This is from ZeroHedge....
After the article I will try to give a basic interpretation for those that do not have a familiarity with the markets. Please pay close attention.
The most important news announcement of the day was not anything to came out of Cannes (as nothing did), nor from Greece (the merry go round farce there continues unabated). No, it was a brief paragraph distributed by the CME long after everyone had gone home, and was already on their 3rd drink. It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existanet. We confirmed interbank liquidity in Europe was at an all time low earlier today, and can only assume the same is true for US banks. But what is very disturbing is that this is just as true at the exchange level, where it appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are not found to be margin deficient, and thus receive a margin call. Naturally, since it is very unlikely that this incremental amount of liquidity can be easily procured in one business day, we anticipate the issuance of hundreds of thousands of margin calls Monday, followed by forced liquidations of margin accounts across America... and the world. Just like when Lehman blew up, it took 5 days for Money Markets to break. Is this unprecedented elimination in the distinction between initial and maintenance margin the post-MF equivalent of the first domino to fall this time around?
So what does this mean? I am still trying to wrap my head around it, but just to cover your ass consider doing the following...
If your bank is open tomorrow morning withdraw as much cash as you can from savings and checking. You can always put it back if there are no ripples.
Make a run to the grocery and stock up with a little extra food in non perishable form. Can goods, etc.
If you own firearms, stock up on extra ammunition.
If you don't own firearms, consider buying a basic shot gun such as a 12 gauge pump.
Yes, I am probably being Chicken Little and certainly hope that I am. But even at a one percent chance, I would better be safe than sorry.
If you did not understand the article, this is what it means in the most basic terms. CME (Chicago Mercantile Exchange) is raising margin requirements effective Monday afternoon. Therefore, those that own securities on margin (borrowed money, ie leveraged) will get a margin call on Monday. This means that they will have to deposit money into their accounts in order to balance the reduction of credit they have been extended. The more leveraged they are, the more money they will have to come up with. What if they don't have the cash instantly available? Well then they will have to liquidate, ie sale their positions at market. This means they will be selling into a weakening market as others having to raise cash will be doing the same.
Even simpler explanation....
There is a fairly reasonable chance that the shit could begin to hit the fan on Monday. I hope I am reading this wrong, and it is very possible that I am. Nonetheless, it is not unreasonable to take some simple precautions.