wynman.com
 
----- Original Message -----
Sent: Sunday, December 18, 2011 8:36 AM
Subject: Bill and Melinda Gates's Foundation Helps ALEC Undercut Public Education

Charter schools are the vehicle of the sneaky-snake right-wing Top One Percent whose objective is to get government out of education and abolishing school systems by pushing vouchers and charter schools.

"ALEC-sponsored "bills would privatize public education, crush teacher's unions, and push American universities to the right. Among other things, these bills make education a private commodity rather than a public good, and reverse America's modern innovation of promoting learning and civic virtue through public schools staffed with professional teachers for children from all backgrounds."

"
ALEC's mission is "to defund and redesign public schools." Underwood detailed how ALEC has been promoting "choice" and "vouchers" for more than 20 years."

Leave it to Billy Boy to throw in with ALEC.

Bill and Melinda Gates's Foundation Helps ALEC Undercut Public Education

Submitted by BuzzFlash on Tue, 12/13/2011 - 3:18pm.

BILL BERKOWITZ FOR BUZZFLASH AT TRUTHOUT

Gates Foundation Enables ALEC's Project to Privatize Public Education

 

In the war being fought over the very survival of public education, the privatizers are forging the future. Is the Bill and Melinda Gates Foundation aiding and abetting them?

I don't know how you feel about Bill Gates, the chairman of Microsoft, and one of the world's richest men. Many people appreciate what he's accomplished. Many think that Gates' wife, Melinda, is doing wonderful work aiding the poor in underdeveloped countries. Gates' dad, who has taken the lead in advocating higher taxes for the wealthy, has always seemed really likable.

In philanthropic circles, the work of the Bill and Melinda Gates Foundation (http://www.gatesfoundation.org/Pages/home.aspx), which gives some $3 billion annually, especially in fighting HIV/AIDS, malaria and mother-child deaths in underdeveloped countries around the world, is highly regarded.

However, there are critics concerned about what Edward Skloot, director of Duke University's Center for Strategic Philanthropy and Civil Society, recently characterized as the foundation's "brass-knuckle philanthropy." (It should also be noted that Skloot has indicated he thinks the foundation's methodology was "pretty close to the ideal.")

At a recent Hudson Institute-sponsored panel titled "Living with the Gates Foundation" (http://www.hudson.org/index.cfm?fuseaction=hudson_upcoming_events&id=899), Tim Ogden, editor of Philanthropy Action, said that Gates is "creating the ball, building the team, hiring the referees," and "funding the instant replay." According to The Chronicle of Philanthropy's Caroline Preston's report, Laura Freschi, of New York University's Development Research Institute, "said it's not out of the question that one day a reader might devour an article about a Gates-supported health project, printed on the pages of a newspaper that gets Gates money, reported by a journalist who received media training paid for by Gates, citing research by scientists financed by Gates."

Gates recently told Christiane Amanpour, the host of ABC's "This Week With Christiane Amanpour," that while he favored raising taxes on the wealthy, he didn't think that would solve the "deficit gap." He also said that he didn't think President Obama was waging class warfare on the rich, joking that as far as knows, there are no barricades in the streets being manned by the wealthy.

Gates does have a legion of critics. In his new biography of the late Steve Jobs, author Walter Isaacson reported that Jobs told him that Gates is "basically unimaginative, has never invented anything ... he just shamelessly ripped off other people's ideas."

Last year, I wrote a piece about the Bill and Melinda Gates Foundation's relationship to the chemical company Monsanto and the agribusiness giant Cargill (http://blog.buzzflash.com/node/11834). The gist of the story was that the Foundation had bought 500,000 Monsanto shares worth around $23 million in the second quarter of 2010. Critics pointed out that amongst other things, Monsanto has for years had a negative impact on small farmers, especially in Africa.

And some critics are highly skeptical about some of the Gates Foundation's choices, particularly as it relates to education in the United States. According to the Gates Foundation website, their education mission in the U.S. is pretty straightforward: "... to dramatically improve education so that all young people have the opportunity to reach their full potential. We seek to ensure that all students graduate from high school ready for college and career and prepared to complete a postsecondary degree or certificate with value in the workplace."

Would it surprise you to learn that the Bill and Melinda Gates Foundation recently gave more than $300,000 to the American Legislative Exchange Council, a shadowy right-wing organization that has inordinate power in state legislatures across the country.   (POSTER'S NOTE:  The strategy is to expand shadow influence FROM Washington DC TO state houses.)

