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The MF Global meltdown is on a par with Lehman Brothers with the effects just beginning to be seen - another example of all that is wrong (and unchanged) in our financial system - but no meaningful mention here?

You have:

1) The 8th largest bankruptcy in the US - ever.

2) Clear 'contagion' from the EU sovereign debt crisis affecting the US being responsible with huge bets on European bonds gone bad - perhaps some of the dumbest 'bets' on could make

3) 'More of the same' - with 40 to 1 leveraging, overly aggressive trading and more with MFG refusing to cooperate with regulators

4) Clearly ILLEGAL commingling of customer fund with firm funds

Why so little coverage here.  This is EXACTLY the type of CRIME #OWS has been so vocal about, EXACTY what is wrong with our financial system


Corzine was a former Democratic Senator and Governor - and was even mentioned as a candidate for Treasury Secretary.

He would have been 'better' than Geithner?

I am convinced that the Democrats are either

1) horribly incompetent and ignorant as to how our financial system (does NOT) work


2) are as bought and paid for as the Republican Party

The only 'good' thing about this is now that a leading DEMOCRATIC figure has been caught in blatant fraud, they may actually start calling for MORE government regulation and oversight......... (nah.... will never happen despite the political capital to be gained... they're owned by the financial guys and aren't going to piss them off).

Again.... why haven't the Democrats pushed HARD for tougher regulation, reinstatement of Glass-Steagall and FAR FAR more?   There should be cries of outrage but ....crickets... that whole Corzine connection is a bit embarrassing huh?

More mentions than you can count on a Google News search  4470 on 'MF Global Bankruptcy'

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Comment Preferences

  •  Tip Jar (6+ / 0-)

    Life isn't fair but you should try to leave it fairer than you found it.

    by xrepub on Wed Nov 02, 2011 at 03:55:27 PM PDT

  •  Except nothing (3+ / 0-)
    Recommended by:
    johnny wurster, janmtairy, Chinton

    There have been several diaries on it. And please link to Corzine ever being considered for Treasury, except in his fevered imagination.

    Republicans 2012 . . . Keeping millions out of work to put one man out of a job.

    by jsfox on Wed Nov 02, 2011 at 04:01:58 PM PDT

  •  No pass for Corzine on this...... (3+ / 0-)
    Recommended by:
    pat bunny, janmtairy, northsylvania
    Yet despite his confidence in risk management, Mr. Corzine’s message to traders was clear: Take more risks. “He was instrumental in pushing our firm forward with risk taking in every book, whether it was U.S. government bonds, currencies, or in repos,” said one trader. “Everything was full throttle go.”

    European sovereign debt looked especially tempting. Instead of the near-zero yields on United States Treasury bonds, short to medium Italian and Spanish bonds were earning 2 to 3 percent. Simply holding those to maturity and collecting the yields would buttress profits as other businesses shrank.

    And while most Wall Street firms sharply ratcheted down their use of leverage, MF Global continued to pile on large amounts of debt. On the eve of its collapse, it had about $34 of debt for each $1 of capital it held, according to data from Keefe, Bruyette & Woods. By contrast, Goldman Sachs’ leverage ratio is $13.50 for every $1.

    Life isn't fair but you should try to leave it fairer than you found it.

    by xrepub on Wed Nov 02, 2011 at 04:05:56 PM PDT

  •  It's been here and there at this site, (4+ / 0-)

    but they didn't get a bailout: so far, it's how private parties should go down in flames: all by themselves, w/o government guarantees to prop them up.

  •  IOKIYAD (0+ / 0-)

    That's what's wrong with this place

    Assent- and you are sane- Demur- you’re straightway dangerous- And handled with a Chain- - Emily Dickinson

    by SpamNunn on Wed Nov 02, 2011 at 07:23:41 PM PDT

    •  One of my complaints - partisan cheerleading (0+ / 0-)

      no matter what

      It's why I remain an Independent.

      Life isn't fair but you should try to leave it fairer than you found it.

      by xrepub on Wed Nov 02, 2011 at 08:17:20 PM PDT

      [ Parent ]

      •  I really don't see it that way. (0+ / 0-)

        There have been multiple diaries, including one by a front pager.

        People are pretty straightforwardly calling Corzine a crook and an idiot.  There's very little "sweep this under the rug" sentiment.

        As noted, these bozos didn't get a bailout, and seem to be failing in the proper manner.

        -7.75 -4.67

        "Freedom's just another word for nothing left to lose."

        There are no Christians in foxholes.

        by Odysseus on Wed Nov 02, 2011 at 09:09:38 PM PDT

        [ Parent ]

        •  there are dairies posted (0+ / 0-)

          occasionally (and  do mean occasionally) that stray from the site's orthodoxy, but they quickly flame out due to a decided or purposeful lack of interest by the readers of this site. Seems that all much rather rail against a nebulous "they" rather than a specific "us". How many diaries are posted about the WH's cozy financial relationship (dependence?) with Wall Street? Oil companies? Insurance industry? Sad.

    •  If Carlyle Group or some other firm was involved (0+ / 0-)

      you'd have people here screaming for the guillotine.....

      This scenario may have severe consequences on the world's financial markets

      Never mind that the commingling of client assets is a HUGE violation

      Life isn't fair but you should try to leave it fairer than you found it.

      by xrepub on Wed Nov 02, 2011 at 08:20:29 PM PDT

      [ Parent ]

    •  Well, the Israelis (0+ / 0-)

      are contemplating air strikes on Iran, the US and UK will get drug in and there isn't too much commentary on here about that either. I don't think it's IOKIYAD, but more like these stories are boring because they resemble other events, whereas OWS is both a shiny new toy and a supposed attack on the root causes of both military and financial adventurism.
      I just made this up, but one tries to make sense of the world (or this site) by making things up.

      "Bootstraps are a fine invention as long as they are attached to boots." blueoasis

      by northsylvania on Thu Nov 03, 2011 at 12:53:41 AM PDT

      [ Parent ]

  •  More on this.... not good for MF G or Corzine (0+ / 0-)

    Sad how this is but one more of many similar cases.....  nobody ever seems to learn

    Life isn't fair but you should try to leave it fairer than you found it.

    by xrepub on Wed Nov 02, 2011 at 08:15:47 PM PDT

  •  No need to exaggerate (1+ / 0-)
    Recommended by:

    It is nowhere near being on par with Lehman.  Unfortunately, most DKers seem not to understand what happened in 2008, and why the Lehman collapse set off a chain reaction that almost completely brought down both the financial system and "real" economy.

    Lehman and the events surrounding its collapse were  catastrophic because of systemic risk -- the fact that various collapses were feeding on each other.

    The big problem with Lehman was its commercial paper (not its credit default swaps as many believe), because the commercial paper default set off a bank run that was predicted to exceed $4 trillion outflow from money markets in just a few hours.  Obviously nothing like that is happening because of MF Global.

    Also, bank clearance ground to a halt in 2008 -- ie, the ability of banks to clear checks and ATM withdrawals from other banks because of the panic over mortgage securities.

    MF Global is a one company collapse.  Feel free to tell us about it, but comparing it to Lehman simply doesn't make sense.

    Europe is in a different situation in which there is systemic risk on sovereign debt -- the possibility that a Greek default would lead to an Italian default.

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