Wednesday, November 16, 2011


MF Global looting could have been perfectly legal, although it seems there was at the very least some sloppy deception going on.

Then, in February 2004 and May 2005, Regulation 1.25 was further amended and refined to the liking of Ferber and the banks. In the end, the door was opened for firms such as MF Global to do internal repos of customers’ deposits and invest the funds in the “general obligations of a sovereign nation.”

This practice, of course, may well be the centerpiece of the MF Global disaster. We now know that Corzine -- who was CEO of Goldman Sachs from 1994 to 1999 -- bet $6.3 billion on the distressed long-term bonds of countries such as Italy and Spain, although it’s unclear if clients’ funds were used. Bart Chilton, a CFTC commissioner, told Bloomberg News on Nov. 10 the loss to customers’ accounts may have resulted from a “massive hide-and-seek ploy.”

Ultimately the only hope for major reform is if enough of the right rich assholes fuck over enough of the (other) right rich assholes, yet at a small enough scale that the Full Bailout doesn't happen. As in, rich people decide they're tired of being fucked over. Though I'm not holding my breath for that needle to be threaded.