Anyone pulling money out of MF Global?
- Thread starter Daal
- Start date
Yeah after last week I guess we now have to be alert for brokers experiencing 'fast market conditions' in their corporate positions. Except there is no 'market' for their positions..... Its all counter party risk for the deals they do.
The trend toward demands for 'zero execution costs' has decimated open outcry in favor of order matching computers. At some point the micro-structure of this business may impact the for profit nature of the exchanges themselves. If the clearing model is shown to be flawed by these types of implosions the entire business is going to become more closed and proprietary.
It took the masters of the universe less than 10 years after Glass Steagall was over turned to blow up the banking system. It's easy to envision exchanges as the next casualty. The public has already been primed to blame speculators for the commodity inflation that comes with printing lots of money.
The trend toward demands for 'zero execution costs' has decimated open outcry in favor of order matching computers. At some point the micro-structure of this business may impact the for profit nature of the exchanges themselves. If the clearing model is shown to be flawed by these types of implosions the entire business is going to become more closed and proprietary.
It took the masters of the universe less than 10 years after Glass Steagall was over turned to blow up the banking system. It's easy to envision exchanges as the next casualty. The public has already been primed to blame speculators for the commodity inflation that comes with printing lots of money.
If it is any consolation, the missing amount has apparently been reduced to $593 Million.
http://www.bloomberg.com/news/2011-...rds-as-regulators-work-to-unfreeze-money.html
My account was flat (I was able to close out Mon 10/31). Today (Sat 11/5) I can no longer see any funds in the account - only an error message. I have of course saved every statement and also previously printed out the web page statement listing. I hope every else also has very good paper records of their accounts. My guess is that some will need it.
http://www.bloomberg.com/news/2011-...rds-as-regulators-work-to-unfreeze-money.html
My account was flat (I was able to close out Mon 10/31). Today (Sat 11/5) I can no longer see any funds in the account - only an error message. I have of course saved every statement and also previously printed out the web page statement listing. I hope every else also has very good paper records of their accounts. My guess is that some will need it.
For example...this trader with $3 Million in MFGlobal futures trading accounts:
http://donmillereducation.com/journ...eekend-trader-frozen-on-the-mf-global-iceberg
http://www.bloomberg.com/news/2011-...rds-as-regulators-work-to-unfreeze-money.html
âMF Global customers may have to wait years to get their money back if the futures broker is suedâ
So the basic question is what are you going to do if it takes âyearsâ to get your money back?
If that happens, why would anyone trade with a futures firm again?
âMF Global customers may have to wait years to get their money back if the futures broker is suedâ
So the basic question is what are you going to do if it takes âyearsâ to get your money back?
If that happens, why would anyone trade with a futures firm again?
From that same article:
"People should expect that the money on deposit with MF Global will be tied up for some time,â Grede said. A former chief executive officer of the Hong Kong Futures Exchange, he has sought to recover about $600 million of customer money from Sentinel, the futures broker that filed for bankruptcy in 2007. âI still have extensive litigation with regard to the customersâ of Sentinel, he said. âItâs been four years.â
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There is no clarification here whether Grede is talking about customer-segregated accounts, or people who bought into Sentinel's investments - but Grede's statement and the current MF debacle have been making me wonder about the following statement from the CME Group:
"In more than 100 years of trading, we have never had a default
or a loss of customer funds resulting from failure of a clearing firm."
Which is still on their website, and can be found on bullet point # 2, page 1 of this document:
http://www.cmegroup.com/clearing/files/financial-safeguards-summary.pdf
I hope this is true, and I hope it will remain true, but one has to wonder . .
The reporting has been really sloppy throughout this. The equivalent to the Sentinel case is the missing funds, which may need to eventually come out of the bankruptcy settlement. I'm resigned to that.
MF Global (brokerage) is not in bankruptcy, the parent company is. The thing to worry about is if one of the creditors of MF Global Holdings sues the brokerage and gets a judge to order the liquidation to be halted. This comes from one of those vague press articles saying the MF Global Holdings money may have been mixed with MF Global money. But since customer segregated funds should be at the top of any bankruptcy, not sure how this could help another creditor. It should all wash out, but you know lawyers. Also, the biggest creditors would probably face too much political pressure if they tried that.
It sounds like the trustee will begin liquidating the remaining accounts, which should all be in cash Monday morning, this week. Hopefully they will just wire some percentage of the money to us.
The problem with transferring to another broker is they also have to transfer all the paperwork. The longer they wait, the more time for things to get screwed up.
MF Global (brokerage) is not in bankruptcy, the parent company is. The thing to worry about is if one of the creditors of MF Global Holdings sues the brokerage and gets a judge to order the liquidation to be halted. This comes from one of those vague press articles saying the MF Global Holdings money may have been mixed with MF Global money. But since customer segregated funds should be at the top of any bankruptcy, not sure how this could help another creditor. It should all wash out, but you know lawyers. Also, the biggest creditors would probably face too much political pressure if they tried that.
It sounds like the trustee will begin liquidating the remaining accounts, which should all be in cash Monday morning, this week. Hopefully they will just wire some percentage of the money to us.
The problem with transferring to another broker is they also have to transfer all the paperwork. The longer they wait, the more time for things to get screwed up.