In November, the foundation announced that it has awarded the American Legislative Exchange Council (ALEC) (http://www.alec.org/) a grant of $376,635 earmarked for ALEC's work on an assortment of education projects, over a 22-month period. The Gates Foundation's official description of the grant reads: "to educate and engage its membership on more efficient state budget approaches to drive greater student outcomes, as well as educate them on beneficial ways to recruit, retain, evaluate and compensate effective teaching based upon merit and achievement."

Robin Rogers is an associate professor of sociology at Queens College and the Graduate Center at the City University of New York (CUNY), and the author of "Why Philanthro-policymaking Matters" in The Politics of Philanthrocapitalism, Society 2011, The Welfare Experiments: Politics and Policy Evaluation (Stanford University Press, 2004). In a recent piece at The Education Optimists titled "Billionaire Education Policy," Rogers pointed out that the Gates Foundation's grant to ALEC was aimed at "influenc[ing] state budget making - where the rubber hits the road on education policy." Rogers noted that after the grant's announcement, "Twitter was buzzing with the news" and the debate revolved around "whether this constituted a Republican takeover of the state budget process, a Gates Foundation takeover of ALEC or both. No one suggested it was a victory for democracy."

Since its' founding nearly 40 years ago, the raison d'etre of the American Legislative Exchange Council (http://blog.buzzflash.com/node/12551) has been to influence state legislatures on behalf of corporations and so-called family values advocates, but mostly corporations. As The Center for Media and Democracy's "ALEC Exposed" (http://www.alecexposed.org/wiki/ALEC_Exposed) project points out, the organization is "not a lobby" and "not a front group": "It is much more powerful than that."

Primarily funded by corporations, corporate trade groups, and corporate foundations," and populated mainly by Republican office holders, ALEC is a non-profit organization made up primarily of a "who's who' of the extreme right."

As I reported in late March of this year, "while the Washington, D.C.-based ALEC may not be responsible for all of the mayhem going on in such states as Wisconsin, Ohio, New Jersey, Indiana, Florida, and Michigan (with more states certain to follow), it has historically played an extraordinary role in shaping pro-corporate legislation in a number of states."

According to ALEC Exposed, ALEC-sponsored "bills would privatize public education, crush teacher's unions, and push American universities to the right. Among other things, these bills make education a private commodity rather than a public good, and reverse America's modern innovation of promoting learning and civic virtue through public schools staffed with professional teachers for children from all backgrounds."

As Julie Underwood, dean of the School of Education and a professor at the University of Wisconsin, Madison, pointed out in a piece in The Nation (http://www.commondreams.org/view/2011/07/14-12), ALEC's mission is "to defund and redesign public schools." Underwood detailed how ALEC has been promoting "choice" and "vouchers" for more than 20 years.

However, Underwood wrote: "ALEC's most ambitious and strategic push toward privatizing education came in 2007, through a publication called School Choice and State Constitutions, which proposed a list of programs tailored to each state." Several states, including Georgia, Louisiana, Oklahoma, Florida, Utah and Indiana enacted ALEC-suggested legislation.

"ALEC's 2010 Report Card on American Education called on members and allies to 'Transform the system, don't tweak it,' likening the group's current legislative strategy to a game of whack-a-mole: introduce so many pieces of model legislation that there is "no way the person with the mallet [teachers' unions] can get them all." Underwood wrote.

According to Underwood, "ALEC's agenda includes":

§ "Introducing market factors into teaching, through bills like the National Teacher Certification Fairness Act."

§ "Privatizing education through vouchers, charters and tax incentives, especially through the Parental Choice Scholarship Program Act and Special Needs Scholarship Program Act, whose many spinoffs encourage the creation of private schools for specific populations: children with autism, children in military families, etc."

§ "Increasing student testing and reporting, through more "accountability," as seen in the Education Accountability Act, Longitudinal Student Growth Act, One-to-One Reading Improvement Act and the Resolution Supporting the Principles of No Child Left Behind."

§ "Chipping away at local school districts and school boards, through its 2009 Innovation Schools and School Districts Act and more. Proposals like the Public School Financial Transparency Act and School Board Freedom to Contract Act would allow school districts to outsource auxiliary services."

Admittedly, the $376,635 grant from the Bill and Melinda Gates Foundation is just a drop from the foundation's bucket, and it will not guarantee ALEC's success in achieving its goals. It certainly will help. As Underwood pointed out, "ALEC's real motivation for dismantling the public education system is ideological-creating a system where schools do not provide for everyone - and profit-driven."

What the foundation's grant might contribute to is another in a series of ginned-up reports produced by ALEC's education team. Robin Rogers wrote recently that there's a danger to extrapolate conclusions from education experiments - as it was in welfare reform: "Our measurements are imprecise at best and meaningless and misleading at worst. Most educators, advocates, researchers, philanthropists, and policymakers are well aware of the problem of measuring complex outcomes. That awareness disappears when we talk about policy experiments. We act as if testing these programs will lead to some empirical, objective truth about what works best."

