Insight: Farm belt rage over MF Global could chill markets

[dkf]

CHICAGO/WASHINGTON — When the CME Group pledged $300 million of its own money to help former MF Global customers get their cash back faster, the exchange was likely thinking of customers like Kansas cattle rancher Tim Rietzke.

Fed up and frustrated with his broker's collapse and what he sees as the CME's slow efforts to help him retrieve $30,000 in stranded capital, Rietzke says his faith in the futures industry has been shaken to its core.

"I would be hedging some feeder cattle right now, but I'm not going to do it. I'm leaving them exposed to the cash market and I don't like that," Rietzke said.

Rietzke may reside far from the trading pit in Chicago, but he and thousands of other ranchers and farmers across the country are at the heart of futures trading.

With billions of their dollars locked up by MF Global's October 31 bankruptcy filing, they are a key voice in determining if and when the futures business regains its poise and reputation.

https://xfinity.comcast.net/articles/news-general/20111122/NEWS-US-MFGLOBAL-FUTURES/

[msongs]

1. futures = speculators and scammers. let the farmers detach as much as they can nt

[dkf]

3. The futures market was supposed to be for the farmers.

It must be pretty sick for farmers to see this.

[karynnj]

9. I know I was really surprised that it was the Argiculture Committee's bill

that included the Phil Gramm provisions that led to no regulation of derivatives and credit swaps. It is fascinating and makes sense that futures developed for agricultural products. It is disgusting that they are impacted by rules were not followed in keeping their money separate.

[girl gone mad]

2. Lie with dogs, get fleas.

Film at 11.

[dkf]

4. We must be infested then.

Wasn't following all the posts at Zero Hedge but just caught up and my stomach is hurting. Ugh.

[JDPriestly]

5. Farmers had the futures market to protect the risks they took when

they farmed.

Interestingly, educated people, teachers, doctors, lawyers, business owners, have no means to buy futures on their investments in their jobs.

It's kind of a unique situation that farmers enjoyed for so many years.

If you have an education degree, and your school decides to cut back and the price offered for your degree decreases dramatically, you are just out. There is no market on which you can buy some small security that will permit you to cash in on your degree even when the market for it goes South.

So, I am not at all surprised that some greedy, dishonest characters went in to ruin the futures market. It was unique. It was a sitting duck. It was too good to be true in this dog-eat-dog economy.

Welcome to the real America, all you hard-working farmers. It's a mean man's world out there.

[unc70]

6. Futures markets more for buyers of commodities

While there can be benefits to farmers from the futures markets, the greater benefits have traditionally gone to those few companies that dominate futures and spot markets as buyers and in many cases the exchanges. e.g. Cargill

[JDPriestly]

8. I don't think that is how it started. I don't think that was the case

in the early history. I think there was a balance. I'm just remembering what I heard about it and the history of the commodity markets when I was very young.

Wikipedia talks about the commodity markets starting in Sumeria, but I'm thinking about stories I heard about the use of the commodity markets in the late 19th century and first half of the 20th century.

Is anyone an expert on this?

[newfie11]

7. Thank you (from a farmer) n/t