Two separate reports from Zero Hedge are questioning the liquidity of major futures indices here in America. One is the CME announcement, made well after hours on Friday where they notified the markets that they are reducing margin requirements by 30% on all trading accounts starting this monday.
The CME is asking for more risk in the futures markets just when it seems that there should be less risk after the MF Global meltdown. Then you have ICE futures announcing the same plan later on friday, reported by Zero Hedge here, which begs the question....Why are they doing this? Dave in Denver outlined margin calls that would be required by all MF Global customers to cover their cash losses by MF Globals plundering of their accounts on Friday. Which would require these same MF Global customers to raise cash for their margin accounts or have them liquidated. Dave in Denver also noted today that IB (Interactive Brokers), who was looking to buy MF Global before it collapsed, doesn't want anything to do with MF Global customers. This probably means that the MF Global situation is much worse than reported so far. This doesn't bode well for the market open on monday and probably will lead to a big down day across the board, including metals. Could this there be excessive leverage and a lack of liquidity? Could this cause a huge selloff and a run for the exits? Maybe. It is all a ponzi scheme and if you aren't on the inside with intimate knowledge of the gambit, you will be fleeced!
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