The Great Sugar Shakedown

[adoucette]

Sorry Michael, you said they paid NO TAXES.

I showed you were wrong.

They paid plenty of taxes, including income taxes.

Now you are quibbling about who they paid them to?

It will probably take more time to prove that this latest allegation is also not likely true, but why should I bother when you are consistantly shown to be wrong?

 

[adoucette]

Oh, so, did you know at present there's NO INVESTIGATIONS into how Corzine stole $1.2 BILLION DOLLARS on a bad bet he made? What happened Arthur? I thought the government was going to investigate and all the information would come out and we'd have a trial by peers and then justice would be served. You know, you were going to "wait and hold off on you judgement". Well, you'll never make a call because there isn't going to be a serious investigation and Corzine will walk away having committed the biggest theft of Private Property in Human history - JUST as I said it would be.

I guess you just don't keep up with the actual FACTS in the case do you?

Jon S. Corzine, the former chief executive of MF Global, was told during the brokerage firm’s final day of business that a crucial transfer of $175 million came from the firm’s own money, not from a customer account, according to an internal e-mail.

The e-mail, sent by an executive in MF Global’s Chicago office, showed that the company had transferred $175 million to replenish an overdrawn account at JPMorgan Chase in London. The transfer, the e-mail said, was a “House Wire,” meaning that it came from the firm’s own money. The e-mail, sent at 2:20 p.m. on Oct. 28 to Mr. Corzine and two of his assistants in New York, says the transfer came from a “nonseg” account, industry speak for a noncustomer account.

http://dealbook.nytimes.com/2012/03/25/e-mail-to-corzine-said-transfer-was-not-customer-money/

 

[Carcano]

I disagree that the role of the government is to do what's best for the nation. As a matter of fact, I worry that 'what's good for the nation' is a slippery slope - one we've already fallen down as is evidenced by how shit the nation now is. The role of the government, it's mandate, is to protect property rights and see that the Law is upheld. Once those things are taken care of, the people of the Nation will do what's best for it.

Take the case of sugar. Who is to say that keeping those 1300 fat-cat sugar plantation owners in business is GOOD for the nation? I can tell you who doesn't think so, the candy makers. Candy markers value add, whereas sugar producers don't. On that alone, candy producers are more economically valuable to the Nation. If the government truly gave two shits about what was good for the Nation, it'd do what's best for Candy makers NOT inefficient plantation owners. But, how would the government know? They wouldn't. Which is why it's best if they stay as far away from doing 'what's best for the Nation' as that's a sure fire way to destroy the nation fastest!


In this case we ended up with a few FAT overly rich plantation owners (who probably hire Mexicans to cut the sugarcane, I damn sure it isn't American citizens doing that back breaking labor).

I agree that the government should not encroach on PERSONAL LIBERTY...the right to do whatever you wish to yourself, even if it means killing yourself.

In my county suicide is actually illegal..!

By aside from upholding the law, maintaining a military and infrastructure I believe there is a role for government in many other public areas.

Not many people know that the federal government for most of US history was funded entirely by import tariffs and excise taxes.

Currently, the average middle class American pays more tax than a medieval serf.

And votes less often than a citizen of republican Rome.

BTW, Sugarcane production in the southern states is done by machines...not mexicans with machetes.

 

[Carcano]

You failed to consider the losses of tax revenue from the many more US jobs destroyed, just in the candy industry alone by the high domestic price of sugar. The higher than need be cost of US food that contains sugar...

The higher cost of sugar has already led to the use of US high-fructose corn syrup as a replacement...and the price of the sweetener in candy is very low as a ratio of its final retail price.

Again, as long as all the money stays in the country, the net result of protectionism is a benefit.

 

[Carcano]

Just the loss in exports of soy etc. which is not produced on the land it could have been grown on as growing sugar (an artificially more profitable use of the land)

Soybean production happens in the mid-west...where it is viable.

Not in the southern states, where the climate is perfect for sugarcane.

 

[Billy T]

... Again, as long as all the money stays in the country, the net result of protectionism is a benefit.

But it does not. Nor do many jobs. A large candy company moved to Canada due to sugar being available there at the much lower global price.

