Wednesday, November 30, 2011

Gerald Celente - Trends Journal: I Got Effed by MF Global. Who’s Going to Eff You?

KINGSTON, NY, 28 November 2011 — The MF Global bankruptcy has more far reaching implications than are currently being acknowledged. Not simply an isolated instance of corporate mismanagement resulting in disastrous and irreparable effects on options and commodity futures markets, the MF bankruptcy – the eighth-largest in US history – is a harbinger of much worse to come.

Don't be taken in by today's stock market bounce that's based on the belief that Europe is coming closer to resolving its debt crisis, and that strong US Black Friday retail sales are a sign recession has been averted.

The European debt crisis is a long term-trend with no quick fixes. And the retail surge is no more than a flash mob spending spree hyped by a corporate media. The more they hype it and the more consumers spend, the more advertising space the media sells to retailers.

The MF meltdown, however, is symptomatic of a global economic system on the verge of collapse. No financial sector will escape unscathed: banks, brokerages, hedge funds, insurance companies, stocks and stock markets are all at risk.

When the evidence is pieced together, it proves how corrupt, bankrupt and dishonest the financial/political cabal that runs America is, and reveals the complicity of the media in covering up their masters’ misdeeds.

How I got Effed by MF Global, And Why it is Important to You I’ve been trading and buying gold since 1978. I am not a “speculator.” I buy coins and bullion as well as futures contracts. My involvement with MF Global went like this:

I made an agreement with the well-respected firm Lind-Waldock (subsequently bought by MF Global) to purchase gold future contracts, with due date for delivery of the gold in December 2011. Holding the gold “contracts” entailed a substantial “margin” requirement … in essence a deposit (similar to a layaway plan at a retail store).

From the time I bought the contracts, I kept building my account so that when it came time to take delivery in December, I would have a substantial amount of money in my account to complete the purchase. But that’s all gone now. My segregated account was raided and emptied, as were tens of thousands of other clients who trusted MF and the entire commodity futures exchange. Indeed, as evidenced in the video link, the CME Group that runs the exchange reneged on its promise as “
guarantor of every transaction that happens in our markets.” (Click here for CME Group’s statement of “guarantee”)

I had been Effed through no fault of my own, and I had a lot of company.

I want to make this absolutely clear: Buying gold to take delivery is NOT speculation! And it is delusion to believe that
you are immune to the systemic criminality that pervades virtually every aspect of the financial sector. MF Global, Lehman, Merrill Lynch, Washington Mutual, IndyMac Bank, Bear Stearns, Northern Rock, Countrywide, Dexia, Anglo Irish, Wachovia, Goldman Sachs, Citigroup, Bank of America, Wells Fargo, Morgan Stanley, Fidelity, Schwab, Vanguard … do you really know what went on, or is now going on behind the closed doors of these firms?

The Big EFF is Coming Which will be the next crooked insurance company, bank, brokerage, savings and loan, or financial institution to go belly up? If and when it happens, what assurance do you have that you won’t be robbed and victimized? Sure, sure, your savings and checking accounts, up to $250,000, are protected by the FDIC in the event of bank failure. But how long will it take to get your money when banks start falling like dominoes? Sure, sure, under SIPC rules, stock accounts are partially protected when your broker/dealer goes bankrupt. But will you still be alive by the time the legal fight is over?

Trends Journal subscribers have just been sent an “Urgent” Trend Alert. In our 20 years of publishing, we have rarely sent out an Alert that demands such immediate consideration.

In a few weeks, we will be releasing a synopsis of our
Top Trends for 2012. Among them will be a warning of a high probability for “economic martial law."

We are confident we know what will trigger it, what form it will take, and how Trends Journal subscribers can be among the few who will have the tools to escape its consequences.

Do you know where your money is? Will you get it back? Are you prepared?

Remember! The business and mainstream media will do everything in their power keep the “confidence game” going. By the time the general public realizes that "economic martial law" has been declared, it will be too late to act.

