I’ve been balancing a number of long-term projects over the past few months, whose deadlines were approaching at the end of the year. I’m just about finished with them, which means little by little I’m able to start following current events more closely. Believe it or not, I simply had no time to look into the MF Global fiasco until just days ago.
I am fully aware of the absurdity of my pointing out how huge this is at such a late date, but I’m writing this post as much to wrap my head around this for my own sake as for any other reason. Conservative investors who were completely non-leveraged, and who had no reason at all to believe they were at risk of losing everything, lost everything. It turns out the company was putting its non-leveraged customers’ assets at risk in side bets in commodities markets. Investors did not know this. It is not uncommon, and it doesn’t necessarily involve breaking any law.
The layman is not going to understand everything that’s happening, and all the implications. I certainly don’t. But I would start with Jim Sinclair, and then move on to Ann Barnhardt, the commodity futures trader who famously shut down her firm just weeks ago out of a complete lack of confidence in the political and financial systems in which she operated. She was