MF Global Implosion Puts Spotlight on Regulatory Gaps, NGI Reports

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    Nov 01, 2011 9:42 PM GMT
    http://www.marketwatch.com/story/mf-global-implosion-puts-spotlight-on-regulatory-gaps-ngi-reports-2011-11-01
    I'm REALLY surprised old riddler has been so QUIET on this..................icon_wink.gif

    Shocking details surrounding the surprise bankruptcy of securities firm giant MF Global Holdings Ltd. were coming to light Tuesday, one day after the company turned in its Chapter 11 papers following an ill-timed bet on the European debt markets.

    While trading exchanges all over the globe rushed to protect their markets from the fallout, reports began to surface that the firm, which is headed by former New Jersey Gov. Jon Corzine, had failed to keep the company's money separate from its customers' accounts........."The MF Global story is a fast-moving one. Tuesday morning people were saying a couple hundred million dollars of customer funds were missing. By Tuesday afternoon that number had ballooned to $700 million," said Ed Kennedy, a broker with INTL Hencorp Futures LLC. "This MF Global implosion will change the entire game because something is not passing the smell test here. Moving customer funds into the company's account is not a one-person operation. With the way regulations are now, an entire chain of people would have to be involved..



    Oh those PESKY regulations again.. fuck, the banks just CAN'T steal money!icon_rolleyes.gificon_rolleyes.gificon_rolleyes.gificon_rolleyes.gif
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    Nov 01, 2011 9:58 PM GMT
    TropicalMark saidhttp://www.marketwatch.com/story/mf-global-implosion-puts-spotlight-on-regulatory-gaps-ngi-reports-2011-11-01
    I'm REALLY surprised old riddler has been so QUIET on this..................icon_wink.gif

    Shocking details surrounding the surprise bankruptcy of securities firm giant MF Global Holdings Ltd. were coming to light Tuesday, one day after the company turned in its Chapter 11 papers following an ill-timed bet on the European debt markets.

    While trading exchanges all over the globe rushed to protect their markets from the fallout, reports began to surface that the firm, which is headed by former New Jersey Gov. Jon Corzine, had failed to keep the company's money separate from its customers' accounts........."The MF Global story is a fast-moving one. Tuesday morning people were saying a couple hundred million dollars of customer funds were missing. By Tuesday afternoon that number had ballooned to $700 million," said Ed Kennedy, a broker with INTL Hencorp Futures LLC. "This MF Global implosion will change the entire game because something is not passing the smell test here. Moving customer funds into the company's account is not a one-person operation. With the way regulations are now, an entire chain of people would have to be involved..



    Oh those PESKY regulations again.. fuck, the banks just CAN'T steal money!icon_rolleyes.gificon_rolleyes.gificon_rolleyes.gificon_rolleyes.gif


    I was considering posting this. MF Global is apparently too small to bail out. As others online have pointed out, this is a firm that was run by Jon Corzine - a Democrat and strong supporter of the Obama Administration - which isn't being openly reported in the national press.

    You're right - you can't just steal. Too bad even regulation here didn't stop the stealing or human nature as you seem to think it should. Fraud has never been an issue that I object to having laws over - and I point out that this isn't something that any type of regulation would have stopped anyway if more than one person at the right position was intent on stealing money.
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    Nov 02, 2011 10:25 PM GMT
    More on the story -

    Fortune Magazine raises the possibility of criminal charges against Jon Corzine the former Democratic Senator and Governor:

    http://finance.fortune.cnn.com/2011/11/02/jon-corzine-mfglobal-to-jail/

    What's amazing, however, is how little attention such a possibility is receiving in the media. The vast majority of articles and blog posts on Corzine have discussed his voracious appetite for risk, rooted in a Wall Street that hasn't existed since Lehman Brothers went broke. Or about how Corzine may be entitled to around $12 million in severance.
    "If this was a former Republican senator and governor, the press would be all over it," argues a GOP-affiliated investment professional. "They'd be talking about how it is emblematic of corruption on Wall Street. But because it's a Democrat, everyone keeps focusing on bad investments rather than the possibility of fraud."

    Also not getting much attention is Corzine's intimate relationship with J.C. Flowers & Co., a private equity firm run by Christopher Flowers, one of Corzine's former colleagues at Goldman Sachs (GS).

    It has been noted that Flowers invested in MF Global and stands to lose nearly $50 million, but the partnership is far deeper than that. Corzine took the MF Global job at Flowers' urging, and simultaneously joined the private equity firm as an operating partner and advisor. In exchange, Corzine reportedly received carried interest in a pair of J.C. Flowers funds (albeit not in the older one housing MF Global).
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    Nov 02, 2011 10:30 PM GMT
    Any and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.
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    Nov 13, 2011 4:26 PM GMT
    Biden: First Guy We Called for Economic Advice Was Jon Corzine

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    Nov 13, 2011 5:28 PM GMT
    TropicalMark saidAny and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.


