Bad things happen to stupid people (Don Miller).... Now hereâs a guy that must of busted his ass to get up to $3mil daytrading the ES. Don appears to be a great trader but a LOUSY risk manager. By his own words, I believe he day trades 20-100 at any given time and using a comfortable $3,000 per contract + additional 200K reserve, he should NEVER have more then 500k with any clearing firm. And for someone who preaches about managing risk with âsizeâ, he bet his whole career on 1 Company! They say âeveryone gets what they deserveâ and Don Miller is no exception! The real questions are: How LONG will it take for the clients of MF to become whole again? And will they get 100% back? P.s.: as we have ALL been their before- going into "hope mode" when the trade goes against us, Don better go into overdrive praying to Jesus...
Busted his ass.. great trader.. lol. Great snakeoil vendor more like, has been for the last decade. Currently makes 150K per jelly course.. dont have to sell many of those to net a few million. Beats day trading the ES any day.
Ive thought that many times South...your probably right! Therfore he really is getting what he deserves!
It certainly makes a difference in <i>media coverage</i>. From Dan Gainor's column today: <i>But hey, Solyndra wasnât run by a former governor considered as a possible Treasury Secretary and hailed by news outlets as an economic expert. That would be a real scandal. Or not, if he had the infamous âDâ after his name. The former governor is Jon Corzine, who has the reverse Midas touch. Heâs run Goldman Sachs, New Jersey and, most recently, MF Global, which just collapsed amidst a $2-billion bankruptcy. MF Global fell apart in what CNBC's Andrew Ross Sorkin called a âmini Ponzi scheme.â But not one story on ABC, CBS or NBC has mentioned that Corzine is a Democrat, was considered an Obama adviser and possible pick for a top spot in his administration.</i>
Don't know who Gainor is, but sure sounds like a partisan hack. Like all such, R and D, they just make stuff up that sounds good to the respective faithful. In particular, I don't get cable so watch ABC evening and CBS morning news. Both mentioned every time it was brought up, Jon Corzine, former D gov NJ. At least one if not both had pictures of JC with BO and mentioned the connection. This corruption is systemic bred by the monopoly on power shared by the R and D's. Both guilty, although the absolutely insane and corrupt Bush economic policies are far beyond the pale of anything else in the past. A trillion dollar plunder of the treasury that our grand children will be paying off. And that's why I am a Libertarian.
There are alot more "Jon Corzine's" out there than most people would like to believe. We've had more than a generation of narcisstic, sociopaths who are capable of blowing up the world economy 100x over since they've never seen a period of depressed asset prices. Their answer to everything is more gummint largesse from Uncle Sugar. If they can't get their backdoor bailout, TARP, TALF, stimulus, fraudulent transfer, they're flat on their backs.
Yep. Right now MF's customers are hyperventilating -- understandably -- but in due time they'll get most or all of their money back. I've been through the mill before with troubled FCMs, though luckily didn't have money with MF. The bigger, much more important, picture will become clear later when the dust settles, and the ugly facts start to bleed out about JC's contacts with the BO administration.
The longer the trustee drags out this liquidation the more scrutiny the entire industry will come under from client funds security perspective. This is logical and no doubt good, but if the exchanges don't apply a bit more pressure they will see their customer bases shrink now that 'default risk' becomes part of the clearing house model. (Reuters) - Almost two weeks after the bankruptcy of commodities firm MF Global, customers at rival firms are all asking the same question: How safe is my money? MF Global's collapse is confronting clients across the industry with the harsh truth that while their accounts may be termed "segregated" that does not mean they are off-limits from trouble at a commodity futures firm, much less backstopped by any government insurance fund. MF Global revealed to regulators during its October 31 bankruptcy that it was short perhaps $600 million in customer funds - money which the firm was supposed to keep in "segregated" accounts maintained under a raft of laws and regulations. The concerns among investors have reached such a pitch that futures exchange operator CME Group announced late Friday that it will provide a guarantee for $300 million of the missing money in the MF Global case. "I've lost a good deal of money already over this. Now I'm a big boy who should have known better, with over 25 years experience in the futures industry, but what they were doing with client funds is to me outrageous," said Stuart McClellan, an independent trader from Norfolk in the United Kingdom, who previously worked for Schroders in London. McClellan has more than $110,000 tied up in MF Global, which he doesn't know if he will get back. "Using the excess collateral in clients' funds to trade is not illegal, but to my mind it's immoral. There is a huge risk," he said. Futures commission merchants, as brokers in the industry are known, have always been allowed, with certain restrictions, to invest customers' so-called "excess margin," or the funds in their accounts over and above the collateral required to maintain trades. The brokers then book any profits for themselves. Segregation simply means that customer deposits can't be mixed with the firm's own money or used to cover firm expenses. They must always be available for customers to trade with or withdraw at a moment's notice. In other words, customer segregated money isn't some big cookie jar for the firm to dip into when it is short on cash. "That is what is so shocking about MF Global's situation," said Michael Greenberger, a former director of the Division of Trading and Markets at the Commodity Futures Trading Commission (CFTC) and now a law professor at the University of Maryland. "If that stability is not present, people will not want to go into what is already a highly volatile trading environment," he said. Now with each passing day that missing money has not been found, there is growing concern