Soy beans grow quite well in the south, where weather conditions are quite like those in Brazil´s huge soy bean fields. In fact ANYWHERE you can grow cane, you can grow soy bean - not uncommon in Brazil to alternate these crops.

The main substitution of high-fructose corn syrup was in soft drinks, not candy. You need the candy not to melt on a hot day. For example there is no high-fructose corn syrup in a Hersey bar just sugar and coco mainly.

When Nestle (or Godiva, or Cadbury, etc.)* buys Hersey as it is less economically competive with high cost sugar, then perhaps you will understand how much damage in many forms the millions given to 1300 people with strong lobby causes the US. (Higher food cost, large net lost of jobs, higher taxes for subsidies, reduced candy exports, (and some agricultural exports of higher value that could have been grown where the cane is as it gets great financial help from the tariff wall keeping cheap sugar our.)

* US should not be buying from these foreign candy producers, but now in Chocolate at least (could not find dollar data for hard candies) they sell us 150% more than we can sell the whole world. That hurts US balance of payments. When you are honest about the accounting, there are only nets loses in many different areas with the sugar tariff wall.

 

[quadraphonics]

The main substitution of high-fructose corn syrup was in soft drinks, not candy. You need the candy not to melt on a hot day. For example there is no high-fructose corn syrup in a Hersey bar just sugar and coco mainly.

Not sure where you got that idea, but Hershey's chocolate is the exception that proves the rule, which is: HFCS is in widespread use in American candy products. You will have a hard time finding mass-produced candy in the USA that doesn't include it (a few notable exceptions, mostly in the solid chocolate sector, notwithstanding).

And regular corn syrup has long been used in chocolate as well (See's uses it), since well before the advent of HFCS. Likewise, most "chocolate bars" that are anything other than pure chocolate (and maybe nuts) contain HFCS.

 

[Billy T]

Not sure where you got that idea, but Hershey's chocolate is the exception that proves the rule, which is: HFCS is in widespread use in American candy products. You will have a hard time finding mass-produced candy in the USA that doesn't include it (a few notable exceptions, mostly in the solid chocolate sector, notwithstanding).

And regular corn syrup has long been used in chocolate as well (See's uses it), since well before the advent of HFCS. Likewise, most "chocolate bars" that are anything other than pure chocolate (and maybe nuts) contain HFCS.

Thanks for the correction. That was not the case quite a few years ago when I lived in the US. Probably the much higher cost of sugar in the US forced Hershey to use "second best" HFCS.

It is sort of obvious, I think, that almost all of the higher quality Chocolate in US is imported - to survive Hersey has targeted the lower end of the economic demand.

I can´t check the ingredients of Hershey as very little (or none?) is sold in Brazil. All the good chocolate is Swiss, Belgium or British made. - Illustrating my point that high quality US made (with expensive sugar) Chocolate is not competitive for export.

Brazil makes with Brazilian coco grown in the NE, and cheap sugar, huge tonnage of chocolate, especially now as large Easter eggs. Currently (or just before Easter, several isles in my large grocery store have large over head racks completely covering the isle with chocolate eggs hanging down from the rack just over my head. It is good (sort like I remember Hershey bars) but not as good as the imported chocolates, but it sells for about half the price.

Do you know for the US chocolates that do use HFCS what fraction is sugar and what fraction is HFCS? I would guess they put as much HFCS in as possible to save money.

 

[Michael]

Sorry Michael, you said they paid NO TAXES.

I showed you were wrong.

They paid plenty of taxes, including income taxes.

Now you are quibbling about who they paid them to?

It will probably take more time to prove that this latest allegation is also not likely true, but why should I bother when you are consistantly shown to be wrong?

It was an example of how government is milking YOU Arthur via income tax (which is immoral) and lets the fat cats walk away tax free. I mean, that was the point of my post if you recall. How Americans are being bilked of 33% of their income.

Interestingly, there have been cases of Americans that have never filed income tax return and because they didn't sign off no that legal agreement they don't have to pay. They've been sued and actually won in court. In other instances people have lost in court while making the same argument. Which suggests the notion of income tax is hazy - at best. It was never meant to be a part of our 'Great Experiment'. There was a reason why we had limited government.

Did you know there's never been a case in history of a nation whose government did not continuously grow. Also, all nations that have risen, have fallen. I believe these two historical observations are intimately related to one another.

