MF Global 2.0 in process ?

http://www.barnhardt.biz/

MF GLOBAL 2.0 MAY BE UNFOLDING NOW

POSTED BY ANN BARNHARDT - MAY 2, AD 2012 11:41 PM MST

If you are foolish enough to still be in the markets and you are doing business with anyone who clears through Penson Worldwide, you need to get out of there.

The stock symbol is PNSN. Just google that and look at the chart. $31.50 high, now trading at $0.49, making new lows daily.

In case you didn't know, I was clearing through Penson when I closed my firm last November. I was blessed in that all of my back office stuff was handled by a lovely little boutique office in Wisconsin that handled IBs like me, that had just been acquired by Penson before I came on board. I never spoke to Chicago or New York, just a merry band of Wisconsinites who were always wonderful to work with. I was truly blessed in that. (The cattle and feeder futures paper that I did in the pit, as opposed to the electronic, which was less and less over the years as the electronic markets grew and grew, was actually all done as give-ups by the FC Stone meat desk. Shout out to Larry and the Stooges, who still call to chat every so often, and have a photo of me with my pink AR-15 hanging in their desk. Good people.) But, the Penson ship is going down, it appears.

They were in trouble last year when MF Global happened and were looking to dump their European divisions, and they did bounce a bit after MF Global when they unloaded their Aussie holdings, but it looks like it is all but over for them. The stock is cratering, and there is chatter on the net that they are taking forever to get cash withdrawls out, posted and cleared. That's a very bad sign. MF global was the same way in the weeks before the end.

The extreme danger is that the CME is going to do with Penson what they did with MF Global and NOT backstop and keep customers liquid when the end comes. MF Global proved that the CME is no longer going to fulfill its fiduciary duty and will screw clients twelve ways from Sunday without hesitation. DO NOT get caught up in that crap. Just get out of the whole, stinking, festering, putrefied mess. Get out of the markets ENTIRELY.

Here is a six month chart on PNSN, which is basically the timeframe since MF Global. Once it broke back under $1.00 in March, it has been Katy-bar-the-door. Strong support at zero. Ugh.

and....

http://market-ticker.org/akcs-www?post=205513

Impending Market Dislocation? (PNSN)

 

If we get another MF Global folks the market will drop 5,000 DOW points and not bounce, as that will be that -- in the grains, in the commodities, in everything.
And Ann Barnhardt has pointed out that the firm that used to clear Think Or Swim futures (but since the Ameritrade acquisition no longer does), Penson, might be that domino.

I have no idea what their liquidity position actually looks like.  All I know is what I see in their stock price.  But this does not look good, and as Ann points out there is now history with MF Global and the CME refusing to make good when their oversight fails and customer funds "disappear."
In short don't expect that you're safe if Penson blows because there is no evidence you will be safe, and plenty of evidence that once again CME will step back and refuse to accept any responsibility for anything that happens to your money.
What's worse is that Penson's net capital has deteriorated markedly in recent months.  We don't have March's numbers but February was down nearly 30% over January.  Two months have passed since that time.....

Now it's certainly possible that Penson could go under but customer funds would be protected and fine.  That's ok if that happens -- businesses fail all the time.
But as I said at the time MF Global went down and customer funds were lost, if it happens again there will be no confidence remaining in the market, the break will be immediate and disastrous, and it is entirely possible that the proprietary trading of all brokerages will unwind and you will discover that there is no such thing as a safe brokerage in which to trade or invest as it is entirely possible that we will discover that all such banks and brokerages have enough proprietary exposure that they will all fail and you will lose all your money.
That simply must be the assumption you make until and unless it's proved otherwise at this point in time.
Therefore if you are not, right now, playing only with money you can afford to lose 100% of, even if you're right about what the market is going to do, then you're a fool to be in the market at all.
Period.
And yes, this means you if you have a 401k, an IRA, or a pension whether private or public.
Our government has not and will not protect you.  That has been proved over the last five years and all of the major political parties -- including Democrat, Republican and Libertarian have refuse to stand up and demand that the crooks go to prison.  In fact, they not only have refused to say that or do it they're actively borrowing from the people they should be policing!
In 2008 and 2009 we had the opportunity to fix this as I was pounding the table on before the dislocation really took off -- back to 2007.  I called for the reinstatement of Glass-Steagall, nightly liquidity proof and no more games.  Of course that wasn't "politically correct" and would have exposed that all these firms were bankrupt already, so it wasn't done.  Then the dislocation came and you get rammed.
Now it's about to come at us again, exactly as I expected it would, as we have fixed nothing in the intervening four years.
Don't say I didn't warn you if and when it happens because I most-certainly did.

and a bit about Penson....

Penson Worldwide Inc
1700 Pacific Avenue
Suite 1400
Dallas, TX 75201
United States - Map
Phone: 214-765-1100
Fax: 214-217-4978
Website: http://www.penson.com

Details

Index Membership: N/A Sector: Financial Industry: Investment Brokerage - National Full Time Employees: 580

Business Summary

Penson Worldwide, Inc., through its subsidiaries, provides a range of critical securities and futures processing infrastructure products and services to the financial services industry primarily in the United States and internationally. The company’s products and services include securities and futures clearing and execution; financing and cash management technology, and other related offerings; and tools and services to support trading in multiple markets, asset classes, and currencies. Its securities and futures clearing services comprise integrated trade execution, foreign exchange trading, custody services, trade settlement, technology services, risk management services, customer account processing, and customized data processing services. The company also participates in margin lending and securities lending, and borrowing transactions primarily to facilitate clearing and financing activities. In addition, it offers Internet account portfolio information services; securities and cash deposits holding and safeguarding services; securities borrowing and lending services; proprietary trading; and retail, risk management, and consultation services for its futures clients. Further, the company provides technology and data products comprising customizable front-end trading platforms, a database of historic U.S. and international equities, options and futures trade data, and order-management services. Additionally, it offers institutional and active retail front-end trading software; technology infrastructure to send orders for securities to North American exchanges, ECNs, and market destinations; and historical intraday time series data plus real-time data feeds for the commodity and equity markets. The company serves online, direct access, and institutional and traditional retail brokers, as well as banks and financial technology firms. Penson Worldwide, Inc. was founded in 1995 and is headquartered in Dallas, Texas.