Jane Galt quits the markets

Barnhardt Capital Management shuts down. Ann Barnhardt explains her belief in “the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.”

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….

And so, to the very unpleasant crux of the matter. 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. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Well, I tried to warn you that Wall Street was nothing but a casino anymore. There is no more genuine investment or financing of capitalist activity on Wall Street than there is in Las Vegas. It’s nothing more than borrowing – or stealing – money to place it on red… then scream for government bailouts when you lose.

The interesting question, which no one has even begun to answer, is how many other capital management firms have been gambling with their clients’ money. And how many have lost it all. I assure you, there is no chance Corzine’s MF Global was the only one.

UPDATE: it looks like the eurocontagion may be getting out of control rather quickly. This may be why Mervyn King of the Bank of England went public with his concerns about a credit crunch. The London Stock Exchange is becoming the lender of last resort for many banks in Italy as concerns over the country’s debt levels squeeze liquidity out of the Italian financial market. With cash increasingly hard to come by, Italy’s banks are turning to CC&G, the L.S.E’s Italian clearinghouse, for short-term lending. That includes some of the country’s largest financial institutions, including Unicredit and Mediobanca, according to a person close to the situation.

The first of many

This six hundred-count indictment is exactly what the Obama administration was hoping to prevent with its $20 billion wrist slap of the banking industry:

The 606-count indictment alleges that the two title officers, Gary Trafford and Gerri Sheppard, directed employees under their supervision to forge their names on foreclosure documents, then notarize the forged signatures, so that it appeared that the pair actually signed the documents.

The pair then allegedly directed the employees to file the fraudulent documents with the County Recorder’s office in Clark County, Nevada. The grand jury found “probable cause” that the alleged scheme “resulted in the filing of tens of thousands of fraudulent documents … between 2005 and 2008,” said Nevada Chief Deputy Attorney General John Kelleher.

This is all the result of the banks attempting to fraudulently fill in the blanks caused by their attempt to evade the county title system. And, as Karl Denninger has noted, this should be the first of many, many more prosecutions of banking executives and their employers.

Noch einmal

The Bank of England is warning that we’re back in two-two-two thousand and eight:

The eurozone crisis has left UK banks unable to raise the funding they need to make loans to businesses, evoking the spectre of the crunch that followed the collapse of Lehman Brothers. And on one critical measure — the cost of insuring banks against going bust — lenders are already facing tougher conditions than at the height of the crunch, the Bank said.

For the benefit of those who don’t speak Central Bank, “on the brink of a credit crunch” means “we expect there to be a serious financial crisis within months”. In the spring of 2008, the bankers I knew were all talking endlessly about the tightening of credit and the senseless calling of major credit lines. And we all know how that turned out in the fall.

Speaking of wholly owned

Goldman Sachs conquers Europe:

As Greece, Italy and the European Central Bank appointed new leaders in the midst of the worsening Euro crisis, observers rushed to find something that might link the cost-cutting crusaders. And it seems the scrutinisers have found a connection in the form of Goldman Sachs. The new president of the European Central Bank, Mario Draghi, Italy’s new prime minister, Mario Monti, and the new Greek prime minister Lucas Papademos all reportedly have the US investment bank as a common denominator.

And Monti has just set the whispers going by refusing to appoint a single elected official to his new cabinet. So, Italy now has an unelected leader buttressed by an unelected consigliere. Fortunately, Goldman has no such undue influence in the United States… wait a minute.

The banker’s president

Who would have thought Obama would turn out to be as wholly owned as John McCain?

President Obama dearly wants to seal a deal in which the nation’s largest banks toss over a few bales of cash — $20 billion to help with foreclosure relief — and the state attorneys general agree not to pursue sprawling and explosive legal cases against the banks.

Mr. Schneiderman and Attorney General Beau Biden of Delaware, joined by a few others, say no. Banks, they say, should disgorge more documents, testify more precisely and prove more completely that they own millions of mortgage notes. These rebel attorneys general want the banks to hand over more than $200 billion, which would enable the government to write down tens of millions of mortgages.

