can anyone give me a run down on mf global and how it will impact metals

anyone know about this stuff?

 

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I think any effect on metals or any commodity will be that of concern that any brokerage is co-mingling your funds with theirs on very risky trades. If they win, they just put your funds back, if not, then you get a MF Global. MF Global made a 6 billion dollar trade (bet) on the European sovereign on margin. The expected action on the various euro-debt such as Greece, Italy, etc. went bad, and there were margin calls, and MF Global didn't have enough cash of their own to meet the margin calls and "allegedly" used segregated funds from their clients, such as those investing in commodities such as agriculture, and others ( most likely some with PM also). But they were still losing and more margin calls came, and this is where it gets very murky... see this column for some conspiracy theories, involving JPM and others, who may have been on the other side of the trade, or ( conspiracy alert) facilitated the trade so it appeared that the now bankrupt , thieving company, was actually maybe transferring customers funds to "partners" and then going bankrupt and claiming they don't know how it happened nor where the missing money is. All reports seem to clear the CME who evidently reported MF Global to the SEC.

http://www.zerohedge.com/category/tags/mf-global

Some commodity traders with MF Global have "misplaced funds" that they may never get back, and as I recall there is no government guarantees on these accounts. Many had to liquidate their commodity holdings as they could not meet any margins.

PM are down, but that has much more to do with the USD and gold/silver itself than any action of MF Global. IMO.

 

Corrzine got a place in here?

 

Corrzine maybe will have a place in a real prison. Shows what sheer greed can do to ( seriously) an experienced, well educated, well connected , should have known better, ex goldman sachs , etc. If the bet had gone through, MF Global would have cleared billions and added extra billions in new accounts. Now Corrzine and his executives appear to have less skills than many on an investment forum. Corrzine traded for his own account also, and would have made a billion+, but KARMA came around this time. I am waiting to see if he used segregated money for his own account trading.

 

I believe the effect may be to reduce the level of PM trading [and other commodities] in the US since the law no longer seems to protect segregated customer accounts. The CME really dropped the ball on this one and I don't know how they will regain the confidence of investors given that they don't seem to have a plan to restore the missing customer money.

 

I agree that it will reduce the activity in paper trades of gold and silver futures which may cause paper prices to fall. They will fall until there is a disconnect with the physical stuff which there is a high demand for.

It takes a DOJ prosecutor to bring charges to Corrzine before he can be sent to the courts to be sentenced to jail. At this point, despite the evidence, none have done this with Corrzine or any of his executives. This, close to two months since the crimes took place. Corrzine has direct and personal connections to Obama, Biden, and has been a big fundraiser for the Democratic party. I guess we will see how much this helps him, but if they don't do something significant, then expect that confidence in the CME to erode very fast.

How does this affect gold & silver? I don't think anyone knows because the entire system depends upon the faith that laws will be upheld. The lesson however is that if you decide to get into the gold and silver market, then you better do it in such a way where you directly control physical access to the metal.