The MF Global Tsunami

What is required to set the stage for another market crash? A huge financial bankruptcy? Witness Lehman, Merrill Lynch, Bear Stearns and many more. No problem. Not a whimper. Life goes on.

So why would anybody care when a third tier broker, MF Global, bit the dust?

Here is the key: When Lehman et all went bust, clients were made whole. Their accounts were still accessible and intact. When MF Global went into receivership clients found their accounts frozen. There will likely be huge losses, and some clients have already gone under as a result. If MF Global clients are not protected any longer by legislation and insurance, perhaps nobody is safe.

Oops...Now we’re talking about you and I, and brokerage clients all over the world. As this shaky new reality sinks in, the MF Global travesty may spawn a widespread run on brokerage accounts. That would cripple the huge banks that own the brokerage firms. The contagion has the potential to metastasize.

Some have said that a ripple from a pebble dropped into the ocean can ultimately produce a tsunami half a world away.

MF Global could be that pebble.

Nobody Wins

Angela Merkel is at the helm of a rudderless sinking ship of females. They grabbed the ring after men dropped the ball in the world that men built.

No men on board, and no lifeboats either.

Bear Fact?

The Dow Jones Industrial Average reached resistance at 12000 yesterday.

Kiss this market goodbye.