PFG Is Now MFG(lobal) Part 2 As $220 Million In Segregated Client Money Has Just Vaporized

UPDATE 2: Have no fear though since as recently as January 2012, the CFTC did not find any "material breaches of customer funds protection requirements" at FCMs (firms like PFGBest)

UPDATE: Account-holders may not be so surprised to find who is the custodian for the PFGBest FX accounts: none other than huge MFGlobal fans, JPMorgan!

Remember when the entire segregated account fiasco was supposedly fixed in the aftermath of the November 2011 MF Global bankruptcy, and where regulators: the CFTC, the SEC, the CME, and anyone you asked, swore up and down this would never happen again? Turns out that 7 months later, the spirit of MFG has struck again, only this time with one letter switched: it is now known as PFG, as we suggested first 3 hours ago when we broke the story.  From the just filed affidavit by Lauren Brinati who is working with the National Futures Association, which in turn has just filed notice prohibiting PFGBest from operating further, and freezing all of its accounts: "On July 9, 2012, NFA made inquiry with US Bank and learned that rather than the $225 million that PFG had reported as being on deposit at US Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank."  Translation: another $220 million segregated account pillage, in the vein of none other than Jon Corzine and MF Global.
The money has now officially vaporized.

BREAKING NEWS… PFG is the Next MF Global: Put into Liquidation-Only Status: $220 Million In Segregated Client Money Has Vaporized

 [Ed. Note: If you don't HOLD it, you don't own it. Read the UPDATE below, here's a snippet: "On July 9, 2012, NFA made inquiry with U.S. Bank and learned that rather than the $225 million that PFG had reported as being on deposit at U.S. Bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank."]

by Michael Greenberg, Forex Magnates:

Another MF Global incident may be looming in the horizon. PFG Best just released this dramatic statement to its clients:
“Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts. PFGBEST is wholly owned by Mr. Wasendorf. Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM. What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds. We will update you as any new procedures are stipulated and with any further information as it becomes available.”
Apparently NFA and CFTC just walked into PFG’s offices and shut the broker down. According to our sources its Founder Russell Wasendorf attempted a suicide last night and some money may be missing from PFG’s accounts. We’ll continue updating once new information flows in.
Read More @ ForexMagnates.com
UPDATE: NFA publishes MRA action against PFG – over $200 million may be missing
Following up on the earlier story of NFA putting PFG in liquidation mode only NFA just released a little bit more information in its MRA action again Peregrine Asset Management Inc and Peregrine Financial Group Inc:
NOTICE OF MEMBER RESPONSIBILITY ACTION:
On July 9, 2012, NFA’s Executive Committee issued a Member Responsibility Action (MRA) against Peregrine Financial Group, Inc. (PFG) and Peregrine Asset Management, Inc. (PAM), whereby: Read More here.

Futures Brokerage PFG Best Freezes Accounts Following Discovery Of Accounting Irregularity

Update 2: Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon.

Update: PFGBest had $400MM in customer segregated funds at the end of April. Is JPMorgan about to "discover" another $400 million in Q2 "profits"?

Just out from futures broker PFG Best to clients, where the owner's suicide attempt apparently has led to a whole new MF Global spin off.

Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts.  PFGBEST is wholly owned by Mr. Wasendorf.  Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM.  What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds.  We will update you as any new procedures are stipulated and with any further information as it becomes available.

... And just as the public trust was storming back into the capital markets.
 

The Death of Price Signals and the Birth of a Faith-Based Financial System

from CapitalAccount:

Bank of England Governor Paul Tucker faced UK lawmakers over the Barclays LIBOR scandal today. He said that the memo documenting his 2008 phone call to Barclays’ CEO about the manipulation of Libor was misunderstood. Meanwhile, rumors circulate that the Barclays board may be trying to separate bank’s investment-banking business. The Sunday Times reported the story, but it has been refuted in other press reports, too. Simon Mikhailovich, Co-Managing Member, Eidesis Capital, talks to us about the role derivatives play in the LIBOR scandal and in enabling bad decisions at systemically dangerous banks.

Meanwhile, Spanish yields rose above 7% today, a critical level deemed unsustainable. As eurozone finance ministers meet again, investors continue to display skepticism that the EU can solve this crisis. Is this because the financial system today is a “faith-based initiative”? Simon Mikhailovich will explain what happens once faith is lost.
And, if you think of the ‘too big to fail’ banks as a cartel, you may be interested to hear about the actual criminal drug-trafficking cartel Bank of America has gotten mixed up with, as alleged by the FBI.
Our guest, investor Simon Mikhailovich lays out how his view of why derivatives have been “disruptive technologies”, fertilizing leverage and risk in the financial system and a web among banks that can’t be undone without immense pain. We discuss these disruptive technologies and their role in allowing the expansion of too much debt that can never be repaid, which could come to roost now in the EU sovereign debt crisis. Mikhailovich breaks down how credit default swaps have been used by banks to hide risk and expand leverage in a way that makes bailouts needed to keep it going (b/c if one bank goes down they can all go down due to counterparty risk). We talk about the lack of reserves and the risk present even in “risk free” money market funds (a $2.5 trillion industry in the US). Our guest breaks down the ways in which he believes the financial system is now a rigged game based on too much debt with manipulated price signals, the Barclays LIBOR scandal being the latest evidence. He discusses the financial system as a “faith-based initiative,” which works as long as people believe in it but as soon as they don’t, is pandemonium. He lays out his thesis for investing in assets outside of the financial system, physical gold being the main one.

