Although it is gonna take me a minute to get there.

Here's why the MF Global story matters to you.

Let's just suppose that you own one share of Apple and the caca having hit the fan, your brokerage firm goes upside down ... or boobs up, as my beloved partner used to say.

Here's the nasty suprise heading in your direction.

You don't really own that share of Apple as it has been purchased with your funds but is being held in your brokerage firm's name supposedly for your benefit.

What is even more interesting is that you have most likely given your brokerage firm permission to pledge that share of Apple as collateral for it's own purposes, be it trading or borrowing or whatever they might want it for when you signed that paperwork you didn't read.

Here's why the MF Global story double matters to you.

The customers of MF Global weren't trading stocks which were purchased in MF Global's name, they were holding segregated commodity accounts, US government treasuries and in some cases physical product most typically gold bars, all of which were held in their own name with MF Global being paid to provide secure housing.

This means that without specific authorization which it mostly never recieved, by law MF Global should not been able to pledge those assets for it's own purposes.

The law was ignored by MF Global but much more importantly, our government regulators who are supposedly in the employ of the victims of this crime actually abetted this theft in the following fashion:

Faced with the choice of the typical Chapter 7 liquidation for a commodities brokerage concern wherein customer assets are untouchable, the SEC deliberately approved the Chapter 11 reorganization of MF Global, the one of two bankcruptcy options that threw customers assets into the entire pot of stuff to be carved up among all of MF Global's creditors.

What's even more interesting is that the SEC did this secretly without contacting the Commodities Futures Trading Corporation which probably is the governmental entity that should have made this decision as it has handled most if not all previous commodity brokerage failures and had experienced people and proven systems in place that would have more likely protected customer accounts.

So to make a long story short federal regulators have abetted the theft of money from private citizens in favor of in this case ... as usual ... JP Morgan and Goldman Sachs, with the now addition of George Soros as the likely discount purchaser.

Nice eh?

Not to beat a dead horse, but remembering the words of President Barack Obama.

Ok, so here's my first ... Ok, Ok second question,

Just axin.

Now for Chris Whalen's question from The Institutional Risk Analyst.

"So why is it that the Large Media have such trouble reporting this story? The fact seems to be that the political powers that be in Washington are protecting JPM CEO Jaime Dimon from a possible career ending kind of stumble with respect to MF Global. By stuffing the commodity customers of the broker dealer via an equity bankruptcy resolution supervised dutifully by SIPIC, JPM and Soros apparently get to benefit at the expense of the commodity customers of MF Global. This situation stinks to high heaven and everyone on the Street we've spoken to about the matter knows it. As the article below notes:

"Rather than being treated as a bankruptcy of a commodities brokerage firm under sub-chapter IV of the Chapter 7 bankruptcy law, MF Global was treated as an equities firm (sub-chapter III) for the purposes of its bankruptcy, and this is why the MF Global customer money in so-called segregated accounts "disappeared".

The effort by former New Jersey governor and MF Global CEO Jon Corzine to save his firm by stealing customer funds seems to warrant further discussion, yet instead we have silence. Here's a question: When is Corzine going to be indicted for securities fraud and other high crimes and misdemenors? The answer seemingly is that the Obama Justice Department is afraid to go there. Thus the fraud at MF Global continues and Washington does nothing to inconvenience the banksters as customer funds are expropriated.

But please, to our friends in the Big Media, could we stop saying that we don't know the location of the missing $1.6 billion of client funds from MF Global? The money is safe and sound at JPM and other counterparties. As with Goldman Sachs et al and American International Group, the banks have been bailed out at the cost of somebody else. And the various agencies of the federal government are complicit in the fraud."

Mr. Whalen's conclusion feels about right to us with regards to Fox and the Wall Street Journal who the other day "reported" that funds had "VAPORIZED".

But can you imagine The New York Times, MSNBC, CNN, CBS etc. ignoring this story in an election year with a Republican in the White House?

 Ya can't ... can ya?

The following article referenced above is from Clearing and Settlement.com.

