Jon Corzine was a key fundraiser since July for Pres. Obama, possible Geithner replacement.

[dixiegrrrrl]

According to Business Insider's story in July:

From the article:
President Obama recruited the former Goldman Sachs CEO Jon Corzine to help him fundraise for his re-election campaign, according to the NYPost.

The main news is that Corzine has been working on Obama's 2012 campaign for months. IE: He hosted a fund-raiser at his Fifth Avenue home for Obama. He's attended secret meetings with Obama, and he organized a meet-and-greet at the Four Seasons for key finance-industry execs and Obama's new chief of staff, former banker Bill Daley.

http://articles.businessinsider.com/2011-07-05/wall_street/29959578_1_president-obama-tim-geithner-corzine

Corzine, according to NPR and other MSM news sources, is a BIG fundraiser for Pres. Obama this year
as well as the last election cycle.

[dkf]

1. This is not good.

[dixiegrrrrl]

5. AND MF was just added to the primary dealer rank last year.

AFTER new "stringent" requirements were in place.
Looks bad for the regulators, too.
Plus, people are wondering how much of the Obama re-election money was being held at MF.

[dkf]

10. Whoa. I bet Obama is sick over this.

What was Corzine thinking?

[dbackjon]

25. What was Obama thinking in the first place

Corzine has always been slime

[dkf]

14. Do you know much about the Repo to maturity trade?

Is this going to be a problem?

http://ftalphaville.ft.com/blog/2011/10/31/717181/mf-global-and-the-repo-to-maturity-trade/

[dixiegrrrrl]

16. What seems to have happened, from what I am reading this am, is

essentially the Greek/Italian debt issue caused margin calls, and with MF being leveraged so high
( 80 to 1, says Financial Times) ..they got squeezed.
But, it also sounds like co-mingling customer accounts was a standard practice, at least for a longer duration than a few months.

bottom line ( I like to keep it simple) ...lack of regulation/oversight and gambling fever.

Question is, how many other firms are in the same position, and how do you tell WHAT position they are in, since everyone is lying about their value?
And what happens when the dishonest gets so widespread that no one trusts the markets anymore?

[dkf]

19. Well I thought CDS were bad enough, but look at what they are doing now to complexity.

http://ftalphaville.ft.com/blog/2011/07/04/612121/now-you-see-it-now-you-dont-collateral-transformation/

http://ftalphaville.ft.com/blog/2011/06/06/585511/clearing-vs-collateral/

http://www.ft.com/intl/cms/s/0/e4109c9c-a31f-11e0-a9a4-00144feabdc0.html#axzz1cT1TJng3

How is a bank regulator supposed to keep up with this? It's like all transactions need to be overseen.

[banned from Kos]

2. Corzine is a decent guy - MF is defunct due to his purchase of Euro-bonds

MF has $6 billion in PIGS bonds and their credit was slashed to "junk" by Moody's/S&P last week.

Now their are accounting issues. He is finished in both politics and Wall St.

[Hotler]

3. Corzine is a decent guy

???????????

[banned from Kos]

6. yeah - he screwed up and trusted the PIGS. Now his career is finished

The PIGS won't get loans anymore.

Real austerity is about to hit them.

[still_one]

8. There are some very real questions that customer funds were intermingled with the companies /nt

[banned from Kos]

11. yeah - I mentioned that there are accounting issues

I won't convict him before some evidence is presented though.

(I'm like that - a due process type, rare these days)

[TheKentuckian]

9. Decent = A (D) next to his name

[dkf]

12. There is more to the story...

If anything this was a financing position (or liquidity trade) — not a bet on the future direction of the bonds themselves.

What’s more, if executed properly the trade should — at least on paper – have posed little or no risk.

The maths was simple enough. You account for the cost of borrowing funds using the bonds in question as collateral (the repo rate) versus the ultimate coupon payments received from the very same bonds.

This is because  in dysfunctional markets the repo rate can be out of kilter with the ultimate returns of the bond itself. This is especially the case if there are more counterparties willing to provide short-term liquidity in return for rates that beat the nominal risk-free return.  In other words to act as pawnbrokers to the market. Alternatively, if you have a good credit standing in the market you may be able to achieve a more favourable repo rate than others.

http://ftalphaville.ft.com/blog/2011/10/31/717181/mf-global-and-the-repo-to-maturity-trade/

--the trade fell apart

[dbackjon]

26. Wrong - he has always been corrupt slime

Never decent

[girl gone mad]

28. Decent guys don't risk vanilla client money..

on disastrous, insanely stupid gambles.

Decent guys don't try to earn quick profits off of the debt enslavement of entire nations.

Decent guys don't defend scumbags who would rather destroy thousands of lives than 'only' make a modest profit.

[mazzarro]

4. This is another of the Dem Wall Streeter

I do not see much difference between Dem Wall Streeters and rethugs'. They one and same thing: cut-throat-selfish and greedy crony free-marketers. I guess he will be a good complement to Bill Daley - who is the current CoS.

[rug]

7. Lay down with dogs, get up with fleas.

[Huey P. Long]

20. We have a serious case of flea INFESTATION.

[dixiegrrrrl]

13. Here be the implications of what comes next

according Zero Hedge:( Last 2 paragraphs of the article)


What happens next? Why customers at all other brokerages, all other exchanges, afraid that their money will suffer the same fate as MF, even if they transact with perfect solvent clearers and agents, will proceed to pull their money, as they know they have nobody to trust but their own prudent and forward looking actions. Which in turn will start the kind of liquidity drain that killed not only Lehman, but froze money markets, and with that brought the complete capital markets to a standstill, only to be thawed after the Fed pledged multiples of the US GDP to rescue Wall Street in October of 2008.

