Futures Brokerage PFG Best Freezes Accounts Following Discovery Of Accounting Irregularity

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

Update: PFGBest Plans 'Several Hundred' Layoffs, Spokeswoman Tells Dow Jones - Dow Jones. Sounds like a good idea in the face of liquidation

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.

 

South American Silver Plummets As Bolivia Announces It Will Nationalize One Of World's Largest Silver Deposits

Anyone long silver miner South American Silver Corp today is not happy, because while the precious metal responsible for the company top and bottom line has risen significantly, it is our old nationalizing friend, Bolivian President Evo Morales (who last year caused substantial moves higher in silver with threats to nationalize various silver mines in his resource rich if everything else poor country) who has stolen the spotlight, with his latest announcement that he is on his way to nationalize SAC.TO's Malku Khota property, which the company describes as "one of the world's largest undeveloped silver, indium and gallium deposits" and which El Pais adds "is considered one of the largest undeveloped silver deposits, with reserves estimated at 230 million ounces, and at least 2,000 tons of indium, gallium and gold as well." Of course, while this is good news for the actual precious metals as it means much more supply is coming offline, it is very bad for mining and extraction companies such as South American Silver, which stand to lose one after another property to a repeat of last year's wave of nationalization. Indeed, at last check SAC.TO was down 27% today alone and plunging.

Analysis: Euro zone fragmenting faster than EU can act

by Paul Taylor, Reuters:
Signs are growing that Europe’s economic and monetary union may be fragmenting faster than policymakers can repair it.
Euro zone leaders agreed in principle on June 29 to establish a joint banking supervisor for the 17-nation single currency area, based on the European Central Bank, although most of the crucial details remain to be worked out.
The proposal was a tentative first step towards a European banking union that could eventually feature a joint deposit guarantee and a bank resolution fund, to prevent bank runs or collapses sending shock waves around the continent.
The leaders agreed that the euro zone’s permanent bailout fund, the 500 billion euro ($620 billion) European Stability Mechanism, would be able to inject capital directly into banks on strict conditions once the joint supervisor is established.
But the rush to put first elements of such a system in place by next year may come too late.
Read More @ Reuters.com

Scranton Mayor: Minimum Wage For All Or Become Stockton

The infamous city of Scanton, PA has had financial troubles for a couple of decades - losing population since the end of WWII - but as NPR reported this weekend, the $16.8 million budget gap that Mayor Chris Doherty is trying to fill (and the disagreements between his taxation proposal and the city council's borrow-more-money view) has driven the mayor to an incredible action. Doherty has reduced everyone's pay - including his own - to the state's minimum wage of $7.25 per hour. In an ironic choice of words, the desperate mayor noted: "I'm trying to do the best I can with the limited amount of funds that I have," Doherty says, "I want the employees to get paid. Our people work hard — our police and fire — I just don't have enough money and I can't print it in the basement." NPR continues, After paying workers Friday, the city had only about $5,000 left in the bank. More money flowed into city accounts that day, but it was still not enough to pay the $1 million the city still owes to its nearly 400 employees. This is, of course, stressful on the union workers affected as one firefighter notes: "[The] kids aren't going to be able to do certain activities this summer — maybe we're not going to be able to go on vacation" (to Italy we wonder?) and "we want to make sure that [Obama and Biden] know there's a Democratic mayor that's not taking care of his public safety unions,"

Recent Rate Cuts Were A Mistake

Admin at Jim Rogers Blog - 1 hour ago

I don’t think either one of them should have cut by 25 basis points–neither the Chinese nor the Europeans. - *in Index Universe* *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.*

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).

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.

