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Yes, but MF Global will only pay from their assets. Segregated client accounts do not form part of MF Global's assets. If they do, it is the END of the futures industry, PERIOD. The people running the exchanges and FCMs know this.. why would the guys selling the picks and shovels scare away the...

Yes, that's right, a repo is a collateralised loan.

Good question. My guess would be yes as customers who have lost money are not creditors at all. Does anyone know if MF Global has any secured creditors? Right now the managed futures industry needs to act collectively and appoint a lawyer to clearly explain to the presiding judge what the...

That's what's always happened in the past. Legally assets in a segregated account do NOT form part of the FCM's assets. Unlike a bank deposit which becomes cash owned by the bank, with the bank having an offsetting liability to you. But that's only for the cash that is there. The shortfall in...

As regards the MISSING cash, yes, that will be bankruptcy BUT clients with cash missing come before all other creditors: If an FCM became insolvent, and there also happened to be a shortfall in the amount of funds segregated for customers (for example, because of a customer default)...

Absolutely not. All cash and T bills held in segregated accounts are segregated. Customers who have their segregated accounts violated do not become creditors. Thieves do not get sued in the claims court for the return of a loan. Bondholders and lenders are creditors.

Only 12% has been stolen. We should count ourselves very, very lucky just for that :)

Let's establish one thing: UNDER NO CIRCUMSTANCES WILL SEGREGATED ACCOUNT HOLDERS HAVE TO BE PART OF THE BANKRUPTCY PROCESS AND QUEUE UP WITH UNSECURED CREDITORS LIKE JP MORGAN? Is that true? Is that set in stone?

The banks are unsecured creditors, just like clients with non-seg accounts. The banks will be behind the seg account holders.

Ok, thanks bone. Does that in practice mean the US clients will take a 0% haircut and we will take a correspondingly bigger one?

What about European clients of the US Brokerage business, i.e. MF Global Inc.?

Can you tell me exactly when you liquidated these accounts? Was it last week?

MIT grad, yes, why not. Lehman quant trader? The point is those strategies can usually only be applied by institutions, and ultimately they did not work out (for Lehman anyway).

I see. So what you're actually saying is that even if you're a poor trader, with the right degrees you can tout yourself around the big banks and some of them will be impressed with the fancy qualifications on your CV. Yes, I agree with that :) But what you're forgetting is that a small...

You really do seem quite confused. Yes, having a degree or MBA from a good school will help you gain junior level entry into an investment bank, which, as an institution, does have an edge. The degree in this case is a hoop you must jump through to get employed by the entity with an edge...

I reckon one of Sarkozy's sons is a daytrader. Every time he and Merkel announce "it's on!" or "er, not yet.." a quick phone call beforehand does wonders for his trading account :)

Well he can't lose, can he? If he's wrong, everyone will just forget about his prediction. If he's right, he will be hailed as a genius.

There is a lot of general awareness about the possibility of a crash and clear memories of 2008 persist. Some would say this reduces the probability of another crash, but I really have no opinion at all on this.

You've made over sixteen thousand posts. Are you sure none of them have been predictions? I would dearly love a crash, 2008 style.. but I know that prediction is futile. ALWAYS.

+1 Just like New York, which is often claimed to be the exception to every rule..