Prepare, survive, prevail …
renew your subscription now (Click here.) You won’t want to miss the “Urgent” Trend Alert subscribers received today … and you certainly won’t want to miss the Top Trends of 2012 coming soon.

Gerald Celente

PS: Times are tough and they are going to get a lot worse. If you are unable to pay the full subscription price, fill out this
discount request form. We will do our best to provide you with vital trend forecasts at a price you can afford … but cannot afford to be without.

60 Minutes: Hidden America

The following must-see 60 Minutes segment further highlights the deteriorating economic conditions across the United States.

MUST LISTEN: Eric Sprott Financial Crisis Worse Than 2008, and More…

King World News released the audio of their interview with Eric Sprott: Chairman, CEO & Portfolio Manager of Sprott Asset Management.

Eric has over 40 years of experience in the investment industry and manages over $10 billion. He has been stunningly accurate in his writings for over a decade, and is one of the most respected industry professionals who accurately foresaw the current crisis. Eric chronicled the dangers of excessive leverage as well as the bubbles the Fed was creating, while correctly forecasting the tragic collapse. Sprott Asset Management is one of the top firms in the world. The firm has become well known not only for its performance, but also for creating a gold and now silver trust.

You can listen to the interview HERE. (On the left side of the page, half way down, click on the small purple logo that reads, “Listen to MP3 – CLICK HERE”)

Eric Sprott: Investment Outlook (November 29, 2011)

Silver Producers: A Call to Action

by Eric Sprott and David Baker

November 29, 2011

As we approach the end of 2011, the silver spot price has admittedly endured a tougher road than we would have expected. And let’s be honest – what investment firm on earth has pounded the table on silver harder than we have? After the orchestrated silver sell-off in May 2011 (please see June 2011 MAAG article entitled, “Caveat Venditor“), silver promptly rose back to US$40/oz where it consolidated nicely, only to drop back below US$30 within a two week span in late September.1 The September sell-off was partly due to the market’s disappointment over Bernanke’s Operation Twist, which sounded interesting but didn’t involve any real money printing. Like the May sell-off before it, however, it was also exacerbated by a seemingly needless 21% margin rate hike by the CME on September 23rd, followed by a 20% margin hike by the Shanghai Gold Exchange – the CME’s counterpart in China, three days later.

The paper markets still dictate the spot market for physical gold and silver. When we talk about the “paper market”, we’re referring to any paper contract that claims to have an underlying link to the price of gold or silver, and we’re referring to contracts that are almost always levered. It’s highly questionable today whether the paper market has any true link to the physical market for gold and silver, and the futures market is the most obvious and influential “paper market” offender. When the futures exchanges like the CME hike margin rates unexpectedly, it’s usually under the pretense of protecting the “integrity of the exchange” by increasing the collateral (money) required to hold a position, both for the long (future buyer) and the short (future seller). When they unexpectedly raise margin requirements two days after silver has already declined by 22%, however, who do you think that margin increase hurts the most? The long buyer, or the short seller? By raising the margin requirement at the very moment the long contracts have already received an initial margin call (because the price of silver has dropped), they end up doubling the longs’ pain – essentially forcing them to sell their contracts. This in turn creates even more downward price pressure, and ends up exacerbating the very risks the margin hikes were allegedly designed to address.

When reviewing the performance of silver this year, it’s important to acknowledge that nothing fundamentally changed in the physical silver market during the sell-offs in May or mid-September. In both instances, the sell-offs were intensified by unexpected margin rate hikes on the heels of an initial price decline. It should also come as no surprise to readers that the “shorts” took advantage of the September sell-off by significantly reducing their silver short positions.2 Should physical silver be priced off these futures contracts? Absolutely not. That they have any relationship at all is somewhat laughable at this point. But futures contracts continue to heavily influence spot prices all the same, and as long as the “longs” settle futures contracts in cash, which they almost always do, the futures market-induced whipsawing will likely continue. It also serves to note that the class action lawsuits launched against two major banks for silver manipulation remain unresolved today, as does the ongoing CFTC investigation into silver manipulation which has yet to bear any discernible results.3

