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Marting Armstrong on MF Global: Stay away from NY
- Thread starter Andromeda
- Start date
Although I agree that bad leadership could destroy a firm under any set of regulations, I think that using customer funds to generate brokerage firm revenue in any way is courting disaster. If dismantling this model means that stated[b/] commissions/fees go up by 50% or even 100%, I'd say so be it -- although my understaning of how a brokerage operates behind the scenes is limited, I'd far rather have commisions increase than endure periodic blowups such as MF Global, and my guess is that a reduction in "hidden costs" would more than make up for the increase in explicit commissions -- especially in the long term.
Quote from Occam:
Although I agree that bad leadership could destroy a firm under any set of regulations, I think that using customer funds to generate brokerage firm revenue in any way is courting disaster. If dismantling this model means that stated[b/] commissions/fees go up by 50% or even 100%, I'd say so be it -- although my understaning of how a brokerage operates behind the scenes is limited, I'd far rather have commisions increase than endure periodic blowups such as MF Global, and my guess is that a reduction in "hidden costs" would more than make up for the increase in explicit commissions -- especially in the long term.
Essentially it would just be another pass thru of ZIRP since the main impetus for playing loose and fast with customer assets was to make up for all of the lost interest income over the past 2-3 years.
Quote from Wallace:
the MFG client problems would have been easily prevented with insurance
Anyone handling client funds should also be insured
in every case there should be no limit to how much is able to be insured
Who provides the insurance?
How much should the insurance cost?
How is that determined?
Who pays for the insurance?
Random.Capital: search here: http://www.cipf.ca/homepage.aspx
bwolinsky, what you have to say is drivel
the CIPF - Canadian Investor Protection Fund prevented MFG and/or their parent
company MFG Holdings from obtaining Canadian clients' funds and sucking them
into the bankruptcy quagmire where US clients' funds are currently sunk
bwolinsky, what you have to say is drivel
the CIPF - Canadian Investor Protection Fund prevented MFG and/or their parent
company MFG Holdings from obtaining Canadian clients' funds and sucking them
into the bankruptcy quagmire where US clients' funds are currently sunk
Quote from Wallace:
Random.Capital: search here: http://www.cipf.ca/homepage.aspx
bwolinsky, what you have to say is drivel
the CIPF - Canadian Investor Protection Fund prevented MFG and/or their parent
company MFG Holdings from obtaining Canadian clients' funds and sucking them
into the bankruptcy quagmire where US clients' funds are currently sunk
The sooner you realize Canadians do it wrong, the sooner you'll realize what we have is right.
A 1/4 of 1% tax on revenue has absolutely nothing to do with the cost of maintaining that insurance. In no way is that at all related to proper insurance premium prices, and if you don't see that, move to Canada. We don't need such ridiculous regulations meant to hurt succesful fcm's and futures brokers, because the goal <b>is regulation</b> and taxation is really what that is, so if you don't see that Canada's on the hook for billions, then I don't have any other way of convincing you, Wallace.
Since you are not a CTA, CPO, or FCM, you have no room to talk here. Being in the industry I understand the premise of the clearing house mechanism for regulation, and you whining about such taxation and over-regulation will not ever help this situation.
MF Global made bad bets. Too bad. Don't kill the industry because someone got their money faster somewhere else.
bwolinsky, the voice of the United Corporations of America: "We don't need such
ridiculous regulations meant to hurt succesful fcm's and futures brokers . . . "
you're correct, I'm not a CTA, CPO, or FCM, I'm on the other side, a customer, and
WHERE'S MY MONEY ?
'Chicago has a problem with missing money' Chicago Tribune Dec 28, 2011
"Further, futures accounts never have had a formal system for guaranteeing
customer money â unlike bank accounts backed by the Federal Deposit
Insurance Corp. or stock-brokerage accounts backed by the Securities Investor
Protection Corp.
The futures industry said it didn't need an FDIC or SIPC because its procedures
and traditions ensured that
customer money would be protected in separate, sacrosanct accounts.
For decades, the industry bragged that no futures customer ever had lost a dime
as a result of a trading-firm failure.
Now Christmas has come and gone, and customers still have not gotten all their
money back. As much as $1.2 billion is unaccounted for."
http://articles.chicagotribune.com/...1_futures-customer-cme-group-futures-industry
ridiculous regulations meant to hurt succesful fcm's and futures brokers . . . "
you're correct, I'm not a CTA, CPO, or FCM, I'm on the other side, a customer, and
WHERE'S MY MONEY ?
'Chicago has a problem with missing money' Chicago Tribune Dec 28, 2011
"Further, futures accounts never have had a formal system for guaranteeing
customer money â unlike bank accounts backed by the Federal Deposit
Insurance Corp. or stock-brokerage accounts backed by the Securities Investor
Protection Corp.
The futures industry said it didn't need an FDIC or SIPC because its procedures
and traditions ensured that
customer money would be protected in separate, sacrosanct accounts.
For decades, the industry bragged that no futures customer ever had lost a dime
as a result of a trading-firm failure.
Now Christmas has come and gone, and customers still have not gotten all their
money back. As much as $1.2 billion is unaccounted for."
http://articles.chicagotribune.com/...1_futures-customer-cme-group-futures-industry
Quote from Wallace:
bwolinsky, the voice of the United Corporations of America: "We don't need such
ridiculous regulations meant to hurt succesful fcm's and futures brokers . . . "
you're correct, I'm not a CTA, CPO, or FCM, I'm on the other side, a customer, and
WHERE'S MY MONEY ?
'Chicago has a problem with missing money' Chicago Tribune Dec 28, 2011
"Further, futures accounts never have had a formal system for guaranteeing
customer money â unlike bank accounts backed by the Federal Deposit
Insurance Corp. or stock-brokerage accounts backed by the Securities Investor
Protection Corp.
The futures industry said it didn't need an FDIC or SIPC because its procedures
and traditions ensured that
customer money would be protected in separate, sacrosanct accounts.
For decades, the industry bragged that no futures customer ever had lost a dime
as a result of a trading-firm failure.
Now Christmas has come and gone, and customers still have not gotten all their
money back. As much as $1.2 billion is unaccounted for."
http://articles.chicagotribune.com/...1_futures-customer-cme-group-futures-industry
It is an isolated incident due to executive missteps.
You haven't answered the questions about who would pay and how much? Any amount is too much, and you seem to be ignoring the fact that we just had the bankruptcy trustee promise to get all of their money, but if MF Global has no equity I can only say that I suspected that the firm operated that way from personal conversations with some of their Introducing Brokers.
To be honest, it doesn't surprise me given their attitude about CTA's just starting, and their inferior product line of automated trading products, including strategy exchange, strategy runner trading automation.
Corzine looks the other way and it is only this firm that hypothecates at the level they do, but I say that now, and that could change in the future. Regulating leverage is all that's required, as the clearing house guarantees performance, and if you don't think that it still does, believe me, MFG is an isolated incident with terrible executive leadership.