The wall of spin shifts and ebbs with every day, retreated and advancing, always to hide the truth.
Professionals in the industry read these things and either laugh themselves silly, or continue to make moves to safeguard their own funds. And I have told you that is what I have done for myself.
I did forecast about four or five years ago that when things started to fall apart, the foreign funds in the US would be the most vulnerable.
And that includes assets held on deposit, even with receipts, including gold and silver. If the Constitution is 'just a goddam piece of paper' what is a receipt?
On a related topic the FASB Acts To Reform 'MF Global Accounting.' The US accounting industry is a disgraced profession right along with economics, perhaps moreso.
As another story from Reuters makes more clear, when word leaked out that the customer funds had been tapped, and that the proposed acquisition of MF Global had fallen apart, the banks started freezing its funds.
This story is spin, but it can be made to stick. If justice is done, I will be astonished. I would just like to see the customers get their money back.
Warning Flags Were Raised in MF Global Transfers
By BEN PROTESS and AZAM AHMED
March 27, 2012
...The misuse of customer money is expected to be a focus of the hearing before the oversight panel of the House Financial Services Committee. It will feature testimony from central figures at MF Global, including Laurie Ferber, its general counsel, and Ms. Serwinski, the chief financial officer for North America...
While using customer funds was a serious red flag at MF Global, it was not necessarily illegal.
A little known loophole in futures regulations permits firms to spend some money belonging to customers who traded abroad, an exemption that contradicts a cornerstone of the industry to always protect client funds. It also differs from the law policing trading in the United States.
Other employees in the firm’s back office have also told lawyers that they knew of a potential deficit in customer accounts on Oct. 27, according to the people involved in the case. One employee on Oct. 30 told an outside firm that was reviewing MF Global’s books that the brokerage firm was worried about a shortfall earlier in the week, according to one of the people involved in the conversation. Federal authorities are also investigating whether MF Global was improperly using customer money as early as August, one of the people involved in the case said.
It is unclear whether the firm’s top executives were aware of a potential shortfall...
The document showed “a substantial deficit” in the amount of firm money used to protect customer accounts, according to the prepared testimony by Ms. Serwinski, who was planning to leave MF Global. Futures firms typically keep a cushion of cash in customer accounts as a buffer to cover losses in case of volatile market swings.
The deficit did not in and of itself violate federal laws, because of the loophole for extra cash in foreign trading accounts. The loophole dates to 1987, when few American traders kept money overseas, and was intended to add controls to a market that was essentially unregulated...
Read the rest here.
