November 17, 2011

Thank You, Ann Barnhardt; We Need More People With Your Courage

Filed under: Activism,Economy,Taxes & Government — Tom @ 8:35 pm

AnnBlendedAnn Barnhardt, a hedge broker specializing in cattle and grain, is quitting the brokerage portion of her business, and has posted an announcement as to why.

Big deal? Uh, yeah.

I’ve had similar more general conversations with several people along the lines Ann follows in her announcement over the past several months (really, upon reflection, including relatives, over the past year). These discussions obviously pre-dated what Ann saw as the point which dictated her exit. I’ve never articulated my thoughts on the situation here at BizzyBlog because, as a non-trader and non-insider who doesn’t closely follow the day-to-day ebb and flow of the markets, I’m not in a position to prove them or to know that I’m interpreting matters properly. Ms. Barnhardt is.

That’s why what follows is a big, big deal (link is to her blog’s home page, as Ann doesn’t have permalinks; excerpted heavily because of the importance of her assertions; HTs to Zero Hedge and Rush Limbaugh):

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

… And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. … my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

As for me, I can only echo the words of David:
“This is the Lord’s doing; and it is wonderful in our eyes.”

My contention is that the extent of the lawlessness goes far beyond the futures markets. Though there were obviously several decades of missteps and craven political calculations which led to it, I insist that the final of three key tipping points of the financial system’s credibility occurred on October 14, 2008, when Hank Paulson put a figurative gun to the heads of the CEOs of the nation’s largest banks, and — utterly without any legal authority, i.e., lawlessly — forced them to “accept” partial ownership and “temporary” de facto control of their firms.

In that same general time frame, the Federal Reserve, in this case secretly and again utterly without any authority, began engaging in massive transfers of funds to troubled domestic and overseas entities, while Fannie Mae and Freddie Mac’s implosions exposed how the two government-sponsored frauds-by-design systematically lied about the quality of the mortgages underlying the securities they issued and the loans they kept on their own books to the combined tune of likely trillions of dollars. No one involved, or at least no one involved at a sufficiently high level, has done hard time.

We began heading down the road Ann cited three-plus years ago when Fan and Fred collapsed without personal consequences for anyone, when Ben Bernanke turned the Fed into the world’s discount window, and finally when Hank Paulson formally announced the beginning of the government’s tyranny over the private portion of the banking system. Note well that all of this took place under cover of the final two months of a presidential election campaign, when apparently no one is allowed to object to anything lest they be accused — perish the thought! — of “politicizing” matters. Now, barring a sea change, it appears that someone who gambled away hundreds of millions of dollars which weren’t his won’t face consequences, while those whose funds were looted are becoming victims of system-enabled theft.

Ms. Barnhardt doesn’t understand how in good conscience one can confidently invest other people’s money, or make recommendations to people as to how they should invest their own money, in what have become lawless financial markets. Neither do I. People who wish to invest on their own are obviously free to try their luck, and of course some will do well. Others won’t. But please, let’s not have anyone kid themselves. In a lawless market, if you do well, it’s because you got lucky, not because you were smart — unless your definition of “smart” includes keeping your head down and not getting noticed, or joining the morally bankrupt cronyism game yourself.

Thank you, Ann Barnhardt. How many other financial advisers, planners, and “market” participants who know the truth are going to have the courage to stop playing along?

Y’know Ann, there’s an Oval Office in Washington which could really, really use a morally grounded occupant — or a reliable, reform-minded Treasury Secretary.



  1. So Ken Lay et al went to jail for Enron’s collapse but Franklin Raines (whose Fannie and Freddie Mae’s collapse took down the economy with it) and Corzine (who stole money from clients) get a free pass?

    Comment by zf — November 18, 2011 @ 2:54 am

  2. I kind of doubt Corzine is going to get off. Obama might want to turn the other way, but there will be too many townsfolk demanding Corzine’s head for Obama to provide him much cover. Did you see the Biden/Corzine clip? Expect this on constant loop during the campaign.

    Comment by Corinna — November 18, 2011 @ 7:58 am

  3. Ms. Barnhardt often makes entertaining points, but having corresponded with her directly several times, I have come to the conclusion that she is not playing with a full deck.

    I had to stop corresponding with her because she began making specific calls for a violent military coup of our government, to be led by retired military generals whom she named. This was in response to my suggesting to her that our military should remain non-political or we will become like some banana republic.

    Entertaining but looney. Or dangerous if one takes her seriously.

    Comment by Skyler — November 18, 2011 @ 8:00 am

  4. IF — emphasis IF — the Executive Branch is arrogating significant power to itself unconstitutionally, it is the duty of the military, which has sworn to uphold the Constitution and has not sworn specific loyalty to the Executive Branch, to do something about it. If they don’t, they are not carrying out their sworn duty. It has nothing to do with being “political” or “non-political.”

    The only points of debate are when the Exec Branch reaches that point, and when it does, what specifically to do about it. If you think that’s “looney,” you need to brush up on constitutional basics.

    And you’re going to have to prove to me that she has ever called for a “violent” coup, as opposed to saying that it may come to that.

