Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else

Tyler Durden's picture

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nope-1004's picture

Canadian banks are sitting on a mountain of shit.  None of them will admit anything, they're all playing hide and hide.  No seek, just hide - like cowards.  They know the toxicity of their holding and how closely tied to the global ponzi they are, but they'll never admit it publicly.

Once a sniff of this reality hits, housing will crumble, CMHC will fold, and the taxpayer will be on the hook, just like everywhere else in the world.  And Jon Corzine will walk, probably on a red carpet, next time he's in public.


lolmao500's picture

And the liberals and the conservatives (both Bilderberg/bankers puppets) will sign our death warrant... giving trillions to the bankers.

Health care? Forget it. Pensions? Forget it. You ain't getting nothing.

It'll be hell.

Freddie's picture

I don't recall any conservatives involved in MF Worldwide just Democrat Corzine (who bankrupted NJ), Bill Clinton (making $50,000 a month of MF Worldwide) and their Democrat muslim pal.

Bansters-in-my- feces's picture

CONseratives in Canada are a little different than USA CONservatives.

But they have one thing in common,they are corrupt.

john39's picture

all political parties are infiltrated and corrupted.  this collapse is not an accident.  time is running short.

marsdefIAnCe's picture

I know a lot of people on ZH like the doom porn, but the latest global financial crisis was 666 years ago when the Italian system collapsed.  "Lighting of Heaven" is Barak O Bammah in Hebrew.  Obama is Osama, the two-headed beast of Revelations 13.  He's been on the national scene for 7 years, since '04.  We're about 1000 days into his Presidency, the 1260th being the eve of July 4th.  This story has already been foretold.  If you're surprised by any of the plays you're not as bright as you think you are.


Nobel Peace Prize + chairs UN Security Council + Pakistan/China/Iran/Russia/WW3 + Fukushima meltdown hitting Babylon + Stuxnet disabling many other plants globally / German nuke sites getting shut down + Gulf Blue Plague + S 1867 + FEMA camps activated for 72 hr notice + Talmud of Jmmanuel + Khazars + Fake Osama raid + "My first 100 days will be so successful I will complete them in 72"



A L I E N's picture

Interactive Brokers has a rebuttal on Elite Trader to some of the accusations:

"Wow - pretty serious accusations here but how many of you really understand what hypothecation is? This is all about margin and stock loan. Remove the ability to hypothecate and you might as well suck out a massive amount of liquidity from the system.

First, let me get this out of the way. The accusations or assumptions that IB client money is used to fund Timber Hill are completely false. The companies are separate.

Client money is segregated. However, if you utilize margin and are long shares, IB can lend some of those shares out to others. These are not risky loans as there are limits on how much can be lent and they can be recalled at anytime and marked to market real time. Those are the rules, they are fair, not risky and add a ton of liquidity into the system.

The comments and fears presented here are a classic over-reaction to margin lending. Do not put IB or other firms on the same plate as MF. IB has a very strict policy when it comes to margin and deficits (ie. real time liquidations) and a very conservative risk management and investment policy. Many clients scream that they want more margin and that the stock loan list isn't long enough and now many of you are calling the kettle black. Before believing everything you read, do your homework and then decide if the practice is risky. Some banks are silly when it comes to greed and what they lend out. Others are not. IB has a long history of being conservative and risk adverse. Our large capital base and handling of client credit should also provide additional comfort. Many of the comments and assumptions on this thread are baseless.

Let's not over-react and create fear where their should be none - and I say this in regards to the comments on the other firms mentioned in this thread as well.

I need to put in a days work now so do not expect any replies for quite some time from me. I agree this is something that needs further clarification so you can be better educated on the subject as well as placate the unfounded fears expressed here. However, this this discussion should be for the industry and not single out IB."


OldPhart's picture

uh-huh...ummm, why does your pic look like a troll?

AldoHux_IV's picture

Pic looks like Zangief, but not the real point-- it seems like a standard vague response from a representative of a firm who may not know what's going on entirely with the firm's practices.

With so many of the activities off-balance sheet it's really a he said she said thing until they blow up and well that's a wee little too late to find out the truth.  I'd like to see the CEO of IB or any other firm mentioned in writing they are practicing conservative risk management and what their [re]hypothecation methods are and then allow an independent 3rd party to audit the off-balance sheet activites just to see who's lying and who's not.

Obviously it's going to require more information than a 'trust us'.

sqz's picture

While I still have no idea the specific link between this article and the Bundesbank in the article of yesterday, I do admit, this information is ... deeply concerning.

