Is the failure of MF Global similar to the failure of Bear in that it is signaling deep problems with liquidity in the shadow banking system? Here are three posts that explain some of the issues (first post) and details (second and third posts).
Danger Lurks in the Shadows
by Mark Thoma at Economist's View
Has The Imploding European Shadow Banking System Forced The Bundesbank To Prepare For Plan B?
by Tyler Durden at Zero Hedge
Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else
by Tyler Durden at Zero Hedge
"Tyler Durden" is a pseudonym used to keep authors who do not wish to reveal their identities anonymous. The author of this post seems quite knowledgeable about shadow banking. Take it for what it is worth.
UPDATE: Here is a short explanation of re-hypothecation
MF Global and the great Wall St re-hypothecation scandal
by Christopher Elias (UK) at Thomson Reuters New & Insight
4 comments:
face it, the economy is getting better now somehow just in time for elections.
it's going to be same old same old after Obama is re elected
and that is not necessarily great
what it means is a compromise like 1996
re election for the king
and republican aristocracy in the senate and house
gridlock
good for wall street and nothing else
Hey Mike Norman,
Did you give this person a job?
http://www.cnn.com/2011/12/07/us/occupy-wall-street-job/index.html?hpt=us_t2
"Frustrated with the economy, Postert says she jumped right into the Occupy Wall Street movement -- all in -- banging drums and washing paint- and dirt-covered sidewalks.
She sounds like the protester stereotype, but she isn't; she has a doctorate in biochemistry."
"For now, Tracy is researching early stage biotech companies for John Thomas Financial. She says she plans to take a test that would allow her to become a broker, and thus a full-fledged member of the 1%. So what are her former Occupy Wall Street compatriots saying?"
Adam,
It seems that the OWS was started by somewhat organized anarchists (oxymoron?;) but this young gal doesnt seem like one of them.
Instead, other young people like her are attracted to the basic message of the movement that in general, our economic outcomes are unacceptable, and something has to be done about it.
I commend her for going there and showing solidarity.
She will do better even in the financial services industry if we can achieve higher national economic outcomes with more equitable distribution of incomes and savings.
Wall st would do well to seek many of the reforms that the OWS folks are advocating for (Ask Corzine who has now found himself 'on the rack'! LOL!)
Resp,
Tom,
I'm starting to look at this as though their bankers (MS & Deutche) basically stole MF Global shareholders capital. Royally screwing Corzine, who had Clinton on the payroll ($50k/mo.) and thought that they would never do that to him as he had Clintons "protection".
So now some liabilites as far as account holders seems to have to fall on the CME, as the banks have already taken out theirs (first position), thus sticking some account holders they are making it out to look like.
The CME insurance fund will NOT want to pay this (its a lot of funds 1B+ which is real money to these people) as they probably look at it as though the banks screwed them so they shouldnt have to pay.
So look for the CME lobby to put pressure on the government to instead come up with the balances to make MFG account holders whole. Hence the "we dont know where the $1.2B is" line...
This whole industry is an immoral cesspool.
As far as Im concerned, if they would just let fiscal adjust to full employment levels, we could let them just go on taking turns screwing each other and leave the rest of us out of it....
Resp,
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