posted on Nov, 4 2011 @ 08:25 PM
This is gonna be EPIC. This will trigger TRILLIONS in margin calls. And not just one or two trillions, dozens if not HUNDREDS of trillions in margin
calls. (yes bigger than the world economy)
CME Goes To Margin DefCon 1: Makes
Maintenance Margin Equal To Initial For... Everything!?
It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it
confirms one of our biggest concerns: systemic liquidity is non-existanet. We confirmed interbank liquidity in Europe was at an all time low earlier
today, and can only assume the same is true for US banks. But what is very disturbing is that this is just as true at the exchange level, where it
appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly,
it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the
CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by
close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are
not found to be margin deficient, and thus receive a margin call. Naturally, since it is very unlikely that this incremental amount of liquidity can
be easily procured in one business day, we anticipate the issuance of hundreds of thousands of margin calls Monday, followed by forced liquidations of
margin accounts across America... and the world.
Remember Lehman? Well it's worse than that. Way worse.
This also means that CME needs capital. A LOT of it. If CME goes under, you ain't see nothing yet.
And what's funnier, people getting their money out of the big banks tomorrow will screw the big banks even more, they'll have even less cash to cover
the margins... when you can't cover your margins, you are forced to SELL... which means EVERYONE will have to sell.
Finally, the whole freaking scam ends MONDAY MORNING!
You won't even need your ``jump you f*****`` signs... a lot of people will go bankrupt monday morning.
IF you didn't plan on moving your money out of the big banks tomorrow... DO IT... Seriously. Especially Bank Of America...
If you are in one of the top banks...
- Bank of America
- Wells Fargo
- Goldman Sachs
- Morgan Stanley
- Met Life
Even in Europe, if you are in a big bank, get out of there, the domino effect could be epic.
edit on 4-11-2011 by Vitchilo because: (no reason
UPDATE : IT WAS CLARIFIED BY CME :
CME Issues Clarification On Margins:
To Usher More Risk, Less Liquidity In MF Aftermath
edit on Sat Nov 5 2011 by DontTreadOnMe because: added update