Ultimately, the central banks will have no choice but to accept all collateral and print like never before. The liquidity gaps and interconnections created by even minor adjustments to the size of collateral pool and its uses will otherwise become unmanageable. Simply trying to change the financial environment to be sustainable is going to cause enormous disruptions to the money supply. CBs must be feeling incredibly powerless and vulnerable as they are forced to swallow the capital markets whole!

Intermediaries will have some extremely tough questions to answer regardless.

fajensen's picture

The central banks could also NOT print, let the non-assets blow up, the banks with it, put the bankers in camps, then freed from the liablities of the shadow banking system, new banks could be created without infinite capital requirements. 

The new banks should be utilities. Heavily regulated, boring, measly profits, drab offices and no slutty secretaries.

Squid-puppets a-go-go's picture

and mass nationalisations will be the rearguard action. I hope they strip the oligarchy of all their fucking real assets and illegalise their fake ones

and before anyone has a crack at me for endorsing nationalisations, submit to this: for the majority of the time in the grand economic cycle , nationalisations are folly and counter productive. In 6-9 months time we will be at that one degree of arc, unlike the other 359, where nationalisations will be prudent, unavoidable and beneficial.

It's not like there's anything left of capitalism to sheild from nationalisation.......

Oh regional Indian's picture

Nationalization is step D-1 to communism. FUll blown that is. Ask us Indians. Everything has always been nationalized and we are a goddamn basket case of a country.

And as for this mess, I said it yesterday, feeling very prescient... hypo-thecated? Hypo is as big or bigger than most/many banks, have huge downside risks in European Housing in general. 

Bring on the collapse already. It's happened in all but name. Like a sand castle meeting a tsunami.




carlnpa's picture


Disagree on nationalization, it will be required to reset the system.

We need to avoid nationalization of losses, claw back ill gotten gains and profits.

Nationalization along the lines of the Bank of NorthDakota would be for the public benefit.


The creation of money and the flow of money should be for the benefit of the people, not just the elites.


JW n FL's picture



Department of Energy 2011 (International) Outlook


We are all FUCKED! (this will only be news to a few of you idiots)


Department of Energy Press Page.


Video presentation.



The PDF short report (direct link).



how about some back ground?

This is for the attention deficit crowd, 1 minute and 45 seconds long and in cartoon medium.



this one is a little longer.. and maybe more for the grownups.. to all of my Friends here.. this is Jeff Rubin, again.. no need for you guys / gals to have to suffer it again.




Al Bartlett on energy consumption versus population

Uploaded by human4832 on Dec 7, 2009

Prof. Al Bartlett discusses his perspective on energy consumption versus population growth. Unending population growth is the root cause of our increasing demand for energy.

This is from a panel discussion with Professor Al Bartlett and former Colorado Governor Dick Lamm at the October 2009 ASPO-USA Denver, Colorado symposium on peak oil. For more information and additional panel videos, see www.AlBartlett.org . Also see www.ASPO-USA.org .



The Most IMPORTANT Video You'll Ever See (part 1 of 8)

Uploaded by wonderingmind42 on Jun 16, 2007

2 million views for an old codger giving a lecture about arithmetic? What's going on? You'll just have to watch to see what's so damn amazing about what he (Albert Bartlett) has to say.

I introduce this video to my students as "Perhaps the most boring video you'll ever see, and definitely the most important." But then again, after watching it most said that if you followed along with what the presenter (a professor emeritus of Physics at Univ of Colorado-Boulder) is saying, it's quite easy to pay attention, because it is so damn compelling.

Entire playlist for the lecture: http://www.youtube.com/view_play_list?p=6A1FD147A45EF50D



David Rockefeller speaks about population control.



Bill Gates on energy: Innovating to zero!


Fracking  Contaminates Towns Water Supply


It was a little town with no one of importance in it.. and we need the energy more than another nowhere, piece of shit, red neck infested, town in the middle of bum-fucked-Egypt!


JW n FL's picture



Capital Account: William K. Black on MF Global and Jon Corzine Culpability (12/08/11)


supafuckinmingster's picture

AAhhhhhhhhhh coulda shoulda woulda............wouldn't it be fucking wonderful if things could be as they should be? But they're fucking not, and ruthless fucks at the top of the 1% aren't gonna let us claw back gains and profits, aren't gonna let us create money for the benefit of the people. The people are here, in their twisted eyes, to serve them. And if things are gonna change it's gonna take a whole lot of violence. It shouldn't have to....it would be nice if it didn't have to but it FUCKING WILL. 

Spastica Rex's picture

Your writing style reminds me of Buckminster Fuller.