 

[Michael]

I guess you just don't keep up with the actual FACTS in the case do you?



http://dealbook.nytimes.com/2012/03/25/e-mail-to-corzine-said-transfer-was-not-customer-money/

March 26 (Bloomberg) -- Bloomberg's Sheila Dharmarajan reports that Jon Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co., according to a memo written by Congressional investigators.


Lets think about this logically. Imagine you were going to steal $1.2 Billion dollars and you're a smart man. Do you think you might NOT send emails around and you MIGHT just want to, oh I don't know, tell people directly. I sure as hell know if I was going to steal $1.2 Billion, I wouldn't be doing it via emails! That an email popped up suggesting he didn't does not surprise me. If I were worth $300 million, knew the Congress and how Congressional hearings work, had the POTUS in my pocket along with many influential congressmen... well, I'd have all sorts of emails suggesting I didn't know nutten. I was just the CEO. I didn't know nutten. Nutten! Me was just a poor wittle CEO. Nutten I tells ya. I didn't know nutten.... Then I'd let the statue of limitations run out, I mean hey, they did it for the other crooks on Wallstreet, they will do it for me too. I have way too much dirt on all of them for them not to. Oh, and looky here, an email that says I didn't know nutten.

 

[Michael]

I agree that the government should not encroach on PERSONAL LIBERTY...the right to do whatever you wish to yourself, even if it means killing yourself.

In my county suicide is actually illegal..!

By aside from upholding the law, maintaining a military and infrastructure I believe there is a role for government in many other public areas.

Not many people know that the federal government for most of US history was funded entirely by import tariffs and excise taxes.

Currently, the average middle class American pays more tax than a medieval serf.

And votes less often than a citizen of republican Rome.

BTW, Sugarcane production in the southern states is done by machines...not mexicans with machetes.

I agree that government can take on additional roles (and sadly has), but, so can the public. The public can organize itself to do anything the government can do with the exception of initiation of violence. Because the government has this legal ability, it must be limited - or it will abuse it.

See: Patriot Act

Also, in order to prevent politicians from bribing the public we need competing currencies so that if the government were to issue currency it's held in check by other potentially more valuable currencies.

However, at the end of the day it comes down to the people who make up society. If the people who make up society believe it's moral to steal from their neighbor who is 'rich'. Well, you will have the immoral society we live in today. Or so it seems to me :shrug:

I can't tell you the number of people I know trying to work the system - and proud to tell you as much. Getting out of paying tax seems to be a point of pride with most people. AND YET these same people want the so-called government-provided services to continue and even more! Everyone knows there's no free lunch. They know that if they aren't paying then someone else is. Yet, they don't have a qualm with stealing. I've seen everything from 'disability' (actually lazy - I mean they seem to work Facebook and PS3 well enough) to simply writing their vacations and perks off on their tax.

 

[adoucette]

March 26 (Bloomberg) -- Bloomberg's Sheila Dharmarajan reports that Jon Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co., according to a memo written by Congressional investigators.

Listen to your own link Michael.
That's the SAME email referenced in the NY Times story and the email was sent by an executive in MF Global’s Chicago office and it showed that the company had transferred $175 million to replenish an overdrawn account at JPMorgan Chase in London. The transfer, the e-mail said, was a “House Wire,” meaning that it came from the firm’s own money.

Lets think about this logically. Imagine you were going to steal $1.2 Billion dollars and you're a smart man.

Well to start with, he didn't steal anything, in the sense that no one is charging that the money ended up in his pocket.

The Firm LOST the money in bad investments.

The problem is in the last few days, for reasons which are still not known, too much Customer money was used then it should have been.

So far it there is still no compelling evidence that Jon was aware of this.

Indeed this last email is an example of why he wouldn't have been aware, since the email from the Chicago office said it was HOUSE MONEY that was being transferred.

One of the really messy parts of this is that existing laws ALLOWED the funds to be mixed, legally, and so the accounting systems also allowed it, but apparently with little control to insure that too much customer money wasn't put at risk.

Do you think you might NOT send emails around and you MIGHT just want to, oh I don't know, tell people directly. I sure as hell know if I was going to steal $1.2 Billion, I wouldn't be doing it via emails! That an email popped up suggesting he didn't does not surprise me.

