The Residential Real Estate Post-Crash Index-Moderated Message Board

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Strategies & Market Trends : The Residential Real Estate Post-Crash Index-Moderated

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To: TH who wrote (53307)	12/12/2011 1:38:02 AM
From: NOW	11 Recommendations Read Replies (1) of 119362

I think I have a good handle on what happened at MF Global as Corzine re-hypothecated 1.2 billion dollars of investors assets to purchase 6.2 billion dollars of Euro bonds on a repo to maturity purchase. MFGlobal collapsed because of the massive margin calls on the bonds as they had not matured yet. The headquarters for re-hypothecation is London England and the BIS reports that leverage is around 4: 1 In MF Global case it is 5 to one. And it certainly explains why the money is missing. It simply evaporated into thin air as the collateral was multi-used. Although this is bad enough, I feel that the CFTC has a real headache with respect to the case of HSBC vs MFGlobal where we are dealing with physical material that cannot be replicated 5 or 10 times over. HSBC is claiming that it is the owner due to the multiple re-hypothecation and that is impossible. The replication of a bar using identical bar numbers and weights is of course criminal behaviour to the highest. What is most concerning to me is the knowledge that Gary Gensler had as he was well aware of this practice of rehypothecation as Corzine was lobbying him on this issue. The fact that he know recuses himself is very troubling. If this is not corrected immediately the whole financial world will implode. Paper gold will disappear from accounts. Even the GLD at the London vaults are probably hypothecated. this is very dangerous. Harvey Organ. harveyorgan.blogspot.com Fact is, EVERY financial asset out there has likely been rehypothecated with leverage of 10-100 to 1 in my uninformed opinion! this ship is going down. No amount of printing will backstop this if true

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