You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login

Reply #12: After MF Global: How to protect customers cash [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
Home » Discuss » Latest Breaking News Donate to DU
Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Dec-06-11 07:23 AM
Response to Original message

Customer money is missing at MF Global. After three mysterious weeks, we dont even know whether the shortfall is $600m or $1.2bn. (OR $3 BILLION, THE LATEST I HEARD==DEMETER) While this is obviously a problem for MF customers, its also a significant challenge for the larger financial system.

When missing customer cash is needed as collateral for other transactions, its absence could contribute to a cascade of failures in other markets. Worried investors, meanwhile, might suddenly reduce their derivatives positions in order to retrieve the margin cash they had placed with other futures brokers to back their trades. This retreat could contribute to dangerous fire sales, further worsening a downward spiral.

Printer Friendly | Permalink | Reply | Top

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002
Software has been extensively modified by the DU administrators

Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC