Weekend Economists Enumerate the Wealth of Nations, February 10-12, 2012

[Demeter]

60. MF Global Trustee Sees $1.6 Billion Customer Shortfall (DEFICIT CLIMBING STILL)

http://dealbook.nytimes.com/2012/02/10/mf-global-trustee-sees-1-6-billion-customer-shortfall/?ref=business

MF Global commodity customers whose cash vanished when the firm collapsed last year are owed $1.6 billion — up significantly from previous estimates — the trustee tasked with recovering the money said on Friday.

The revised figure reflects growing concerns that the trustee will not be able to claw back $700 million in customer money trapped overseas. Until now, the trustee did not include the $700 million when projecting the shortfall, hoping to avoid a battle with MF Global’s British arm, which is holding the customer money.

But now the trustee, James W. Giddens, has acknowledged that he is making little headway in recovering the money from KPMG, the court-appointed administrator for MF Global’s British subsidiary. That money, Mr. Giddens said, was held for American clients who traded on foreign exchanges.

The problem echoes a cross-border fight in the Lehman Brothers bankruptcy, when customer money was trapped overseas. More than three years later, that issue remains unresolved...(MFGLOBAL) Customers who traded in the United States have received about 70 percent of their cash back. But customers who traded overseas have yet to see a penny...

SO MUCH FOR GLOBAL INVESTING....LONDON IS A PIRATES' NEST

MUCH MORE GRUESOMENESS AT LINK