on December 14, 2011 by alchemystic in American Downbeat, Depression Cookbook, Rim Shot, keg party, Comments (2)

Was The “Collapse” Of MF Global Premeditated? A Conspiracy Theory

Submitted by Tyler Durden on 12/13/2011 20:31 -0500

www.zerohedge.org

Derivatives, unlike stocks where the equation has always been murky, are for the most part zero-sum products: one’s gain is someone else’s loss (net of commissions) unless of course the entire system collapses in a daisylinked chain reaction (think AIG). And MF Global’s bankruptcy, by dint of being a derivatives broker, and the resulting massive losses to both shareholders and clients, means that some entity, on the other side of all these failed bets, made off like a bandit. Which bring us to a rather disturbing theory proposed by Walter Burien of CAFR1.com who has floated the rather the chilling idea, and what some may call an outright conspiracy theory, that by scuttling MF, Corzine effectively helped some shell company (or companies) which were controlled by a “cabal” of his closest confidants (we will let readers come up with their own theories who the former CEO of Goldman Sachs may have been close with) to make the offsetting profit that resulted from the accelerated and massive losses borne by MF’s stakeholders in the vicious liquidation. As Burien says: “A government and media cover up would just focus on MFG’s loss. A true and open investigation would be focused on “who” took the other side of the coin; the profit.” And now that we know that Corzine allegedly lied to the Senate, just how much deeper does his transgression go, and did his really hand over the company on a silver platter to some anonymous “Hold Co” by taking on massive risks he knew were going to blow up in his face, albeit knowing the “other” side of the trade would compensate him for it? After all, Corzine’s legacy may have been forever tarnished, but if there was one thing the man knew after all those mostly successful years at Goldman, it was risk. So did he really blow up MF on a idiotic risk miscalculation bet within two years of joining, purely by mistake, or is there something more?

From CAFR1

“Collapse” of MF Global?

Corzine is a thief. He lost by trading activity the house’s (MF GLOBAL) money to the tune of a billion dollars and then dipped into the client’s money for 700 million dollars (almost a 2-billion dollar loss). It is the #1 criminal infraction that can be committed in the commodity futures market by using client’s funds for a house posistion and with something of this magnitude the CFTC would have gotten an arrest and seizure order against Corzine from day-one when discovered if it was for other than the politically connected Corzine.

Here is the BIG point that needs to be immediately passed on to the public. In a situation like this the “loss” to MFG is just one side of the coin. The other side of the coin is who made the profit that counter balances with the loss.

If Corzine had this set up as an intentional sting operation, in advance a shell trading company is established and for example purposes we will call it Hong Kong Trading Partners LTD. (HKTP) held in Singapore. The sting goes like this:

As Corzine through MFG takes a derivative futures market position HKTP takes the exact corresponding opposite position tit for tat to what MFG is entering into. The market goes against MFG creating a loss but now the equal profit is growing in HKTP.

MFG increases their position and HKTP likewise does the same and the market again goes “against” MFG and “for” HKTP.

Now for the play-out of the sting. It is announced MFG has taken this large position with their own funds and also did the primary no-no of using client’s funds to back it.

Well, procedure is clear in this type of situation: “Forced liquidation of all positions held by MFG”

What this does is give HKTP the liquidity to get out of their position from MFG’s forced liquidation without causing an adverse movement to HKTP’s position when being liquidated. MFG’s forced liquidation is HKTP’s volume needed to get out of their position and lock in their profit. Wealth transfer complete; MFG and a few of their clients decimated, and none outside of the sting are the wiser if no one carefully looks at who was playing the other side of the position against MFG.

If Corzine and a few of his buddies set up a sting as noted above, as far as they are concerned, they did not loose 1. something billion dollars for MFG and MFG’s clients, what they did was they transferred 1. something billion dollars to themselves through a shell global trading company(s).

In most cases when a sting like this plays out it is not just one shell company used to play the other side of the coin, usually it is spreed out between ten or more shell trading companies.

A government and media cover up would just focus on MFG’s loss. A true and open investigation would be focused on “who” took the other side of the coin; the profit.

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Tue, 12/13/2011 – 20:33 | 1976853

i thought Corzines trade in itself did NOT lose any money ????????????….if so, it has to be something else

Tue, 12/13/2011 – 20:47 | 1976919

I STILL can not get over the fact that Corzine is not a Jew. This story has Madoff/Boskey/Millken/Rothschild/Soros et tal Yiddishness written all over it.

Shocked I am that Corzine is (apparantly) a Gentile.

?Rock the Casbah

Tue, 12/13/2011 – 21:04 | 1976977

seriously? you read this post and this is the first thing that pops into your head?

Tue, 12/13/2011 – 20:34 | 1976857

Follow the money…all paths lead to the bank accounts of JP Morgan!