Meanwhile, despite the needless volatility triggered by the paper market, the physical market for silver has never been stronger. If the September sell-off proved anything, it’s the simple fact that PHYSICAL buyers of silver are not frightened by volatility. They view dips as buying opportunities, and they buy in size. During the month of September, the US Mint reported the second highest sales of physical silver coins in its history, with the majority of sales made in the last two weeks of the month.4 Reports from India in early October indicated that physical silver demand had created short-term supply issues for physical delivery due to problems with airline capacity.5 In China, which reportedly imported 264.69 tons (7.7 million oz) of silver in September alone, the volume of silver forward contracts on the Shanghai Gold Exchange was more than six times higher than the same period in 2010.6,7 It was clear to anyone following the silver market that the physical demand for the metal actually increased during the paper price decline. And why shouldn’t it? Have you been following Europe lately? Do the politicians and bureaucrats there give you confidence? Gold and silver are the most rational financial assets to own in this type of environment because they are no one’s liability. They are perfectly designed to protect us during these periods of extreme financial turmoil. And wouldn’t you know it, despite the volatility, gold and silver have continued to do their job in 2011. As we write this, in Canadian dollars, gold is up 23.4% on the year and silver’s up 6.8%. Meanwhile, the S&P/TSX is down -12.3%, the S&P 500 is down -5.1% and the DJIA is up a mere +0.26%.8

So here’s the question: we think we understand the value and great potential in silver today, and we know that the buyers who bought in late September most definitely understand it,… but do silver mining companies appreciate how exciting the prospects for silver are? Do the companies that actually mine the metal out of the ground understand the demand fundamentals driving the price of their underlying product? Perhaps even more importantly, do the miners understand the significant influence they could potentially have on that demand equation if they embraced their product as a currency?

According to the CPM Group, the total silver supply in 2011, including mine supply and secondary supply (scrap, recycling, etc.), will total 1.03 billion ounces.9 Of that, mine supply is expected to represent approximately 767 million ounces.10 Multiplied against the current spot price of US$31/oz, we’re talking about a total silver supply of roughly US$32 billion in value today. To put this number in perspective, it’s less than the cost of JP Morgan’s WaMu mortgage write downs in 2008.11

According to the Silver Institute, 777.4 million ounces of silver were used up in industrial applications, photography, jewelry and silverware in 2010.12 If we assume, given a weaker global economy, that this number drops to a flat 700 million ounces in 2011, it implies a surplus of roughly 300 million ounces of silver available for investment demand this year. At today’s silver spot price – we’re talking about roughly US$9 billion in value. This is where the miners can make an impact. If the largest pure play silver producers simply adopted the practice of holding 25% of their 2011 cash reserves in physical silver, they would account for almost 10% of that US$9 billion. If this practice we’re applied to the expected 2012 free cash flow of the same companies, the proportion of investable silver taken out of circulation could potentially be enormous.

Expressed another way, consider that the majority of silver miners today can mine silver for less than US$15 per ounce in operating costs. At US$30 silver, most companies will earn a pre-tax profit of at least US$15 per ounce this year. If we broadly assume an average tax rate of 33%, we’re looking at roughly US$10 of after-tax profit per ounce across the industry. If GFMS’s mining supply forecast proves accurate, it will mean that silver mine production will account for roughly 74% of the total silver supply this year. If silver miners were therefore to reinvest 25% of their 2011 earnings back into physical silver, they could potentially account for 21% of the approximate 300 million ounces (~$9 billion) available for investment in 2011. If they were to reinvest all their earnings back into silver, it would shrink available 2011 investment supply by 82%. This is a purely hypothetical exercise of course, but can you imagine the impact this practice would have on silver prices?