And that, dear reader, is called unintended consequences, and how the bankruptcy of a small exchange can avalanche into a crippling Ice Nine of what is left of capital markets all over again, courtesy of crony capitalism, rampant criminality and a regulator and enforcement body that is more fascinated with midget porn than any regulating or enforcing of the very firms it hopes to get an assistant general counsel job from in a few short years.
http://www.zerohedge.com/news/someone-going-jail-mf-global-caught-stealing-hundreds-millions-customers

[banned from Kos]

15. the Doomers at ZeroHedge have been wrong for 2.5 years

law of averages should help them someday.

I watched doomer fave FAZ go from 1000+ to 25 while they said "buy".

[KoKo]

34. Many folks here don't have enough money to gamble on trading to visit ZH...

and participate in the cesspool of RW Fascists that post on the threads. The site, itself, started off good...but, one would be better served watching Max Keiser than spending time on ZH's comment section. For the most part, though...ZH does break some stories we need to know. It's just that they need heavy moderation over there to keep the trolls and weird folks who are obsessed ..under control.

[redqueen]

17. Secret meetings, meet-and-greets with key finance industry execs,

and his new chief of staff, who is a former Banker?

[Octafish]

18. There's a reason Goldman Sachs is above the law.

They're buy-partysons.

[suffragette]

21. That's the connection that stood out for me as well

Corzine - former Goldman Sachs
Mark Patterson, Treasury Chief of Staff - former Goldman Sachs
Adam Storch , Managing Executive of the Security and Exchange Commission's Division of Enforcement (position created in 2009) - former Goldman Sachs

[Octafish]

23. What a coincidence.

The 99-percent gets shut out of fiscal policy, economic decisions and regulatory oversight. Again.

PS: Thank you for the heads-up on Mr. Patterson and Mr. Storch. I hope they're well-compensated.

[suffragette]

29. Very cozy connections

for the 1%. For the 99%, agree with what you wrote.

Was just reading this from February 2011 and the disaster capitalism approach jumped out.


http://online.wsj.com/article/SB10001424052748704775604576120582242430722.html
FEBRUARY 3, 2011
Corzine Builds MF In Goldman's Image
Nearly a year after taking over as chief executive of MF Global Holdings Inc., former Goldman Sachs Group Inc. Chairman Jon Corzine is set to announce a series of moves that could turn the brokerage and trade-clearing firm into a mini-Goldman.

The 64-year-old Mr. Corzine, the former New Jersey governor hired in March 2010 to return MF Global to profitability and capitalize on tumult caused by the financial crisis, is expected on Thursday to outline new plans to expand the firm into asset management, possibly through an acquisition, according to people familiar with the situation. MF Global might consider deals that would generate 10% or more of the New York firm's future revenue, these people said.

~~~

Mr. Corzine started shaking up MF Global as soon as he arrived, including the elimination about 10% of jobs at the company, which now employs 2,857 people. Analysts expect MF Global to report a small profit for its fiscal third quarter, but Mr. Corzine views the company as a several-year turnaround project.


~~~
The Federal Reserve Bank of New York announced late Wednesday that it selected MF Global and French bank Soci?t? G?n?rale (sic) SA's U.S. unit to become the two newest securities dealers assisting the U.S. government in sales of Treasury debt.


I added the bold.

[girl gone mad]

31. Notice his first move..

was to fire lots of people. He was grabbing for cash from the start - as much cash as possible to put at risk betting on infinite bailouts.

This is what people were talking about when we said the financial bailouts were a fool's errand. Now it's moral hazard writ large. It must end.

[suffragette]

32. Agree, it must end.

It's so very blatant, isn't it?

[Safetykitten]

22. But...but...oh, nevermind.

[dbackjon]

24. Corzine has always been corrupt

That Obama would associate with him tells you whose side Obama is on - NOT OURS.

[banned from Kos]

27. Says who? on what basis?

Your credibility is no good without a link to prove past corruption.

[KoKo]

36. You'd have to give a few examples, though...to be believable here.

I know anyone who was head of Goldman-Sachs has to have some bad baggage...and Corzine got himself a Senate Seat and then moved on to Governor of NJ where supposedly he was not liked. I used to live in NJ...but that's way back and even then NJ had history of hating Governors from both parties once they got into office.

Some of his voting record in Senate was okay before he left. But, I can't remember if he was there when Clinton and Friends shot down Glass-Steagall Act or did the DeRegulation of the Media...plus some other dirty deals. I don't think he was there for NAFTA, though.

I'm too lazy to look up when Corzine ran and won his Senate Seat...and few here would care...so why bother.

[Tierra_y_Libertad]

30. Fat-cats + politicians = Our government

[KoKo]

33. Yes.....that's amazing if one thinks about it. CNBC says DOJ and FBI are Investigating

...so Obama is on top of this early so it won't hurt him... Not to worry.

[KoKo]

35. From the article, Obama claimed that Corzine was "his man on Wall Street"

Would make sense given Obama's very paltry record on prosecuting the criminals there. Now...he's got his hands full with this one. E.J. Dionne just wrote and article that Obama had escaped any scandals in his administration.

Want to know why? Because he refused to prosecute anyone who participated in what would have been considered "scandals" or "criminal activities" under Chimpy Bush's Administration.

So...Corzine will be interesting to watch.

[GeorgeGist]

37. I once heard Obama make the ludicrous claim ...

that he "always believed in capitalism". Yet there remain those who won't get it.