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Alex Filonov
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I was born in 1956 in USSR. After graduation from college in 1979 I worked full-time as an IT specialist. Until 1990 I worked for different companies in the Soviet military industrial complex. I created a small software business in 1991, which failed in 1993. I worked for Oracle Corp in 1995 in... More
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Muddling Investor
  • About JP Morgan And MF Global 4 comments
    Aug 21, 2012 5:52 PM | about stocks: JPM

    Just my opinion... There are a lot of publications crying for the prosecution of CEO and whoever else made decisions in these companies. I don't think so.

    MF Global was an investment fund. As any investment company, it carried an implied risk. This risk was published in the fund business model: use leverage to buy short term government debt, mostly European and hold to maturity. What can go wrong if all governments (with small exception of Greece) paid all transhes in full and in time? Leverage. MF Global had to use debt securities as a collateral when taking loans. When those securities lost value because of another debt crisis, creditors required more collateral. It was classic margin call situation. Definitely, MF Global management made mistakes. Maybe somebody stepped outside the law, but only serious law enforcement investigation can prove it. So far it didn't. Investors lost money, but that's exactly the risk they accepted when investing in MF Global. I understand emotional aspect and lust for blood, but law is not about emotions. My advice to investors: research companies carefully.

    JP Morgan (NYSE:JPM) case is more complicated. The only reason they are not prosecuted now is repeal of Glass Steagall act. Banks, especially big, "too big to fail" banks, should not be allowed to trade like hedge funds. But they are allowed now and they are doing it. So, what JPM did was probably legal, but shouldn't be. Because if too big to fail bank fails, taxpayers will pay. You can shout, you can say "no more bailouts" but in real life, when there is a choice between a bailout of banksters and financial panic, any responsible government chooses bailout. That's why Glass Steagall act existed, that's why it should be restored in some form.

    There is no evidence so far that JPM or some people there broke existing law. It means that nobody goes to jail, now. It also means that law must be changed. US (and, by extension, World) financial system should be protected from careless speculators.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: JPM
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Comments (4)
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  • Maninder Batra
    , contributor
    Comments (564) | Send Message
    @what a piece of crock article this is....
    Tell to the investors whose derivatives MF global sold without their permission and whose money JP morgan has pillaged into its accounts . Maybe you should be a PR manager for the US govt .You are from USSR right?You must have been an editor for Pravda apologising for the Andropov-Gorbachev scams they ran on the world.
    22 Aug 2012, 06:01 AM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
    Author’s reply » You're too emotional. Emotions are not accepted in the court of law.
    As far as I know, all accounts at JPM are doing fine, nobody was robbed. JPM problem is all about financial system stability, not about individual accounts. Again I'm all for restoring Glass Steagall.
    As for MF Global, again, when you invest in anything, which is not FDIC insured, you are taking risks. If you judge your risks properly, you get good profit. If not, well, that's capitalism for you.
    22 Aug 2012, 10:51 AM Reply Like
  • Maninder Batra
    , contributor
    Comments (564) | Send Message
    Like I said you could be a good PR manager for Obama or Jp Morgan.An supporter of the Crooks.Tell that to clients from whose accounts MF Global stole money without their consent.


    Bollocks.And what court of law? USA has no court of law .Its a degenerate fascist mafia state under the control of Banks. There is no legitimacy in american law courts. Like the soviet you are,a typical apologist for Tyranny.
    22 Aug 2012, 11:02 AM Reply Like
  • Maninder Batra
    , contributor
    Comments (564) | Send Message
    “Those wondering why the Department of Justice has refused to go after Jon Corzine for the vaporization of $1.6 billion in MF Global client funds need look no further than the documents uncovered by the Government Accountability Institute that reveal that the now-defunct MF Global was a client of Attorney General Eric Holder and Assistant Attorney General Lanny Breuer’s former law firm, Covington & Burling.”


    Guess who saved Corzine from the evidence of fraud ,Eric Holder ,the same guy who was involved in arming mexican drug cartels(who DEA claims to fight) in Operation fast and furious .What a joke ,arming your own enemies.


    when Such people run the justice system,there is no legitimacy.Then the state can ONLY BE REFERRED to as A MAFIA STATE.
    22 Aug 2012, 11:12 AM Reply Like
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