Posts Tagged “MF Global”

Occupy Wall Street, Consider This My Gift to You…

2 | By Shah Gilani

Out of far left field, I see something coming that I never expected.

It’s more like the coming together of pieces of a puzzle that have eluded us for too long.

By the way, Occupy Wall Street, if you’re listening, and I hope you are, and you’re still floundering (which I know you are) without a cause that anybody can really wrap their heads around, drop your drums, chants, and wanderings, and make the coming together of this puzzle what you’re protesting.

And make what could result what you are demanding.

Because, really, this could be the mother lode…

Those “New” E.U. Fiscal Rules Aren’t So New

2 | By Shah Gilani

Very soon we will see if the old market adage “Buy the rumor, sell the news” is true.

While rumors of Europe’s impending demise were momentarily shot down by an array of silver bullets, the actual news out of Brussels of a grand bargain wasn’t… exactly… honest.

Let’s call the half-measures agreed to by European leaders “Brussels sprouts,” because they’re more like “green shoots” than a cabbage patch panacea.

The leaders agreed to agree that they needed an agreement on how to more closely integrate their fiscal and monetary interests.

Yeah, that’s what they said. I say good luck with that.

Actually, they made some other moves, too.

Find out what else these European “leaders” did…

The Inside Story of How Our Financial Regulators Let Us All Down

0 | By Shah Gilani

Did you hear the story about MF Global?

No, not the headlines about its bankruptcy – the real story.

If you haven’t heard it yet, it goes something like this.

MF Global became a primary dealer only eight months ago.

“Primary dealer” is an elite status. It means the firm is one of only 22 government bond dealers that trades directly with the Federal Reserve’s New York trading desk.

Only, the Federal Reserve doesn’t regulate or oversee MF Global, the Commodities Futures Trading Commission (CFTC) does – or rather is supposed to.

But, even more incongruously, the CFTC isn’t the first overseer of MF Global . It ceded that responsibility to the CME Group Inc. (Nasdaq: CME), which owns and operates the largest futures exchanges in the United States. The designated self-regulatory organization for more than 50 futures brokers, CME was supposed to be the cop on the beat.

However, the not-so-funny thing about the relationship between MF Global and the CME Group is that MF Global recently boasted on its Website that it “was the top broker by volume at CME’s metals and energy exchanges in New York and in the top three at its Chicago exchanges.”

So, is it any wonder that the CME just last week audited MF Global’s segregated customer funds and found them to be in compliance?

These are the same supposedly segregated funds which the CME is now saying may have been tampered with. According to the CME:

“It now appears that [MF Global] made subsequent transfers of customer segregated funds in a manner that may have been designed to avoid detection insofar as MF Global did not disclose or report such transfers to the CFTC or CME until early morning on Monday October 31, 2011.”

How much money are we talking about? About $633 million – or 11.6% out of a segregated fund requirement of about $5.4 billion.

Do you see what I’m driving at?

So the real story is, t he Federal Reserve, which doesn’t regulate MF Global but regulates all banks in the United States, lets a futures commission merchant with investment bank wannabe desires become an insider in its dealings. Meanwhile, a private for-profit enterprise that runs the self-regulatory apparatus that oversees its own customers steps in for a federal agency that’s supposed to be in charge of commodities, futures and derivatives markets.


And that’s only the tip of the iceberg….

What’s Challenging Democracy Today

0 | By Shah Gilani

A referendum? In Greece? Are you kidding me?

As my 16-year-old nephew Nathaniel says, “What the…?

Apparently, that’s a popular statement of surprise in his southern California surf town. The first time he said it, I was flabbergasted, thinking he was going to finish that well-worn exclamation with a bad word. But it works better his way…

What isn’t going to work is George Papandreou’s call for a referendum.

He wants the Greek people to decide if they want to tighten their belts so much that they’re willing to starve themselves to death for the sake of paying back the IMF and their European neighbors.

Why his move hurts everyone…