Silver miners need to acknowledge that investors buy their shares because they believe the price of silver is going higher. We certainly do, and we are extremely active in the silver equity space. We would never buy these stocks if we didn’t. Nothing would please us more than to see these companies begin to hold a portion of their cash reserves in the very metal they produce. Silver is just another form of currency today, after all, and a superior one at that.

To take this idea further, instead of selling all their silver for cash and depositing that cash in a levered bank, silver miners should seriously consider storing a portion of their reserves in physical silver OUTSIDE OF THE BANKING SYSTEM. Why take on all the risks of the bank when you can hold hard cash through the very metal that you mine? Given the current environment, we see much greater risk holding cash in a bank than we do in holding precious metals. And it serves to remember that thanks to 0% interest rates, banks don’t pay their customers to take on those risks today.

None of this should seem far-fetched. One of the key reasons investors have purchased physical gold and silver is to store some of their wealth outside of a financial system that looks increasingly broken. The European banking system is a living model of that breakdown. Recent reports have revealed that more than €80-billion was pulled out of Italian banks in August and September alone. In Greece, depositors have taken almost €50-billion out their banks since the beginning of 2010.13 Greek banks are now completely reliant on ECB funding to stay afloat. The situation has deteriorated to the point where over two thirds of the roughly 500 billion euros that banks have borrowed from the ECB are now being deposited back at the central bank.14 Why? Because they don’t trust other banks to stay afloat long enough to get their money back.

Silver miners shouldn’t feel any safer banking in the United States. Fitch Ratings recently warned that the US banks may face severe losses from their exposures to European debt if the contagion escalates.15 There’s very little at this point to suggest that it won’t. The roots of the 2008 meltdown live on in today’s crisis. We are still facing the same problems imposed by over-leverage in the financial system, and by postponing the proper solutions we’ve only increased those risks. We don’t expect the silver miners to corner the physical silver market, and we know the paper games will probably continue, but the silver miners must make a better effort to understand the inherent value of their product. Gold and silver are not traditional commodities, they are money. Their value lies in their ability to retain wealth in environments marked by negative real interest rates (), government intervention (), severe economic uncertainty () and vulnerable banking institutions (). Silver’s demand profile is heightened by its use in industrial applications, but it is the metal’s investment demand that will drive its future performance. The risk of keeping all of one’s excess cash in a bank is, in our opinion, considerably more than holding it in the more enduring form of money that silver represents. It’s time for silver producers to embrace their product in the same manner their shareholders already have.

For more information about Sprott Asset Management’s investment insights and award-winning investment capabilities, please visit

Low Risk Stocks With Quality Upside: ETN, INTC, LNCR, MSFT

Today's stock market is nothing more than a risky way to put capital to work. Yet, the degree of risk assumed in investing is ultimately borne by the investor when he makes a decision to buy or sell. For most of 2008, when valuations were stretched, risk of capital loss was at an all time high. Yet in 2009 when every one was hiding from stocks and businesses were being given away at low prices, actual risk of capital loss was much lower.

Techs Two
Technology has come a long way since the high flying Internet bubble days of the late 1990s. In fact, some of the more established technology names today represent some of the best low risk opportunities for investors. Leading chip maker Intel (Nasdaq:INTC) is basically like a rich annuity with a bonus option of capital gain from the stock. Trading around $23, shares yield nearly 4%, or double that of 10 year Treasuries. The company pays out around $3 billion in dividends, but collects over $9 billion in annual free cash flow. The balance sheet has approximately $7 billion in cash, and the stock trades for around 10 times earnings. If one were to hold Intel for 10 years, odds are very high that shares would easily outperform Treasuries with very low risk. (For related reading , see Measuring And Managing Investment Risk.)

Microsoft (Nasdaq:MSFT) is another cheap cash gushing tech giant. The business sits on over $40 billion in cash. Microsoft seems inclined to return more of that cash to investors via dividends each year. With only $5 billion a year being spent on dividends, no dividend is safer today. And a 3.3% yield is nothing to sneeze at in this low interest rate world.

