You Don't Own What You Think You Own!

Brenda Burton <[email protected]>

Fwd: Fw: You don't own what you think you own!1 message

Shirley Rickett <[email protected]> Mon, Oct 15, 2012 at 10:43 AMTo: Undisclosed recipient <[email protected]>

thanks, Greg GET YOUR SILVER AND GOLD ASAP

--- On Sun, 10/14/12,

Subject: Fwd: Fw: You don't own what you think you own!

Date: Sunday, October 14, 2012, 11:40 PM

PUT YOUR ASSETS IN PHYSICAL GOODS

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If you own stocks or bonds or anyinvestment through a broker, you don’treally own those investments. They arepooled and if the broker goes under,you’re shit out of luck. Not only don’t youown the investments you bought with yourown money, but your broker has pledgedthose assets many times over. The CaseyReport has a jaw dropping interview with

Gmail - Fwd: Fw: You don't own what you think you own! https://mail.google.com/mail/?ui=2&ik=9eb89f17bf&view=pt&...

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hedge fund manager David Webb, whoreveals the truth about our financialsystem. The conclusion is that yourowners don’t give a dang about you. Theyhave your money and they want more.And they will get it. Here are a few choicequotes from the interview:

“It took me some years to uncover thebasis for how this has changed. It allarises from a revision of the UniformCommercial Code, Article 8, in 1994. Thisarticle governs securities “ownership.”When they did this revision in 1994, theycreated a completely new legal conceptcalled a “security entitlement,” whichmeans that a security is now a contractualclaim rather than property. That’s the key,and it’s hugely important because acontractual claim in a bankruptcyproceeding has very little standing. Soeven though there are records that a


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particular security is your property, it’sreally not. If your broker goes bankrupt,those securities, by law, become part ofthe bankruptcy estate. As a client, youcannot revindicate those securities in abankruptcy. Of course, secured creditorshave a higher priority to the assets of thebankruptcy estate than you do. So you’releft with an inferior claim to what youthought was your own property.”“But it gets worse. All of the securities arepooled – there is no specific identificationof who owns what. By law, in abankruptcy, the losses must be shared prorata across the client pool. So even if aclient somehow manages to get a legalassurance that their securities are notbeing hypothecated, they are still in a poolwhere other clients have margin accountsand their securities are beinghypothecated. Hypothecation is when afirm pledges a clients’ assets as collateral


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to another party. The securities firm isallowed to use the client assets ascollateral for its own proprietary trading.In my book, that’s fraud. But it is perfectlylegal. So the securities firm borrows thesecurity on the assumption that it willreturn like securities to the pool. But, ofcourse, when an insolvency occurs, themusic stops and those securities are notreturned. The firm that received thosesecurities as collateral is a securedcreditor, and if there is a bankruptcy, theytake those assets – the assets you thoughtyou owned – and immediately sell them.They are gone. And you’re left as anunsecured creditor, which means you getwhat’s left over at the end, if anything.Further, in 2005, the Bush administrationrewrote the bankruptcy law. There used tobe a concept of “fraudulent conveyance,”which meant that if a firm transferredassets to a secured creditor within six


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months before its bankruptcy filing, thereceiver was required by law to give thoseassets back. It’s called a clawback. Butthis revision of the bankruptcy lawchanged that. The law now specificallysays that the receiver is not to claw backthe assets. So what was considered afraudulent conveyance prior to 2005 isnow legal. This is very similar to whathappened with MF Global and theirtransfer of client assets to JPMorgan. Butit was not considered fraud. Everythingwas done according to the law.”“One set of assets can be used ascollateral multiple times, which is calledrehypothecation. So a securities firm givesclient assets to a secured creditor ascollateral for proprietary trading. Thesecured creditor can then turn around anduse those same assets as collateral fortheir own proprietary trading. So thoseassets are passed on to another firm as


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collateral, and so on. This is the chain ofhypothecation and rehypothecation; thesame assets are used as collateral overand over again. I can’t stress this next partenough – it’s very, very important. Thereare about $700 trillion of derivativesworldwide in a $70 trillion economy. It’spretty easy to see that there cannotpossibly be enough collateral backing.The entire financial asset base of thepublic is being used as collateral. This is ahuge risk that everyone bears, whetherthey know it or not. If we have a majorfailure anywhere in that collateral chain,the collateral is pulled out and cannot bereturned to the pool.”

When the collapse ensues, they will takeyour money. Laws won’t matter. Justicewon’t matter. Fairness won’t matter. Youwon’t matter. They want it all.--

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You Don't Own What You Think You Own!