Tue, 12/13/2011 – 20:40 | 1976880

shady liquidity in the ES is down.. hmm imagine no bids http://hedge.ly/u4r7JU

Tue, 12/13/2011 – 20:50 | 1976930

…. and then into the Obama re-elect ops. likely they had some kind of gun to Corzine’s head.

Tue, 12/13/2011 – 21:03 | 1976971

According to the New York Times there’s 200 million of this money sitting in the London office. The only reason to keep it there is to determine exactly how it got there in the first place. If this was a sting and the 200 million is from Effen Global then this was a pretty bad one. Moreover the testimony of “i really have no idea” makes no sense either cuz “the government obviously knows” so the best approach would be to “spill the beans” and start “naming names”–preferably people who tried to stop it from happening in the first place. this obviously did not happen. the only name coming up so far is “Corzine, Corzine, Corzine.” And of course “Gensler, Gensler, Gensler.” I sense “Clinton, Clinton, Clinton” and “Emmanuel, Emmanuel, Emmanuel” as well–but who knows. Talk about a rolodex! That’s a friggin “who’s who”! The Democratic Party is beyond belief lucky that they have a President who has a moral sense and has “kept the Chicago loo
nies at bay.” I imagine something about reading those national security reports and seeing how “they” deal with threats to America…

?NOTW777

Tue, 12/13/2011 – 20:35 | 1976858

??http://scripturetext.com/lline.gif); background-repeat: no-repeat repeat;” width=”98%”>

For what s
hall it profit a man, if he shall gain the whole world, and lose his own soul?

?Lore

Tue, 12/13/2011 – 20:53 | 1976941

“For what shall it profit a man, if he shall gain the whole world, and lose his own soul?”

Short Souls.

?WonderDawg

Tue, 12/13/2011 – 20:58 | 1976953

Tue, 12/13/2011 – 20:35 | 1976859

the effects of peak oil can no longer be papered over

oil is the new fed funds rate – bumpy ride ahead

enjoy the kill off

Tue, 12/13/2011 – 20:36 | 1976865

Killing MF Global (& Lind-Waldock subsidiary) keeps small speculators out of the precious metal futures market.

& takes pressure off the fiat Ponzi.

Perhaps Corzine was pushed into it by shadowy power-brokers.

?Dr.Evil

Tue, 12/13/2011 – 20:37 | 1976866

No matter if it was intentional or not , Corzine should be the poster boy (hang em) for the OWS crowd!

Tue, 12/13/2011 – 20:44 | 1976899

no such luck..OWS sucks Obama/Biden dick…Corzine and Soros are their fellow travelers…FUCK OWS hypocrisy

?pragmatic hobo

Tue, 12/13/2011 – 20:38 | 1976868

didn’t the losses come from declining value of italian and other sovereign debts?

Tue, 12/13/2011 – 20:48 | 1976923

As I understand it the trade never went sour…it just got perceived to be riskier and it was margin calls that sunk MFG by eating cash faster than MFG could liqidate assets. By the time the white knight buyer was in the picture they’d already screwed the pooch by comingling customer funds…too late.

That repo to maturity may well be intact to this day. Owned by Soros at a nice discount…but intact

Sheer speculation of course

?Conax

Tue, 12/13/2011 – 20:43 | 1976872

Maestro- if you please..

http://www.youtube.com/watch?v=HWqKPWO5T4o

JPM

?hannah

Tue, 12/13/2011 – 20:39 | 1976879

,,,gee you think they stole the money…? we are the sheeple…!

?Catullus

Tue, 12/13/2011 – 20:40 | 1976882

?bwgnr007

Tue, 12/13/2011 – 20:41 | 1976887

Yes it was premeditated … all Roads lead to ROME…. just as Legatus

Tue, 12/13/2011 – 20:44 | 1976905

Is that a neighborhood in tel aviv?

Tue, 12/13/2011 – 20:43 | 1976897

?Dr. Gonzo

Tue, 12/13/2011 – 20:43 | 1976898

?Conax

Tue, 12/13/2011 – 20:49 | 1976915

Will Rogers once said he’d rather be the man that bought the Brooklyn Bridge than the man that sold it.

?jesse livermoore

Tue, 12/13/2011 – 20:45 | 1976907

gary gensler will get to the bottome of this…………..lol

?Alex Kintner

Tue, 12/13/2011 – 20:46 | 1976910

Corzine learned the lesson of Bernie Madoff. Steal the money *before* the final crash. Then play the Sgt Shultz defense at the hearings — “But Col Klink, I knoooow noooothing.”

Tue, 12/13/2011 – 20:46 | 1976911

I’ll take “something more” for $500 Billion Alex!

?PSEUDOLOGOI

Tue, 12/13/2011 – 20:46 | 1976912

Tyler,

this is for you: http://www.cnbc.com/id/45659547 there have been many posts on ZH that pretty much predicted this… Enjoy!