Revolving Consumer Credit Has Biggest Jump Since 2007, As Depository Institutions Turn On The Spigot

Two items of note in this month's consumer credit statement. First: after dipping the most in April ($3.5 billion) since April of last year, revolving consumer credit soared by $8 billion in May, the most since November 2007, and just shy of half of the $17.1 billion in total consumer credit increase, solidly beating expectations of an $8.5 billion increase. Whether this one time spike will hold is unknown. What is known is that the US government continued to fund student and car loans to the tune of $6.2 billion, or roughly in line with historical Federal Government funding. Which, however, brings us to the second note. In May something quite curious happened: as the second chart shows, while the Federal government continues to be the primary source of lending, the biggest source of loans in May was actually Depository Institutions, which added $17.5 billion in May, a number only matched by the surge in December lending amounting to $21.3 billion. Back then, however, all of this lending was to fund holiday purchases which would soon be returned (we all remember the epic surge in December retail sales, only for everything to be unwound and then some in January and February). Which then begs the question: just what did consumers splurge on in May? Because it better have been more than just gas.

Brent Crude Jumping As Norway Stops Pumping

The price of Brent crude oil has jumped rapidly back over $100 (above Friday's highs) on news of a complete shutdown of Norway's oil production after labor talks failed. Coupled with more hopes and dreams of the so-far ineffectual Chinese monetary policy easing, it seems that all the bullish lower-oil-prices-as-a-tax-cut arguments become entirely reflexive as every time we see oil prices drop on global growth questions, so the central bank puts provide just the ammo to remove that benefit as they BTFD in every correlated risk asset - and Oil seems the 'cheapest' of those in the last few weeks.

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Two-Thirds Of Voters Say Obama Has Kept His Promise Of "Change", Although 56% Find He Has Changed It For The Worse

Four months before Obama's reelection vote, the people have spoken, and agree that when it comes to Obama's first election promise of "Change", the president has kept his promise... with a twist. As The Hill reports, following a poll of 1000 likely voters on July 5, "Two-thirds of likely voters say President Obama has kept his 2008 campaign promise to change America — but it’s changed for the worse, according to a sizable majority. A new poll for The Hill found 56 percent of likely voters believe Obama’s first term has transformed the nation in a negative way, compared to 35 percent who believe the country has changed for the better under his leadership." So still more or less a toss up. However, one thing is certain. As we reported previously, when it comes to defending America from an alien invasion: "The two presidential candidates may be neck and neck in most (un)popularity polls, and according to some metaphorical sources are even the same person just with different Wall Street backers, but when it comes to the critical topic of resisting an alien invasion, Obama is far better prepared, according to two thirds of the population." And that is really all that matters.

Murder as State Policy

by Eric Margolis, Lew Rockwell.com:

The ghost of Palestinian leader Yasser Arafat is rising from his grave to haunt Israel and the Americans.
A devastating investigation by Qatar’s al-Jazeera has found mounting evidence that Arafat’s death in 2004 was caused by the poisonous radioactive substance Polonium 210. Arafat’s widow, Suha, is now calling for his body to be exhumed and sent to the Swiss scientific institute in Lausanne that recently discovered traces of Polonium in Arafat’s clothing and personal effects.
She foolishly failed to have her husband’s body autopsied after his mysterious death. The French military hospital at Percy that treated the dying Arafat has never released an adequate report on the real cause of his death.
Read More @ LewRockwell.com

Putin: West exports ‘airstrike democracy’ to cling to Arab influence

from RussiaToday:

Russian President Vladimir Putin has criticized the West for clinging to its influence in the Arab world under the guise of “humanitarian operations.” He dubbed western involvement in Arab affairs as nothing more than a “rocket and bomb democracy.” At a meeting with top Russian diplomats Putin said that certain countries will do anything to retain the influence they have become accustomed to in the Arab world. He stressed that western nations often adopt a one-sided policy in Arab affairs that violates international law.

