MF Global for Dummies

Discussion in 'Economy' started by chanel, Nov 2, 2011.

  1. chanel
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    chanel Silver Member

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    This is expected to be one of the top ten bankruptcies in the nation.

    What will the fallout be for the American people? For the countries whose currencies they gambled on? For Jon Corzine?

    He will be getting a $12 million golden parachute. This is the man who nearly destroyed NJ and was rumored to be a contender for the U.S. Treasurer.

    MF Global's Collapse Draws FBI Interest - WSJ.com

    I supposed this company isn't "too big to fail"? :confused:
     
  2. editec
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    editec Mr. Forgot-it-All

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    If reports are accurate then what MF did was CLEARLY a crime.

    MF comingled clients' funds with corporate funds to mask their corporate insolvency.
     
  3. chanel
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    chanel Silver Member

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    Yes it appears a crime was committed. Of course they are saying it might just be a "bookkeeping error". :doubt:

    Right now I'm concerned about the "big picture". TARP was used to prevent this kind of bankruptcy because it would have had a major impact on the economy. Will this?
     
  4. editec
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    editec Mr. Forgot-it-All

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    No I don't think TARP is the problem here.

    This really is just your basic accounting crime, not much different now than it would be during better times with our without TARP.
     
  5. chanel
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    chanel Silver Member

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    According to this woman, MF Global is just the tip of the iceberg:
    "The Entire System Has Been Utterly Destroyed By The MF Global Collapse" - Presenting The First MF Global Casualty | ZeroHedge
     
  6. chanel
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    chanel Silver Member

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    MF Global Trustee Says Shortfall Could Exceed $1.2 Billion - NYTimes.com

    I wonder what the magic number is for jail time. $600 million? 1.2 billion? or 70 gazillion?
     
  7. Toro
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    Toro Diamond Member

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    Though it is one of my daily sites, I would be really, really hesitant to quote anything from ZeroHedge as an accurate assessment of, well, anything.

    And I believe Corzine has foregone his severance package.

    But he was a failure at MF Global, no doubt about it. Damn, they were stupid.
     
  8. jillian
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    jillian Princess Supporting Member

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    what i don't understand is why he allowed global to leverage as heavily as he did when he was one of the people railing against that kind of debt to asset ratio when the economy crashed.

    oh.. and you're correct. he DID forego his severance package. it seems, though, that there wouldn't have been a severance package, anyway, once the bankruptcy court gets through with MF Global.
     
    Last edited: Nov 22, 2011
  9. bigrebnc1775
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    bigrebnc1775 Diamond Member

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    interesting READ

    Employees of the company have given $108,650 to Obama’s campaign and the Democratic National Committee, according to federal records. MF Global’s chairman and chief executive, former New Jersey governor Jon Corzine, has raised at least $500,000 for the campaign and the DNC as a “bundler,” or volunteer fundraiser.
    MF Global ties awkward for Obama campaign - The Washington Post

    and yes I noticed Romney received some money from and employee but no support from the Chairman and CEO
     
  10. Toro
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    Toro Diamond Member

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    All investment banks use leverage. That's their business model. He just did it stupidly. I was trying to figure out what he knew about the European sovereign crisis nobody else did, because he blew up MF Global buying European bonds. He also allowed his firm to be placed at the mercy of the dealers. MF was a dealer. Think of the dealers as The House in a casino. He's The House, and decides he doesn't want to be The House anymore, and let others be The House. Pretty stupid. MF used to be a commodity broker, and a good one at that. Then he wanted to make it Goldman-lite. What a fool.
     

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