Totentänzerlied's picture

Nationalization of finance is analogous to the devil switching his pitchfork from his right hand to his left. Finance and government have been married and fused for millenia, regarding them as separate entities is dangerously naïve. "Just this one time and never again" and "it's only temporary" are the siren songs of despots and tyrants. The only things to which it is a solution are unacceptably slow wealth extraction and insufficient serfdom.


zorba THE GREEK's picture

I'm glad ZH is keeping this piece as the lead article. I read it last night and read it again this morning and

I going to read it again tonight. The implications from this are mind boggling, but it does make the Fed's

actions seem more logical now. No sovereign nation or major financial institute can be allowed to fail anywhere

in the Western World because it would mean total collapse of the house of cards within days.

AldousHuxley's picture

Shit already failed.

Fed just covering shit up with rose petals while government scrambling to clean it all up with oil, but China and Russia says dont' touch our bitches in Syria and Iran. BTW, China has STEM grads to hack drones while US has retards texting OMG all day.

dizzyfingers's picture

"BTW, China has STEM grads to hack drones while US has retards texting OMG all day."

Pithy word picture/mirror of US society now, mindless twits are the next big adult power/voting block, with all of that demographic truth's terrifying implications. 


dizzyfingers's picture

"...total collapse of the house of cards within days..."

Timed for Christmas/New Year holiday? Hmmm?

The Big Ching-aso's picture



Whores, trollops, and sluts.   The lot of them.   Let boils erupt pustules of fetid gangrenous fluid from their poisoned uteruses.

These bitches are ready for the shit pile.   Useless and dangerous.   Helluva combination.

topcallingtroll's picture

Hey Al IEN

Does interactive brokers have a subsidiary in the united kingdom?

If so, then everything you just said was a lie and these client funds have been re hypothecated and leveraged four times, and it is off balance sheet so it cant be found.

Michael's picture


Woman says she performed oral sex on married Newt Gingrich

"A woman who worked for Newt Gingrich’s first successful congressional campaign in 1977 is sharing allegations of an adulterous affair with her boss in an attempt to stem the rise of the current GOP front-runner.

Anne Manning says that she had an adulterous relationship with Gingrich 34 years ago. At the time, he was married to his first wife, Jackie Battley, and campaigning for Congress with the slogan “Let Our Family Represent Your Family.”

Manning told the National Inquirer that she performed a sexual act on Gingrich in a Washington, D.C. hotel room, but adds that they didn’t have sex so that “he could say he had not slept with me.”'


Michael's picture


Documents: ATF used "Fast and Furious" to make the case for gun regulations

"Documents obtained by CBS News show that the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) discussed using their covert operation "Fast and Furious" to argue for controversial new rules about gun sales.


In Fast and Furious, ATF secretly encouraged gun dealers to sell to suspected traffickers for Mexican drug cartels to go after the "big fish." But ATF whistleblowers told CBS News and Congress it was a dangerous practice called "gunwalking," and it put thousands of weapons on the street. Many were used in violent crimes in Mexico. Two were found at the murder scene of a U.S. Border Patrol agent.


ATF officials didn't intend to publicly disclose their own role in letting Mexican cartels obtain the weapons, but emails show they discussed using the sales, including sales encouraged by ATF, to justify a new gun regulation called "Demand Letter 3". That would require some U.S. gun shops to report the sale of multiple rifles or "long guns." Demand Letter 3 was so named because it would be the third ATF program demanding gun dealers report tracing information.


On July 14, 2010 after ATF headquarters in Washington D.C. received an update on Fast and Furious, ATF Field Ops Assistant Director Mark Chait emailed Bill Newell, ATF's Phoenix Special Agent in Charge of Fast and Furious:


"Bill - can you see if these guns were all purchased from the same (licensed gun dealer) and at one time. We are looking at anecdotal cases to support a demand letter on long gun multiple sales. Thanks.""


Michael's picture

The Only Hope for the European Union is for its people to adopt in its entirety, the US Constitution, immediately!

The countries would be relegated to statehood status, but they will retain all rights not given exclusively to the federal government. Let me tell ya, that's still a lot of rights the states retain.

By the way, a private Federal Reserve is still unconstitutional in the European package, as are income taxes.


Sandmann's picture

An alternative would be for British Government Officials to fly in and sequestrate US Government Assets seized from The Crown by terrorists and rebel movements........in the meantime, the Us could prepare for the Coming Meltdown when Geithner admits that he is an Agent of Goldman sent to rescue its deals in Greece and Turkey and Spain.

