In The News Today

Posted at 5:29 PM (CST) by & filed under In The News.

My Dear Friends,

This ruling would impact your retirement accounts in case of a bankruptcy of your custodian or the custodian’s clearinghouse.

There is a way and means of protecting against this, discussed here multiple times.

Sentinel ruling may hurt MF Global clients
By Tom Polansek and Ann Saphir
Thu Aug 9, 2012 8:18pm EDT

(Reuters) – A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel’s bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers’ funds in dedicated accounts to protect them from being used for anything other than client business.

However, Thursday’s ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.

"I don’t think that’s what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.

"It does not bode well for the protection of customer funds."

Worse, Grede said, is that the ruling suggests that a brokerage that allows customer money to be mixed with its own is not necessarily committing fraud.

That may raise the bar for proving that MF Global Holdings Ltd, under then-CEO Jon Corzine, misused customer funds as it scrambled to meet margin calls to back bets on European debt in the brokerage’s final days. A $1.6 billion customer shortfall remains.

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I believe it’s going a lot higher. It’s going to have a parabolic spike, caused by some event or some loss of confidence. A US dollar crisis would be a perfect example. That will cause gold to go through the roof, and then everybody will want to own it. I don’t think we’re even close to that yet. Gold will probably have a much greater run than some of the other hard assets because it’s also a currency.
— Frank Giustra, mining industry entrepreneur

Jim Sinclair’s Commentary

We will pay the Piper. There is no other alternative.

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Jim Sinclair’s Commentary

When thinking about a Gold Standard please keep in mind that gold can guarantee a balanced system for decades, but cannot fix the system.

Gold is the "Day After" long term guarantee of a fix.

The National Debt: $16 Trillion Dollars Of Moral, Cultural And Political Decay
Bill Flax, Contributor

Wow! We’ll soon cross Sixteen Trillion Dollars in Federal Debt! S-i-x-t-e-e-n T-r-i-l-l-i-o-n D-o-l-l-a-r-s. That’s a lot of vote buying even for Washington. Is this ruin? Have we indentured our children into servitude? Solomon warned borrowers will be slaves to their lenders. Add $120 plus trillion in unfunded forthcoming liabilities and, well, we’re doomed.

Yet, as significant as this looks, and sixteen trillion of anything cannot be insignificant, the economic repercussions are the least of America’s worries. We still finance this cheaply. Rates on Treasuries remain low. Moreover, America endures as the world’s preeminent economic engine.

Obviously, debt weighs heavily on markets, especially the spending which spurred annual deficits exceeding $1 trillion. Government intervention smothers more gainful private pursuits. As Washington nonchalantly politicizes capital the economy suffers. Private actors would invest far better than politicians bribing the electorate.

As resources filter through the state’s machinations, liberty and prosperity are sacrificed to political ends. Massive debt is economically bad, really bad, and perhaps even hopeless; but much, much worse is what this reveals about America’s moral, cultural and political decay.

Our present debt debacle frequents comparison to World War II. We borrowed then to save Western Civilization. That war would end in triumph. Today, we spend subsidizing civilization’s demise with no victory evident and no end apparent. These debts and the moral morass they sponsor will worsen. Acceleration is baked in as baby boomers only begin to retire and taxpayer supported illegitimacy spawns multi-generational dependency.

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Jim Sinclair’s Commentary

Not according to MSM, MOPE or our most esteemed leaders. In fact the depth of coverage would suggest it never even happened.

Bombshell: Feds slam BP in key court filing, admit pollution from 2010 spill continues to ravage Gulf

In a bombshell federal court filing, U.S. government lawyers are slamming British Petroleum for making false and misleading statements that seek to both dodge blame for 2010′s Deepwater Horizon catastrophe and ignore the ongoing environmental devastation, from diseased dolphins to destroyed wetlands.

The papers filed late last week by the U.S. Justice Department’s top environmental lawyers and New Orleans U.S. Attorney Jim Letten charge that BP’s effort to show the fairness of a proposed $7.8 billion settlement with thousands of Gulf Coast residents and businesses harmed by the spill is instead larded with falsehoods.

The federal government’s 37-page objection to BP’s legal claims blast the oil giant’s “culture of corporate recklessness” that led to the Deepwater Horizon disaster and argue that BP wants the court to overlook deceased dolphins in Louisiana’s Barataria Bay and dying deep-sea corrals that are sickening fish in Gulf of Mexico.

And the feds are not alone in accusing BP of going over the line in trying to justify the pending $8.7 billion settlement. In a separate filing, Alabama Attorney General Luther Strange also accuses the oil company of misrepresentation and argues that BP committed “willful misconduct” by attempting a risky “top kill” method to stop the 2010 spill, when it knew that method would fail.

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Jim Sinclair’s Commentary

In the final analysis all that is required will be provided, as in QE to infinity.

Spanish, Italian yields fall on Draghi bond comments.
ECB President Mario Draghi yesterday indicated that the bank would be open to buying government bonds with a maturity of 2-3 years, telling the European Parliament that doing so wouldn’t contravene EU treaties. The remarks add further confirmation that the ECB is set to act, sending Spanish and Italian bond yields sharply lower today. Meanwhile, Bundesbank chief Jens Weidmann is reportedly totally isolated in the ECB in his opposition to the bond purchases