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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