But in the end, their argument is elemental: Wouldn’t the nation benefit from knowing the truth about the behavior of banks and bankers?…

[T]he Obama administration has Shaun Donovan, secretary of housing and urban development; the economic adviser Gene Sperling; and Attorney General Eric H. Holder Jr. dialing liberals, activists and bloggers, urging them to pressure the rebellious attorneys general to forgo emotionally satisfying inquiries and take the deal.

Take the deal? It’s absurd on its face. Notice how desperate the banks are to close the doors on their past actions. Anytime someone is delighted to pay a $20 billion fine, you have to ask yourself what they are so eager to put behind them. It’s not just mark-to-market or Europe that will cause them to implode, it’s also their criminal activity. This combination of factors means that the big banks are eventually going to go down sooner or later, the only significant question is which blow will prove to be the lethal one.

It’s fascinating to see this perspective being presented in the New York Times, of all places.

Multiple police

McQueary says he stopped the rape and that he did talk to police… and not merely the university official in charge of the campus police:

Mike McQueary, the Penn State assistant football coach under fire for his reported lack of action in an alleged 2002 rape of a boy by Jerry Sandusky, said in an email to a former classmate that he stopped the assault in an athletic facility shower and discussed it with police.

In the email obtained by The Morning Call, McQueary wrote that he “did have discussions with police and with the official at the university in charge of police” following the alleged incident between Sandusky, a former Penn State assistant coach, and a boy.

The interesting thing is that despite what many have assumed, this doesn’t contradict what is reported to have been in the grand jury transcript – I haven’t and don’t intend to read it – but it did catch my attention that all the reports about it only said McQueary had not spoken with the University Police. But that says absolutely nothing about whether he did or did not speak with the State College police or some other police department. It seemed to be a strangely specific negative comment.

Asked about McQueary’s statement in the email that he had discussions with police, Penn State police told The Morning Call they were deferring to the university public relations office, which did not return a call Tuesday afternoon. Pennsylvania State Police in Harrisburg, which is heading the investigation, did not return a call…. The State College Police Department did not return a call for comment.

If McQueary is telling the truth – and there is no reason to assume he is not – then this will be a second example of the police receiving an eyewitness report about Sandusky raping a child and doing absolutely nothing about it. I’ve been convinced that if there is something sinister going on in Penn State, it goes well beyond the football program and the police have known about it for years. Remember, the police are not paid to protect and serve the public, they are paid to protect and serve the powerful. This has always been the case.

The police are not a magic talisman. They are a notoriously corrupt institution. Anyhow, the Penn State scandal appears to be getting curiouser and curiouser.

The irony

Why should one assume that homosexuals know anything more about science than they do about history?

Frontline, which is based in a former Army barracks in Wavertree, has been condemned by gay rights campaigners as trying to ‘repress’ people’s sexuality with ‘Dark Ages’ views.

The national Lesbian and Gay Foundation’s Andrew Gilliver said: ‘The issues about “childhood pain” are nonsense. The pain is often caused by people who don’t understand what they’re going through. We are born gay, but we learn prejudice. This is Dark Ages stuff.’

In response to which I quote the 1929 Encyclopedia Britannica: “[T]he contrast, once so fashionable, between the ages of darkness and the ages of light have no more truth in it than have the idealistic fancies which underlie attempts at mediaeval revivalism.”

Roissy has an article today about the way in which feminists are increasingly caught with their pants down by science. It’s a cogent point, even if his definition of science includes things that are definitely non-science, such as evo psych. The same is true of the homosexual community. The “born gay” hypothesis has already been heavily damaged by genetic science and the more malleable human sexuality is determined to be, the more it becomes clear that even if initial sexual orientation is not a conscious choice, dynamic abnormalities are at least partially susceptible to normalization as various ex-gay ministries have claimed.