Safe and Steady
Industrial giant Eaton Corp (NYSE:ETN) is another safe and steady stock that continues to move along for investors. A little capital appreciation in the share price along with the 3.4% dividend yield is all you need for a quality total return in this environment. The company's industrial electronic equipment is used in hundreds of industries and long-term demand will be stable for years to come. An aging population will require increased services from Lincare Holdings (Nasdaq:LNCR) which provides respiratory and oxygen tanks for the home health care market. Lincare's products are not only used by the elderly but also in prenatal nutrition, chemotherapy and other conditions that can affect anyone, regardless of age. Cash flows at Lincare are solid as evidenced by the 3.6% dividend yield. At approximately $22 a share, the business is trading around 10 times forward earnings.

The Bottom Line
The degree of risk assumed in investing is determined by one's own investment decisions, not by the stock market. One should not assume that the market is always risky or not. Rather, participate in those stocks where risk is low relative to the price you pay in exchange for future return.

Jay Taylor: Turning Hard Times Into Good Times

11/29/2011: The Next Government Sachs Scam. This Time it’s Housing

Is China going bankrupt faster than U.S.?

WASHINGTON – Here's a shocker.

China is going broke faster than the U.S., according to economic planner Kirk Elliott – who is making this point the lynchpin of a live webinar he's conducting for WND viewers today at 12:30 p.m. Eastern.

Here are some shocking facts Elliott discusses in a WND column today on which he will expound during the webinar:

  • China's debt is about $36 trillion yuan (or $5.68 trillion USD). This number is astronomical considering that it is just a little more than one-third of the U.S. total debt, but the difference between the U.S. and China is that the U.S. national income per capita is $47,140, whereas China's national income per capita is $4,260 – not even one-tenth of the U.S. amount. To be on par with the U.S., China's total debt should be around $1.5 trillion USD, but it is three times that! Considering that the U.S. has an unsustainable debt position, China's is ridiculously out of control and puts that country in extreme danger of a financial collapse of epic proportions.
  • China's officially published interest rate of 6.2 percent is fabricated. In reality China's inflation is 16 percent. This is eerily similar to the United States as well. The U.S. official inflation of around 3 percent is nowhere close to unofficial inflation estimates of 10-13 percent. What does this mean for China? This means that cost of living, wages and cost of goods sold in China will have to rise, and instead of exporting deflation, China will be exporting higher priced goods, thus affecting the rest of the world that purchases its goods. The world is on the verge of an inflationary cycle like we have never seen. Additionally, central banks around the globe are printing money on a massive scale to try to stimulate liquidity and spending (this is the definition of inflation!). Add to this a rising price structure in China, the major exporter to the world, and we could be preparing for a global hyperinflation.
  • Excess capacity in the economy and private consumption is only 30 percent of economic activity. Of course this is the case, as China's population is extremely poor and China is an exporting nation. The vast majority of its goods should not be private consumption. But, what the excess capacity indicates is that there is a global economic slowdown. Since China's growth is dependent on the rest of the world purchasing its goods, a global recession does not bode well for China's economic future.
  • China's officially published GDP growth of 9 percent is fabricated. The real number is a negative 10 percent! China's robust GDP has always been a pipe dream, as the country has been building infrastructure (railroads, highways and real estate development – including ghost cities). Since personal spending is only 30 percent of China's GDP, roughly 70 percent of China's GDP can be attributed to this massive build-up. It will dry up, as has already started. The regime is about to be exposed, as people are starting to wake up to the fact that the "emperor has no clothes."
  • China's taxes are too high. Taxes on Chinese businesses – indirect and direct – are 70 percent of earnings. Individual tax rates are 81.6 percent. There is no way China can remain strong with these high taxes. We thought our taxes were high – because they are! But we are like schoolboys compared to China. It is the big boy on the taxation block. It's just economics 101 – a country cannot remain strong or viable with tax rates this high. The population will ultimately revolt. I really believe China is ripe for revolution given these numbers; it's just a matter of time. Sadly, for the Chinese citizens, their strong-arm government will not look kindly on any kind of political or social opposition.

