MF Global announcement
- Thread starter 1nibbler
- Start date
I hope other futures brokers are not invested in European sovereign debt to the same extent. But I bet they are. All we can hope is that they aren't leveraged up to the hilt.
When you consider that several UK local councils (local government) invested in Icelandic debt you have to think that all kind of mundane businesses are invested in high yielding Greek debt (and did some when it was not so high yielding) as an aside to their core business models.
My bone with the regulators is that they should be pulling licenses when segregation does not take place, and putting bankers behind bars for breaches, not simply handling out a miniscule fine (relatively speaking), as they did with Barclays.
But the whole point of fraud is that it is a crime. Criminals, by definition, don't follow the law, don't honour their promises, and so on.
Thus, any statements of good faith are completely worthless, if the person or company is wracked by fraud and criminality. The only rational response to broker solvency issues is wire out your money immediately and ask questions later.
Since you've obviously been in hibernation for the last 2 years, the answer is 'no fucking way'. OWS would burn down the stock exchange if that happened
MF Global Commingled Customer Funds? Well, we now know MF stands for Mother Fackers
http://www.zerohedge.com/news/someo...l-caught-stealing-hundreds-millions-customers
http://www.zerohedge.com/news/someo...l-caught-stealing-hundreds-millions-customers
Yes I agree on all points. Even if the allegations of MF Global co-mingling customer funds with company funds is not proven to be true, it's the old adage of "better safe than sorry".
It's much easier to "wire out your money and ask questions later" rather than becoming an unsecured creditor to a firm that did not honour their premises to keep customer money separate.
from the above article:
What happens next? Why customers at all other brokerages, all other exchanges, afraid that their money will suffer the same fate as MF, even if they transact with perfect solvent clearers and agents, will proceed to pull their money, as they know they have nobody to trust but their own prudent and forward looking actions. Which in turn will start the kind of liquidity drain that killed not only Lehman, but froze money markets, and with that brought the complete capital markets to a standstill, only to be thawed after the Fed pledged multiples of the US GDP to rescue Wall Street in October of 2008.
And that, dear reader, is called unintended consequences, and how the bankruptcy of a small exchange can avalanche into a crippling Ice Nine of what is left of capital markets all over again, courtesy of crony capitalism, rampant criminality and a regulator and enforcement body that is more fascinated with midget porn than any regulating or enforcing of the very firms it hopes to get an assistant general counsel job from in a few short years.