What was MF global and should I worry?

Was MF global a bank? It lost a lot of its customers money. I have a bank of america account and was wondering if this could happen to me. I saw an article about how BOA transfer derivatives to its deposit taking unit(that would be me). Heres the article

business week

Because the derivatives would be paid off first and if the loss was massive( talking trillions of derivatives) could it possibly bankrupt the FDIC and my deposit is second in line to get funds? I did withdraw most of my money and have it in a safe but I would like to keep it in a bank.

John Corzine, head of MF Global at the time made a 40:1 bet on European bonds, that lost. MF illegally used private customer funds with investment funds and a couple billion is now missing.

reply to post by mnmcandiez
So could BOA do something along those lines. Was MF global a deposit taking institution? I know people had money there at MF but is it the same situation as BOA? Was MF global backed by FDIC?

MF Global was an Investment Bank, which defaulted on Future Trades.

Should you worry ?

In the opinion of many…abso-fricken-lutely.

BoA is one of the weakest banks in the US and its collapse is possible.

No large National Bank is safe at this time, all have been attempting to hide their losses in the derivative market, which will collapse the system.

No way around the collapse, the only issue is WHEN.

MF Global is the result of a reckless deregulation of the financial industry, and yes, I'm afraid it could happen to you as well.

Bank of America just made sure the average taxpayer is now guaranteeing $75 TRILLION (!!!!!!!!!!) of their risky derivatives investments!!! And yes, that includes you

LINK

EDIT: To sum it up, you should do more than worry...you should be scared as hell, and pissed off at any politician who wants to deregulate the financial industry further (Romney, Perry, Bachmann, Newt, Obama, Ron Paul, etc.). Most of them are bought sock-puppets...and they're allowing companies to shif their risk over to the taxpayer. So they either make a profit and get massive tax subsidies (or pay no taxes at all like Exxon), or make a loss and pass that loss on to the taxpayer.

Happy times

reply to post by brokedown
How do they "hide" there losses in the derivatives market and what exactly is a derivative.I will do more research and get back to this thread.

reply to post by jlafleur02


No, MF Global was not backed by the FDIC.

They fell under different rules, the were suppose to be regulated by the Investment Security Commission.

What took place is a default on future trades. MF Global sold Gold in April for delivery in October and with the rise in Gold price were unable to meet its obligations.

But, this does not mean that you should feel that your money is safe at BoA, because it is a high risk.

BoA has positioned its obligations to the derivative market in with the deposit accounts, which means that it can pay the obligation with your deposit, which is covered by FDIC and they will default on the deposit account placing them under the control of the FDIC.

The rules of the FDIC are they do not have to pay a claim for one year if they so choose to do so.

Can you go one year without the money in your bank account ?

Secondly, will there be any money left to pay claims a year from now.

If anyone has any money available for investment purpose, they should take on the responsibility of managing the own funds and NEVER, EVER invest in paper.

Emulate what the large investment houses do, they fool others in giving them their wealth traded for paper and they take that wealth and buy real assets, like real estate, gold, silver, oil, etc.

Here is sound advice:

First insure your family has Food & Water back-up supply.

Second, if you have any other money, GET OUT of PAPER Investments, like 401k, bonds, stocks. Anything you have traded your wealth for paper.

Third, re-invest in local, hard assets. Like real-estate, this is the most opportune time to be purchasing real-estate in my life time.

If you choose to have a bank account, choose a local State bank, or better yet a Credit Union, stay away from National Banks.

reply to post by jlafleur02


What is a derivative ? Now, that is a good question, in reality no one knows for sure, not even the people who invest in them.

But,

An easy way to picture it is it is a gamble bet on either the rise or fall of a “yield” produced by an investment.

Think about it like this, each investment produces interest from the investment, this increased value is the yield, then the derivative investment is a side bet, gambling if this said yield will rise or fall, one can bet either direction.

This is the truth of it, a person can have better odds from a table bet at Las Vegas than what a derivative could produce and Las Vegas pays when you win.

US Banks hold 214 trillion dollars in obligations directly tied to the derivative market, there is only 575 billion dollars in circulation, in no way can they ever pay these obligations.

Our system is already bankrupt, the Federal Reserve is only keeping the Ponzie scheme going for as long as they can.

The bailout that the Federal Reserve made, backed by using the wealth and labor of the citizens, and their children, and their children’s children is how the derivative market as been kept afloat so far, but this is coming to an end quickly.

The bailouts that began in 2007 were never about low income persons buying house in which they could not afford. It was always the investment bank bundling the mortgages and selling the same bundle over and over again, sometimes they had sold the very same bundle to a hundred different investors.

Sounds like fraud to me, someone should have gone to jail, but what the MSM did was to divert the attention away from the criminals and get America to believe that the collapse was the fault of citizens buying beyond their means.
In 2007 when this all began 41 billion dollars could have purchased every home and paid in full the mortgage that was in default in America, and the Federal Reserve was given a blank check.

In 2011, now 1.6 trillion dollars later, every home in American that is in default could be purchased for approximately 150 billion, a far way from 1.6 trillion wouldn’t you say.

So, what happened to all of this money, it was given to the large banks to cover their losses in the derivative market.

Should you worry... well, yes and no.

From a personal standpoint, no, because your savings account at BofA is insured by the FDIC (up to $100 000 if I'm not mistaken). As was pointed out by brokedown
That in and of itself has always been a little funny to me because in the end, it is insured by you (as a taxpayer) so you end up paying for it in the form of inflation if nothing else.
Of course, if your bank goes belly-up, you'll be more than happy to get your money back!

However, from a systemic standpoint, you should be very worried.

If this fraud goes unpunished, it is a sign that we are perhaps beyond the point of no return when it comes to financial lawlessness. If the brazen fraud highlighted by the 2008 financial debacle wasn't enough, the investment banking model has just taken it up a notch to outright theft from "protected" customer accounts.

Moreover, they have attempted to lie about the actual numbers, and claim to not know where the money is!?!

Add to that the obvious connections to government and the recent imposition of ex-Goldman technocrats to rule European countries, and we have an outright fascist takeover of governments world-wide by a small group of banking cartel members.

This may sound a little "tin-foil hatty", but that is what is happening right before our eyes.

the Billmeister

EDIT:
Oh yeah, and everything else brokedown said.