So you obviously don’t know what a merchant bank does for producers
Cash and carry
Or
Hedging commodities
I produce 1 contract of nickel
I hedge 1 contract at lme
Now if I’m a large producer I give my warehouse receipt to jpm they give me a line of credit for the initial margin and will loan me money for variation on the hedge
Basic hedging 101 for commercial entities
Generally in a large squeeze (I have experience with the government on how to break squeezes)
Most banks at a point can’t lend any more money to the client or the exchange raises margins
This is the flaw in futures market
The shorts or hedgers will have to cover
Not the longs they have plenty of cash
You can figure out the rest
Yes much collusion
First the squeezer
Then special interests at the exchange level (Jeff you were one of the only honest guys on the board )
Are to blame
Also incompetence
Like when the cme defaulting on seg funds suing mf global bankruptcy
Btw I found the money for the FBI
So it always isn’t what it seems and the truth nowadays is hard to find .
You might be partly correct
So you obviously don’t know what a merchant bank does for producers
Cash and carry
Or
Hedging commodities
I produce 1 contract of nickel
I hedge 1 contract at lme
Now if I’m a large producer I give my warehouse receipt to jpm they give me a line of credit for the initial margin and will loan me money for variation on the hedge
Basic hedging 101 for commercial entities
Generally in a large squeeze (I have experience with the government on how to break squeezes)
Most banks at a point can’t lend any more money to the client or the exchange raises margins
This is the flaw in futures market
The shorts or hedgers will have to cover
Not the longs they have plenty of cash
You can figure out the rest
Yes much collusion
First the squeezer
Then special interests at the exchange level (Jeff you were one of the only honest guys on the board )
Are to blame
Also incompetence
Like when the cme defaulting on seg funds suing mf global bankruptcy
Btw I found the money for the FBI
So it always isn’t what it seems and the truth nowadays is hard to find .
Great article! Thanks Jeff...as an old econ major, I love seeing how this stuff plays out.