"is the world spinning out of control?", page-2

A comment I posted in the post I am replying to went:

"...an article on Jesse’s Café American speculates a coming gigantic confiscation scheme is in the works. The story says, “At some point a ‘black swan’ event, or perhaps something the classical world would have simply called ‘nemesis,’ is going to knock the US futures market off its foundations. The government and exchanges will seek to force a solution on market participants through the de facto seizure of positions and accounts, with a settlement dictated by the Banks. MF Global looks like a dry run for that much larger default.”

In the light of that it is interesting that the CFTC is now acting:

"CFTC tightens limits on brokerages using customer funds

The U.S. futures regulator unanimously approved on Monday tighter limits on how brokerage firms can use customer funds, a measure the now-bankrupt MF Global had encouraged the agency to delay.

The Commodity Futures Trading Commission rule prevents brokerage firms, known as futures commission merchants, from conducting "in-house" repurchase transactions and restricts them from investing customer money in foreign sovereign debt....

Bart Chilton, a CFTC democratic commissioner, called on the U.S. Congress to establish an insurance fund to make up any shortfalls to customers in the futures world, similar to the Securities Investor Protection Corporation for securities and the Federal Deposit Insurance Corporation for banking.

"If the regulatory and enforcement belt breaks, customers don't lose their pants," he said.

RISKY FOREIGN DEBT OFF LIMITS

Under the new CFTC rule, in cases where the brokerage firm is allowed to invest customer funds, the agency will permit them to invest in securities such as Treasuries, agency debt, corporate notes and commercial paper. Potentially risky foreign sovereign debt will no longer be permitted.

Transactions between affiliates of a company where the two entities exchange money or funds also are restricted by the new CFTC rule...."

The full article is at http://www.reuters.com/article/2011/12/05/us-financial-cftc-meeting-idUSTRE7B410420111205

My comment:

So it seems that the CFTC does not want to appear to be a toothless tiger. However, what is needed are prosecutions and clients being given back their cash etc.

So far noone has been charged over a billion dollars plus of clients' money held in clients' accounts just disappearing.