How JP Morgan And George Soros Ended Up With MF Global Customer Money

In recent testimony before a Congressional committee, MF Global’s former chief Jon Corzine as well as other MF Global executives said repeatedly the didn’t know where the failed brokerage firm’s $1.2 billion of missing client money was. In fact, MF Global executives knew exactly what happened to the money, as do the regulators who oversaw the firm’s bankruptcy. The so-called segregated customer funds were repeatedly, and legally (through re-hypothication), used as collateral for MF Global loans for 100:1 leveraged bets on European sovereign debt.

Ok so whose political party benefits when George Soros is flush with cash?

It all sort of comes together after a while don't it?

Gregor Macdonald's fine site Gregor.us is a new and welcome addition to our list of places we hang out at in the middle of those nights we have failed to take our medicine.

Gregor provides outstanding analysis of the sources and markets for energy and conveys that analysis in short and simple articles.

Recommended.

As always, click the chart for the entire work.

For A Million BTU

And we're paying the Saudis and Hugo Chavez mas o menos a hundred bucks a barrel because?

Evidently there are Al Queda flags flying atop public buildings all over Libya.

This has raised a question in the mind of Congressman Dennis Kucinich worthy of your consideration.

At least we prevented that bloodbath.

Oopsies!

From Syracuse University's Trac Report program via Chris Martinson (sort of) and The Economic Populist (moreso).

All three pieces are very good and worth the time.

Criminal Prosecutions for Financial Institution Fraud Continue to Fall

Federal prosecutions for financial institution fraud have continued their downward slide despite the financial troubles reported in this sector. The latest available data from the Justice Department show that during the first eleven months of FY 2011 the government reported 1,251 new prosecutions were filed. If this activity continues at the same pace, the annual total of prosecutions will be 1,365 for this fiscal year, down 28.6 percent from their numbers of just five years ago and less than half the level prevalent a decade ago.

Table 1: Criminal Financial Institution Fraud Prosecutions

I'm thinking that the Obama/Democrat excuse here should be that the failed policies of the Bush Administration and it's mismanagement of the Justice Department among other agencies has forced him to continue this deficit of prosecutions.

First from Physician's Committee for Responsible Medicine via Chart Porn via Katie (who is now somebody's Grandma) a side by side comparison of Federal Subsidies for Food Production and Federal Nutrition Recommendations, niether of which would exist at all were it up us.  

This is followed up by a three para story on how U.S. government food policy became as screwed up as U.S. government everything else.

I'll sum up ...... politics as usual.

You should read it anyway.

Next from Zero Hedge via the U.S. Energy Information Administration which also would not exist were it up to us.

I'm feeling charitable this morning and feel like you need to gain the conclusion drawn within this article so I've cut and pasted it below.

There are no data-supported broad-based drivers for dramatically lower gasoline consumption other than austerity and lower economic activity.

The code-word for "austerity and lower economic activity" that is verboten in the Mainstream Media is "recession." Indeed, if you examine the EIA data, the only causal factor that has backing in the data is recession--or if you prefer, austerity and lower economic activity.

Then there is the price of fuel.

People have to go to work, pick up the kids, get their meds, etc., and few urban centers in the U.S. have mass transit systems that are up to the task of replacing autos. So most Americans have what we might call non-discretionary driving. But as the price of fuel rises, people find ways to lower their discretionary driving by combining trips, shopping less often, shortening or eliminating vacations, etc. Enterprises reduce costly business travel with teleconferences and other digital technologies.

Data supports the notion that high oil prices lead to recession.

For example, Chris Martenson recently made a compelling case for this in Why Our Currency Will Fail ("Note that all of the six prior recessions were preceded by a spike in oil prices.")

Household income doesn't rise just because oil is climbing in cost, and so the extra money spent on fuel is diverted from other consumption or saving (capital accumulation). Higher fuel costs lower household capital formation and reduce consumption/economic activity.

Oil has been elevated for months, kissing $100 and rarely dipping below $90/barrel. Do higher oil costs explain the decline in gasoline consumption? Once again, they undoubtedly influence consumption, but that cannot explain the 40% drop in consumption. After all, when oil spiked in 2008 to $140/barrel, deliveries only dropped by a few million gallons: from 58.8 MGD in July 2007, before the spike, to 54.8 MGD at the point of maximum pain in July 2008.

The cost of oil has declined sharply from mid-2008, yet consumption has tanked from 54.8 MGD in July 2008 to 42.4 MGD in July 2011. That's a hefty 21% decline.