What can he possibly say??

by Bill Holter, MilesFranklin.com:
Paul Tucker, Deputy Governor of the BOE will take the stand in Britain’s Parliament shortly, but really, what can he possibly say? It is a documented fact (phone logs and newly released e-mails) that he spoke to Barclays’ Bob Diamond. Can he say “I don’t remember”? Or maybe “we talked about the weather”? I’m pretty sure that he can’t. He is in line to become “governor” of the BOE or the equivalent of our Ben Bernanke so why doesn’t he tell the truth and say “we were trying to adjust interest rates”. It is what central banks and central bankers do isn’t it. I mean think about it, is it so shocking that a central banker would try to “influence rates”?
This is the problem as I see it from a “logic” standpoint. Here in America and also in London, the buzzword has always been “we are the most transparent and free markets in the world”. We know now and are learning more on a daily basis that this is not true, in fact, for the last 5++ years investors have been “hoping” that we are not free markets at all. Investors want “juice”, they want “free money” to flow freely so that speculation can again run wild and bail out the multitude of underwater positions. But, then you have the flip side, the “public persona” side, central banks can’t be seen as “rigging” the markets”.
Read more @ MilesFranklin.com

DNSChanger is False Flag Excuse for FBI to Shut Out Internet Users

by Susanne Posel, Activist Post
Today The Federal Bureau of Investigations (FBI) will pull the plug on the Domain Name System (DNS) because of DNS Changer malware that has been used as a safety net for servers infected by a virus that redirects users to a bogus DNS server.
On July 9th, Internet users will be able to access the Internet if your computer is not infected.
The FBI wants everyone to check their computer by going to the website for the DNSChanger Working Group. When you visit this site, if your computer is “ok”, you will see a “green square”.
When you go to this website to have your computer checked for DNSChanger, you are essentially giving the FBI the ok to allow your ISP and computer to be surveilled.
Read More @ Activist Post

Silver, Gold and the Coming Deflation

from Wealth Wire:
Historically gold has made its significant gains, relative to other assets (as well as nominally), not during inflation, but during deflation (Note: I am using the terms inflation and deflation very loosely in this case). These significant gold rallies historically occur when value flees instruments such as stocks and certain commodities.
Since the 1920s there have been three major gold rallies (1930s, 1970s and the current rally).
All three major gold rallies came after a significant top in the Dow and the Dow/Gold ratio (1929, 1966 and 1999). A great portion of the 1930s and 1970s rallies occurred when the Dow was falling significantly. In fact, the biggest rise in the gold price occurred when the Dow was falling or was trading closer to the bottom of its trading range during that period.
The current gold rally (since 2001) has mostly been during the time when the Dow has also been rising, with the exception of a short period in both 2002 and the end of 2008 to Feb 2009. The best of the current gold rally, since 2001, has been during a time when the Dow was rising as well.
Read More @ WealthWire.com

Forbes Op-ed Voices Opposition to Gun-grabbing U.N. Treaty

from Info Wars:

Finally, after weeks of virtual silence, a corporate media venue is warning about the threat posed to the Second Amendment by the United Nations’ so-called “Small Arms Treaty.”
“It may not come as surprising news to many of you that the United Nations doesn’t approve of our Second Amendment. Not one bit. And they very much hope to do something about it with help from some powerful American friends,” writes Larry Bell for Forbes.
If ratified by the Senate, Bell warns, the United Nations will:

1. Enact tougher licensing requirements, creating additional bureaucratic red tape for legal firearms ownership.
2. Confiscate and destroy all “unauthorized” civilian firearms (exempting those owned by our government of course).
3. Ban the trade, sale and private ownership of all semi-automatic weapons (any that have magazines even though they still operate in the same one trigger pull – one single “bang” manner as revolvers, a simple fact the anti-gun media never seem to grasp).
4. Create an international gun registry, clearly setting the stage for full-scale gun confiscation.
5. In short, overriding our national sovereignty, and in the process, providing license for the federal government to assert preemptive powers over state regulatory powers guaranteed by the Tenth Amendment in addition to our Second Amendment rights.

The United States joined 152 other nations and officially supported the U.N. Arms Treaty Resolution in January of 2010. Secretary of State Clinton has promised to push the treaty through the Senate.
Read Larry Bell’s article here.

