by Mac Slavo
August 12, 2012
Former money manager Ann Barnhardt, who
in November of 2011 made the decision to cease operations of her brokerage
firm and return funds to her customers citing “systemic” problems within the
entire financial industry, has issued a new warning about the stability of
US banks and the safety of individual deposit accounts.
The warning, stemming from a recent federal appeals court ruling surrounding
customer funds lost during the 2007 collapse of Chicago futures broker
Sentinel, indicates that individuals who lose deposited funds because a
financial institution improperly manages that money, even if those funds are
supposed to be “segregated” from other operations of the firm, are
essentially left with no recourse if the firm goes belly-up.
According to the court, a misallocation of those
“is not, on its own, sufficient to rule as a
matter of law that Sentinel acted ‘with actual intent to hinder, delay,
or defraud’ its customers.”
The implications of the ruling, according to
Barnhardt, will affect the monies of all private individuals who have seen
their deposit accounts wiped out in the collapse of firms like John
Corzine’s MF Global and put all deposit account holders in the country at
risk should their bank be faced with a financial windstorm:
The NFA in collusion with the banksters,
government and judiciary have achieved their goal. The entire concept of
“customer segregated funds” is officially, completely, legally dead.
Guys, it is OVER. I know that many of you are still cowering in normalcy
bias, unable to deal with reality, unable to face the world as it is,
but you have GOT to snap out of it. The marketplace is DESTROYED. You
CANNOT be in these markets. All legal protections are now officially
The federal appeals court ruled yesterday that not only does BNYM stay
at the front of the line, but that using customer segregated funds as
collateral is NOT a crime, and that co-mingling customer segregated
funds with proprietary funds is NOT fraud.
What this means is that even if Jon Corzine is somehow dragged into
court by private citizens, because you know damn good and well that the
Justice Department will never, ever touch him, Corzine now has a legal
precedent, likely from a bribed or otherwise coerced Federal Appeals
Court, explicitly stating that an FCM can use customer deposits to pay
its debts, and that the customers themselves are subjugated and have
basically no legal right to their own monies, no matter what the law
says, or what legal assurances, claims or guarantees are made to that
customer about their funds held with an FCM or any other brokerage or
The “secured” party at the front of the line
will always be the mega-bank who made the fraudulent loan using the
stolen customer funds as collateral.
In other words, all customer funds in the United States are now the
legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank
is the counterparty on the loans the FCM or depository institution takes
out in order to fund its mega-levered proprietary in-house trading
Ann Barnhardt via
The ruling is specifically designed to protect
large financial institutions that have (purposefully) mismanaged customer
funds and used the hard-earned life savings of Americans to gamble on
equities, commodities and bond markets.
If those firms happen to make the wrong bet, as
MF Global, Sentinel and a handful of others have recently done, depositors
who have placed funds with the banks under the belief that their bank
account is securely protected from trading liabilities are now completely
exposed and liable for the incompetence and negligence of those who engage
in market trading.
This latest ruling combined with recent actions by
Federal Reserve and other government regulators suggests a
massive fraud has taken place and the financial system itself is under
extreme strain with the potential to make the financial collapse of
2007-2008 look like just a training exercise.
In recent days, for example, it’s come to light that the government has
secretly called on the country’s five major banks to
prepare themselves for collapse by creating
stress recovery plans to be used in the event of worst case scenarios.
A few weeks ago, the Federal Reserve also implemented a new policy for money
market funds held by financial institutions.
Per the new policy, money market funds, which
account for some $2.7 trillion in deposits across the United States,
can be frozen in the event of an
emergency or financial panic. This means that if and when the system
does go into a tailspin, at exactly the time people will want to pull their
money out of their bank account, they will be restricted from doing so.
These latest actions by government regulators, judges and financial
institutions point to one thing: that we have an unprecedented financial
collapse in the making. If such a financial crisis comes to pass it is clear
that the policies and procedures now in place will transfer the legally
owned deposits and money market savings of individual Americans into the
hands of the banks at which those funds are kept.
Get Your Money Out.
collapse-centric investment strategies and
what is money when the system as we know it falls