Elliott concludes: "There is an economic tsunami about to engulf China, and because of the size of China's economy and its manufacturing might, the impact of the tsunami will be felt far and wide. The United States will feel it in the form of inflationary pressures that we can't afford right now. Periphery countries to China may feel its military might or cower to political pressure as governments that run out of money start to do irrational things (look at the United States, or Greece, or the European Union)."

Total OTC Derivatives in $Billions

How To Prevent Identity Theft While Traveling

Identity theft doesn't just happen when you're at home. In fact, you may be even more vulnerable to it while traveling because you're carrying your valuable personal information around with you in unfamiliar and distracting environments. In this article, we'll give you some tips for keeping your identity safe while you're on the road.

Don't Perform Sensitive Transactions over Public Wi-Fi
Whether you pay for access or not, public Wi-Fi networks are not secure. It's tempting to log on in airports, hotels and airplanes whether you want to kill some time, check your email or make sure you have enough money in your bank account to pay for the rest of your trip.

Don't do it. Criminals can use a technique called Wi-Fi sniffing to intercept data transmitted insecurely over a wireless network, and programs that facilitate Wi-Fi sniffing are readily available online. Even accessing your Facebook account could be a bad idea. If someone hijacks your account, they could send embarrassing messages to your friends, post inappropriate status updates and do other things that might damage your reputation. Smartphone users can protect themselves by using their carrier's secure 3G or 4G service. Otherwise, handle any sensitive online business on your secure home network before you leave town.

Use a Different Computer Exclusively for Travel
Laptops and netbooks are so cheap these days that you might be able to afford more than one. If you travel enough to make such a purchase worthwhile, get a new computer that you will use exclusively for travel. Since it's not possible to completely erase data from a computer, strictly limit the amount of sensitive data that goes onto your travel computer. If it's lost or stolen, you won't have as big of a problem as if you had lost your main laptop with all your tax returns on it.

Clean out Your Wallet
Pare down the contents of your wallet to only the essential items you'll need on your trip. If your wallet is lost or stolen while you're traveling, it will be easier to clean up the mess if you know exactly what your wallet contained and if it only contains a few items. You'll need your driver's license or other ID, two different credit cards, some cash and that's about it. Leave your debit card at home if at all possible. Credit cards offer superior theft protection. You also shouldn't need your health insurance card, numerous credit cards or any checks. You certainly shouldn't bring your Social Security card with you. In fact, it should never be in your wallet.

Use a Money Belt
A wallet isn't that hard for a pickpocket to snatch, but a money belt that's worn under your clothes and against your body is considerably more difficult to grab. As long as you avoid getting into your money belt in public, a potential thief won't know where to look for it, and you'd likely feel it moving against your body if a pickpocket did manage to find it. Not all money belts are worn around the waist. Some can be worn around the leg or around the neck. Get one that feels comfortable and secure.

Put Mail Deliveries on Hold
Nothing says "we're not home" like a pile of newspapers in the driveway. And while you may not care if someone steals your newspaper while you're gone, you will care if they steal a package you ordered or anything out of your mailbox. You also don't want to signal that there's no one inside your home - if someone can steal your identity out of your mailbox, think of the damage they can do with all the documents that are probably lying around your house. It's free and easy to place a hold on your postal service deliveries at the USPS website, and many newspapers will also let you put your subscription on hold through their websites. Ideally you would also have a neighbor, friend or relative check your house once or twice a day for any flyers that get hung on your front door or left on your doorstep.