    Yup. In fact, I think people who are responsible for destroying the retirement accounts of tens of thousand of Americans have created far more harm than a drug dealer or burglar.
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    Nov 22, 2011 7:02 AM GMT
    Christian73 said
    TropicalMark saidAny and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.


    Yup. In fact, I think people who are responsible for destroying the retirement accounts of tens of thousand of Americans have created far more harm than a drug dealer or burglar.


    Um, that would be Congress and the electorate by design. This insistence that all these problems are because of everyone else would be laughable if it were not for the fact that these problems are so serious.
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    Nov 22, 2011 7:03 AM GMT
    http://dealbook.nytimes.com/2011/11/21/mf-global-trustee-estimates-shortfall-could-be-more-than-1-2-billion/?ref=business

    The court-appointed trustee overseeing the liquidation of MF Global’s brokerage now estimates that the shortfall in the firm’s customer funds could be more than $1.2 billion, double previous estimates.

    Regulators currently suspect that MF Global improperly used customer money for its own purposes in the days before filing for Chapter 11 protection, according to people briefed on the matter.

    The decision to release the updated figure on Monday came after authorities concluded that much of the customer money had left the firm, these people said.
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    Nov 22, 2011 10:48 AM GMT
    riddler78 said
    Christian73 said
    TropicalMark saidAny and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.


    Yup. In fact, I think people who are responsible for destroying the retirement accounts of tens of thousand of Americans have created far more harm than a drug dealer or burglar.


    Um, that would be Congress and the electorate by design. This insistence that all these problems are because of everyone else would be laughable if it were not for the fact that these problems are so serious.


    Did Congress push Americans to give up pensions for 401ks?

    Did Congress then invest those Americans' life savings in the mortgage backed securities market?

    Did Congress then make bets totaling $4 trillion on that market, which was valued at $1 trillion?

    Did Congress then blow up that market erasing billions in savings? icon_rolleyes.gif
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    Nov 23, 2011 12:26 AM GMT
    Christian73 said
    riddler78 said
    Christian73 said
    TropicalMark saidAny and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.


    Yup. In fact, I think people who are responsible for destroying the retirement accounts of tens of thousand of Americans have created far more harm than a drug dealer or burglar.


    Um, that would be Congress and the electorate by design. This insistence that all these problems are because of everyone else would be laughable if it were not for the fact that these problems are so serious.


    a. Did Congress push Americans to give up pensions for 401ks?

    b. Did Congress then invest those Americans' life savings in the mortgage backed securities market?

    c. Did Congress then make bets totaling $4 trillion on that market, which was valued at $1 trillion?

    d. Did Congress then blow up that market erasing billions in savings? icon_rolleyes.gif


    a. By giving false security that Social Security would exist for them, yes. If Americans had invested in 401Ks however and held they would have likely made out just fine (such is investing in equities - where you accept that there is both risk and reward).

    b. No, but Congress did encourage the development of those securities through the CRA 1999, Fannie Mae and Freddie Mac, and it is the Fed that kept interest rates unsustainably low pushing many Americans to find better returns elsewhere.

    c. See (b)

    d. The bubble burst. Things that aren't sustainable just don't on forever. The real estate market fell and along with it the debt securities that propped up that market but it was Congress that created the incentives in both credit and in the underlying asset that resulted in the bubble.
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    Nov 23, 2011 12:54 AM GMT
    riddler78 said
    Christian73 said
    riddler78 said
    Christian73 said
    TropicalMark saidAny and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.


    Yup. In fact, I think people who are responsible for destroying the retirement accounts of tens of thousand of Americans have created far more harm than a drug dealer or burglar.


    Um, that would be Congress and the electorate by design. This insistence that all these problems are because of everyone else would be laughable if it were not for the fact that these problems are so serious.


    a. Did Congress push Americans to give up pensions for 401ks?

    b. Did Congress then invest those Americans' life savings in the mortgage backed securities market?

    c. Did Congress then make bets totaling $4 trillion on that market, which was valued at $1 trillion?

    d. Did Congress then blow up that market erasing billions in savings? icon_rolleyes.gif


    a. By giving false security that Social Security would exist for them, yes. If Americans had invested in 401Ks however and held they would have likely made out just fine (such is investing in equities - where you accept that there is both risk and reward).

    b. No, but Congress did encourage the development of those securities through the CRA 1999, Fannie Mae and Freddie Mac, and it is the Fed that kept interest rates unsustainably low pushing many Americans to find better returns elsewhere.

    c. See (b)

    d. The bubble burst. Things that aren't sustainable just don't on forever. The real estate market fell and along with it the debt securities that propped up that market but it was Congress that created the incentives in both credit and in the underlying asset that resulted in the bubble.


    Are you high tonight? 401ks are what was obliterated in the crash and have forced many baby boomers to delay retirement, thereby increasing unemployment among college grads.

    CRA has nothing to do with the crash. In fact, Fannie and Freddie were late to the game on subprime mortgage backed securities.

