Standing back and looking at the big picture we have a stampede to the exits taking place. Massive selling/unwinding taking place and cash being placed in short-term government treasury bills i.e. money market equivalents. That explains the very low 4 week treasury bills. It looks like hedge funds and other big players see major fall ahead.
"MF Global told clients yesterday that the margin on FTSE small cap and US stocks would increase to 90pc. FTSE 250 and European stocks will require a 75pc margin. A senior MF Global salesman told one client the company was finding it increasingly difficult to finance highly-leveraged positions. "We're freezing people out of anything but the FTSE 100," he said. MF Global, which is listed in New York, denied rumours about its liquidity. Shares in the broker recovered a little after Monday's plunge which saw almost two thirds wiped off the company's value." Interesting.
"The increase is mainly for one part of our business, equities derivatives," said Diana DeSocio. The company said it had raised margin requirements on its European equities "contracts for difference," or CFDs. The contracts are between two parties to exchange the difference between the opening and closing prices of a security over a set period of time.
MF are requiring clients to put up 90% margin, up from 10%(?), but made a statement that they had no liquidity issues........................................................................