The Chicago Mercantile Exchange Congratulates Itself (Pre-MF Global): No One Has Lost Money. Surprise!

Gary North

Dec. 10, 2011

The Chicago Merc is a clearing house for futures traders. It makes sure that in the gigantic zero-sum game that futures contracts are, at the end of each trading day, the accounts balance.

In this video, a representative of the CME brags that no client has ever lost money as a result of a faulure of a broker using the CME's services.

That was then. This is now. MF Global went bust On October 31. It has somehow lost track of $1.2 billion. The CME immediately froze the customers' accounts. They could not get their money back.

CME has pledged $300 million for the trustees of MF Global. But the trustees will will use $2.2 billion of the remaining assets pay off commodities investors who were on the other side of MF Global's trades. The non-leveraged investors who were not part of the futures side of MF Global will get nothing.

Watch the video. It was posted on YouTube by Gerald Celente, who says he gas $100,000, debt-free, in his account. He now has nothing in the account.