And even pride paraders should be entirely supportive of the idea that homosexuality can be cured. Because the rapidly declining number of girls being born in China and India indicates that if the “born gay” hypothesis was correct, there will soon be very, very few homosexual individuals permitted to live once a method for prenatal orientation screening is developed.

You ain’t seen n-n-nothin’ yet

The Boomers finally begin to become dimly aware that the younger generations do not see them in the same way they have always seen themselves:

Talking about our generation is not going to be as much fun for the Boomers as it was in those long distant days of infinite promise. My generation has some real accomplishments under its belt, especially in the worlds of science and technology. And we made important progress in making American society a more open place for people and groups who were once excluded. In every field of American life, there are Boomers who have made and are making important, selfless contributions: in hospitals, in classrooms, in government, in business, in the military. You name it and we are there.

But at the level of public policy and moral leadership, as a generation we have largely failed. The Boomer Progressive Establishment in particular has been a huge disappointment to itself and to the country. The political class slumbered as the entitlement and pension crisis grew to ominous dimensions. Boomer financial leadership was selfish and shortsighted, by and large. Boomer CEOs accelerated the trend toward unlimited greed among corporate elites, and Boomer members of corporate boards sit by and let it happen. Boomer academics created a profoundly dysfunctional system that systemically shovels resources upward from students and adjuncts to overpaid administrators and professors who by and large have not, to say the least, done an outstanding job of transmitting the cultural heritage of the past to future generations. Boomer Hollywood execs created an amoral morass of sludge — and maybe I’m missing something, but nobody spends a lot of time talking about the towering cultural accomplishments of the world historical art geniuses of the Boomer years….

All of this was done by a generation that never lost its confidence that it was smarter, better educated and more idealistic than its Depression-surviving, World War-winning, segregation-ending, prosperity-building parents. We didn’t need their stinking faith, their stinking morals, or their pathetically conformist codes of moral behavior. We were better than that; after all, we grokked Jefferson Airplane, achieved nirvana on LSD and had a spiritual wealth and sensitivity that our boorish bourgeois forbears could not grasp. They might be doers, builders and achievers — but we Boomers grooved, man, we had sex in the park, we grew our hair long, and we listened to sexy musical lyrics about drugs that those pathetic old losers could not even understand.

What the Boomers as a generation missed (there were, of course and thankfully, many honorable individual exceptions) was the core set of values that every generation must discover to make a successful transition to real adulthood: maturity.

This is precisely the point that I have been making, if in a more contemptuous manner. The Boomers, by and large, continue to exhibit less maturity than their children, and in some cases, their grandchildren. It is not at all uncommon for Generation X children to have far more in their savings accounts and retirement plans than their irresponsible parents, who blithely assume that someone else will always continue to pay for their sheer wonderfulness.

Even their claimed accomplishments are suspect. What the author describes as “important progress in making American society a more open place for people and groups who were once excluded” could be more accurately described as destroying societal cohesion and creating the fault lines upon which society will eventually fragment. Especially if “groups who were once excluded” is intended to include “foreigners who live in foreign countries.”

“What begins in arrogance often ends in shame; there are some ominous signs that the Boomers are headed down that path. Sooner or later, the kids were going to note what a mess we have made of so many things, and now, it seems, the backlash has begun.”

The generational backlash hasn’t begun yet. And it won’t get into full swing, or have any material consequences, until more Boomers retire and the cost of maintaining them breaks the federal budget. But one thing that is already mathematically certain is that Generation X, the Millenials, and the Hispanic immigrants will not pay to support the Baby Boomers in old age. Because they cannot. The Boomers ate too much of the societal seed corn instead of sowing it.

Mailvox: the search for science-based faith

I’m not sure AD can find what he is looking for, mostly because I don’t believe it exists or even can exist:

Thank you for your blog. I started reading it through WND then over the last several months have learned a lot about being a beta. I was raised in Christian churches and accepted Christ at an early age but looking back I was playing church. After [many] years of a rocky marriage my wife filed for divorce. We hadn’t attended church in about 14 years and I decided to go to a local congregation.

