NEW YORK (Reuters) - Three weeks after MF Global's collapsed, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still stuck.
While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker's October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers' total funds have been authorized for release so far.
The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million.
$3 billion? I thought there was a $600 million discrepancy?
What's going on here? More to the point, are we about to have another game of "musical creditors" like we did with GM and Chrysler, where certain "special people" got paid in front of others despite not actually having a legal preference?
This is bad juju folks. If confidence in the sanctity of customer deposits is lost across the financial system you will see a massive run on brokerages and banks -- after all, if this is going to happen to the futures markets with MF what happens to the farmer who uses these markets as a way to sell forward his production and thus bring certainty to his business operations?
How about the airline? The steamship operator who needs to know what he'll pay for fuel? The railroad? The chemical factory?
There are dozens of industries that use these markets folks, and most of them are very pedestrian companies that employ huge swaths of America.
You're going to cut all of this off if this doesn't stop as people will utterly flee from the markets if there is no clarity on what happened and people do not immediately go to prison if the law was violated -- and it appears that it was.
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If confidence in the sanctity of customer deposits is lost across the financial system you will see a massive run on brokerages and banks
I agree in principle.
However, what I know of American people in general, is that their confidence in the sanctity of customer deposits can't be lost because they're not paying attention. They just don't care.
They don't want to talk about anything 'negative' (anything economic basically)and prefer to ignore unpleasant facts.
Otherwise why would millions of Americans bank with the TBTF? Because they don't know, they don't want to know, and because life is whole lot happier if you pretend everything's fine, that your banker is an honest man, and that you can still trust your government to do right by you as a taxpayer.
Tell me the preceding sentence doesn't describe the largest segment of Americans...
If you say that it doesn't, consider yourself lucky for knowing people who do pay attention and who do give a ****.
My impression is that average people know more about the Penn State thing (or Casey Anthony) than any of the stuff Karl has blogged about over the years I've been visiting here.
That is by design. The media controls the thoughts of the American people. It tells them what to think, what to care about, and what they should be outraged about. And most people don't actively seek the truth. They are content to swallow the pablum and go on consuming and living the lie for maximum personal advantage.
It's the New American way. Get yours; the means don't matter only the end.
The total is rising slowly because they're seeing how little of the actual amount they can get away with revealing. Everything above that is their gravy... and as much below that as they can get away with.
And they did a takedown on Celente's account too... sweet revenge for someone?
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It's not an issue of "cooperation" vs "go it alone": it's a question of involuntary vs voluntary relationships.
* I think Ann Barnhardt is more and more right. God help us! * Progressives / Marxists / Communists are many things, STUPID and IMPATIENT are not two of them. * A hot civil war is coming. * And people wonder why I prep!
12Bolt took the words right out of my mouth. I could ask a dozen people outside of my office today what their thoughts on MF Global were and I would doubt that even 1 of them would know what MF Global was, let alone have a grasp of what the situation may indicate.
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"Winter is coming." -Motto of House Stark "Mo'lon La'be"- Leonidas "Strong people are harder to kill than weak people, and more useful in general" - Mark Rippetoe "Its like Calvinball."-MarvinMartian
Dashingdwl
Posts: 9757
Incept: 2007-06-26
los angeles
And the key source of funding for Europe's major and insolvent banks has been U.S. money-market funds. This crisis is now past the point where the authorities can hope to control the situation. We are now days (not weeks or months) away from the first major bank failures.
No safe place.
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When you are hard and disciplined, you can be principled. People fear you because they have no leverage against you. It's the truest form of Liberty.
Madras
Posts: 383
Incept: 2008-10-09
Philly 'burbs
Quote:
If confidence in the sanctity of customer deposits is lost across the financial system you will see a massive run on brokerages and banks
Quote:
I agree in principle.
However, what I know of American people in general, is that their confidence in the sanctity of customer deposits can't be lost because they're not paying attention. They just don't care.
They don't want to talk about anything 'negative' (anything economic basically)and prefer to ignore unpleasant facts.
Otherwise why would millions of Americans bank with the TBTF? Because they don't know, they don't want to know, and because life is whole lot happier if you pretend everything's fine, that your banker is an honest man, and that you can still trust your government to do right by you as a taxpayer.
^^^ This ^^^
With rare exceptions, nobody ever believes "it can happen to them" until it happens to them.
Nothing will happen until the whole thing goes off a cliff.
There won't be a critical mass of folks who care until supply chains freeze up and people are confronted with bare grocery store shelves, closed gas stations, and ATMs that don't produce FRNs.
I am exhausted from trying to get anyone to care. I get the same answer, "It doesn't affect me and even if all this stuff is happening, you and I can't do anything about it anyway, so stop worrying about it."
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The fact that you have not yet personally seen the wheels come off the bus does not confirm the presence of lug nuts.
They don't want to talk about anything 'negative' (anything economic basically)and prefer to ignore unpleasant facts.
Oprahism. People have been brainwashed to think like this. There are entire industries in entertainment and business who make money training people to not question anything.
The people will not care, right up until the instant they do care, then it will be over for the bankster industry. Unfortunately it will be over for everyone else as well, GD #2 here we come.
The the credit cycle will begin anew.
Flap
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Here are my predictions for everyone to see: S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu. "You can't build a house of cards on a shaking table." - Tony Johns The January 2015 AMZN put at $130 (cost $4.25) will be a winner.
Wonder if it is time to pull the plug on the ole 401k...
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"Any man who thinks he can be happy and Prosperous by letting the US Government Officials take care of him, better take a closer look at the American Indian." Henry Ford
@12bolt I've had my family tell me that the government always does things in our best interests. The gov wouldn't lie to us. Our money is totally safe in banks because it is insured by the FDIC. One sibling told me that she would never take her money out of her mutual funds because if the markets decline, she wouldn't want to miss the gains when the markets recovered.
With thinking like that, why would they pay attention nowadays? Besides they have other priorities, like buying stuff on credit, new cars and houses, the latest techie gadgets, and taking exotic vacations.
Edit to add what Madras said "I get the same answer, "It doesn't affect me and even if all this stuff is happening, you and I can't do anything about it anyway, so stop worrying about it.""
What amazes me is that you cannot move money from a client account in a brokerage firm without (1) client signature and (2) electronic trace of the funds. Maybe a few hundred shares of stock or cash could get "lost" for a while. But, $600M or $1.2B? Come on. Numbers this large do not disappear. They are traceable by a margin clerk. You don't need teams of forensic accountants to find it unless ....
By Ronald D. Orol WASHINGTON (MarketWatch) - A trustee seeking to distribute customer securities overseen by bankrupt MF Global Inc. estimated Monday that $1.2 billion in client money may be missing, twice as much as previously expected. "At present, the Trustee believes that even if he recovers everything that is at US depositories, the apparent shortfall in what MF Global management should have segregated at US depositories may be as much as $1.2 billion or more," the trustee said in a statement.
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"And in knowing that you know nothing, that makes you the smartest of all." - Socrates
I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft.Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear?
Are you suggesting that regulators have "found" other firms the aren't segregating accounts? I know they were supposed to start investigating all of the big players, but....
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"And in knowing that you know nothing, that makes you the smartest of all." - Socrates
I am suggesting that you must assume this is the case.
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I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft.Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear?
