MF Global and your margin money
Many who hedge in the futures market or market grain through someone who uses futures or derivatives may face a reluctance by lenders to bankroll them, says Art Barnaby of KSU. He thinks it's possible we'll see the results of this as higher interest costs on margin loans which will be translated into wider basis.
Here's the U/Ill blog on the issue.
The collapse of MF Global could be felt as much by lenders as by farmers and elevators which had placed hedges, but have lost all or part of their margin account. If lenders lose money as part of the bankruptcy, their future reluctance to loan money for risk management margins will be a significant loss. If money is loaned, interest rates could be charged at premium levels. Elevator managers will likely have to pay higher rates, and that will be reflected in lower cash bids and wider basis levels. "
Re: MF Global and your margin money
Why isn't a lot of people in jail over this, starting with the person that gave the okay for the wire? They knew that money was off limits but just turned their heads.
The CFTC and the CME have dropped the ball, because those crooks could have just made all accounts whole and moved on. Probably the reason they didn't cover all the losses, because there is more than likley a lot more roaches in the system, and they are afraid that might expose them more. The way this was handled is wrong in so many different ways, it's not even funny.