Oh, and I’m completely shocked, just SHOCKED that home sales were double counted and now must be revised down…

I wonder if property taxes gonna be revised down too? Hahahahaha

Tue, 12/13/2011 – 20:49 | 1976928

They won’t be…just like “short sells” or bankrupt auction properties don’t count when deriving average home price in your neighborhood.

Definition of a ponzi – 1 man enter 2 men leave…

Mad Max would be disgusted

Tue, 12/13/2011 – 20:47 | 1976913

Tue, 12/13/2011 – 20:48 | 1976924

TOWNES VAN ZANDT – THE COO COO
http://www.youtube.com/watch?v=gtW108oGyhY&feature=bf_prev&list=AVGxdCwV…
.
Townes Van Zandt – Mr Gold and Mr Mud (Live at the Old Quarter)

http://www.youtube.com/watch?v=WkkNtU8VmU0&feature=autoplay&list=AVGxdCw…

?Hansel

Tue, 12/13/2011 – 20:49 | 1976927

Who would possibly want to take the money of commodity speculators (e.g. gold bugs) and funnel it into Euro sovereign debt… other than every central bank in the world?

?Stanley Lord

Tue, 12/13/2011 – 20:59 | 1976955

This is the kind of article that makes ZH lose credibility.

Corzine might as well had a mask and a gun, he stole, but he is protected, and he will be pardoned.

The derivitives market is way bigger than the commodity market, there is no one trader on the other side.

Stop dreaming up scenarios and stating them as fact.

?eddiebe

Tue, 12/13/2011 – 20:59 | 1976956

Well sure, why not, but…. prove it.

Tue, 12/13/2011 – 20:59 | 1976958

It would be more shocking to find out there was no corruption.

The banksters make the rules, the banksters break the rules.

Tue, 12/13/2011 – 21:00 | 1976961

Lets see who is on the other side of the trade and their associates.

I suspect Corzine was just another really smart guy who thought he was smarter than he actually was.

Tue, 12/13/2011 – 21:00 | 1976962

Occam Razor. Corzine was a greedy SOB and he raided customer funds. Far easier explanation, and less steps than the conspiracy theory.

?topcallingtroll

Tue, 12/13/2011 – 21:03 | 1976974

Never assume conspiracy when simple incompetence and stupidity can explain it.

However all my previous successful conspiracies looked like accidental incompetence and stupidity, so if I figured out that looking stupid and incompetent makes intent hard to prove, then corzine probably knows that too.

?Flammonde

Tue, 12/13/2011 – 21:01 | 1976964

Journal For the Protection of All Beings, 1961) By Gregory Corso and Allen Ginsberg

Gregory Corso: What is your department?

William Burroughs: Kunst und Wissenschaft.

Gregory Corso: What say you about political conflicts?

William Burroughs: Political conflicts are merely surface manifestations. If conflicts arise you may be sure that certain powers intend to keep this conflict under operation since they hope to profit from the situation. To concern yourself with surface political conflicts is to make the mistake of the bull in the ring, you are charging the cloth. That is what politics is for, to teach you the cloth. Just as the bullfighter teaches the bull, teaches him to follow, obey the cloth.

Gregory Corso: Who manipulates the cloth?

William Burroughs: Death

Allen Ginsberg: What is death?

William Burroughs: A gimmick. It’s the time-birth-death gimmick. Can’t go on much longer, too many people are wising up.

Tue, 12/13/2011 – 21:01 | 1976967

Didn’t Soros end up with the Italian bonds?

Wouldn’t shock me. He is the shadiest MFER on this planet.

Tue, 12/13/2011 – 21:03 | 1976975

Oh come on, Corzine, a gazillionaire, would never risk putting himself in the position of going to jail. He fucked up. End of story.

Tue, 12/13/2011 – 21:04 | 1976976

Oh come on, Corzine, a gazillionaire, would never risk putting himself in the position of going to jail. He fucked up. End of story.

Tue, 12/13/2011 – 21:04 | 1976978

Of course it was a set-up; execpt I BELIEVE corzine didn’t know anything about it. He was set-up be his JP Morgan buddies the left him holding the bag.

Tags: AIG? ?American International Group? ?Commodity Futures Trading Commission? ?Futures market? ?Goldman Sachs? ?goldman sachs? ?Hong Kong? ?MF Global? ?None?

2 Comments

Elliptical review

December 17, 2011 @ 8:13 am

Strongly suggest adding a “google+” button for the blog!
Current Coupon Codes

December 17, 2011 @ 8:23 am

I love the blog of your blog. Obviously you have a very valid point, however I can’t get over how great the site design is.

Was The “Collapse” Of MF Global Premeditated? A Conspiracy Theory

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