The Denials Begin: Interactive Brokers Is First To Claim It Has Not Engaged In Commingling Rehypothecation

Now that the rehypothecation bogeyman has been let loose, and the question of just how many paper (and apparently physical) assets have been double, triple, and n-counted (where n can be a number up to "infinity") by the infinitely daisy-chained modern global financial system in which one's liability is someone else's asset....apparently up to infinity times, the next logical step was for the firms named in the original Reuters article to step up and begin denials they had anything to do with anything. Sure enough, below is the first (of many) such response, by Interactive Brokers, claiming it has been greatly misunderstood and unlike MF Global, it has done nothing wrong at all. Of note is that IB was simply one of many brokers mentioned in the Reuters piece, where we read that "Engaging in hyper-hypothecation have been Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion),Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JP Morgan($546.2 billion) and Morgan Stanley ($410 billion)."  Sure enough, we predicted a firm would have to promptly step up and "deny all charges." To wit: "Oh Jefferies, Jefferies, Jefferies. Barely did you manage to escape the gauntlet of accusation of untenable gross (if not net) sovereign exposure, that you will soon, potentially as early as tomorrow, have to defend your zany rehypothecation practices." As it turns out Jefferies, and all the other mentioned banks tried to avoid this festering can of worms by completely ignoring the topic... until Interactive Brokers' response now demands that every single named bank has to do the same and come out with an outright explanation of why it has billions in hyper-hypothecation, or else not journalists and bloggers, but the market itself will suddenly start asking questions. Something tells us it will not be nearly as easy enough for the others to deny all charges...Incidentally, if this indeed becomes "the next big thing", what the potential collapse of (re) hypothection means is that PBs will be unable to lend out shares anymore, in effect collapsing stock shorting as there is one giant short stock recall/forced buy in. Ironicaly the unwind of the biggest market fraud could result in the entire market pulling one last "Volkswagen"style hurrah, before all hell breaks loose.

Rumor Of Swedbank Failure Results In Second Latvian Bank Run In One Month

Two weeks ago we presented pictures of a bank run in Latvia after one local bank had been found to do just what MF Global is alleged of doing - gross cominningling. To wit: "If anyone is wondering why the collapse of MF Global after the discovery of its commingling and theft of client funds was the single worst thing that could happen to market confidence, then look no further than the small Baltic country of Latvia where precisely what Jon Corzine's firm did to its clients, has happened at the bank level. Businessweek reports: "Lithuanian prosecutors issued an arrest warrant for Vladimir Antonov and Raimondas Baranauskas who are former shareholders of Bankas Snoras AB. Both men are suspected of embezzlement and document forgery, the Prosecutor General said in a statement on its website today. Baranauskas is also suspected of accounting fraud and abuse of authority, it said." Kinda like Jon Corzine, if not by the actual authorities, then by everybody else....Depositors can withdraw 50 lati a day beginning today for the rest of the week, said Krumane at a pressconference." At today's rate this is about $95. Which is why what happened next, as shown in the pictures below, was to be completely expected, and is a perfect indicator of the collapse in liquidity and credibility of our own system where commingling, unlike in Latvia, goes unpunished." Sure enough, as nothing has changed, either in Latvia or the US, things just got worse. Following a rumor in Latvia that the large Swedish bank Swedbank is about to collapse, Latvia has just experienced its second bank run in under a month.

Is A Physical Silver Shortage Spike Imminent?

That imbalances in the supply and demand of precious metals, particularly silver, could lead to a shortage of physical product in the future should not come as a surprise to many - it is a topic covered extensively here in the past. Nonetheless, as a useful reminder of the big picture in the silver market, Future Money Trends has released another update video, reminding viewers that if traded purely on fundamentals, there is a high likelihood of increases in the price of silver, and other precious metals. As the authors put it, " There simply isn't enough physical silver to deal with the demand of a fiat currency crisis. As the paper silver market pushes prices down, all hell will break loose in the physical market." While that conclusion may or may not be applicable just yet, when coupled with recent revelations of potential double counting of precious metals at the warehouse level (see HSBC-MF Global story), the situation will certainly get only more exacerbated. Furthermore, should silver miners take Eric Sprott's advice to heart and decide to convert some or all of their product into physical, the market will suddenly recall that in addition to liquidity, prices are also determined by something called fundamentals. And fundamentals, especially in combination with a market risk spike, confirm a price jump may be imminent.

Silver Investors Will Make A Lot Of Money

Dave in Denver at The Golden Truth - 5 hours ago

I MF Global'd (i.e. embezzled) this video from http://www.zerohedge.com/this morning. For those who have not watched it yet, it is a great explanation of why there will be a massive move higher in silver at some point in the near future (don't ask me for a timeframe). We know the market for large deliveries of physical silver is getting very tight per the Sprott Asset comments that they have to wait several months for delivery when they buy a large amount of silver. It certainly calls into the question the reliability of the "reported" silver inventories on the Comex. Currently ... more » 

Drake University Straw Poll Results

from OSKYNews.org:

DES MOINES, Iowa – Dec. 11, 2011 – As campus buzzed with the activity of the ABC News Presidential Debate, 1,223 Drake University students participated in one of the largest student straw polls this election cycle. Students were asked to pick their favorite Republican candidate. Among the Republican contenders, Ron Paul won the poll with 35 percent of the vote. Paul was followed by Mitt Romney (25 percent) and Newt Gingrich (10 percent). Students were then asked who they would vote for in a head-to-head matchup between their preferred Republican contender and President Obama. Fifty-five percent of respondents chose the Republican candidate over Democrat Barack Obama.
Responses also indicated many Drake students are not strangers to presidential campaigns. A remarkable 44 percent said they had seen or met a presidential candidate within the last year.
Another notable statistic gathered from the poll was the nearly perfect distribution of party identification. Forty-one percent of students self-identified as Republican or leaning Republican, while 40 percent of students self-identified as Democrat or leaning Democrat. Sixteen percent of students self-identified as Independent, and 3 percent reported “Other.”
Read More @ OSKYNews.org

