A warning to those who think that this story being off the front page means it's over.

It's not.

I am getting repeated reports that farmers and other producers are turning increasingly to direct deals with the users of their products, eschewing the futures markets entirely.

These are not speculators. These are the people who grow the corn, wheat, soybeans and other products you wish to buy in "processed" form.

This is exactly what I warned might happen, and it appears that it is.

It is an extremely dangerous trend for consumer price stability and in fact for the stability of our nation's economy in general.

Futures markets in various forms are not new constructs. They literally date to the East India Tea Company with spice contracts. They are necessary lubricants for price stability and the even functioning of markets.

Some very ordinary transactions that we have all become accustomed to are at risk of disappearing entirely. Among them are airline tickets at a known price for travel six months from now. Reasonably-stable prices for a box of cereal are another example (corn has traded from 572 to 799 in the last year; a forty percent range over the last 12 months; soy and wheat have seen similar moves); indeed, virtually every food item in your store, from orange juice to bacon (pork bellies) is hedged off in these markets!

The move to direct transactions means that the reasonable stability we have enjoyed in these transactions, or even the ability to enter into them at all over a horizon of more than a month or two, is at risk of disappearing!

I warned when this story first broke that the danger was much more severe than being reported and that in fact the financial media was downplaying the importance of this fiasco. It was (and is) my expectation that if there is another event of this sort the entire futures market structure for hedging these prices would be likely to collapse.

But now the cracks are becoming evident around the edges anyway.

The producers don't have to put up with this crap and they are beginning to vote with their feet.

The unwillingness of the government, from Obama and Eric Holder on down, to demand that these funds be returned to the segregated client accounts immediately irrespective of who holds them and irrespective of how, with sorting out who goes to prison for the actions behind their loss, if anyone, at a later date is a failure that the markets appear to be taking very poorly.

If you think this story is "over" because it's no longer front-page news, you're wrong. Keep your ear to the ground on this one -- it is rather likely that more unpleasant surprises are going to be forthcoming in this sad saga.

(end article)

I'm sure you have nothing to worry about from Sotero marking you as an enemy to his regime though, so I'll agree with your implied statement of security for yourself. He won't win the 2012 election, but there will be an event so unexpected between the election and Inauguration day Sotero will find a way to justify his continued treason to the constitution.

As for my New Year's resolution.... It's not worth my time replying to any more of your repetetive BDS posts. It's clear you can't acknowledge Sotero is "the new boss, same as the old boss" and won't ever acknowledge where the real problem is..... in addition to Sotero's policies. When the direct rebuttals are provided and undisputedly shown to prove the thesis Sotero is the same boss, you simply make an ad hominem statement as your reply worthy of your 'valuable' time to post. Sol Alinsky would be proud of you.

In closing, the rest of the futures world knows what's going on. Keep your head in the sand... just don't try to convince others (at great endangerment to those others) that it's just (my) world that's about to crumble.

This MF Global situation isn’t just about a few bucks being stolen from a brokerage firm. Both the scope and cascading consequences of Corzine’s actions put this firmly in the domain of economic treason – as in an act of economic war upon the United States and her people. This is why I told Peter Schiff that execution should be on the table for Corzine. Treason, in whatever form, is a capital offense. If Schiff hadn’t cut me off, I would have explained this. Capital punishment is serious, solemn business. It’s not an inflammatory rhetorical tool. If execution is ever put on the table, there had better be a solid, well-thought out justification for it. In this situation of massive economic treason, it would be fully justified.

Oh yeah, if my 'prediction' is wrong, and it's a republican that wins the election, (and is inaugurated) I'm sure you'll remind us all (ad nauseum) who it was that signed into law the bill that will authorize critics of the next republican administration to be rounded up, held without trial, or simply executed at the command of the president.

No, you won't? Big surprise.