A few interesting aspects of the MF Global disaster.

1./ It was the cash in the accounts that was stolen. The money that was invested in commodities was at market risk but because it was tied up could not be pilfered. Of course because there was no longer any cash backing up the positions many got margin calls.

2./ The margin calls probably had a larger role in the commodities sell off this week than most people think.

3./ If people no longer trust the CME then commodities will have a huge amount of volatility in the future. That was the purpose of the exchange in the first place to smooth out prices.

4./ It may be a coincidence but a total loss of confidence in the CME is exactly what the US FED would want to get the price of commodities down short term. Lower input prices will put a damper on inflation and should give a boost to the US economy and if not it will at least give them some room to bring in another stimulus program as they can point to deflation as making it necessary.

In the end though there is no place to hide.
It is their sand box and their toys.
If they don't win they will change the rules.
Governments in trouble are extremely dangerous. They will do whatever it takes to survive.