JPMorgan Bank to Hold Collateral After Futures Firms’ Losses

Let’s get this straight.
JP Morgan grabbed segregated client funds in both the MF Global and PFG Best bankruptcies, so now in order to protect clients from a vaporization (theft) of segregated funds by rehypothecation counter-parties (JP Morgan), customers will now be required to hold excess margin collateral directly at JP Morgan!?!
This is like requiring the hens to sleep in the fox den in order to prevent them from being eaten by a fox getting into the hen house! 
HOW ABOUT YOU EXTERMINATE THE FREAKING FOX!?!?!

JPMorgan Chase & Co. (JPM) will allow customers to house excess swaps and futures collateral in a separate bank account as it seeks to reassure investors after losses at MF Global Holdings Ltd. (MFGLQ) and Peregrine Financial Group Inc.

The new service will allow clients to automatically aggregate excess margin at JPMorgan Chase Bank N.A., the firm’s insured deposit-taking unit, Emily Portney, head of agency clearing, collateral and execution at the New York-based bank, said in a telephone interview.
“It’s certainly in response to client queries and more emphasis on safekeeping of client money,” Portney said. “The key is safety, operational efficiency and more choice for clients” in how their funds are protected and invested, Portney said.

Futures brokerage customers at MF Global are still missing $1.6 billion in segregated funds after the firm filed for bankruptcy in October after bets on European sovereign debt, credit ratings downgrades and the worst quarterly loss in the company’s history unnerved investors. About $220 million in segregated client money is unaccounted for at Peregrine
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Comments

  1. A small side note to JPM-Chase trying to keep customer’s money.  Recently I bought some silver from SD Bullion.  I used my Chase card to purchase and then  changed to a check for this payment, saving the seervice charge.  SD Bullion refunded the payment to my Chase card. Then the story got complicated.

      Chase then told me it would refund my charge.  Uhuh!  Riiiight.  To date it’s  taken 12 days and 3 phone calls to get them to send a check for the refund.  In my third phone call I to threaten the agent and move up to her supervisor.  They actually had the temerity to tell me it was not their policy to refund overpayments or refund cash in their customer’s credit card accounts.   After a long conversation I got them to agree to the refund and am awaiting payment. Supposedly the check is in the mail.  We will see.  
      This is absolutely symptomatic of this bank’s desperation to keep customers funds.  This had nothing to do with SD Bullion since I decided to change my form of payment and save the credit card service fee.  The problem is with Chase and their desperation to keep cash.  This tells me things are much worse than I supposed if this bank tried everything they could to hold on to my money.
    My suggestion is that if you have any sort of account or credit card with Chase get rid of it. Somehow, some way, these thieves are going to figure out a way to steal your money either via your credit card, a connection to your bank account or any other form of currency account you have. It will be like that South Park cartoon clip—-”your money is invested—aaaand, it’s gone.”

  2. This is just another large, irritating raindrop to pelt the consciousness of those who are awake.  Eventually, the drops will turn into a flood (and eventually baseball sized hail) with nowhere to run and nowhere to hide.
    The sheople will think it’s just another rainstorm until their skulls start getting crushed.

  3. Doc, help.  i cant seem to wake up from this bad dream……… 

    the fox is clearly in charge of the hen house.




  4.      It gets crazier everyday!

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