MF Global is a huge deal

Posted on November 1, 2011 by Fred Stiening

When I wrote my piece about the impending failure of MF Global, I didn’t know that MF was a “primary dealer” for the US Treasury. The primary dealers being solvent is more important even than the “too big to fail” banks

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2 Responses to MF Global is a huge deal

  1. Art Stone says:
    November 1, 2011 at 6:56 pm

    The CME group believes that MF Global did not segregate funds in customer accounts necessary to protect currently open futures contracts. Blackrock was called in late last week and believes about $700 million is missing from the company’s brokerage unit.

    The process the SIPC uses takes time to work – the guarantee is that eventually the assets in your brokerage account will be transferred to another broker – but until that process is completed, you don’t have the ability to sell your holdings – which is a serious problem for volatile highly leveraged things like futures and options contracts. The CME’s clearing corporation may ultimately be in trouble over this – typically the clearing corp doesn’t have a big buffer to absorb losses.

  2. Parrott says:
    November 2, 2011 at 1:55 pm

    MF global is run by Jon ” no seatbelt” Corzine. I guess the Occupy wallstreet hippy protestors can ask for big lib corzine’s head. But he’s one of them? LOL
    I hope a big hole opens and swallows them all.
    Praise the lord and pass the bullets .
    Parrot out.

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