My wife keeps a spread sheet and looks for not just a bad number but any disturbing trend. The swings can be surprising.
Got everything to do with it. In the US the concept of "moral obligation" is very powerful particularly if it is insurance related and government mandated. There is no one in this country that does not believe the government will put the full faith and credit of the US behind the FDIC and/or SIPC if they falter. The same will be true if there is insurance here. Taxpayers in Europe who live in other countries are about to bail out Spanish banks even though they have no legal obligation to do so. Taxpayer money is like water: Once it spills it runs downhill FAST!!
you seem Swan Noir to have ignored my statement: "the CIPF insurance is industry funded" and as far as "moral obligation" goes, if there were any in the US there wouldn't be the need for insurance
LOL ... I'm not claiming a US moral superiority. I'm telling you how it works here and how the taxpayer gets screwed.
Put in the same insurance that stocks have like the SIPC. Why is that so hard? Yes, it probably means more paperwork and fees for the futures brokerages but at least it would provide some peace of mind. http://www.fool.com/investing/beginning/2007/01/17/insuring-your-investments.aspx#.UANdNfWvPrc
Although we do not know the full facts of what happened in this matter, the system failed to protect the customers of Peregrine," Gensler said. "Just like the local police cannot prevent all bank robberies, however, market regulators cannot prevent all financial fraud. Market regulators cannot prevent all financial fraud is another way of saying "stuff happens..." That's a pretty strong endorsement of insurance by the CFTC Chairman. For those who say futures trading is risky: Nowhere in the disclaimers does it say the risk is due in any part to dishonesty or incompetence by the broker.
Yeah, I posted a few days ago on another thread that they would probably eventually pull out the "police" analogy. I mean, it is true, but you are right that, if that's the case, customers need to be able to protect themselves before the fact, not rely on the courts and regulators after the fact. Agree 100% with your comment about risk, too. It's ridiculous to have to add an incremental, yet avoidable, risk on top of the risk that futures traders already take just in placing a trade.
Of course there is enough risk in trading so it is ridiculous to have unnecessary added risk from inadequate safeguards. But one of the main problems is that these guys can live well for years and then, in many cases, end up not doing a ton of time. They have a very serious fiduciary duty to protect segregated funds. Any infractions -- even when it is for a few days and then squares up -- should result in jail time. It doesn't matter if there is no actual loss or if the firm rights itself, at the point there is any irregularity in that segregation account the US Attorney's office should indict them and, if proven, send them off to jail for a year or two. It is not their money and they have a responsibility to protect it 24/7 ... 365. Unless it is simply a minor clerical mistake involving pennies they should pay an immediate price for any infraction. Yes ... we need something akin to SIPC but until that happens the Attorney General should announce a policy of immediate prosecution on any shortfall beginning immediately.