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Apparently the ongoing mess at Sentinel Management Group is producing a slew of rulings at the Federal Appeals Court level that don't bode well for investors, chiefly placing their funds that are in segregated savings accounts in danger of being ripped off by brokerages ala MF Global and Sentinel and leaving the depositor without any legal recourse to get their stolen money back. To wit:
Quote:
That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud’ its customers.
— U.S. Circuit Judge John D. Tinder
What this means is that the Federal Appeals Court is explicitly stating that an FCM can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to their own monies, no matter what the law says, or what legal assurances, claims or guarantees are made to that customer about their funds held with an FCM or any other brokerage or depository institution. The “secured” party at the front of the line [BNYM, who was allowed by the ruling to be placed at the head of the line of creditors, while customers whose finds were stolen were placed at the back] will always be the mega-bank who made the fraudulent loan using the stolen customer funds as collateral.
In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.
This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.
The court has ruled that once your money passes out of your PHYSICAL POSSESSION it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you.
Now I know this ruling was made at the surface for brokerage banks like Goldman, but is this just fear-mongering, or can the ruling actually stretch to savings banks like Wells Fargo, B of A, Chase, etc where people keep CD's and passbook accounts?
The only place to keep your money where nobody else can or will take it is in your bedroom. Modeerf has nailed the paradigm. That is the only thing certain about the future.
The only place to keep your money where nobody else can or will take it is in your bedroom.
Thieves can, and do, find people's hiding places in their bedrooms, and in other locations in their houses and apartments. Just ask your local police department. Your money is much more likely to be taken from your bedroom than it is from a bank insured by the FDIC.
How do ya think its gonna end when the money runs out? Seriously I'm curious, cause I have trouble seeing a way out of it.
The money will not run out because the federal government prints more. There are problems with that, of course, one of which is that it's inflationary. Inflation has been extremely low the past several years, but that will not last forever. Our country has had periods of inflation in the past, and we will have them again.
Thieves can, and do, find people's hiding places in their bedrooms, and in other locations in their houses and apartments. Just ask your local police department. Your money is much more likely to be taken from your bedroom than it is from a bank insured by the FDIC.
I wasn't talking about thieves. Thieves are acting illegally, and you're responsible for your own defense against crime. If your money is held by anyone else, it does not require criminality for someone to legally help themselves to your money, with the blessings or even the orders of the courts. Sorry, the FDIC does not insure my money against levy, seizure, attachment, fees, penalties, or hypothecation. And, since the police are on their side, I would not trust my local police department to tell me the truth about anything. When push comes to shove, Americans will discover that the police are the enemy. Which is why "police states" do not rank very high on the desirability scale of places to live.
The money will not run out because the federal government prints more. There are problems with that, of course, one of which is that it's inflationary. Inflation has been extremely low the past several years, but that will not last forever. Our country has had periods of inflation in the past, and we will have them again.
the Federal Government doesn't print any money, The Federal Reserve does which is a privately held bank. Given the name Federal in order to confuse the American public into thinking that is actually works for them.
Real inflation has been close to 10%a year over the past few years, of course the government's statistics don't reflect that because they change whatever needs to be changed to keep the number lower.
Real inflation has been close to 10%a year over the past few years, of course the government's statistics don't reflect that because they change whatever needs to be changed to keep the number lower.
What facts, what sources of information, and/or what calculations allow you to say that real inflation has been close to 10% a year over the past few years? I purchase groceries, clothing, restaurant meals, gasoline, various types of insurance, paint and home building supplies, motel rooms, and various other things that normal people purchase. I can say with absolute certainty that your figure is just wild hyperbole when compared to my personal experience over the past few years. Sure, if you want to cherry-pick a few things whose costs have gone up more than the official rate of inflation, those things are indeed out there. Health care costs are one of them. Gasoline is very volatile; it goes up and down more than most consumer products. I have a hard time relating to wild statements presented as facts; therefore, I believe we are condemned to talk past each other and I can see little point in continuing.
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