    Comment by TBlumer — November 18, 2011 @ 8:10 am

  5. I will forward you my email thread.

    Comment by Skyler — November 18, 2011 @ 8:23 am

  6. Skyler, if you are going to make an accusation like that, claiming personal knowledge of Barnhardt’s perspective, you need to identify yourself. As it is, I can’t take you seriously, although I’d very much like to know if what you are saying is true.

    Comment by clazy8 — November 18, 2011 @ 8:31 am

  7. Essentially, she claims that Obama is not a legitimate president and that this is grounds for the military, led by a couple retired generals whom she named, to remove him from office. She said she has long advocated this remedy and that a failure to do so is tantamount to treason.

    But it’s not the military’s job to decide who the president is. That’s the job of the people.

    Comment by Skyler — November 18, 2011 @ 8:39 am

  8. IF — emphasis IF — it is PROVEN that he is illegitimate and that he really doesn’t qualify as eligible for the presidency under the Constitution, the it doesn’t matter whether he “won” the election.

    And yes, IF it is PROVEN, she is right, and you are wrong — the military MUST carry out its duty, which is to uphold the Constitution, and failure to do so is indeed tantamount to treason. That’s not even remotely arguable. The only thing arguable is when you reach the level of proof. Does it have to be done through the courts, or is there a point at which it become so self-evident that you don’t need the courts to prove what is obvious to any reasonable person?

    Though they’d obviously better be damned sure, it is possible that military leaders can reach the conclusion that a president is illegitimate without a court ruling that such is the case, especially when it become obvious that the courts are failing to rule properly in the face of overwhelming evidence. Again, failing to do what’s necessary to uphold the Constitution would be tantamount to treason. IMO, we’re not there, but we’re a lot closer than you seem to want to believe.

    Comment by TBlumer — November 18, 2011 @ 8:58 am

  9. The point is that Ms. Barnhardt was advocating a military coup led by named generals based on the silly claims that Obama’s birth certificate was a forgery.

    It may be a forgery, but you’d still have to prove he’s not a naturally born citizen (no one disputes his mother’s citizenship). And even then, this is not a matter for the military. The Constitutional process was used to put him in office. It is not the military’s job to oversee that process or reverse it. The military defends against enemies, not processes.

    Comment by Skyler — November 18, 2011 @ 9:24 am

  10. The email exchange you forwarded didn’t specifically call for violence, and I see by your latest comment that your backing away from the claim. You should never have raised it.

    IF — again emphasis IF — Obama is not a natural-born citizen, then you are wrong in your “even then” statement, because the Constitutional process would have been ABUSED to put him in office. Thus, as she notes in the email exchange, the fact that a guy has been put in charge of the country who has no constitutional authority to be in charge of the country IS a matter for the military to address, and failure to do so would be tantamount to treason.

    Comment by TBlumer — November 18, 2011 @ 9:32 am

  11. Congress has an approval rating somewhere near the single digits. The military is the one national institution with a consistently high approval rating.

    In such a situation, a military takeover of some sort is very, very likely. Governments derive their power from the consent of the governed, and TehAmurrikanPeepl definitely incline more towards trusting their generals and colonels/clonals/kernals (and even the lieutenants and privates) rather than the people put in place by the system with the supposed legitimacy.

    It has little legitimacy anymore. It can lose what’s left pretty easily.

    Comment by Rollory — November 18, 2011 @ 10:24 am

  12. [...] How many will join her? [...]

    Pingback by Transterrestrial Musings - “Thank You, Ann Barnhardt” — November 18, 2011 @ 11:05 am

  13. [...] The most telling recent blow is the bankruptcy of MF Global, a commodity trading futures firm run by Jon Corzine, former governor of New Jersey. It appears that he stole $600 million of investor’s money. Another commodity trader has now closed her fund and returned her customer’s money. Here’s why: “The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my cli… [...]

    Pingback by Chicago Boyz » Blog Archive » Congress is a criminal enterprise — November 18, 2011 @ 1:06 pm

  14. [...] to Lee; more here) Posted by Jeff G. @ 11:14 am Comments (0) | Trackback [...]

    Pingback by The center is not holding — November 18, 2011 @ 1:14 pm

  15. [...] you skimmed past Insty’s link to this jaw-dropping missive, I highly recommend it.  This is an outraged, moral hedge broker who shut down her fund.  Why? To [...]

    Pingback by She is woman, hear her roar! | World's Only Rational Man — November 18, 2011 @ 3:19 pm

  16. If Obama is removed by impeachement or assassination, the generals don’t take over. Joe Biden does. He is at least as corrupt as any democrat.

    Even the SecDef due to DoD’s recent creation, is pretty far down the pecking order of members of the cabinet.

    Comment by DonM — November 18, 2011 @ 4:59 pm

  17. Who is Ann Galt?

    Comment by Jayj — November 18, 2011 @ 5:35 pm

  18. “The Execution of Seal Team Six????”

