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Author Topic: MF Global 2.0  (Read 1030 times)
miscreanity
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May 04, 2012, 06:03:36 PM
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Ann Barnhardt raises warnings again: MF Global 2.0 May Be Unfolding Now

After MF Global failed last year, there was a Canadian firm and a Japanese fund that mimicked the rehypothecation fiasco. Now, it looks like the next wave is hitting, and it's a big one.

If you haven't yet, follow Jim Sinclair's advice to make your holdings book entries at the respective transfer agents so that your ownership of stocks cannot be questioned as easily as if it were your word against your broker. This isn't a guarantee, but it's better than nothing.

More instruction on direct registry from JSMineset.

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May 04, 2012, 06:23:30 PM
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Ann Barnhardt raises warnings again: MF Global 2.0 May Be Unfolding Now

After MF Global failed last year, there was a Canadian firm and a Japanese fund that mimicked the rehypothecation fiasco. Now, it looks like the next wave is hitting, and it's a big one.

If you haven't yet, follow Jim Sinclair's advice to make your holdings book entries at the respective transfer agents so that your ownership of stocks cannot be questioned as easily as if it were your word against your broker. This isn't a guarantee, but it's better than nothing.

More instruction on direct registry from JSMineset.

Good information.  Smiley

I won't venture to predict when a second MF Global might occur, but Ann Barnhardt is not someone to ignore. She has much experience in finance and commodities trading.

Jim Sinclair's eccentricities are matched only by remarkable insight. He's a bona fide insider whose family members actually founded some of the world's top investment banks and exchanges. His companies have held some of the most coveted financial contracts of the 20th century. Although I've only tangentially and sporadically dealt with gold mining in my career, I've luckily had the pleasure of meeting with Mr. Sinclair on several occasions, and I can tell you he's the real deal. Ignore his advice at your own peril.
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May 07, 2012, 07:40:21 PM
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Sigh, PNSN had at its peak a market cap that's five times lower than the smallest company in my stock portfolio.  Even MF global was a comparatively small company in terms of financial importance.  Plus, Eurozone contagion risk (the primary culprit for MF global's failure) is already priced into markets, which would be much, MUCH higher otherwise (dow near the 17,000 mark sans Euro Debt Madness).

Regarding the protective advice - anyone doing business outside the realm of FDIC or SIPC insurance is stupid anyways. Keep an accurate record of your statements on a monthly basis and you'll be just fine, especially going forward over the next 25 years as risk and market volatility gradually subside.  Your risk of losing all your money betting on gold and silver is much higher than having your brokerage or bank collapse.
miscreanity
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May 07, 2012, 08:47:29 PM
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Sigh, PNSN had at its peak a market cap that's five times lower than the smallest company in my stock portfolio.  Even MF global was a comparatively small company in terms of financial importance.  Plus, Eurozone contagion risk (the primary culprit for MF global's failure) is already priced into markets, which would be much, MUCH higher otherwise (dow near the 17,000 mark sans Euro Debt Madness).

Regarding the protective advice - anyone doing business outside the realm of FDIC or SIPC insurance is stupid anyways. Keep an accurate record of your statements on a monthly basis and you'll be just fine, especially going forward over the next 25 years as risk and market volatility gradually subside.

First, this is not about Penson or MF Global. It is concerning the systemic decay present in the realm of finance. The latter of the two firms was minor in comparison to the overall system, yet it has caused massive dislocation of capital and undermined confidence in the system to a point where there is rapidly declining participation - not unlike the decline in workforce participation.

Next, your suggestion that the FDIC or SIPC are worth spit on the ground is ignorant of the ongoing cannibalisation of the financial structure. What is occurring there is a mere illusion of continued status quo operation while under the surface, there is no support either domestically or internationally. It is glaringly apparent that you are unaware of this.

Why the animosity toward gold and silver when a piece of art sold for a record USD$119mm? Where are the calls that art is in a bubble? Or oil? Or food? They must all be in a bubble because their prices are rising, right? And who needs food or energy?

Study the structure of the financial system and the global interplay among asset classes, as well as cultural differences between nations and historical precedent; or just stick your head in the sand and keep listening to CNBC.

I wouldn't have any venom for you if it weren't for the fact that you seem intelligent, yet spout the bolded items quoted above and this statement:

Your risk of losing all your money betting on gold and silver is much higher than having your brokerage or bank collapse.

Check your facts.

Some MF Global Clients Wait for Dollar One (despite insurance, see below)
FDIC Failed Banks since 2000

From FDIC:
Quote
How much insurance coverage does the FDIC provide?

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

This covers the smaller players, but cannot protect high net worth individuals. That has unintended consequences for those that are protected, notably destabilisation of the underlying system should wealth be removed by large holders of wealth. The resulting destabilisation is obscured from those falling within the protective envelope by government insurance. In particular the fact that the FDIC is underfunded and failing to recoup on expenditures through litigation. Where will the FDIC procure sufficient funding?

From Investopedia:
Quote
Caveats to SIPC Insurance
There are certain things the SIPC does not cover. Unlike the FDIC, it is not blanket coverage. Some of the things not covered include:

  • Commodities and futures contracts, as well as options on these
  • Foreign-exchange contracts
  • Insurance policies
  • Mutual funds held outside the brokerage (these are the responsibility of the mutual fund sponsor)
  • Investment contracts not registered with the SEC (private equity investments, for example, which are the responsibility of the general partner of that fund)

Over 450 banks have failed since 2007 alone. Gold and silver have NEVER gone to zero. The probability of bank or brokerage-held assets going to zero is virtually 100% versus gold or silver failing. There is no excuse for a reasonably intelligent person to not think for himself - reassess your dogma.

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