Wall Street’s link to LIBOR

Americans still assume the London banking rates scandal doesn’t affect them – but they’re wrong
by Robert Reich, TheGuardian:
Britain is abuzz with the Libor scandal, but so far it’s been a yawn in the United States. That’s because Americans have assumed that the wrongdoing is confined to the other side of the pond. After all, “Libor” is short for “London interbank offered rate”, and the main culprit to date has been London-based Barclays. It’s further assumed that the scandal hasn’t really affected the pocketbooks of average Americans anyway.
Wrong, on both counts. It’s becoming apparent that Barclays’ reach extends far into the US financial sector, as evidenced by its $453m settlement with American as well as British bank regulators, and the US justice department’s active engagement in the case. Even by American standards, the Barclays traders’ emails are eyepopping, offering a particularly a chilling picture of how easily they got their colleagues to rig interest rates in order to make big bucks. (Bob Diamond, the former Barclays CEO, says the emails made him “physically ill” – perhaps because they so patently reveal the corruption.)
Most importantly, Wall Street will almost surely be implicated in the scandal. The biggest Wall Street banks – including the giants JP Morgan Chase, Citigroup and Bank of America – are likely to have been involved in similar manoeuvres. Barclay’s couldn’t have rigged the Libor without their witting involvement. The reason they’d participate in the scheme is the same reason Barclay’s did – to make more money.
Read More @ TheGuardian.co.uk

Are Western Banks and the Mexican Drug Cartel Inter-Dependent? BoA Implicated in Drug Related Money Laundering

from Silver Vigilante:
Whose to blame for the ongoing violence in Mexico related to drug cartels? Whilst the popular idea places the blame on the Mexican federal government and corrupt state officials, the truth of the matter seems clearly to be that major western banks are abetting the laundering of the cash which drives the violence. Through the US federal government – an institution fascist in nature – the banks are supplying the weapons in a feedback loop designed to keep chaos on the high and cash passing through their accounts.
On Sunday, the Wall Street Journal reported that the Mexican cocaine-trafficking cartel Los Zetas used accounts at Bank of America Corp. to launder money. There is a distinct tie between Los Zetas and the second-largest US bank by assets, Bank of America, according to the Federal Bureau for Investigations. The FBI’s sworn statements cover about twelve transactions since December 2009 in which over $1.5 million was deposited or withdrawn from two BoA accounts.
Bank of America has yet to be raised as a suspect for drug-laundering. The case calls to mind Wells Fargo’s $160 million settlement with the Justice Department in 2010 part of allegations that the bank enabled drug traffickers to launder money by shifting it between Mexican currency-exchange houses and the bank. To be sure, Wells Fargo and Bank of America are not the only to banks to be named as institutions that have abetted money-laundering by drug-traffickers.
Read More @ Silver Vigilante

Ouch! The Wine Bubble Blows Up

from Testosterone Pit.com:
Disclosure: I’m biased. I love wine—almost as much as I love craft brews—but I’m leaning towards Californian wines; they’re awesome and grow in my extended neighborhood. More precisely, I love drinking wine, not keeping it locked up in a refrigerated vault, and certainly not investing in it. Hence, I have little sympathy for those who got the timing wrong when they bought high-dollar French wines for the sole purpose of investing in them, instead of drinking them, and I certainly don’t feel sorry for them in their plight. But a plight it is.
It all has to do, like so many things, with the China bubble, and central banks.
Wine as an asset class, if you will, didn’t do much until the China bubble got going seriously and rich Chinese began piling into the market: from the summer of 2005 through the Beijing Olympics in 2008, the asset class skyrocketed 152%. But then the world experienced the Lehman Moment, and from September to December that year, the asset class plunged 22.3%.
The fact that wine could fall off a cliff like this scared central bankers around the world, and they dusted off their printers, plugged them into their 440-volt outlets—these are big industrial machines, not desktop devices (see video link at the bottom)—and they started printing money to buy up assets of whatever kind, possibly even wines, which would explain their drunken stupor at the time. As all this freshly printed money out there was searching for a place to go, it created numerous bubbles, and revived others that had been gasping for air. Including the wine bubble
Read More @ TestosteronePit.com

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