In the wake of the MF Global scandal, Ms. Barnhardt concluded that she could not look her clients in the eye and suggest they invest their funds into a rigged market. The market has risks enough, run on a fair and competent basis. But if the dice are loaded, the cards marked, if the fix is in--then it is time to go home.
Today, Ms. Barnhardt sent this message to her clients (OS quotes in part--and urges his readers to read it all.)
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
This isn't like shutting down a mom-and-pop retail store, when MomAndPop have decided they've had enough. People like Ms. Barnhardt love their line of work, know that only a handful of people are good at it, and know if conducted properly, customers benefit from her work. And, it's lucrative!
That is hard to walk away from, turn out the lights, close the door, close all positions and hand the money back to the clients. It's walking away from a life's work, a goal achieved, a dream come true. And, yet, she did, and informed her clients as to her reasoning.
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
The lady is unashamedly Christian, and decided to heed the words of the Master who admonished: What doth it profit a man if he gain the whole world, and yet lose his soul?
Her entire blog page is fascinating to read...OS leaves it to his readers to explore.
OS understands, although does not compare himself to her. There was a time, though, when he had to walk away from a business he had always dreamed of building and owning, because it had turned evil. He knew it would fall of its own weight once he stepped away, and it did. It hurt--a lot. The memory is still tender to the touch.
But, upon turning away, the real adventure began.
Here's wishing Ms. Barnhardt well, and hoping her tribe increases.