Ghordius's picture

thanks for the comic relief

AldousHuxley's picture

if you go to capitol and there is restroom for US congressmen and women. Go to the toilet and you will see two things:


(1) toilet paper with US dollar design

(2) toilet paper with Constitution design


You don't have any rights my friend. Even communists now have US style constitutions.  GUNS > PAPER

DaveyJones's picture

how could he do that to that vulnerable woman. Blindness is one of the most challenging disabilities

Socratic Dog's picture

Well gee that's much more important than the imminent total collapse of the world's financial system.

You bloody idiot.

Manthong's picture

Sounds like a resume enhancement nowadays.

A L I E N's picture

Those aren't my words, I just quoted from that site.. thought it was interesting

I believe they do have operations in the UK.

Also another post on the site says in the customer agreement IB does allow re-hypothecation as well as hypothecation:

"Interactive or its Affiliates may deposit collateral, securities and/or other Customer property with third parties and may pledge, re-pledge, hypothecate or re-hypothecate Customer collateral, securities and/or other Customer property, either separately or together with other securities and/or other property of other Customers of Interactive for any amount due to Interactive in any Interactive Fully-Disclosed Account in which Customer has an interest"

Doña K's picture

Today, Corzine during questioning, he mentioned that one of the largest insitutional shareholders (owners) is Fidelity and other institutions like it.

We should then worry that these institutions may be the next dominos?

I am taking out my IRA just in case.

Stay alert my friends 

Voluntary Exchange's picture

Yep TP you nailed it!  

What needs to be known on a case by case basis is if a firm has subsideraries or associated entities in UK, and if so how much hypothication and off books liability exists, and how that relates to a particular firm if you are in Say, the USA or Canada.  

But even if your firm is "clean", with so many "big fish" out there already carrying a fatal dose of UK hypothecation "radiation" do you think your clean firm can survive in the market ecosystem when all those fish start to die? Are you starting to get nervous yet?  

chubbar's picture

Just FYI for everyone, I dug out my copy of a brokerage agreement I have with Scottrade. Paragraph 61 has language exactly per the above quote allowing for the hypothecation or re-hypothecation of securites. It does also have language in addition to that which says losses or gains from those activities will not accrue to the individuals account. It goes on to make this statement.

"We are required under SEC rule 15c3-3 to retain in our possession and control all fully paid-for securities. Securities used as Collateral for Margin Loans are not fully paid for and therefore are not subject to the same obligation."

I'm hoping that this language is the difference between having an investment account and a zero balance when TSHTF.

XitSam's picture

And rules preventing comingling prevented MFGlobal from going under.

Curve Watcher's picture

Umm, I think I'd look up their definition of "Margin Loan" before I got too hopeful or went to bed tonight.  Years ago, my (ex)broker tried to get me to take out a margin account secured by the fully-paid for stock he'd just bought for me.  Said it was "standard" -- that all the kids had one.  You might have a margin account and not even know it.

Papasmurf's picture

Is there any rule of law anymore when $1B can go missing and there are no indictments?  I'm not sure SEC15c3-3 is relevant in the long term.

chubbar's picture

I tend to agree with you papasmurf and no, it's definitely not a margin account (and yes, they did try to put me in one). I just have a straight up account with them but it isn't going to kill me if they steal it, not going to help either though. If these retail stock brokerages go tits up because of this type of calamity we'll all have bigger problems to be worrying about!

Use of Weapons's picture

Some banks are silly when it comes to greed and what they lend out. Others are not.

Was this designed to be read by kindergarten children?

"Silly" is a bit of an understatement given the situation.

Taint Boil's picture

You lost me at "hypothecation" Starting to get Zero Hedge overload ... think I'll head over to TheOilDrum.com

onthesquare's picture

in reading the conditions of the agreement set up by MF.  It seems it was only a matter of time before the system would become abussive and hyper-hypothecate.  Anyone who would agree to such a risk was, in themselves, banking on an un-ethical outcome.  The ship is sinking and there are only enough life boats for 1/10.

DevilsPrinciple's picture

It would appear that A lien has plagiarized a thread comment  from the IB board under the SN of DEF.The  IB " rebuttal" if one could refer to it as that, is a grouping of non sequiturs.

"I need to put in a days work now so do not expect any replies for quite some time from me. I agree this is something that needs further clarification so you can be better educated on the subject as well as placate the unfounded fears expressed here. However, this this discussion should be for the industry and not single out IB."


"Before believing everything you read, do your homework and then decide if the practice is risky. Some banks are silly when it comes to greed and what they lend out." 


Evidently A Lien, many HAVE done their homework. When you actually have something worth learning about, perhaps we will be ready to listen.

chubbar's picture

What is your position in IB? My guess is that this level of transaction is so far above your paygrade that you are oblivious to it. This story isn't about a bunch of regional office managers getting together and cooking the books.