The Daily Show Correspondents Explain The Economy

Just over a month ago, the intrepid correspondents from The Daily Show set out on a mission to educate the US public on what exactly 'The Economy' is all about. In their inimitable style they chose five topics to summarise such a broad subject: Banks; Wall Street; Recessions & Depressions; Trickle-Down Economics; and Economists. The challenge as always is to guess where the satire ends and the truth begins as so much of the following five clips is scarily close to the truth.

Excerpt From MP John Mann and Bob Diamond's Testimony

US Futures Brokerage Accounts Frozen - Hundreds of Millions In Customer Money Missing

 

Spain's 10 year yield rises to 7.08%/Spain gets budgetary deficit extension/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 hours ago

Good evening Ladies and Gentlemen: Before starting, here is a quote from Grant Williams of Hmmmm: "If the long-stated claims about government-sanctioned, bank-led manipulation of precious metals markets put forward so eloquently by the likes of Ted Butler, Bill Murphy & Chris Powell at GATA as well as Messrs. Sprott, Sinclair, Davies et al are eventually proven to have any validity whatsoever

Gold Daily and Silver Weekly Charts.

 

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SP 500 and NDX Futures Daily Charts

 

On Gold As A Hyperinflation Put

Gold has had an amazing recent run. From December 1999 to March 2012 the U.S. dollar price of gold rose more than 15.4% per annum, the U.S. Consumer Price Index increased by 2.5% per annum, while U.S. stock and bond markets registered annual gains of 1.5% and 6.4%, respectively. It is not surprising then that there is so much disagreement about gold’s future and it is this "Golden Dilemma" that a new paper by Erb and Harvey focuses on, analyzing at least six somewhat different arguments that have been advanced for owning gold: gold provides an inflation hedge; gold serves as a currency hedge; gold is an attractive alternative to assets with low real returns; gold a safe haven in times of stress; gold should be held because we are returning to a de facto world gold standard; and gold is “underowned”. The debate over the prospects for gold resembles in some sense the parable of the six blind men and the elephant. Different perspectives, different models, lead to different insights. Depending upon which rationale, or combination of rationales, one embraces, gold is either very expensive or attractive. However, one important conclusion is that their analysis shows that the price of gold is very sensitive to even a remote possibility of another Weimar Republic-like inflation episode. So while there is disagreement over gold as an inflation-hedge, it is critically a levered option on hyperinflation as even extraordinarily small probabilities of 'extreme' inflation will have a large impact on the possible future price of gold.

Silver Mine Nationalization Kicks Into High Gear…What Next?

by Bix Weir, Road to Roota:
Like others involved with the Good Guys, Bolivia has been holding back on the nationalization of their mines until the TIME was right. Which is now! Investors in South American Silver Corporation should have read their Road to Roota for the past 3 years! Bolivia is in the process in pulling the plug…
Morales announced that he will nationalize major silver deposits
This is a very big deal for many reasons. First, it will take away from the available physical supply. Second, it will scare silver investors away from owning shares and toward owning more physical silver. And most importantly, as nationalization begins sweeping the poverty stricken nations the BAD GUYS will be called to the table to prove that their COMEX shorts are legitimate hedges on mining production. Just more reasons the position limit rules will help our cause…NO MORE MASSIVE NAKED SHORTING! Jeffrey Christian’s justification for silver derivatives has just hit a brick wall. Think Barrick and their Pascua-Lama 200M oz hedge with Silver Wheaton in Chile & Argentina (I don’t trust the SLW business model at all…you shouldn’t either.)
There are rips and tears in the fabric that holds the Bad Guy’s monetary system together. When you add them all up you can easily see that their time of controlling our lives is almost over.
Will we be smart enough to choose the Right Road to travel forward on when this is all over?
I hope so.

Dismal Equity Volume Day As Gold And Treasuries Surge

UPDATE: AA beats (headlines - at first glance) though Adjusted EBITDA is half Q2 2011's) and is holding modest gains after-hours - though well of initial knee-jerk reaction highs. And AMD (-7% after-hours) just pre-announced cutting revenue from sequentially +3% to -11%!!
Despite the ubiquitous late-day surge to day-session highs in S&P 500 e-mini futures (ES), equities ended the day marginally lower - rejecting the late-Friday surge unreality (as VIX also snapped back up and went sideways at pre-Friday-surge levels all day). The narrowest range in two months for the day-session in stocks (with major financials underperforming and only the Healthcare sector green on the day) was the antithesis of the strength in Treasuries with 5Y at record-low yields and 10Y testing back to 1.50%. Gold also led the day - notably outperforming both the USD-implied weakness and stocks - though the two now-QE-sensitive assets converged into the close - leaving Treasuries in the dust. ES drifted lower all night through the European session and converged with broad risk asset's far less sanguine levels from Friday into the US day-session. CONTEXT and ES tracked each other very well all day long until the last 30 minutes or so when stocks pushed 4-5pts rich. Credit modestly outperformed equities on the day but this was more catch-up from Friday than a new leg up as markets were dismally quiet in both stocks and bonds today - much quieter than Thursday and Friday of last week with ES (day) closing below its 50DMA (despite the late-day grind). EURUSD roundtripped from opening strength to weakness and back to modest strength leaving USD -0.2% (and only AUD weaker against the USD on the day).