    I’ll say what everyone else is thinking but is too scared to say. The Obama regime is almost certainly directly complicit in these deaths. The time, location and most especially, the PASSENGERS in the Chinook were passed to the Taliban. Additionally, you can’t take out a Chinook with small arms fire or even standard RPGs such as the Taliban use. The Taliban needed serious weaponry to take this helo down, and that serious weaponry needed to be in exactly the right spot at exactly the right time, ready to fire.

    Why would the Obama regime kill Americans? I think the question is, why WOULDN’T the Obama regime kill Americans? The Obama regime is composed of Marxist-Leninist psychopaths. A glancing, superficial survey of 20th century history shows one glaring fact above all others: MARXISTS MURDER PEOPLE WITHOUT COMPUNCTION. Marxists also hate Americans, by definition.

    She is a nutcase. She is bat guano crazy, a certified Warner Brothers Loony Tunes bedlamite. To believe the above is irrational. To actually have the stupidity to publish it shows an obliviousness to the real world that should disqualify anything she says – even about subjects for which she is considered “expert.”

    Does anyone on this thread care about evidence? Or facts? Or has wild conjecture, spurious charges, and the connecting of non existent dots become SOP when evaluating an argument?

    Comment by Rick Moran — November 18, 2011 @ 8:30 pm

  19. Sorry Rick, being wrong on one issue — if she’s indeed wrong — doesn’t make you wrong on every one.

    Yes, wildly wrong arguments in other areas need to be considered (if they are indeed wildly wrong — do you know for a fact that “The time, location and most especially, the PASSENGERS in the Chinook” were NOT passed to the Taliban? And how did you come about obtaining this special knowledge? There are lots of quite legit questions as to why those men were where they were, and whether their assignment was appropriate to their SEAL status).

    But that doesn’t change the fact that in her chosen trade, at which she has apparently done passably well (at least) and does know what she’s talking about, she has observed that the system has failed, and that the failure involved means that we can’t count on the markets functioning as they should. And that’s a fact regardless of whether or not “She is bat guano crazy, a certified Warner Brothers Loony Tunes bedlamite.”

    You can choose to DISCOUNT “anything she says – even about subjects for which she is considered ‘expert,’” but it’s out of bounds to automatically DISQUALIFY it.

    Why don’t you tell me exactly how and why she is wrong about what she wrote in her announcement, which is after all what this post is about?

    P.S. And she is far from being the only person who thinks that the markets, with the cronyism, clearly failed oversight, and Federal Reserve manipulation, are rigged and thus by definition not safe.

    Comment by TBlumer — November 18, 2011 @ 8:48 pm

  20. I’ve read Miss Barnhardt’s site off and on and I fear for her life due to some of her comments concerning muslims. She is a very brave woman. I’m anxious to learn what her future plans are as she says she is taking some time off from her postings for now! She tells it like it is for sure!!!

    Comment by renoman — November 18, 2011 @ 10:14 pm

  21. TBlumer,

    I didn’t intend any backing away from any claim. To think that a couple of retired generals could remove a sitting president from office without the use of violence is absurd.

    And you’re right, it’s not even remotely arguable. The military has no responsibility, obligation, or justification to ever decide to remove a president from office. The president was put into office after a long campaign, elections, an electoral college vote, certification by the Congress, and even an oath administered by the Supreme Court. I don’t see any military approval required in any of those steps.

    If Ms. Barnhardt were correct and the sitting president were illegitimately put into office, some other process would be required. I’d suggest using the process detailed in the Constitution before we start advocating for military coups led by retired military generals that no one has heard of before. Anyone, seemingly including yourself, who calls for such actions would be one of those domestic enemies that the military is sworn to protect against. Make no mistake about that.

    Comment by Skyler — November 18, 2011 @ 10:40 pm

  22. The military swears its oath to the Constitution. If the President is objectively determined to be illegitimate AND no one else will carry out their duties to remove him from office, it is the military’s duty to remove him from office. That would not be a coup. It would be setting things right.

    Comment by TBlumer — November 18, 2011 @ 10:49 pm

  23. [...] a morally grounded occupant — or a reliable, reform-minded Treasury Secretary. Let’s switch to China, to a different arena – Yeah, some kids in China might be riding [...]

    Pingback by Oikonomos, revisit – Live Wisely Net — November 21, 2011 @ 8:19 pm

  24. Can’t imagine the army moving absent an act of Congress, a judgement by the Supreme Court, or both. We’re *probably* not anywhere near the point of a civil war, in that the “progressives” might start one if they thought they could win, but their numbers are fewer, and since being in the army isn’t, like, cool, man, actual practical experience is thin on the ground in the libtard camp. On the other hand, most vets are more conservative, and as we get older we get even more conservative.

    On the other hand, any “militia” would have about as much chance against the US Army as the Taliban, short of any mercy they get due to being Americans.

    As far as the original article, pretty much every precious metal bug is aware that the silver market has been fatally compromised in that there is more silver accounted for than could possibly exist. JP Morgan has also recently bought enough platinum to seriously compromise that market as well. Gold is too expensive and there is too much of it for that market to be cornered.

    Comment by badfrog — November 22, 2011 @ 9:32 pm

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