CME Group Debt Rating Downgraded by S&P
Posted by Ann Barnhardt - February 8, AD 2012 10:25 AM MST
Dude, get out of there. I'm telling you. S&P downgraded CME Group's paper this morning, specifically citing their failure to protect the customers of MF Global and thus the marketplace in general, the erosion in overall customer confidence in the markets, AND the CME's growing involvement in over-the-counter derivatives. Amen, amen and amen.
If you have a CME membership or memberships, I would recommend that you SELL NOW while it still has value. Remember, memberships are traded via auction, so when everyone finally wakes up and realizes that the CME is a dead man walking, the memberships will drop to worthlessness instantaneously. Do you really want to sell your membership to a pimple-faced 21 year old computer nerd who wants to test out his new HFT algorithm for $1000? That's what you're diving towards as we speak. Get out now.
Here's the WSJ piece.
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Posted by Ann Barnhardt - February 7, AD 2012 1:03 PM MST
1. I tweeted this last night, but just have to post it here because it is . . . terrifying. This animated .gif is from Nanex, via ZeroHedge.com . Each frame in this animation is one trading day. The various colors are the 14 main electronic markets. The red is NASDAQ, the yellow is NYSE, etc. The color key is on the top-right. The x-axis (along the bottom) is the day session, beginning at 9:30am EST on the far left, and proceeding to the close at 4:00pm EST on the right. The y-axis (up and down) is the amount of trade volume of the high-frequency computer trading algorithms. The animation (time) is January 2007 through today. You can see the date scrolling in the very bottom-left of the frame. First, note the evolution of the HFT trading itself. Next, notice what happens on August 5, 2011 and forward. 8/5/2011 is the day U.S. Treasury paper was downgraded to AA+ by the ratings agencies.
nanex.net When I say that the markets are a total smoke-and-mirrors farce, do you understand what I am saying now? All of the PEOPLE are gone. The entire edifice is just these computers trading in-and-out with each other all in a matter of microseconds, over and over again. None of it is real. And the futures markets are exactly the same. The people have been either leaving or have been forced out, or raped. Get out, get out, get out, get out, get out.
2. Here is a great interview between two very smart cookies, and good guys, both friends of this site, Warren Pollock and Karl Denninger. If it weren't for the internet, there would be no practical way to hear any intelligent discourse such as this. They cover many topics. Do listen to the whole thing.
youtube.com
3. The CME announced last week that it had created a $100 million dollar "insurance fund" for farmers and ranchers for the next instance wherein an FCM regulated by the CME eats its pigs, the CME breaches its fiduciary duty and fails to backstop and guarantee the positions, and then locks the customers out of their accounts while the markets continue to trade, while the CME sets up an illegal bankruptcy specifically designed to screw the customers.
Payouts are capped at $25,000 per account, or $100,000 per cooperative.
This is just insulting. The CME is, to this day, sitting on an EIGHT BILLION DOLLAR emergency slush fund which they did not tap for ONE DIME in order to fulfill their purpose and duty, namely to backstop MF Global and make the customers whole. Now, in a truly pathetic and transparently phony gesture, they are saying that the NEXT time they just let a firm make off with the customer seg funds, they will consider giving farmers and ranchers up to $25,000, or a pro rata share of $100 million divided by the number of claims (If there would be any more than 4000 claims, the $25,000 would have to be reduced to a smaller share) if they file a bunch of claim forms and wait for a year. Give me a break. $25,000 is a MEANINGLESS PITTANCE. I don't know who is dumber, the Merc jackals who think that this is somehow convincing or consoling, or the head-in-the-sand sheeple who are still doing business with these hyenas.
Here is the document if you care to read it. |
