Andrew Abraham

andy-0101 My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I adhere to the philosophy of trend following. Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets me apart from other traders is that I am not only concerned about the return on investment but how much risk I will have to tolerate to achieve my goals.

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MF Global clients cry foul over JPMorgan tactics in bankruptcy recovery

MF Global clients cry foul over JPMorgan tactics in bankruptcy recovery

This is not a foul, this is a travesty!
This is not to boost our chances of recovery of our money. These monies were segregated accounts and belong only to the owners of the m. Similar in nature to one’s bank account or stock market account. JP Morgan is trying to sweep titled segregated accounts into the assets of MF Global into the bankruptcy courts.

The analogy is very simple. Lets say you have a bank account in your name. The bank makes bad business decisions. Then a company like JP Morgan makes a claim on your personal assets that happen to be at the bank. How would you feel? How safe do you think your money is? Would you leave any money there? Would you not trust the bank or the financial system? This is this the simple analogy.If Judge Martin Glenn allows this, nothing is safe. Not bank accounts, your money market, your 401k, your stock account.

Read the whole article from the NY Post

It’s not just the protesters at Zuccotti Park who complain big banks are trampling on the little guy.
Smaller customers of MF Global believe bank giant JPMorgan Chase, run by CEO Jamie Dimon, is angling to cut ahead of them in MF’s long line of creditors.
Some MF clients are planning to file a motion in Manhattan bankruptcy court today, led by James Koutoulas, chief executive of a Chicago commodities trading firm, in a bid to boost their chances of recovery from the eighth-largest bankruptcy in US history.
At issue is a lien and other protections given to JPMorgan, MF’s largest lender, in exchange for an $8 million loan the bank gave to MF on its first day of bankruptcy.

In short, the lien appears to give JPMorgan the right to some assets that creditors might otherwise try to claw back through lawsuits.
The bankruptcy judge in the case, Martin Glenn, acknowledged he doesn’t normally grant such special rights for a lone lender and said he would re-evaluate the matter at a hearing today.
In an interview, Koutoulas called the loan “a farce” and “a cheap ploy for them to jump the line.”
Stanley Haar, owner of a small commodities trading firm in Boca Raton, Fla., who is part of Koutoulas’ group, said if the bankruptcy judge confirms JPMorgan’s lien, “We would automatically be stepped on by the bank.”
A person close to JP Morgan, which declined to officially comment, said the bank is entitled to be lead creditor because it was MF’s biggest lender as the result of a revolving $1.2 billion credit line given to MF before the broker-dealer imploded. “Everyone’s interests are aligned among creditors,” the source said.
MF — run by former NJ governor and ex-Goldman Sachs chief Jon Corzine until Nov. 4 — filed for bankruptcy last month after making big bets on dicey European debt. The details of the messy bankruptcy are still being hammered out, and it’s not clear yet whether any customers will be left standing behind corporate creditors like JPMorgan.
What is known is that $600 million of MF customer funds that were supposed to be segregated from the firm’s dough — and therefore safe from a bankruptcy — have gone missing, throwing the normal order of things out of whack and opening the door to customers fighting with lenders for the remaining assets.
The latter option will devastate customers like Foti Georgiadis, a day trader who had close to $1 million in one of MF’s plain-vanilla brokerage accounts for stock and bond holders.
The Malibu, Calif., investor said he’s been unable to access his account since the bankruptcy and has gotten no word about when or whether his assets will ever be released to him.
“I can’t get out of my positions. I can’t pay my bills. I can’t feed my family,” he said. “Why don’t you just kill me?”
Today’s filing by Koutoulas will request that MF’s customers be given priority over any assets recovered if customer accounts were, in fact, wrongfully co-mingled with the company’s assets.
Koutoulas is also agitating to get a seat on the creditors’ committee, which is currently being led by JPMorgan.
Another subject of some customers’ ire is James Giddens, the trustee put in charge of cleaning up the mess and returning money to customers and creditors.
Several trading clients have asked that Giddens be removed as trustee given his track record with collapsed Lehman Bros.

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Andrew Abraham
Abraham Investment Management

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