Billions in Precious Metal Treasure Lie in Landfill Trash

by Brittany Stepniak Wealth Wire:
We often hear tales of people stumbling upon treasure in some random, isolate locations, but this story involves billions worth of treasure lying somewhere truly obscure: underneath thick, mile-high piles of human waste.
According to experts with the first-ever Global e-Sustainability Initiative (GeSI), there are loads of buried treasure sitting idle in landfills across the United States.
And we’re not just talking about miscellaneous treasure, we’re talking about gold, silver, platinum, and palladium. Amidst the mountains of waste, experts say that the precious metal deposits in landfills are often 40-50 times richer than ores being mined underground.
Aside from the environmental threats these landfills have created, there are some advantageous qualities about them. Consumers and businesses alike could hone in on some of the interesting opportunities unfolding here…
Read More @ WealthWire.com

Egan-Jones Downgrades Netherlands And Austria To A, Negative Watch

Netherlands, that one of four remaining AAA-rated Eurozone countries (by the big 3 rating agencies at least), was just downgraded by Egan Jones. And for good measure, EJ also cut Austria, both to A, outlook negative.

Earnings Season Preview: +9.7% 2012 EPS Growth Still Too High

By now, it seems clear that the US earnings season will be softer than was forecast a couple of months ago. In fact, there was more negative guidance during the second quarter than any time in this cycle and Morgan Stanley, like us, believes these soft results and weaker guidance are not fully discounted into a QE-hungry market. Lower oil, a stronger dollar (e.g. a one-standard deviation appreciation in the US Dollar against a basket of currencies decreases expected S&P 500 earnings by 2.6%), lower 10-year yields and a preponderance of evidence of lighter growth from economically sensitive companies are reasons for a lower view of Q2 EPS than we previously expected as UBS notes the 'official' US Q2 reporting season kicks off in earnest today with Alcoa followed by over 3,000 global companies reporting in the next two months. At the sector and stock level UBS sees particular risk around some of the higher rated areas such as consumer staples and consumer discretionary, where relative multiples are high and expectations are demanding and while they see consensus estimates for 2012 global EPS growth have been falling - at 9.7%, they remain too high given the Eurozone crisis / policy response; deteriorating global macro data; and the corporate profit cycle - and in that order of importance.

Ned Naylor-Leyland on CNBC: Gold Manipulated Like LIBOR

from Silver Doctors:
Cheviot’s Ned Naylor-Leyland, who recently sat down with The Doc and advised SD readers that Bob Pisani’s ‘GLD’ gold bar is actually owned (and registered on the bar list) by ETFS was back on CNBC Europe today, with Naylor-Leyland SHOCKING his CNBC hosts by stating ‘gold may have been manipulated like LIBOR.‘
Naylor-Leyland advised CNBC that gold manipulation serves dual purposes:
‘It is effectively an intervention in two ways; one would be the fact that for central banks, gold and silver going up doesn’t make their currency look any good and secondly a number of the big commercial banks have very large short positions which they like to manage and make easy money from.‘
Full MUST WATCH interview below:



Read More @ SilverDoctors.com

NWO WATCH: Fortune Magazine Portends The “Death of Cash” As Congress Prepares For Cashless Society

from Silver Vigilante:
In an article today called “Tech giants-and startups like Square – want you to use your phone to pay for everything from gum to train rides. Here’s how they plan to achieve cash-free nirvana,” Fortune and CNN Money graced the internet with a clear picture of a cashless future for society.
The article innocently begins with a description of the Chai drinking, bicycle riding culture of the hipster. The setting, New York’s Cafe Grumpy, is one example of our cashless future. Sitting on a sidestreet tucked away, the author of the article recounts his order:

“Charge it to Miguel,” I told the barista after ordering a cappuccino, and charge it he did — to my phone. Not that I ever pulled my iPhone from my pocket. Seconds after the barista tapped my order on Grumpy’s minimalist register — an iPad mounted on a stylish countertop stand — my phone vibrated in my coat pocket, signaling that our transaction was complete. I couldn’t wait to check that everything had worked as promised. (It had.) For the first time ever I was tickled by the act of paying for something.

It is predominately in coffee shops like this one that one can pay for an espresso or pastry with a mobile phone app. The particular wallet app used by the author is called Square, and was developed by Jack Dorsey, Twitter’s co-founder. This small coffee shop in New York is not the only place where one can use a phone to pay. Banner brands like Starbucks, Macy’s and Home Depot all offer the smartphone payments, and, as the article makes clear, many more small-to-medium businesses and tnc’s are forging ahead with the idea and technology.
Read More @ Silver Vigilante

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