For anyone who caught the CME post on Zerohedge yesterday its been updated.

[dkf]

CME Goes To Collateral DefCon 1: Makes Maintenance Margin Equal To Initial For... Everything!?
Submitted by Tyler Durden on 11/04/2011 21:20 -0400

Update: Based on unofficial statements by the CME, it appears that the exchange has gone the way of inviting more risk by lowering Initial to meet existing Maintenance margin across the board. We will likely only know for certain on Monday. We suppose the proposed explanation will be to minimize margin exposure for onboarded MF positions. Of course, that this is very much counterintuitive at a time when risk is spiking and vol readings per SPAN are soaring, and instead is inviting even more risk, is apparently irrelevant to the exchange.

http://www.zerohedge.com/news/cme-goes-margin-defcon-1-makes-maintenance-margin-equal-initial-everything

[kestrel91316]

1. Thanks for the word salad. What is CME?

[mainer]

2. Haha. I asked for an explanation too, on an earlier thread.

I really am curious what all this means.

[dkf]

5. The initial post used the term "defcon1" as it looked like they were raising margin requirements

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2245711&mesg_id=2245711

"Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything."

So now they are saying that instead of raising margin requirements to the initial margin as in the post above, they lowered initial requirements to maintenance margin as the update states.

Whew.

[Extend a Hand]

3. cme=chicago mercantile exchange

I think the update means it will be cheaper to invest in commodities traded on the cme exchange with borrowed money (but I'm sure no expert).

[Ruby the Liberal]

4. False Alarm.

This was in relation to Corzine's MF Global implosion this week and the initial margin requirements for transferring MFG customers to maintenance margin levels.

“Yesterday, CME Group successfully transferred MF Global customer positions to a new clearing member with part, but not all, of their funds, as approved by the bankruptcy trustee and the court. By reducing the initial margin “ratio” to 1.00, we ensure that margin calls that are issued to these transferred MF Global customers will be limited to bringing their accounts into compliance with the lower, “maintenance” margin levels. Maintenance margins are set to provide appropriate risk management coverage. Initial margins are set to provide an additional buffer against future losses in the account.”

http://kiddynamitesworld.com/the-cme-margin-notice-that-has-everyone-in-a-tizzy

[dkf]

6. Spread like herpes lol.

"The notice was picked up (and spread, like financial news Herpes) by ZeroHedge, who predicted a plethora of margin calls on Monday, and of course, imminent Financial Armageddon.  There is of course an alternative potential explanation."

http://kiddynamitesworld.com/the-cme-margin-notice-that-has-everyone-in-a-tizzy

[DeSwiss]

7. We're home!!!! Where is everybody!?!?!?!