It took Corzine 4 years to run NJ further into the ground, but only 1 to destroy MF Global.
As a whole, this saga started and ended pretty quickly. In March 2010 Jon Corzine (former Governor of NJ and former GS CEO) became CEO of MF Global. Fast forward a little over a year and MF got in trouble for having too much of dat PIIGS debt and the stock dropped 67% last week alone. Furthermore, now MF Global is is preparing to file for bankruptcy as early as today and Interactive Brokers is waiting to buy them up. Some questions to consider.
1. Most of you are probably gonna read this after markets open, but what do you think will be the impact on the markets? This was the biggest fear of the critics of the terms of the EFSF and the Greek debt haircut, could it spread to other firms or reduce confidence in the bailout?
2. What's gonna happen to Corzine? Needless to say he will never be the Secretary of the Treasury now, but is he done on Wall Street too? His tenure at GS and MF seems to say so.
3. What is this going to further do with public opinion about proprietary positions considering Corzine is the main reason for these trades ?
Not saying the EFSF is gonna work
Serves him right for his treatment of LTCM fiasco. But unfortunately he is probably not done.
'When the lower-ranking official suggested that the trade was too big, Mr. Corzine brushed the concerns aside, responding that his career on Wall Street and in politics made him confident about the bets.'
Pride comes before a fall. Corzine needs to keep his ego in check, otherwise he'll just end up blowing up firms or getting ousted. Having an exposure greater than MS should have signaled that the trade was too risky, yet he failed to pay attention and went ahead with it.
He reminds me of John Meriwether, who based his strategy on past success and failed in spectacular fashion not once, but TWICE.
Its the ultimate success story. A man who has failed to improve any of the institutions he has worked for, yet made a boatload at each.
"In 1994, with Corzine as co-head of fixed-income, Goldman Sachs’s pretax income fell by more than 80 percent as the company lost money on wrong-way interest rate bets, according to William Cohan’s history of the investment bank, “Money and Power,” published this year by Doubleday. Corzine resisted then-Chairman Stephen Friedman’s calls to scale back risk- taking, according to the book. Still, Corzine rose to chairman that year when Friedman departed.
Russia Positions
Four years later, Corzine, as co-CEO, pushed traders to keep risky positions after Russia announced a devaluation of the ruble and defaulted on some of its foreign debt, while co-CEO Henry Paulson pushed to exit the holdings, according to Cohan. The firm had almost $1 billion in trading losses in the second half of that year.
He left Goldman Sachs in 1999 with an estimated $400 million as the firm went public. Corzine was elected to the Senate the following year and became governor in 2006. He was defeated in the November 2009 election by Republican Chris Christie."
http://www.businessweek.com/news/2011-10-27/corzine-copying-goldman-at-…
Corzine is looking at a $12.1 million severance package. Unfuckingbelievable.
It's shit like this that makes me think Occupy Wall Street has a fucking point.
Corzine is the perfect example of a person who's good at getting power, and really shitty at using it correctly. I don't want to hear any pathetic sycophantic rationalizing: how does civilization rid itself of such people? I look at Gaddafi and take satisfaction that he got what was coming to him: what about the rest of the sociopaths that rape society and send us backwards on the developmental timeline?
They do have a point about shit like this. Unbelievable is the only word I have.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/201…
http://sec.gov/Archives/edgar/data/1401106/000119312511183746/ddef14a.h… (scroll up a bit)
Looks like there has to a change in control for the golden parachutes to be triggered. Not that anyone's betting they won't be somehow pushed through.
http://www.bloomberg.com/news/2011-11-01/mf-global-probe-said-to-involv…
Wow, just look at this shit storm now. I hope that Corzine gets sued.
If this is true, he should go to jail. I bet he did something unethical, just considering how his personality seems. He was so convinced he was right, I could imagine he diverted client funds to buy sovereign debt.
oh yeah, customers' money should have been in segregated accounts. Those people who have accounts with MF Global is f*cked. Those thing happened in the past. I just hope Fed and Treasury don't bring Volcker rule upon smaller firms because of this.
THIS is why I'm pissed at Corzine. Do I care if some jerkoff finds a way to make a buck? Frankly, no.
The blowback fucks over the rank and file guys that haven't made it big yet. Add to this that the resulting regulatory environment makes it that much tougher to get ahead, and it doesn't MATTER how much anyone tries to make the politicians and the OWS crowd the scapegoats.
A Roman businessman, Crassus, had molten gold poured down his throat for looting the state. While I'm not advocating brutal torture, I do fail to see why anyone who violates the public trust should be spared the full brunt of the law. I agree with Eddie's longstanding point: how the fuck are NONE of these people going to jail?
loos money is not a crime
losing sorry
should they be allow yto fail yes should this be an ethic issue no.
It's official, MF misappropriated their client's money. Someone better go to jail over this.
I'm wishing its Corzine. Fines are pointless since he has an estimated US$400m from sale of GS stock during its IPO. It'll be interesting if he gets convicted like Rajaratnam :)
I don't give a shit if someone makes or loses money, as long as it's not MY money. When someone breaks the law and walks scott free, it makes people question why they're sitting in front of a computer day after day when they could very easily turn to crime. If people get the impression that there's no point to [more or less] following the rules and loose faith in the system, there is no limit to bad it gets.
Sometimes, I hear people say that 'the system' protects the small people from the powerful. In reality, it protects the rich and powerful from a population that feels like they have nothing to lose.
That fucking sucks. Unbelievable.
Priceless:
Here's hoping they get some "convictions".
Spoke to some traders who have accounts in MF Global and they are all raging pissed about it.
A lot of these guys are independent, prop traders who clear through MF.
I personally have an account with them, and when I was attempting to transfer my account over to another futures broker, encountered tons of intimidation and resistance from MF. They kept assuring me that the assets were safe b/c they were segregated and that I'm being irrational and rash and to reconsider. Anyone who listened to them now has no access to their frozen money.
Since Monday afternoon, all outgoing wires have been frozen, so they have access to none of their money. On top of that for those who still have open positions they can't trade out of their postions online, but have to call someone at MF Global who then has to submit a handwritten market (think losing some money on the spread) order to liquidate a position.
This is not to mention that some of them also have periodic withdrawals in order to pay for basic uses that are suddenly frozen.
Horrible, horrible situation and if in indeed they find out that money is missing from those "segregated" accounts then someone definitely needs to go to jail for this.
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