If you want to know why your Wiccapundit no longer speculates in the stock and commodities markets, and instead invests exclusively in lead and brass (*wink*) for long-term gain potential, look no further than the widening cesspit that is MF Global.
The two big shitburgers of late: (1) The bankruptcy trustee in the MF Global Chapter 7 proceeding SEIZED physical bullion of MF Global’s customers; bullion that they paid for, took actual delivery of, have serial number receipts for specific bullion bars of, that they stored in bonded warehouses and have paid receipts for storage fees for. (2) The MF Global bankruptcy was filed as a Chapter 7 for a SECURITIES dealer, not for a COMMODITIES BROKER, which MF Global actually was. The difference? Under Subchapter IV of Chapter 7 of the bankruptcy code (the proper section for a commodities broker bankruptcy), the customers are first in line. Under the section for securities dealers bankruptcy, the CREDITORS are first in line. Can you say J.P. Morgan?
As Ann has said before, if you think you actually own something in this environment, YOU DON’T, unless you can physically stand in front of it with a weapon in your hands to defend it.
Forewarned is forearmed.