Market Curiosity: Exploring Markets And Systems

November 21, 2011

WARNING 2: If you still have “money” in futures accounts or brokerage accounts, WHY? (update 2, Nov 21)

Filed under: Editorials — Tags: — Jeff Fitzmyers @ 9:00 am

Wouldn’t it be worth it for piece of mind to empty most of an account and wait for the dust to settle for 2-3 months? Conversely, why have money in trading accounts right now.

“The Entire System Has Been Utterly Destroyed By The MF Global Collapse” – Presenting The First MF Global Casualty …So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

Oh Oh. “Regulated” Derivative Markets About To Blow Up? …Nothing that has come out of the CME, the SEC or Washington DC that has restored my confidence that MF Global is, in fact, a one-off situation. In point of fact The Fed is now requiring margin on certain repo transactions where they never did before, implying that there may well be additional snakes in the grass and additional unrecognized and intentionally hidden risks of this sort…

Oh Crap They’re lending your so-called “margin deposit” out to someone, making the entire premise of depositing margin against your position a bad joke and guess who the joke will be on if anything goes wrong?

+ WARNING: If you still have “money” in futures account or brokerage accounts, well, WHY?

Update: Email from Richard Maybury:

Due to the crisis in Europe, I think odds of a run on the banks, and subsequent temporary closing of the banks as during the Great Depression, have increased greatly. If it happens, it will likely only last a week or two, and I don’t think anyone will lose money. The government can always print enough to keep the banks flush, but it would take a while. However, the temporary closure would be highly inconvenient. I suggest you hold extra cash in small bills and coins, don’t leave the house without some, and keep your gas tank at least half full. Nothing to be alarmed about (I hope), but be prepared.

November 21: Here You Go: It’s Over

We’re done folks. CNBC is reporting that there are now clients running out of the markets entirely because they do not believe their customer funds are safe.

That’s the end of it. The belief that there are more MF Globals has now taken hold. The thieves have pushed it too far and now we’ve got the start of a global liquidity run, and with good reason.

The authorities both in the regulatory side and on the prosecutorial side have reufsed to put a stop to the thievery and now the risk factors have turned into realized risk.

The market is done folks. You can be right but if you make your bet in the markets, are right, and then get screwed anyway when someone steals the money and nobody goes to jail there comes a time when people begin to understand that it can happen to them and will unless they depart the market.

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