muses of the moment

December 6, 2011

Martin Armstrong’s World Economic Conference (part two)

Filed under: Martin Armstrong, Odds 'n ends, The Banking Crisis, The Dollar Crisis, The Financial Crisis — Tags: — totallygroovygirlfriday @ 2:17 am

Click here for part one.

The People

Totallygroovygirl really enjoyed talking with like-minded people from around the world at Martin Armstrong’s World Economic Conference last weekend. The following are some of the things that were discussed and what their opinions are about economic topics.

Groovygirl spoke with a very nice gentleman from Canada that is in the financial industry. (Most attendees that gg spoke to were private investors.) Mr. Canada said that the Canadian Banks are doing well because the real estate market in Canada has not collapsed, the Chinese have been investing heavily. When it does, the banks will experience stress like the US did.

There were several people from Australia, some were working in Asia. Two people said that Australia’s economy is dependent on China. Once China goes, Australia will experience stress. So although Canada and Australia are strong long-term because of resources, they are currently dependent on industries that will stumble at some point. One man said that there is a lot of uncertainty in Thailand, because the king (who is not well liked) is on his way out, but it is uncertain what will follow. This sounds similar to the Middle Eastern Arab Spring; change has come, but there is uncertainty about what is to follow. Uncertainty keeps investors from investing and businesses from starting or expanding until certainty returns.

Totallygroovygirl spoke to a very nice gentleman. His broker was MF Global. He said he has received about 30% of his money, he has heard he will receive another 30% or so soon. He is not sure he will ever see the rest. This man seemed to be an excellent trader and investor. He has made a lot money. But the take-away from that conversation was that you can be a great investor, but a collapsing system, outside of your control, can take those profits. So, today, it is not enough to be a great trader, you must make sure your money is as safe as possible from a collapsing system.

Groovygirl asked this gentlemen several questions about the MF Global situation, since he was directly impacted. I asked if his broker knew about problems before hand. He said no; in fact this gentleman called his broker back in August asking about safety of his money and options to reduce risk. I am not sure what prompted him to do this, but his broker was as surprised as anyone when things went down.

So, I also asked him about what he thought about the fact that the CME and CFTC are doing nothing about it. Especially, the CFTC who is not covering any losses. He said that they don’t want to start a precedent to cover 100% of losses, because this will happen again. Get that? Other brokerage houses will go down, more investors are going to lose money. Make sure you are protected as much as possible.

Martin mentioned that a few people called him and told him that they could not attend the conference because all their money was tied up in MF Global. I am sure that many people in the room, besides the gentleman I spoke with, were affected by MF Global in some way. Since the majority of people there traded or held gold, silver, and other commodities investments.

It is groovygirl’s opinion that the losses at the brokerage houses are similar to the losses of bank depositors in the Great Depression as it relates to system breakdown, how that breakdown affects business activity, and total loss of confidence that lasts a generation. By the time this is all over, investors could avoid trading houses like the plague (at least in the US). And I am not referring to just private traders, your pension fund, 401k, mutual fund, hedge fund, ETF; any investment can go thru a brokerage house at some point. Pension funds and other investments are large enough to recover losses if one house goes down, but what if the majority of US brokers experience stress? This is another example of what a loss of confidence will do. At the very least, for safety, they will pull all their money and not trade, before they move to London. That is revenue lost.

Time will tell how extensive the MF Global situation is (rumors were numerous at the conference, so I will not mention them) and if the government can restore confidence. So far, they are only pushing it out of the press as much as possible.

Click here for Chilton’s latest thoughts on MF Global on CNBC yesterday. Notice he mentioned clawbacks? Clawbacks? Now everyone who closed trades weeks/months before may lose their money. This interview did not assure me, it made me a lot more nervous.

And this. Highridge (commodity pool account) says that their $50 million account isn’t even on the list of MF Global account holders, let alone where the money is! This is VERY SERIOUS.

We still have no idea what investments are affected. ETFs? Hedge funds? Commodity pools? Which ones? How much?

Click here for part three.

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6 Comments »

  1. Thanks so much for the info.

    Comment by icd — December 6, 2011 @ 3:45 am

  2. thanks a lot for the updates..

    Comment by Band318 — December 6, 2011 @ 12:18 pm

  3. No problem.
    gg

    Comment by totallygroovygirlfriday — December 6, 2011 @ 12:45 pm

  4. Fascinating. I appreciate anecdotes from these things. Thoughts shared between attendees can be as enriching as the presentation material.

    Thanks GG!

    Comment by Lore — December 7, 2011 @ 5:43 am

  5. […] here for part one. Click here for part two. As I stated before, I can not share proprietary information, but I can highlight things Martin has […]

    Pingback by Martin Armstrong’s World Economic Conference (part three) « muses of the moment — December 7, 2011 @ 1:40 pm

  6. […] others like best Martin Armstrong's World Economic Conference (part one)Martin Armstrong's World Economic Conference (part two)totally groovy girl fridayA Warning from Jim SinclairMartin Armstrong's 2011 […]

    Pingback by Martin Armstrong’s World Economic Conference (part one) « muses of the moment — December 7, 2011 @ 1:41 pm


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