So I'd Recommend Putting Your Money In Your Mattress

[phantom power]

Certainly don't let the big boys play with it. There's been some question floating around about how MF Global might have stolen their clients' money legally.

If I understand this correctly, while they're supposed to keep customer money segregated, they can offer part of it up as collateral for other bets. If the bets go bad, the client is out of luck and there's nothing they can do about it. So, uh, not so segregated after all.

License to steal.

http://www.eschatonblog.com/2011/12/so-id-recommend-putting-your-money-in.html

[Hotler]

1. k&r n/t

[coalition_unwilling]

2. This is truly scary, if true. If you read the internal link (from

Business Insider), the gist is that, under an obscure 'Regulation T,' small investors may not necessarily receive protection from the SIPC in the event a broker has used part or all of their assets to 're-hypothecate' its own account and that broker's bets subsequently fail. As I understand it, 're-hypothecation' is the pledging of securities as collateral, the sort of institutional equivalent of an individaul investor buying securities on margin.

On a side note, Corzine looked absolutely pathetic and totally clueless in front of the Congressional panel investigating MFGlobal's demise.

At this point, it would be great to get some of the finance pros that frequent DU to weigh in, as I am little more than a not-so-talented layperson.

[raccoon]

3. Bookmarked to read later. nt