MF Global was headed by Jon Corzine. Corzine was the former governor of New Jersey from 2006 to 2010. Corzine is also a former CEO of Goldman Sachs. Currently in addition to running MF Global, he is serving as President Obama’s front man for his Wall Street Financing Campaign.
MF Global was handpicked by President Obama to be an elite primary dealer that would serve as a trading counterparty of the New York Fed in its implementation of monetary policy. Primary dealers are supposed to be heavily regulated and monitored, as they are required to participate in Treasury auctions. As of October 31, there were 21 primary dealer members including the likes of behemoths that include JP Morgan, Citigroup, Goldman Sachs, and Morgan Stanley.
And yet, somehow despite all of this regulation, it was discovered that $700 million of customer money was “missing”. It is suspected that customer money was diverted to support the trading arm of MF Global.
So in summary, we have one of the 21 elite primary dealers, headed by a former democrat governor who once ran one of the largest and most despised firms in America and who is now serving as President Obama’s Wall Street financing campaign chairman, running a firm that lost $700 million in customer funds causing the 8th largest bankruptcy in US history. And we are being asked to believe that there were no politics involved in making MF Global a primary dealer and that somehow the regulators at the SEC, the CFTC, the CME Group, and the New York Federal Reserve missed it? And that President Obama in no way had any influence over the decision making process.
Our system stinks. It appears to not only allow but to encourage outright looting. There are no regulations being enforced and no one is going to jail. It appears to me the bankers are robbing us blind and nothing is being done about it. The government appears to not only be looking the other way, but to be in on it.
And now we have a primary dealer that the government charges with making an orderly market in Treasuries appearing to have commingled around $700 million in customer funds with their own trading book. And nobody in the government gives a hoot!
