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View Diary: Taibbi and Connaughton on Obama, Geithner, “The Rule of Law,” and “Government, Enron-Style” (173 comments)

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  •  "I simply do not know where the money is." (33+ / 0-)
    NEW YORK (CNNMoney) -- Jon Corzine, the former chief executive officer of the bankrupt broker MF Global, apologized for his firm's failure Thursday and told a House committee that he doesn't know where its missing customer money went.

    "I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine said, in prepared testimony to the House Agriculture Committee on Thursday.

    . . .

    Corzine, a Democrat who served as a U.S. senator and governor of New Jersey, was called to Capitol Hill to participate in the Agriculture Committee's investigation of the firm, which went bankrupt after disclosing bets on risky European debt that sparked a panic among investors.

    In his prepared remarks, he did not mention a specific value for the shortfall in customer funds. But since the bankruptcy filing, investigators have been trying to find $1.2 billion that should have been in MF Global customer accounts, according to the trustee overseeing the brokerage firm's liquidation.

    •  did he check his pockets? (20+ / 0-)

      I know I always find an odd $2 or $3 million there when it's time to do the laundry.

      Or at least, I would if I were a gazillionaire.

      "In America, the law is king." --Thomas Paine

      by limpidglass on Thu Dec 22, 2011 at 12:18:05 AM PST

      [ Parent ]

    •  just have read a nice explanation (2+ / 0-)
      Recommended by:
      NearlyNormal, eyesoars

      why it could have been no lie.
      i am not advocating all conclusions put he shows an intresting pattern how it can work.
      so if the money is at JP morgans as roumored in the link, through the new rules in the bancruptcy law,
      about derivates  allways first to collect or just keep the underlying assets without notice to anybody, in case of an bacruptcy.
      mr corzine could have been telling the truth for once
      surprisingly enough.

      •  Your link goes to a really interesting article. (6+ / 0-)

        Really interesting.  Here's an excerpt:

        If I am right then MF Global was the first hint of Plan B in action. The bankruptcy laws allow a mechanism for banks to disembowel each other. The strongest lend to the weaker and loot them when the moment of crisis approaches. The plan allows the biggest banks, those who happen to be burdened with massive holdings of dodgy euro area bonds, to leap out of the bond crisis and instead profit from a bankruptcy which might otherwise have killed them. All that is required is to know the import of the bankruptcy law and do as much repo, hypothecation and derivative trading with the weaker banks as you can. To me, this gives a possible answer to why there has been such a surge in derivatives trading.

        If I am right about all this, I think this means that some of the biggest banks, themselves, have already constructed and greatly enlarged a now truly massive trip wired auto-destruct on the banking system. If they have and they have explained any of this to our politicians then it would explain why our governments have been so abjectly willing to bail out any and all of the biggest banks and sacrifice anything else in the process. Any hint of relucatnace and the banks can make veiled reference to the extreme ‘risk’ of systemic ‘panic’ and forced liquidations. None of which is really a panic, since they have engineered it.

        Are the banks threatening us? No, no, good lord no! Just pointing out the reality of the state of the system. There just happens to be a gun pointed at our head and the banks just happen to find their finger on the trigger.

        It is yet another revealing look at how the deregulation and revisions to our banking and bankruptcy laws have played heavily into bringing the world into economic crisis - and sadly suggests that the Too Big To Fail Banks have even more leverage than we might have imagined.

        I have long suspected that part of the Geithner Obama approach to the financial industry has had something to do with the epic size of the CDS and MBS markets, and this article seems to point to exactly how and why it is so incredibly threatening.

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