WHERE IS THE MONEY AT MF Global

myoffices

myoffices

Its amazing how the regulators can play dumb. If you ever worked on a trade floor then you know where the money is. I would like to start a thread to see if we can bring some light to how this happened.

I will go first. Someone screwed up a trade that was cancelled and rebilled to the company account. The position went down and it was in a margin account that got gobbled up when the margin call ate up all the equity.

No trail. Find the cancel and rebill and you find the source of the money. It never left the building.

When the grass is cut the snakes will show.
 
If only it were that simple. It's not trading that it's all about. There are no issues with trading on the secondary market (the one you and I have access to), the issues are more closely related to the primary market such as the unresolved sale of securities to JP Morgan which JPM didn't pay for due to their worries about MFG being unable to pay what they already owed them. This might have started the chain reaction. But again, it's probably not that simple. If it were, there wouldn't be only people like you starting threads, there would also be blogs and news articles. Sadly, in the financial world, there are so many ways to divert money and re-account value that the mind boggles. I agree that the regulators are playing dumb though.
 
Did you even have your money in MF?..


I am confused if you meant "WHERE IS MY MONEY AT MF GLOBAL" or "WHERE IS THE MONEY AT" in general...
 
Quote from myoffices:

Its amazing how the regulators can play dumb. If you ever worked on a trade floor then you know where the money is. I would like to start a thread to see if we can bring some light to how this happened.

I will go first. Someone screwed up a trade that was cancelled and rebilled to the company account. The position went down and it was in a margin account that got gobbled up when the margin call ate up all the equity.

No trail. Find the cancel and rebill and you find the source of the money. It never left the building.

When the grass is cut the snakes will show.
More...

Wow, this is brilliant. The Corzine Sov death trade had nothing to do with it. Go get 'em, Cluseau. I would also look into a guy named Madoff as well. Some smoke there.
 
The day the stories started up about customer funds being missing...that was exactly my conclusion. They were so sure of their idiotic bets on Euro debt...that when it went against them...they doubled down....using OPM.

I guess Corzine never watched an interview with Kyle Bass. What was his next trade going to be after Euro debt....long the JGB 100:1?
 
Quote from atticus:

Wow, this is brilliant. The Corzine Sov death trade had nothing to do with it. Go get 'em, Cluseau. I would also look into a guy named Madoff as well. Some smoke there.
More...

Do you know what a trade rebook is? If you don't know then let me explain it. When A trade is not accepted by the original trader it goes into a firms error account. That trade is rebooked to another account or that trade is sold out to the market taking a loss for the firm or a profit if the SOAB (Sons Of A B) is lucky. The trading department gets to keep the trade profits if its successful. Usually if its up the trading dept gets the trade and if its down then some trader swallows the loss and gets fired. The firm takes the hit if its too much and only an operations person can override the system. So you are looking for an operations person who rebooked the trade- Whether by mistake or on purpose. When they find the trail of the trade this will show you where the money is. If the trade is still on the books then it may return as the SMA values in the margin account returns. Any good accounting firm could run the trades for the year and find the source.

With the Death trade it looks like they rebooked the trade into a wrong account that had funds and thats what I believe happened. With no where to go the losses they hoped would come back but the marketplace and regulators found out to soon before the trade in the market bounced back. By The way Corzine didn't do the trade. So he won't go down as long as he keeps to his story. Joe Jett....Is all I have to say.

:cool: :cool:
 
Quote from myoffices:

Do you know what a trade rebook is? If you don't know then let me explain it. When A trade is not accepted by the original trader it goes into a firms error account. That trade is rebooked to another account or that trade is sold out to the market taking a loss for the firm or a profit if the SOAB (Sons Of A B) is lucky. The trading department gets to keep the trade profits if its successful. Usually if its up the trading dept gets the trade and if its down then some trader swallows the loss and gets fired. The firm takes the hit if its too much and only an operations person can override the system. So you are looking for an operations person who rebooked the trade- Whether by mistake or on purpose. When they find the trail of the trade this will show you where the money is. If the trade is still on the books then it may return as the SMA values in the margin account returns. Any good accounting firm could run the trades for the year and find the source.

With the Death trade it looks like they rebooked the trade into a wrong account that had funds and thats what I believe happened. With no where to go the losses they hoped would come back but the marketplace and regulators found out to soon before the trade in the market bounced back. By The way Corzine didn't do the trade. So he won't go down as long as he keeps to his story. Joe Jett....Is all I have to say.

:cool: :cool:
More...

Yeah, they must have DKed them on billions. You Sir, are an imbecile.
 
For those studying the MFG failure, this report on the failure of MJK in 2001 makes for interesting reading.

The report details the anatomy of a BD margin call and it suggests changes to Rule 15c3-3 that might help prevent or lessen the impact of future failures.

From: http://www.sipc.org/pdf/SIPC_dt.PDF

"Although MJK may have been experiencing cash flow or other difficulties before it failed, its collapse was immediately induced by its inability to fund its reserve deposit required under Rule 15c3-3, the SEC’s Customer Protection Rule. As discussed above, in August of 2001, MJK had ceased receiving mark to the market payments from Native Nations on the securities it had borrowed from it, but nevertheless continued to pay those marks to the market to its securities lending counter parties. MJK temporarily funded those payments by borrowing against customer margin securities, but was required to later fund its Rule 15c3-3 Reserve Account deposit following its reserve computation later that week. It funded that deposit by further borrowing against customer securities, only to raise the following week’s requirement even further. This cycle or “spiral” continued until MJK ran out of customer margin securities to borrow against."
 
That b*tch Edith O'Brien better start talking.

I read today that she 'disputes' Jon Corzine's version of events, which he gave UNDER OATH before Congress.

b*tch better start talking if she wants to avoid the perp walk. Corzine can afford better lawyers than her.


TALK, EDITH! TALK!
 
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