Sun, Oct 22, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque Futures Intelligence

Independent Investigation Required: Did Criminal Activity Lead to Damage to US Price Stability?
Opinion: MF Global isn't a fight against Wall Street or capitalism. It's a fight against a criminal minority.

Wednesday, November 14, 2012

Independent Investigation Required: Did Criminal Activity Lead to Destruction of US Price Stability?

Opinion:

By Mark Melin

The regulated derivative markets in Chicago, New York and around the world offer key mechanisms for price stability.  They offer market participants the opportunity to hedge everything from interest rates to physical commodities.  Around the world a certain type of professional is drawn to the industry: the risk manager.  Many have seen leveraged implosions up close and they typically utilize a diversification strategy with a series of warning tools to provide indication of leverage problems.

It is for this reason damage to the core mechanism of price stability is so critical, particularly at this moment in economic history.  As a debt crisis threatens to implode across Europe, the unregulated Over the Counter (OTC) derivatives that now underlie the financial foundation could lead to serious consequence. The fight being witnessed is really between the forces that have favored unregulated, opaque derivatives fighting a battle against regulated exchange traded products, is one view.  Regardless of the viewpoint, the regulated mechanism of price stability being violated provides a serious backdrop to consider the damage being wrought if known criminal behavior is tolerated.

"Profits are down across the industry with trading volumes, " Mr. Koutoulas observes. "Sophisticated futures customers would prefer counterparty risk with a 'Too Big to Fail bank' rather than an uninsured clearing house." 
"Segregated account protections have proven to be nothing more than a paper tiger by Mr. Corzine's theft. If Corzine is allowed to walk, it sends the message to not just the futures industry, but the entire US financial complex, 'You can just steal customer money.' If a stand against criminality is not taken the integrity of the entire financial system is at stake."

MF Global About Criminality

MF Global is not an indictment of Wall Street, nor an indictment of any one company or firm.  It is an indictment of a criminal minority that apparently have a disproportionate degree of influence.

On Friday, October 26, 2012 a regulator went public for the first time calling MF Global theft. If this clear indication of criminal behavior is not acknowledged by those operating the investigation, it will represent a new low in criminality surrounding Wall Street. 

This isn't a fight against Wall Street or capitalism. It's a fight against the criminal minority.



 
This article was published in Opalesque Futures Intelligence.
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad