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I understand she was involved in cattle and grain futures

BCM Has Ceased Operations (Part 1)
Posted by Ann Barnhardt - November 17, AD 2011 10:27 AM MST
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.

Continued . . . .


BCM Has Ceased Operations (Part 2)
Posted by Ann Barnhardt - November 17, AD 2011 10:26 AM MST
. . . . Continued

Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.

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.

Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.

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. I will continue to blog at, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, 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.”

With Best Regards-
Ann Barnhardt


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16 Replies
Veteran Advisor

Re: I understand she was involved in cattle and grain futures

WOW that is an awesome letter! Thanks for sharing. For all of you that have faith that our government that is against the people will do anything for the people this should serve as your wake up call!  We have certainly entered into an era of governing against the people.  Lots of milk markets are already under attack for this very reason. The firms that had hedged are no longer able to carry the positions and as they unwind the price implosion that is about to be seen will be huge!


The same holds true for the grain markets. the only difference is that now we all now the wizard has no clothes you guys get what you deserve for swimming with these big fish.


The only thing you can do is control your physical. I think the fat lady has sung and now the opera is about to turn tragic! 

Pals calls for physical delivery would have absolutely stopped this train wreck in it's tracks but instead the almighty turn over of the weakening dollar has now led us to a point of no return. The problem is systemic and it is not in the lax enforcement of law it is infact the lax enforcement of common sense that has gotten us here.  This is truly the swim at your own risk end of the pool!


BTW she is spot on about the cronnieism she just didn't go far enough. Bush did it to and oh yea lets not forget that Hillary made a 100 large the easy way also using Cattle!  The CME is still the place where kingships are funded! 


Thisis serious boys when the faith erodes so does the value.  And remember what backs our dollar? The full FAITH and CREDIT of the US government.  We already lost the credit now the faith is gone.  Call me doom and gloom but tell me how do we get our faith back?  The only way is to reestablish law. in doing that we will destroy our fractional lending system with it's over leveraged over insured asset base crumbling like the Detroit lions offense today.  IT will be unbearable to watch and unavoidable. We have officially entered the rearrange the chairs on the titanic stage. 

Shameful that we participated!

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Senior Advisor

so JR..........does

that make you a superbull on physical commodities???????  If a dollar wont buy anything........but a 5 gallon bucket of grain will, whats it worth setting in your bin...........


just asking...........because it seems the same crowd that is crazy doom and gloom the world is ending, also feel like everything will be worthless.........well in dollar terms it might, however land and the ability to produce food/fiber/fuel/shelter will be priceless........

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Senior Contributor

Re: so JR..........does

Hey MT, ya ever notice those doom and gloomers appear to have never missed a meal? Noticed a lot of those protestors on TV being removed by the cops looked like they had been eating real regularly.

If anything were to be learned here, if what the doom and gloomers predict comes to pass, we farmers will still be in demand.

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Senior Advisor

Re: I understand she was involved in cattle and grain futures

My guess is she couldn't make a go of it for some reason. Perhaps she made some bad choices.


The idea that Obama has anything to to with this - or his cronies (read Democrats?) - is quite laughable. The organization- CME/CFTC has been strictly business as usual and Gensler seems to be either powerless or a captive of the 'in crowd' and that 'in crowd' could hardly be typed as 'Marxist'.  Absolutely no action regarding the alleged corruption of Wendy Gramm at the CFTC by intimidating one of the internal CFTC judges on CFTC cases made recently, before she went on the be on the audit committee at Enron.


Quite a pathetic scene all around.



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Re: I understand she was involved in cattle and grain futures

Much discussion at Forum on Friday re: the letter.


Turns out the woman is a radical germanic christianist. Check the youtubes at her website. My guess is that the good citizens of Colorado will see some O'Donell sort of political positioning sometime in the not too distant future.


I'm guessing that there is some affinity business to be done by spouting that schtick.


Hard telling what the story is beyond that.


Yeah, if she was complaing when Brooksley Born got the boot a dozen years ago there would be some cred here.


That horse was out of the county and across the state line a long time ago.

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Senior Advisor

Re: so JR..........does

non of them will ever look hungry unless the mail stops coming with their check from the government.......heck they are squatting in our parks and on our government ground, using it as their own personal toilet paper........heck they are even bumming the electricity to power microwaves and heaters.........they are squatting on the very ideals they are protesting against...........


its ironic that they hate wall street and government...........but without those two things these bums wouldn't have public land to assemble entitlement money for food and clothes and booze and drugs.........and we all know most of them pay little or no taxes, probably get money back, especially compared to those working on wall street or wherever..........


theres an easy fix to all this.........unemployment benefits for ONE YEAR........then you have to decide one of three things....


1.  go off benefits

2.  join the military and get experience and education along with serving

3.  work for the state digging ditches, picking up trash, cutting brush, buidling whatever


I bet that would kick start a few people start looking for a job..........



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Re: so JR..........does

Surely since the government has poured huge wealth onto the grain faming and landowning class by mandating that consumers incinerate their products....


we should be willing to pay back the accumulated government benefits- just the direct ones mind you, let's say just since the massive Reagan bailout of farmers began in 1985.


Only reasonable interest should be charged.

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Veteran Advisor

Re: so JR..........does

Well I think we kid ourselves when we talk about the dollar is worthless (it already is) and then say that pur product wil be worth alot as you said land, food fuel, shelter. AS to super bull no I think that i would still call myself a rodeo clown in this one.


here's the thing.  What will a bucket of corn be worth in gallons of milk?  OR maybe I should say how many buckets of corn can I charge for a gallon of milk? HA


And yes I painted both parties with the same brush. 


This system isn't transparent nor is it faithful. More and more I believe the fix is in.

THis letter may be "over the top" but it is very true of how many folks feel. The grounds for their feelings are maybe suspect however the emotions are real. 

Last weekend at a family gathering lots of folks were upset about the price of beef,Turkey and Milk.  Theyall had a lot of anger just under the surface that was starting to boil over. Not a one of them was on unemployment and none of them would fall into an occupy what ever mindset. These were middle USA folks.

Yet all wanted to believe in something and all of them lacked faith in our current system.


My point was that (and this is purely antecdotal) that the lack of faith in the system is reinforced by MF global and things like tarp and to big to fail.  When the people lose faith they lose hope and hope isn't going to be returned till we have some kinda rule of LAw. The way to get that faith back is to turn the lights on this kinda stuff and point out that what Jon Corzine did is law breaking!


My thoughts are a little jumbled and maybe I will come back and edit this later But I did feel it was right to respond. 

BTW the folks that will put this thing over the edge will be the hard righters.  There are gonna be so many laws come outa this stuff that it will stymie all commerce.

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Senior Advisor

Re: So you think

the wall street protestors must look like a detainee from the nazi prison camps before they have good reason to protest? Hell no! you wouldn't be protesting. You get government checks and you get to buy high priced toys and deduct them fully off your income tax. You get more in one year from the government than they get in a life time and you snub them like they were poor white trash.



I'm sure as heck going to have to go on a diet before I can protest anything. I probably won't live long enough to get to a cceptable weight level. Maybe become anarexic.

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