that MF Global may have abused its legal latitude with the segregated customer accounts. The fear is that MF lost the segregated funds in bad trades or used them illegally to meet other obligations. By this time, traders and investigative sources say, it should have been possible to trace the money, if it still exists, in some account with another financial institution. Some traders who tried to withdraw funds from MF Global prior to the bankruptcy received checks that bounced. Commodity traders and investors are now saying they will demand their brokerage houses reveal exactly what they plan investing customer funds in. Don McAfee, a private investor from the San Juan Islands in Washington state, said he had been a "novice" trader of commodities who had become interested in the sector, in part because he saw less risk from the fate of individual banks and brokerages than in equities or bonds. "It was a way of diversifying out of just playing stocks, and I was very attracted to the fact you did not seem to have any counterparty risk," McAfee said, who has around $220,000 still frozen at MF Global. "In the future I am going to want an ironclad guarantee that my account is fully segregated. And if it's not I need to know that at most it's being invested in U.S. Treasuries, not commercial paper or foreign bonds." PRESSURE MOUNTS ON RIVALS Brokers at rival firms, who had perhaps hoped to benefit from the disappearance of one of their fiercest competitors, are fielding endless calls from concerned customers and fearing a run on their own accounts. "I'm getting calls from people, wanting to know if this could happen again, if I can give them proof that the banks I'm dealing with are okay and that their money is safe," said one broker on the floor of the Chicago Board of Trade (CBOT) on Thursday, who asked not to be identified. "That's never happened to me before. There's a lot of fear,' he said. Other traders said they were looking to spread their accounts across multiple brokers to limit their risk, after watching friends and colleagues locked out of the market over the past two weeks. Others said they were looking into insuring their funds. The failure to free up client funds quickly after the bankruptcy was further undermining faith in the safeguards in the commodities market, said Michael "Mack" Frankfurter, co-founder of commodity trading advisor Cervino Capital Management LLC in Beverly Hills. "There is unintended consequences and systemic risk evolving in this situation. It's not about what needs to be done going forward... It's about what needs to be done immediately to save the industry," he said. WHO TO TRUST? MF Global's standard agreement with customers permitted the firm to "borrow, pledge, repledge, transfer, hypothecate, rehypothecate, loan or invest any of the collateral" in customer accounts. The language is typical of agreements throughout the industry, said one longtime futures trader and industry consultant who did not want to be identified because he does work for CME Group. The largest customers might be able to get that language tweaked in their favor a bit, perhaps with an agreement to split revenue earned on the customer deposits. But smaller investors generally have to accept the firm's plans for the use of excess cash in their accounts. Trading in commodities has exploded over the past ten years, increasing by more than 600 percent according to some estimates, and bringing in a new breed of 'Mom and Pop' investors hoping to protect themselves against, and benefit from, the rising costs of food and energy. The practice of firms using customer excess cash to make money has been a basic source of revenue for the industry for decades, if not centuries. In fact, it is revenue from those investments that has allowed the firms to cut their commission rates to attract more business. The practice is codified in U.S. law and regulation, which until 2000 limited use of the funds to basically U.S. Treasury and state and municipal obligations. Over the next five years, the rules were eased to permit firms to use customer money to enter into repurchase agreements and buy foreign bonds, money market funds, and assorted securities. When the financial crisis prompted second thoughts from the U.S. Commodity Futures Trading Commission, the industry fought to stop proposals to cut back on how much the firms could do with customer money. MF Global, which was led by ex-Goldman Sachs CEO and former New Jersey Governor Jon Corzine, teamed up with Newedge Group, a major competitor, and warned in a December 2010 letter that reducing the stream of revenue could force some futures commission merchants to shut down. The Futures Industry Association, an umbrella organization representing futures traders such as Goldman Sachs Group and Jefferies & Company, as well as MF Global, also pushed back against plans to stop firms investing in foreign bonds and other riskier assets with customer funds. The proposal was eventually shelved. The MF Global collapse prompted CFTC Chairman Gary Gensler to say November 7 that he will push again to tighten the restrictions. Industry experts say that may improve the security of segregated funds, but it could also force brokers to charge higher fees. Meanwhile, the building outrage over the missing money is rattling industry veterans. Dennis Gartman, a board member of the Kansas City Board of Trade known for his daily market commentary, wrote Friday that if industry leaders do not act quickly to make good on the MF customer money, "the futures markets shall be under real and permanent assault." Todd Thielmann, a former MF Global broker on the floor of the Chicago Board of Trade, said fear was spreading fast among customers. "They've taken any excess money out of all firms now and they don't know who to trust." (Reporting by David Henry, David Sheppard and Matthew Goldstein in New York. Additional reporting by Jed Horowitz, Barani Krishnan and Josephine Mason in New York, Samuel Nelson and PJ Huffstutter in Chicago; editing by Edward Tobin and Martin Howell)
Excellent paper. Basically says 88.4% now, debate the 11.6%, but it does sound like there's not any money so with that in mind since the portion used for speculation by JC is most likely gone, the principal of 88.4% will continue to be whittled down by enormous legal costs that are completely outrageous, unreasonable, and unethical.