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Agriculture's Big Picture


AgWeb Editor Greg Vincent takes a big-picture look at agriculture and current events.

Bloomberg: Missing MF Global Funds at JP Morgan

Nov 04, 2011

 Somewhere throughout the day the other day, I lost my car keys. Couldn't find them anywhere. I tore the house apart looking for them. But it didn't matter how much I looked, my car wasn't going anywhere until I found them. That's a little how this week has been for MF Global customers. The $5.45 billion in segregated funds at MF Global is the car, but the missing $633 million from those funds were like the key. 

An appeal by the CME Group to the Commodity Futures Trading Commission got the money, at least the money they could find, released. That announcement came through on Wednesday, but they would only allow 60% of the money to be released. 

As of yesterday, the CME Group announced in a statement, that $410 million (about 28.3%) of the $1.45 billion (60% of the total) of the customer segregated funds have been transferred. This is from about 5,300 accounts. According to a source at the CME, there are about 15,000 different accounts at the CME.

Now that this money is finally being moved, the total market is facing a $1 billion margin call on Monday, says Pete Meyer, publisher of Opening Print. Check out his blog here

At the same time this was taking place, former New Jersey Governor Jon Corzine became the former CEO of MF Global. He stepped down this morning, and  because he has a big heart, he says he won't seek the $12 million severance package that was written into his contract. Nice guy to do that, as thousands of customers have been dealing with this all week. 

Now, and this is still developing today, Bloomberg is reporting that they have found the missing money. It just across town in an account at JP Morgan with a mere $658.8 of customer funds.

So, if true, the money has been there all along. Maybe it wouldn't have stopped MF Global from filing bankruptcy, and who really cares if it would have. But, if the money was right there, there could have been a simple and easy transfer of funds on Monday and thousands of MF Global customers, and their customers, which includes farmers and feedyard operators across the country, wouldn't have been sitting idle this week with no access to a total of $5.45 billion of segregated money.  

Now where did I put that $633 million? One thing is for sure. It's always in the last place you look. 



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