What other plausible explanation is there for the decline from 42.4 MGD in July 2011 to 30.9 MGD in November 2011 other than a dramatic decline in discretionary driving? 

That 27% drop in a few months in unprecedented, except in times of war or sharp economic contraction, i.e. recession.

If we stipulate that vehicles and fuel consumption are essential proxies for the U.S. economy, then we can expect a steep decline in economic activity to register in other metrics within the next few months.

Such a sharp drop would of course be "unexpected" given the positive employment data of the past few months. But as the data above shows, employment isn't tightly correlated to gasoline consumption: gasoline consumption reflects recession and growth.

In other words, look out below.

Featuring John Michael Whitby on the keyboard,  Jim Murphey (I think) and Cindy Cashdollar on steel,  Jason Roberts also singing backup and some youngster I can't get figured on fiddles,  I believe that's David Miller playing the upright bass and I'm guessing David Sangor on the drums.

This is one of the 1,387 versions of a band that has enjoyed a 40 year run as one of America's favorite working bands, having won 9 or so Grammys and numerous other awards from Rolling Stone's Country and Western Band of the Year to the Acadamy of Country Music's Touring Band of the Year, all the while featuring it's one enduring presence, the great Ray Benson on guitar and vocals.

It's Asleep at the Wheel.

Route 66

After 40 years on the road it seems like Ray might be losing it a little as they're starting to have to stamp his name on his stuff.

From American Banker via Zero Hedge.

Missing Settlement Document Raises Doubts on $25B Deal

More than a day after the announcement of a mammoth national mortgage servicing settlement, the actual terms of the deal still aren't public. The website created for the national settlement lists the document as "coming soon."

That's because a fully authorized, legally binding deal has not been inked yet.

The implication of this is hard to say. Spokespersons for both the Iowa attorney general's office and the Department of Justice both told American Banker that the actual settlement will not be made public until it is submitted to a court. A representative for the North Carolina attorney general downplayed the significance of the document's non-final status, saying that the terms were already fixed.

"Once the documents are finalized, they'll be posted to nationalmortgagesettlement.com," the representative said in an email to American Banker.

Other sources who spoke with American Banker raised doubts that everything is yet in place. A person familiar with the mortgage servicing pact says that a settlement term sheet does not yet exist. Instead, there are a series of nearly-complete documents that will be attached to a consent judgment eventually filed with the court. That truly final version will include things such as servicing standards, consumer relief options, legal releases, and enforcement terms. There will likely be separate state and a federal versions of the release.

Some who talked to American Banker said that the political pressure to announce the settlement drove the timing, in effect putting the press release cart in front of the settlement horse.

On the positive side, Tyler Durden is in rare form over this.

It is only appropriate, and so ironic, that a politically motivated settlement whose purpose is to squash any claims of pervasive defective document fraud (and contract law but just ask GM bondholders about that - it's hardly news) is itself found to be ... defective.

American Banker reports that the reason why the terms of the so-called historic (just ask the Teleprompter in Chief) foreclosure settlement deal are not public yet, is "because a fully authorized, legally binding deal has not been inked yet."

Wait, so America's cohort of AGs just all, pardon the pun, robosigned a piece of paper that does not exist?

Oh and anyone who had doubts that the settlement, which incidentally is paid for by you, dear taxpayers, in the form of bank bailout cash, of which the banks still owe over $10 billion in some capacity, was merely a political ploy to get taxpayers to fund Obama's reelection campaign by subsidizing squatters with $2,000 per vote in the presidential race come November, using banks as intermediaries to make the administration seem oh so powerful and daring to take on the banks, who in fact are the only ones benefiting from this farce, by holding a gun to the head of the hold out AGs forcing them to sign a piece of paper that does not even exist, this should put all those doubts to rest.

And just in case you have forgotten, here are just a few of the ubiquitous Linda Green's many signatures.

Click the image below for details.

All change is not growth, as all movement is not forward.

He knows so little and knows it so fluently.

Mediocrity would always win by force of numbers, but it would win only more mediocrity.

The only difference between a rut and a grave are the dimensions.

There wouldn't be half as much fun in the world if it weren't for children and men, and there ain't a mite of difference between them under the skins.

Women like to sit down with trouble - as if it were knitting.