And no one would do that kind of movement of money if it WASN'T in writing, because if you do it without written authorization then your butt is on the line and EVERYONE who can move money in those denominations knows that.

Look, if someone did something wrong DELIBERATELY, then someone is going to get in trouble for this and it's not likely that someone is going to take the blame for Corzine if it was something he did on purpose, but one would need proof that it was and so far that hasn't come up.

and looky here, an email that says I didn't know nutten.

And if you knew how complex computer accounting systems like this work, it's quite easy to understand why he might not have known nutten.

 

[Michael]

Well to start with, he didn't steal anything, in the sense that no one is charging that the money ended up in his pocket.

The Firm LOST the money in bad investments.

A perfect example of why the notion of 'Corporation' exists - to shield Citizens from their criminality. 'The Firm' went bankrupt, not Corzine. The government has two freaken mandates, protect property rights and uphold the Law. What does it do? Creates a fiction called a Corporation so it can get out of protecting property rights and let weasels like Corzine slide past being held accountable.

If you think $1.2 Billion dollars can be harvested out of private accounts, something that has NEVER EVER EVER BEEN done since the founding the Duthc East Indian Company created markets in 1602 then you are completely naive (willingly or otherwise). Corzine personally placed this bet on the Euro. HE took over FM Global a mutual insurance company founded in the 1800s and ran it straight into the ground by making one fat bet on the Euro. HE did that Arthur. Of course he knew everything that was going on in MF Global. He's the one that placed the god damn bet.

What planet do you live on? The Planet LaLa Land? Turn off CSI and slowly back away from the TV. Only a complete imbecile could imagine a scenario where Corzine takes control of MG Global, personally places abet on the Euro worth $1.2 Billion, looses this bet and knows it can not be covered, then suddenly it is covered when the personal bank accounts are stolen from covering the bet! AND he didn't know about it!?!?!

I'm pretty sure a 12 year old can peace this one together.... I also sure you're not a complete imbecile. So why the farce?

Anyway, I know he won't be held accountable. He has $300 million dollars and plenty of CONgress in his pocket and was one of Obama's biggest campaigne contributors. BUT, I digree, lets do as you suggest and await the trial by a Jury of his Peers. When is that scheduled by the way? Or is this a case of a Congressional 'Hearing' where his buddies put on a show and he walks scott f%cking free.

Yeah, lets see the Trial by a Jury of his Peers.

 

[adoucette]

No Michael, back to the original article:

A transfer of money from a customer account does not in and of itself constitute wrongdoing. Companies often keep a buffer of their own money with client money to cover sudden market losses, and can withdraw their own money at will. If a firm dips beneath that buffer, however, it has violated federal regulations.

Which means that the computer systems allowed this intermingling of funds.

At this point, we don't know how too much customer money was used.

Why?

Giddens is part of a small army of professionals sorting through the MF Global's books and looking for the money: a staff of around a dozen lawyers and paralegals from Giddens' law firm, Hughes Hubbard & Reed; 100 consultants from Deloitte; 60 accountants from Ernst & Young; and 190 ex-MF Global staffers hired temporarily to help in the clean up.

The task has been made significantly more difficult by the poor quality of the firm's bookkeeping, said Kent Jarrell, a spokesman for Giddens. http://money.cnn.com/2011/12/06/news/companies/mf_global_money/index.htm?iid=EAL

Note that last part: the poor quality of the firm's bookkeeping

So yes, it is entirely possible that this was mainly an accounting screw up and NOT something done by Corzine.

No I'm not naive. Indeed I'm sure I know this area FAR better than you do as this area is pretty much the business I'm in (on the accounting software side, but for Banks, not investment firms, but the concepts are very similar) and knowing the complexity of these accounting systems I'm quite sure this kind of thing is possible without the necessity of anyone actually doing anything wrong ON PURPOSE.

Indeed, an accounting problem like this, having too much customer money being accounted for as the firm's money, could have existed for a very long time (even pre Corzine), and the only reason it even shows up as an issue is because the firm's balances went negative.

That's not to say that something wasn't done wrong on purpose, but that's simply not been established yet, even though a small army of accountants have been going through the books for months on end.

