Obama’s Democrat cronies steal 1.5 billion on Wall Street

A major story hit the news 2 days ago that barely saw the light of day in the high-profile mainstream media. The story was about the investment firm MF Global and its CEO, who is a crony of Barack Obama and Democrats in Congress. Jon Corzine, former Democratic U.S. Senator from New Jersey and former Governor of the state, had been the CEO of the Wall Street firm until Friday. 2 days before, on Wednesday, it was reported that Corzine had lost over 600 million dollars in investors' money betting on European debt. By Thursday that figure was correctly set at 1.5 billion.

On Friday Corzine resigned.

In the aftermath of the fiasco, MF Global is now the subject of an investigation. Regulators suspect there was 'insider trading.'

Corzine is a former head of the Wall Street firm Goldman-Sachs, the entity from which Barack Obama has tapped many of his top economic advisers, including Treasury Secretary Timothy Geithner, Larry Summers, Robert Rubin, Alice Rivlin, Steve Rattner, Mark Patterson, Anne Fudge, David Lipton, and Michael Frohman, among others.

Goldman-Sachs has also been one of the top contributors to the 2008 Obama Presidential campaign, giving over a million dollars to Obama's presidential bid. Only the University of California gave more money to the Obama campaign.  

According to Ann Barnhardt of Barnhardt Capital Management, Inc., it was painful having to tell her clients that the money they invested with Corzine at MF Global was gone:

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Here We Go Again:Wall Street Takes a Dive

FOX Business: The Power to Prosper

Spooked traders fled equities and raced into safe-haven assets amid growing euro zone and global economic tension, shoving the Dow nearly 500 points into negative territory. 

Today's Markets

As of 3:16 p.m ET, the Dow Jones Industrial Average plummeted 494 points, or 4.3%, to 10,915, the S&P 500 slid 60.1 points, or 5%, to 1,134 and the Nasdaq Composite tumbled 141 points, or 5.6%, to 2,370. The FOX 50 plunged 37.6 points to 823.  

Energy and materials stocks like Halliburton (HAL: 40.40, -5.05, -11.12%) and U.S. Steel (X: 27.08, -3.01, -10.00%) took the strongest beating. However, the selloff was broad, with industrials such as General Electric (GE: 15.22, -1.01, -6.23%) and most other sectors coming under intense selling pressure as well. 

In a sign of the uncertainty in the markets, safe-haven assets rallied in early trading. Gold jumped $28.20, or 1.6%, to $1,822 a troy ounce, settling at a record high. The benchmark 10-year treasury rallied, with the price soaring over $100, and the yield slumping to an all-time low below 2%. 

Volatility was quite high on the day. Indeed, the VIX, often referred to as a gauge of fear, spiked 33%.  

The economy has come squarely back into focus with a heavy stream of economic data released on Thursday. Morgan Stanley also warned the global economy is "dangerously close to a recession" and cut its global economic growth outlook significantly. Goldman Sachs also pared back its forecast of economic growth. 

Manufacturing in the Philadelphia area contracted sharply in August.  The Philadelphia Federal Reserve's gauge of manufacturing activity came in at -30.7, far short of expectations of 3.7.  Reading above 0 point to expansion, while those below 0 indicate contraction. 

A number below the -20 level is "rare outside of a recession" and poses a "very worrying development" for policymakers who are working to keep the economy afloat, according to economists at Barclays Capital. 

The markets are being driven lower "not only be the euro zone ... but also a relentless release of domestic data that speaks to both an underlying inflationary environment and anemic – if not stagnant growth here in the U.S.," Peter Kenny, managing director at Knight Capital Group said in a note to clients. 

Wall Street has also been paying close attention to the sovereign debt crisis in Europe for several months.  The fears peaked last week when reports suggesting certain large European banking institutions may have issues gaining access to sufficient capital sparked massive selloffs and volatility.  

A report on Thursday by The Wall Street Journal saying the Federal Reserve is very concerned about major European banks facing significant funding difficulties rekindled those fears.  The Fed was also worried that the crisis on the other side of the Atlantic could spillover into the U.S. banking system, according to the report. 

Major European financial services companies like Societe Generale, Barclays (BCS: 10.19, -1.39, -12.00%) and UBS (UBS: 13.32, -1.30, -8.92%) took sizeable losses on the news. 

Earlier this week, French President Nicolas Sarkozy and German Chancellor Angela Merkel failed to quell market concerns after a summit failed to produce a specific solution to address sovereign debt concerns in the 17-member European Union. 

Energy Markets Sell Off 

Energy markets were under pressure amid economic concerns and a stronger dollar.  Light, sweet crude plunged $5.20, or 5.9%, $82.38 a barrel.  Wholesale RBOB gasoline dipped 9 cents, or 3%, to $2.78 a gallon. 

In currencies, the euro fell 0.72% against the U.S. dollar, while the greenback climbed 0.6% against a basket of world currencies. 

Read more: http://www.foxbusiness.com/markets/2011/08/18/daily-market-update/#ixzz1VPg52v3e