    I agree with your point about the Fed, but it's the Right that's always crying about inflation, so thank yourself on that one.

    Congress does not control the Fed, which kept rates low and encouraged the house flipping binge and other things that drove the bubble.
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    Nov 23, 2011 1:08 AM GMT
    Christian73 said
    riddler78 said
    Christian73 said
    riddler78 said
    Christian73 said
    TropicalMark saidAny and all involved need to be charged and convicted with serious jail time.. I'm tired of this 'white collar' crap of luxury sentencing.


    Yup. In fact, I think people who are responsible for destroying the retirement accounts of tens of thousand of Americans have created far more harm than a drug dealer or burglar.


    Um, that would be Congress and the electorate by design. This insistence that all these problems are because of everyone else would be laughable if it were not for the fact that these problems are so serious.


    a. Did Congress push Americans to give up pensions for 401ks?

    b. Did Congress then invest those Americans' life savings in the mortgage backed securities market?

    c. Did Congress then make bets totaling $4 trillion on that market, which was valued at $1 trillion?

    d. Did Congress then blow up that market erasing billions in savings? icon_rolleyes.gif


    a. By giving false security that Social Security would exist for them, yes. If Americans had invested in 401Ks however and held they would have likely made out just fine (such is investing in equities - where you accept that there is both risk and reward).

    b. No, but Congress did encourage the development of those securities through the CRA 1999, Fannie Mae and Freddie Mac, and it is the Fed that kept interest rates unsustainably low pushing many Americans to find better returns elsewhere.

    c. See (b)

    d. The bubble burst. Things that aren't sustainable just don't on forever. The real estate market fell and along with it the debt securities that propped up that market but it was Congress that created the incentives in both credit and in the underlying asset that resulted in the bubble.


    Are you high tonight? 401ks are what was obliterated in the crash and have forced many baby boomers to delay retirement, thereby increasing unemployment among college grads.

    CRA has nothing to do with the crash. In fact, Fannie and Freddie were late to the game on subprime mortgage backed securities.

    I agree with your point about the Fed, but it's the Right that's always crying about inflation, so thank yourself on that one.

    Congress does not control the Fed, which kept rates low and encouraged the house flipping binge and other things that drove the bubble.


    Um drama queen much? Look at historical chart of equities which were most affected by the crisis. Most markets have rebounded to within 10% of their levels just prior to the crash - and certainly reflective of what they would be had there not been a bubble to begin with. To suggest that they were therefore somehow "obliterated" is either a massive exaggeration or an outright lie given you can't leverage 401Ks.

    As for the CRA, Fannie Mae, Freddie Mac, investment requirements for institutional investors, regulated oligopolies of ratings agencies, mortgage interest deduction, etc. had nothing to do with the asset bubble? Apparently you're the one who's high this evening. Fannie and Freddie were hardly late to the game when they bought up and collateralized those debt obligations given their position in the mortgage markets (which ranged upwards of 70-80% of the entire mortgage market).
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    Nov 23, 2011 2:26 AM GMT
    riddler78 saidUm drama queen much? Look at historical chart of equities which were most affected by the crisis. Most markets have rebounded to within 10% of their levels just prior to the crash - and certainly reflective of what they would be had there not been a bubble to begin with. To suggest that they were therefore somehow "obliterated" is either a massive exaggeration or an outright lie given you can't leverage 401Ks.

    As for the CRA, Fannie Mae, Freddie Mac, investment requirements for institutional investors, regulated oligopolies of ratings agencies, mortgage interest deduction, etc. had nothing to do with the asset bubble? Apparently you're the one who's high this evening. Fannie and Freddie were hardly late to the game when they bought up and collateralized those debt obligations given their position in the mortgage markets (which ranged upwards of 70-80% of the entire mortgage market).


    Do you ever tire of repeating the same worn out and debunked "theories"? icon_rolleyes.gif
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    Nov 23, 2011 3:25 AM GMT
    Christian73 said
    riddler78 saidUm drama queen much? Look at historical chart of equities which were most affected by the crisis. Most markets have rebounded to within 10% of their levels just prior to the crash - and certainly reflective of what they would be had there not been a bubble to begin with. To suggest that they were therefore somehow "obliterated" is either a massive exaggeration or an outright lie given you can't leverage 401Ks.

    As for the CRA, Fannie Mae, Freddie Mac, investment requirements for institutional investors, regulated oligopolies of ratings agencies, mortgage interest deduction, etc. had nothing to do with the asset bubble? Apparently you're the one who's high this evening. Fannie and Freddie were hardly late to the game when they bought up and collateralized those debt obligations given their position in the mortgage markets (which ranged upwards of 70-80% of the entire mortgage market).


    Do you ever tire of repeating the same worn out and debunked "theories"? icon_rolleyes.gif


    Debunked by someone who wears tinfoil hats? Right... icon_rolleyes.gif Delusions of grandeur again? You should see someone about that.