Monday, October 31, 2011

MF Global…not so MF but quite global...

I did not really comment on this last week. However the amount of BS being propagated on the media and street about them is just ridiculous. The reality is that Bear Stearns also blew up because of what is really  proprietary trade gone wrong…all the big firms have essentially a ponzi financed prop trade that is short the dollar and attempting to capitalize on asset price inflation. MF was no exception and the reality is that you can see how the leveraged positions short dollars and long assets will end up turning out for the banks and large firms in general. Now, if MF were the only story we might skip it…but when Bear blew up its book…there were quite a few others on the verge of doing so at the same time…how the saying goes is that where there is one roach there are probably a lot more…well get your roach repellent out TODAY…we are going to need it…the contagion is spreading from Europe to everywhere.

ANYONE who has their trades cleared through MF Global either directly or indirectly has been unable to trade today. So, any trader who only trades there is just sitting there watching the market move…what a disaster. My best wishes go out to everyone who trades through them…maybe now people will better understand why I will NOT trade via Goldman and did not choose MF Global either but rather Interactive Brokers. I have to say for the record that I feel like IB is the best shop on the street and one of the most conservatively managed too.
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