 

[Michael]

Let's see the trial by jury. When is that going to happen?

 

[adoucette]

For a Criminal tiral, first you have to find that someone did something illegal.
So far that hasn't happened (though they are still looking)

BUT

The top execs, including Corzine have what's known as a Fiduciary Responsibility to their customers, and their PERSONAL assets are on the line for that.

BUT

That would be a CIVIL case, as they would be sued for damages due to neglecting these responsibilities (ie running the firm with a poor quality bookeeping system), and not a criminal case.

Still, considering Jon's rather short time at the firm, I doubt he would be the one who takes the big hit here, the CFO and possibly the CIO and the Board would likely be more in line for the bigger share of the responsibility if this turns out to be because of poor control of "Systemic Risk".

 

[Carcano]

But it does not. Nor do many jobs. A large candy company moved to Canada due to sugar being available there at the much lower global price.

The sugar tariffs have been beneficial to the US in many other ways when you consider the spin-off effects of HFCS substitution. A higher production of corn means lower prices for corn oil and the high protein animal feed made from the germ.

Amazingly, Brazil has even taken to importing American corn ethanol when its own supply is down:

http://www.agrimoney.com/news/exclusive---sugar-squeezed-brazil-buys-us-ethanol--2888.html


"The scarcity of sugar products in Brazil, the top producer, has led the country to turn to the US for corn-based ethanol to replenish depleted supplies of its own cane-based alternative.

Brazil's North East region has, in an unusual if not unprecedented move, begun importing US ethanol to replenish supplies lost as soaring sugar prices encouraged mills to turn cane into sweeteners rather than biofuels.

The move defies typical industry dynamics which, as sugar ethanol is less energy-intensive to manufacture than America's corn-based biofuel, typically makes Brazil's version significantly more competitive."

 

[Carcano]

I forget the correct number, but it is more than 100 pounds of sugar the non-diabetic average American consumes each year as sugar is added to almost everything he eats. Thus the cost to Americans is above $1000 per year added to their food bill.

I looked it up...the actual figures for US sugar consumption are 46.7lbs of sucrose and 37.7lbs of HFCS.

http://en.wikipedia.org/wiki/High-fructose_corn_syrup

At 25 cents per pound thats $11.67 per year...far less than your $1000 guess.

 

[Michael]

This is why I suggest going to first principals - which is the problem, no one knows or agrees as to what those are. If the role of government is pretty much limited to protection of private property and ensuring the law if upheld and protecting the boarders, then it has no right to put tariffs on sugar. It's up to the citizens to decide for themselves if they do or do not want to purchase American produced sugar.

One could argue if it protects sugar, then it should protect the candy as well and not allow candy made in Canada to be sold in the USA if it in any way harms US candy producers. But, why stop there? How about cars? TVs? Everything? Nothing should be allowed to compete with a US company inside the US. But, then what about between states? How about jobs? Perhaps the government should protect all jobs. Which is more important, jobs or property? You can't have it both ways. You're going to have to make a choice as to which is more important. If it's jobs then how about no one owns anything and only US made items are provided to the US public. Such items could be provided to all citizens - free of charge. I mean, why not? Who is to say what is and is not correct?

If we agree stealing is not moral, then we cannot subsidize sugar farmers and in a truly free society the Citizens will be left to choose for themselves.

 

[Michael]

For a Criminal tiral, first you have to find that someone did something illegal.
So far that hasn't happened (though they are still looking)

BUT

The top execs, including Corzine have what's known as a Fiduciary Responsibility to their customers, and their PERSONAL assets are on the line for that.

BUT

That would be a CIVIL case, as they would be sued for damages due to neglecting these responsibilities (ie running the firm with a poor quality bookeeping system), and not a criminal case.

Still, considering Jon's rather short time at the firm, I doubt he would be the one who takes the big hit here, the CFO and possibly the CIO and the Board would likely be more in line for the bigger share of the responsibility if this turns out to be because of poor control of "Systemic Risk".

MF Global was apparently doing fine until they let that dipshit Corzine place billion dollars bets on carry trades.

Mark my words: A slight slap on the wrist at most.


One would think, given your expertise, you'd at least think about some of the benefits a monetary system of competing currencies would provide the US.