Bankruptcy Trustee to Investigate JPMorgan in MFGlobal Case

Bankruptcy trustee for MFGlobal, James Giddens, said is is willing to act on actions taken by JPMorgan Chase  (NYSE:JPM) during the last days of the firm with respect to loans JPM handed out to MFGlobal.  They were the agent on a $1.2 billion loan that may have received preferential payments before MFGlobal declared bankruptcy.

Giddens would be taking this action to sue JPMorgan to recover customer money gone missing when the brokerage went up in a puff of Italian Bond bets in October.

Meanwhile on Capitol Hill, former CEO of MFGlobal, John Corzine’s testimony about not knowing anything about the commingled customer accounts was called into question by statements made by CME Groups Executive Chairman Terence Duffy.

These issues may be small potatoes to the titans on Wall St. but the farmers who used the commodity markets to properly manage their business currently have no money with which to plan for their spring planting.  If you think food prices are high now, wait until the U.S. can’t plant any corn because JPMorgan wanted a loan repaid.

JPM’s stock price took a serious tumble, along with all of the financials, on this news and the FOMC minutes indicating that no QE3 was imminent from the U.S. Federal Reserve.  By the looks of the official Fed Balance sheet it would seen that they are doing everything imaginable to foment a credit crisis in Europe and the U.S.  The Adjusted Monetary Base has been dropping since the summer which is the best indicator of the Fed’s real policy. Federal Reserve Credit has been flat to negative for months.



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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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