Be Cautious
No one wants to spend his or her entire vacation looking over his or her shoulder, and you don't have to be suspicious of everyone you meet. At the same time, you shouldn't be too trusting around strangers. Don't ask someone at the airport to watch your bag while you run to the restroom (that's a bad idea anyway given airport security procedures). Make sure no one is trying to observe what you're doing on your laptop or smartphone, be careful what you reveal in cell phone conversations in public places and be aware that strangers asking for help are sometimes trying to distract you while an associate picks your pocket.

The Bottom Line
Don't put yourself at high risk of identity theft when you travel. Identity theft is not a crime you can entirely prevent, but you can take basic precautions to minimize your risk of becoming a target.

The Economy Doesn't Matter To These Stocks: DG, FDO, ORLY, WMT

A good economy is certainly good for the stock market. Unfortunately, the reality of capitalism is that for all the good it does in terms of allocating capital to the most efficient sources, capitalism does come with setbacks. As the U.S. witnessed in 2008, some of those setbacks can be severe and prolonged.

Strong Economy Not Necessary

Every business wants to operate under a strong, growing economy; it's a tailwind that provides a great growth boost. However, since reality is such that no economy can remain consistently strong, investors can not rely on strong macro conditions. In any regard, investors should be focusing on the company and the quality of management first, and the macro situation second.

To be sure, weak economies always pose a degree of risk for companies, but there are businesses that continue to demonstrate they can prosper, whether or not the economy is strong. O'Reilly Automotive (Nasdaq:ORLY) is one of largest auto parts retailers in the U.S. Looking at O'Reilly's financial statements shows little indication that the economy suffered a heart attack in 2008. Net sales grew from about $3.5 billion in 2008, to almost $5.4 billion in 2010. Profits more than doubled from $186 million, to over $419 million over the same time period.

What Consumers Want
If you want to find out which companies are likely to continue to do well, just look at what consumers want and continue to buy; consider both individual and corporate consumers. Whether the economy is strong or weak, consumers are now very much interested in bargains, especially for basic commodity-like necessities.

Retailers like Dollar General (NYSE:DG) and Family Dollar (NYSE:FDO), which sell products like soap, towels, socks and other basics at rock bottom prices, are prospering and will continue to do so. Even certain food items can be bought for less at DG and FDO. With over 9,500 locations, DG has more locations than Wal-Mart (NYSE:WMT) and offers consumers the convenience of being nearby.

The reality is that no one really cares where they buy their brand of toothpaste or laundry detergent; all that matters is the price. Ultra discount retailers have managed to successfully compete with Wal-Mart on price and consumers continue to visit these stores, more and more.

The Bottom Line
Investors are better served by keeping things simple, especially when trying to navigate the choppy seas that characterize the current market environment. Look for businesses that create value or fulfill a need desired by today's consumer, then look for a good price point to investment. Add in a little patience and successful results are very attainable.

Money Found in Britain May Belong to MF Global

About $200 million in customer money that vanished from MF Global is believed to have surfaced at JPMorgan Chase in Britain, according to people briefed on the matter. The discovery could be the most significant breakthrough in a monthlong hunt for the missing funds.

During MF Global's last chaotic days, the brokerage firm overdrew an account at JPMorgan, according to another person who is close to the matter. Some investigators now believe the firm used customer funds to patch at least some of the hole, which would have been a significant breach of federal law.

MF Global transferred the roughly $200 million in the days before the firm filed for bankruptcy, said the people, who requested anonymity because the investigation was incomplete.

Some investigators suspect that the transfer to JPMorgan was the first major misuse of customer money at MF Global, the commodity brokerage powerhouse once run by Jon S. Corzine, the former Democratic governor of New Jersey. Authorities are also looking into whether JPMorgan initially questioned the source of the cash and sought proof from MF Global that it was complying with regulations, one of the people said.

The authorities believe MF Global failed to give JPMorgan full documentation for the cash, the people briefed on the matter said. But the bank's concerns hardly mattered because the money had already been transferred to the account in Britain. It is unclear whether investigators can recover the $200 million.