For the first time I’m actually going because I want to learn about having a better Christian walk. The trouble I’m having is I want to know what I’m talking about when I talk to someone, (e.g., ex-wife) about Christ and the Bible. I am no Bible scholar and I only have basic answers to her talking about discrepancies in the gospels and the story of a virgin birth savior being included in other religions.

I believe God’s word should stand up to legitimate scientific scrutiny but I can’t say, “well, it is a fact that this or that original text confirms what the modern Bible translations say.” I really want to know what I’m talking about.

Are you able to direct me to sources so I can start to really know I’m basing my faith on a sound foundation? Maybe I’m not showing faith by asking this question but I think I need to know for me.

This is somewhat outside my area of knowledge, as common misconceptions about TIA to the contrary, I don’t get into apologetics, particularly science-flavored ones. So, it might behoove me to step back and allow the scientists here, particularly Stickwick and the other physicists, to provide any recommended reading. I’ve never paid much attention to the present state of the scientific consensus or considered it to be any sort of truth metric because I am old enough to recall it having been the precise opposite of what it is today in many different areas. No one who recalls the butter-margarine consensuses, the global ice age-global warming consensuses, the steady state-Big Bang consensuses, or the low fat-low carbs consensuses is likely to be overly concerned about what scientists happen to be asserting is absolute truth today. Give them a few years and there is a reasonable chance they’ll be saying something very different, if not the exact opposite. Never forget that scientists do not study history and very few of them even know anything about the history of science.

That being said, Patrick Glynn’s God: The Evidence: The Reconciliation of Faith and Reason in a Postsecular World, wouldn’t be a bad start. It’s nothing I would consider conclusive, but it will disabuse you of the notion that you cannot balance your faith in science with your faith in God.

But a word of warning. It is not so much indicative of a lack of faith to seek a sound scientific foundation for one’s religious faith as it is evidence of flawed reason. As I have demonstrated on numerous occasions in the past, science is not a reliable basis for one’s faith in anything, religious or otherwise, due to its dynamic nature and its intrinsic reliance on human honesty. It is engineering that is truly reliable by virtue of its much more stringent system of material verification of truth claims; only when science has been transformed into engineering can it be considered more or less reliable, and even then, it can be less than perfectly accurate.

Note that at the moment, after decades of “scientific certainty”, science is attempting to ascertain if supra-luminal speeds are possible. The idea science is capable of being used as any position at all on the supernatural beyond the purely philosophical not only defies reason, but history and scientific history as well.

And if religion got things as reliably wrong as science does, no one would believe in it. When science fetishists complain that religion claims absolute truth, they are projecting. It is religion’s room for and acceptance of doubt that accounts for its persistence; it is science’s false pretensions to being the final word on truth that explain why the world has become increasingly skeptical of science and scientists.

Theft by bureaucrat

Keep this in mind the next time a bond issue comes up for a vote:

Cities and states across the country are using money designated for specific purposes—such as fixing roads or sewers—in order to fill financial holes elsewhere, according to public officials and records. The moves are exposing municipalities to controversy, as federal regulators and local auditors are more heavily scrutinizing their finances to protect bond buyers and taxpayers.

This isn’t exactly new. When voters pass a school bond, they usually do so under the impression that the school will hire more teachers or buy computers. But, as has increasingly been the case over the last three decades, the school districts are hiring employees with no teaching function, to such an extent that half of all public school employees now are not teachers.

The corruption in America is both endemic and structural. This was probably the most shocking thing I realized after moving to Europe, where the corruption is more readily recognized and apparent. It wasn’t that there was more corruption, but that it was only a different form of it.

The amusing thing is the notion, popular among bureaucrats, that it isn’t stealing if you put it back after you get caught. “The city is cooperating fully with the investigation,” said Ivan Harris, an attorney at Morgan Lewis & Bockius LLP who is representing Miami in the SEC matter. He said the city “stands by the accounting for the transfers” because some of the funds had been unused for their designated purposes and other funds were replaced.

I’m surprised more bank robbers don’t give that excuse a whirl.