JPMorgan Said Near Deal for MF’s LME Stake

[pmbug]

JPMorgan Chase & Co. (JPM) is nearing a deal to acquire MF Global (MF) Holding Inc.’s stake in the London Metal Exchange for about 25 million pounds ($39 million), according to a person familiar with the process.
...
MF Global filed for bankruptcy protection last month after making bets that went bad on European sovereign debt. Its British subsidiary, MF Global U.K. Ltd., one of 12 category 1 members of the LME that normally hold the right to trade on the floor, was stopped from trading on the metals exchange on Oct. 31. The company’s special administrator in Britain, KPMG, has been trying to sell the unit’s stake.

The subsidiary owns 600,000 ordinary shares out of 12.9 million, a 4.7 percent stake, and 25,000 nonvoting B shares, according to a U.K. Companies House filing on Oct. 24.

JPMorgan has raised its holdings in the LME over the past year. It owned 800,000 shares as of Oct. 24, compared with 550,000 shares a year earlier, according to filings with Companies House.
...
The LME, for its part, has been the object of takeover interest. The exchange, which handles 80 percent of global trade in metals futures, said in September it had received several “expressions of interest.” A bid may be recommended to shareholders as early as March, Martin Abbott, chief executive officer of the exchange, said at the time.
...

http://www.bloomberg.com/news/2011-...o-near-deal-for-mf-global-s-stake-in-lme.html

JPMorgan wants to control the spice. The spice must flow!

 

[DSAbug]

I was pretty disappointed when I read that.

 

[DCFusor]

I'll second that disappointment. No way that much concentration of power is good for markets (even if you liked or trusted JPM), though the world seems to be rushing toward that generally in almost everything.

 

[DSAbug]

I'll second that disappointment. No way that much concentration of power is good for markets (even if you liked or trusted JPM), though the world seems to be rushing toward that generally in almost everything.

Which is why the world is burning in the 1st place.

 

[DoChenRollingBearing]

Criminal mafias working towards a monopoly. They have their oligarchy/cartel now and yet they still want more. Since there appears to be no will by .gov (paid off .gov) to rein these guys in, we have to look after ourselves.

Gold, silver and platinum are major planks of my platform! And diversification outside the USA.

 

[DosZap]

Rather amusing

That the OLD man JP himself basically SAVED the country with his wealth in the early years,and now HIS empire is helping in taking it down.
History has a way of repeating, in strange ways at times.

 

[KMS]

In April 2007, Commitments of Traders Report revealed that four or fewer traders held 90% of all short silver futures contracts totalling 245 million troy ounces, which is equivalent to 140 days of production. According to Ted Butler, one of these banks with large silver shorts, JPMorgan Chase, is also the custodian of the SLV silver ETF. Some silver analysis have pointed to a potential conflict of interest, as close scrutiny of Comex documents reveals that ETF shares may be used to "cover" Comex physical metal deliveries. This led analysts to speculate that some stores of silver have multiple claims upon them. On 25 September 2008 the Commodity Futures Trading Commission (CFTC) relented and probed the silver market after persistent complaints of foul play.[20] On September 1, 2010, Bloomberg reported that JPMorgan Chase will be closing their Proprietary Trading Desk.

source

Why are they allowed to continue owning parts of exchanges? Honest question.

 

[ancona]

Am I the only one who thinks this MF Global thing was a deliberate set up? I think it was done to eliminate a thorn in JP Morgans side, a silver thorn to be exact.

 

[pmbug]

Am I the only one who thinks this MF Global thing was a deliberate set up? ...

Nope.

 

[DCFusor]

It could be a setup, but those turkeys ripped me off, as I've posted about elsewhere here and they had it coming. Couldn't happen to a more deserving bunch.

Following is speculation based on little to no data:

These guys were one of the kings of fast-and-loose - I do know this from having once worked with them. Many of these types of houses get in a little too deep, but the good 'ol boy club will sometimes help them out, with a little liquidity "off the books" in return for some sort of favor in kind later. But you have to stay in the club, and be in good standing in it for that to work for ya. Like in any club, you can push it a little too far if you're not careful, and only find out when you get tossed out.

Going back to the initial crash, and the bailouts, note that some were bailed, some allowed to fail, or forced into mergers with the very companies they'd previously been a thorn in the side of. A little bit of closer examination shows who was "in good standing" in that club, and who was not.

This could easily be just another case of that - your own sig would apply in that case.
As they've pointed out on ZH - Corzine wasn't in bad odor in the WH or anything, and so far, isn't feeling much heat from that quarter - but the WH isn't in this club, exactly (more like the salaried house waiter). To the extent they were set up, it's probably more like "someone suddenly refused to keep helping them out of their problems". And from following the money, we can make a reasonably good guess who that was, I think.

 

[DSAbug]

It seems to be that the firms that have the most commodity exposure seem to consistently be the ones that blow up and ALWAYS seem to do so 3-6 months after big run ups.

 

[Island_Dweller]

Great thread. Not sure how I missed it until now.

 

[ancona]

JPM is a giant bag of scum. They will pick through the carcass and toss the bones to the creditors. **** JPM, I hope they crash and burn on their mountain of derivative paper.