http://finance.yahoo.com/news/mf-global-jpmorgan-again-center-002846254.html "By adhering to procedure and not cutting MF Global any slack, these people say, JPMorgan was able to slow the delivery of funds, worsening MF Global's distress. As a result, they note, hundreds of millions of dollars of MF Global money may be still (be) stuck in accounts at JPMorgan." Wasn't there something similar to this with Bear Stearns (or was it Lehman. Or both...?) At least MFG customers know they can knock on "straight guy" Jamie's door to get their money back.
Why didn't they file for bankruptcy before they had to pay JP Morgan their swap loss? Because they didn't want to swallow their pride and do the best thing for the customers? Don't be so sure. If this happened, it would disassemble the foundation of the financial system. This is like saying MGM Grand should give Joe the Welder's casino money back because his kid blew it all in online gambling during the 90s. People would setup Ponzi schemes knowing their customers would get their money back at the expense of some third party (JP Morgan) who had no responsibility. It was MF's recklessness for leveraging resources they needed for a gain they did not need. They were dead wrong on Europe; what else is there to say that they were stupid...oh yeah, being Cornell Mustard and taking a 'loan' from their customers' money! It's MF's responsibility to make the best value for their shareholders and customers, and it's the governments responsibility to not intrude on private enterprise - but also to not allow an atmosphere where we (derivative customers) are playing Russian roulette when we choose a broker.