Rogers added: "Policy experiments are supposed to tell us empirically how good a program or approach is. They don't do this very well. Randomized experiments are expensive, difficult, and rare. Most policy 'experiments' aren't really experiments. They are a trial run of a program with data collection. Even then, the data is often collected haphazardly or to highlight program success and minimize failures. Politics and research also operate in different time frames - solid evaluations often take years. In short, well-funded policy evaluations take too long to actually affect policy, and ad hoc evaluations don't produce reliable findings."

In the final analysis, ALEC will take Gates money. It will likely come up with another report touting the success of charter schools and voucher programs, and more reasons to bust teachers unions. It will design sample legislation for its members to introduce in state houses across the country. The privatization of public education will move forward. This is not a project that Bill or Melinda Gates should be proud of.


http://blog.buzzflash.com/node/13204

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New post on Bare Naked Islam

9/11 images on Diet Pepsi Cans in Afghanistan

by barenakedislam

There are no coincidences in life. The graphic image on the side of Diet Pepsi cans being served to American troops in Afghanistan bears more than a passing resemblance to the 9/11 terror attacks on the Twin Towers, with smoke coming out the top of one of the towers and a plane flying above. As [...]

Read more of this post

barenakedislam | December 18, 2011 at 3:24 AM | Categories: 9/11 Censored | URL: http://wp.me/peHnV-DPB

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---------- Forwarded message ----------
From: BOB GREGORY
Date: Saturday, December 17, 2011
Subject: 'GETTING CLOSE TO THE GOAL!
To:



Below is a screen capture from 10:40 p.m. Eastern Standard time tonight (December 17)  Nearly $4 million has been donated yesterday and today.  If you have not yet made a donation, please do it now.  It's time to put YOUR money where Ron Paul's mouth is. 

This campaign depends on very large numbers of people making modest donations.  Other candidates get their money from big corporations and very wealthy people who can expect favors if their candidate is elected.  The favor Ron Paul will do will be to restore the government to its constitutional basis and cut runaway spending.  It will be a favor that benefits all the people.  Please give $20 or $50 or $100---whatever you can.


</mail/u/0/s/?view=att&th=1344f70c5db3a9a7&attid=0.1&disp=emb&realattid=ii_1344f4bcad2afa3a&zw>

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---------- Forwarded message ----------
From:
Date: Sunday, December 18, 2011
Subject: GPS In Dire Jeopardy
To: ITSALLGONEROOMY@freedoms.lost


GPS In Dire Jeopardy
This one is even worse than the Solyndra scandal.......
it could kill you.........REALLY!

LightSquared is a private company that wants to establish a new broadband service using some of Obama's stash.

The company is owned by an Obama high roller and supporter who has billions of dollars at stake in this venture.

At one point Obama even owned stock in the company.

Recently the Department of Defense testified that the new service would interfere with critical national security GPS programs.

Obama's FCC attempted to get the DoD testimony of General Shelton changed to down play the interference.

The General wouldn't cave in and called it like it was.

Now there is a new DoD and DoT report stating that LightSquared is about as bad on navigational equipment as everyone knew it would be.

Test findings found no significant interference with cellular phones but......

Test findings did show that LightSquared signals caused harmful interference to 75% of the GPS receivers tested. 

Here's the real biggy.....The FAA also found interference with a flight safety system designed to keep pilots from running into mountains. 

So it's no longer a matter of making people buy a new GPS systems so Obama's buddy can have his private broadband system approved.

So I guess Obama will either have to have all the
mountains leveled or prohibit planes from flying
over them?    However, if you think about it.....
more mountain crashes could get rid of a lot
of the 1% super rich.
 
 
Cheers, Jerry Thompson
 
 

!~~~~~~~~~~~~~Bob's Footnote~~~~~~~~~~~~!

I have had a recurring dream.  I am in a crowd of friends and we
are viewing a long-legged Mulatto Negro, hands tied behind his back,
hoodwinked, seated on a large horse with a noose firmly around his
neck, the other end of the noose rope tied securely over and to a
large oak tree limb, ,
Just before the dream ends, I step from the crowd, slap the horse's
flanks hard,  my hand stings and the horse bolts,,,,,,,,,,
Squeak, Squeak, Squeak, squeak, squeak, squeak ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

I awaken to the wonderful smell of coffee brewing on a bright
sunny Fall morning in the peace and tranquility of a house-at-
the-end-of-the-road in beautiful East Texas.
AHhhhhhhhhhhhhhhhhhhhhhhhhhh



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