Harry Potter, Twilight, And The EU

Neither Harry Porter nor the Twilight series felt that one movie could bring proper closure, so both did the “final movie” in 2 parts. The EU has adopted that tradition and is already pushing the focus to the next Summit in March which really will be the grand finale. They also seem to have stolen from the Twilight series and only work in the middle of the night and have to hold press conferences before the sun comes up. They haven’t yet taken to calling us muggles, but they themselves certainly seem to believe in magic words like IMF while shorts live in fear of the “bazooka” with many names. With the Summit having reached a conclusion, we now wait on a few final scenes to play out. The plot started falling apart on Thursday with Draghi’s testimony, but by forming a circle, holding hands, and chanting IMF and G-20 over and over, the market was placated, at least for a day.

BREAKING: US Troops Deploying on Jordan-Syria Border

Bundesbank Rejects Europe’s IMF Funding Ruse

Germany’s Bundesbank has raised serious objections to EU summit plans to shore up Italy and Spain by channelling up to €200bn (£170bn) from central bank reserves through the International Monetary Fund (IMF).
by Ambrose Evans-Pritchard, Telegraph.co.uk:
Europe’s leaders agreed in Brussels to mobilise the reserves of the 17 national banks of the eurozone system to finance the IMF, hoping that this will then lever fresh money from China, Japan, and other global powers.
Andreas Dombret, a Bundesbank board member, said Germany’s central bank cannot take part in any form of covert funding for EMU states in trouble through the bank-door of the IMF, saying further money can be used only to support the normal operations of the Fund.
“The money cannot migrate into some sort of special pot that is used exclusively for Europe. That would be a clear breach of the prohibition of monetary financing of states. The German Bundesbank has explicitly ruled this out,” he told the Handelsblatt newspaper.
Mr Dombret said the Bundesbank’s share of any such IMF package would be €45bn and is “inherently risky”. It would require an indemnity of some kind from the German parliament. This in turn would breach the €211bn ceiling already set by the Bundestag on EU bail-outs.
Read More

  

"If you ever hear the words, I'm from the Government I'm here to help you...Run..." Ronald Reagan

With that in mind...

Update: News Channel 5 Confirms Door-To-Door Questioning Of Food Supplies In Tennessee While Canneries Downplay Initial Reports

by Mike Adams, NaturalNews.com:

Citizens in Tennessee are being asked by government workers to divulge details about their preparedness plans in a door-to-door “assessment” program reported by Janet Kim from local news channel 5 (http://www.newschannel5.com/story/1…). During this assessment, government workers ask residents 22 questions about their preparedness status. NaturalNews has confirmed through reliable sources that these include questions about emergency food supplies.
Fortunately, this effort is being done by a Tennessee group of state employees who are widely recognized throughout the preparedness community as being “good guys” who are truly just trying to help people get prepared. They are not interested in confiscation or anything of the kind, according to our sources. It’s a local community preparedness support effort.
On another front, three days ago Oath Keepers reported that their chapter president in Tennessee was told by a local cannery federal agents were demanding customer lists (http://www.naturalnews.com/034371_f…). This account quickly went viral across alternative news websites, and the news exploded across the ‘net.
Read More

Alasdair Macleod: “By End of 2012 Silver May Triple And Gold Should Be Priced Around $3800″

from Tekoa Da Silva’s Bull Market Thinking:

A few days ago I had the opportunity to speak with Alasdair Macleod, a proponent of sound money and Senior Fellow at the GoldMoney Foundation.
The interview was a fascinating discussion on the concept of money itself, different schools of economic thought, plus what may lie ahead for gold, silver, and the West.
A chief topic during the interview was Keynesian Economics and it’s deadly impact on society. Alasdair indicates that, “Keynesianism is a self-serving mechanism,” in which, “only governments, their cronies, and banks benefit. Outside of Ron Paul, you don’t have anyone with the foresight or the guts to take the Austrian view. If members of congress or parliament do find out about Austrian economics–they have to keep quiet about it because of the politics of the system itself.”
Read More (and Listen to the Interview) @ BullMarketThinking.com

BERNANKE’S OBFUSCATION CONTINUES: The Fed’s $29 Trillion Bail-out of Wall Street

[Ed. Note: Related.]
by L. Randall Wray, EconoMonitor.com:
Since the global financial crisis began in 2007, Chairman Bernanke has striven to save Wall Street’s biggest banks while concealing his actions from Congress by a thick veil of secrecy. It literally took an act of Congress plus a Freedom of Information Act lawsuit by Bloomberg to get him to finally release much of the information surrounding the Fed’s actions. Since that release, there have been several reports that tallied up the Fed’s largess. Most recently, Bloomberg provided an in-depth analysis of Fed lending to the biggest banks, reporting a sum of $7.77 trillion. On December 8, Bernanke struck back with a highly misleading and factually incorrect memo countering Bloomberg’s report. Bloomberg has—to my mind—completely vindicated its analysis; see here: http://www.bloomberg.com/news/2011-12-06/bloomberg-news-responds-to-bernanke-criticism.html.
Any fair-minded reader would conclude that Bernanke’s memo to Senators Johnson and Shelby and Representatives Bachus and Frank is misleading. One could even conclude that it is not just a veil of secrecy, but rather a fog of deceit that the Fed is trying to throw over Congress.
Read More @ EconoMonitor.com

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