Representatives for both MF Global and JPMorgan declined to comment. A spokesman for the MF Global trustee, James W. Giddens, declined to comment.

JPMorgan has long been thought to hold some of the money that disappeared from MF Global. As one of MF Global's primary banks, JPMorgan has been a persistent presence in the firm's demise and the messy aftermath. The bank loaned to MF Global until its waning days and has been a vocal and tenacious presence as a creditor during the firm's bankruptcy hearings.

Rumors circulated briefly this month that the missing money had turned up at the bank. The reports were dispelled later in the same day, however, when investigators disclosed those funds had already been accounted for.

Some of the funds MF Global used to shore up its account with JPMorgan may have been legitimately transferred. Firms often keep a cushion of cash to protect customer accounts, which they are allowed to tap with certain restrictions. While the firm ultimately blew through that buffer, it is unclear when that happened and if it intentionally used customer money.

Some industry lawyers liken JPMorgan's role in the MF Global bankruptcy to the bank's position in the messy collapse of Lehman Brothers, albeit on a smaller scale. As the nation's largest bank, JPMorgan is intimately involved in many large bankruptcies. In 2008, as Lehman Brothers was struggling to survive, JPMorgan officials demanded several billion dollars in collateral to meet margin calls. Lehman acquiesced, severely draining its liquidity.

In the case of MF Global, the process is further complicated since the roughly $200 million is believed to be in Britain, which has its own bankruptcy rules.

The transfer came after a relatively routine overdraw of an account MF Global held at the bank, the person close to the matter said. JPMorgan systems picked up the shortfall and sent an automated message to MF Global, said the person, who requested anonymity because the information was private. The firm complied with JPMorgan's request and transferred the money, the person said.

After receiving the money, JPMorgan raised questions about its origins but received few answers. Some investigators suspect that MF Global transferred the customer money to another unit of the firm and mixed it with the company's capital before sending it to JPMorgan.

Such a transaction would have masked that it was customer money. It also would have violated a guiding principle of the futures industry: never mingle customer money with firm money.

The roughly $200 million that is believed to be at JPMorgan is a fraction of the money thought to be missing. The total amount of cash that is unaccounted for is itself the source of much debate.

Shortly after Oct. 31, when the firm filed for Chapter 11, authorities suspected that about $600 million in customer cash was nowhere to be found. Last week, Mr. Giddens's office put the number at $1.2 billion. Some regulators and the CME, the exchange where MF Global did much of its business, have disputed the larger estimate.

The missing money has prompted a wide-ranging federal investigation. The Commodity Futures Trading Commission is leading the search for the cash while the Federal Bureau of Investigation and federal prosecutors in New York and Chicago are examining potential criminal wrongdoing.

Neither the firm nor Mr. Corzine has been accused of wrongdoing. The lengthy search is owed in part to shortcomings in MF Global's recordkeeping .

Representatives for the F.B.I. and the C.F.T.C. declined to comment.

Next month, a pair of Congressional committees will examine MF Global's collapse, which came after investors and customers fled the firm amid worries over its risky wagers on European sovereign debt. The Senate Agriculture Committee will hold the first hearing on Dec. 13, followed by the oversight panel of the House Financial Services Committee on Dec. 15.

For the first time, lawmakers are looking to publicly question Mr. Corzine, who spent five years on Capitol Hill as a Democratic senator from New Jersey. He resigned as head of the firm earlier this month. In addition, they hope to call as a witness MF Global's chief operating officer, Bradley Abelow, who served as Mr. Corzine's chief of staff when he was governor of New Jersey. Mr. Abelow and Mr. Corzine have not responded to the request from lawmakers on the House committee, according to a person with knowledge of the matter who was not allowed to speak publicly. It is unclear if the two men will agree to attend.

The deadline for a response is approaching. Should Mr. Corzine and Mr. Abelow decline, the committee can subpoena the executives.