Icap ........
I was just thinking the same about Icap.... seems to have weathered the storm relatively better but ......... is it a business thing or just market sentiment ??
I thought market volatility was good for their volumes and business in general ??
At least that was the perceived wisdom...
I was just thinking the same about Icap.... seems to have weathered the storm relatively better but ......... is it a business thing or just market sentiment ??
I thought market volatility was good for their volumes and business in general ??
At least that was the perceived wisdom...
The fear is that if Bear Sterns can effectively go bust in less than a week then so can any financial institution. MF's taking a hit because it's business is mainly on exchange i.e there is a clearing house to guarantee any trades, so it's not 'too big to fail' therefore if MF did get into trouble there wouldn't be any central bank bail outs, just alot of worthless shares.
I think it's overall risk aversion to financials. Anything loosely related to financial companies is getting a total battering today.
I think it's overall risk aversion to financials. Anything loosely related to financial companies is getting a total battering today.
If you think about it however it doesn't make entire sense. BS had a load of toxic junk in the form of sub-prime on it's book which therefore brought about counterparty risk. MF are simply the brokerage arm and only really have daily clearing risk. For me it doesn't make sense and I really want to go long however given the market reaction today to little or no news I run the risk of owning completely worthless shares.
Having pondered this for a little while I totally agree with you. I actually forgot that MF Global have split off from the hedge fund side of the business (and I bet alot of the sellers have too) so there's no chance of some undisclosed fund with a billion dollar loss on its books.
I think today is one of those 'irrational' days where people trade with their emotions and completely ignore the fundamentals. I'll definately be following MFs price more closely, this could be an excellent long term value trade.....
However, as the saying goes "the market can stay irrational longer than you can stay solvent".
Good luck with your trade!!
what i'm worried about is undisclosed losses from that wheat trader which really started the run. is there something more to it than this? I don't know. as a brokerage MF can't be worth zero, i'm certain of that. they could suffer a cash flow problem.....
fibonelli
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I wonder if he really bought the shares or was is just propaganda ....?
If he did buy them he surely did not just sit there and **** away almost $1bn
charliechan
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i remember a story a few weeks ago about a memphis based individaul (broker/customer?) of man losing them $14m or something as he built a massive wheat position in small clips as their risk system failed/had a bug. man had to eat that. i believe they puked the position as soon as they realised, pushing the market further against. so brokers do have a risk of doing business - as everyone does!
Mathemagician
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I wouldn't sweat it. I arranged for a test withdrawal of a portion of my account with MF Global and the $150k wire was expedited and processed on the very afternoon of the 70% drop. That told me there were no short-term liquidity issues and I continue to trade with MF Global as normal.
jj
jj
try withdrawing £1m+, there's now a daily limit of £1m per day
Mathemagician
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When the liquidity problems are real, you can't get $1 out of there...
jj
jj
don't rule out man buying their brokerage arm back @ $10. i will wager their CFD and spread markets will be severely reduced; i am kicking myself i was away when they touch $3 something!!! man has zero risk! especially as cfd' s are now 90% margin call!
