MF Global was a very significant bankruptcy….Second only to the Lehman Brothers Inc. collapse.
With restrictions on orders limited to liquidation only, billions of dollars being moved within a short amount of time will always have an effect on a market. Could this be what has been bringing the markets down over the last four days?
One of the key differneces between this failure and Lehmans failure is, Lehmans segregated account had no discrepencies….MF is missing over $1 billion from it’s segregated account…. this does not bode well for the confidence level investors have in fund mangers or regulatory bodies such as the CFTC. Investors could very well be liquidating from other funds as well, just based on what’s going on with MFGlobal…just a thought.
It really seems like this could be the eye of the storm, considering all the factors at the moment, including but not limted to, a liquidating hedge fund, lost investor confidence, super commmittee at odds about the debt trimming in the US, continued unrest in the middle east and the financial troubles in the Eurozone spreading it’s tentacles across the globe, there seems to be a small run home to mom and dad! US cash!
With the market falling for the last few sessions, and profits in metals being considerable for some, another possibility that is causing precious metals to drop could be investors taking their profits to offset the market loss. This is what we interpreted Paulson’s move out of gold was recently. It doesn’t seem that Paulson has lost his confidence in gold, rather losses elsewhere can appear much better when offset with profits from another investment. Something to think about.
Take advantage of a somewhat stronger fiat dollar and a dip in the hard yellow metal for an ideal exchange opportunity. Once everyone figures out that Mom and Dad “aint” young anymore, and have used up all thier financial resources, the one thing left before a new confidence is restored in a currency is hard metal, gold, silver, platinum and palladium.