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Jamie's crew is probably safe, but it looks like Jon is facing his 'Kenny Boy' Enron moment, although he may find some shelter in the Sargeant Schultz defense. I know nothing. NOTHING.
I guess the fellows who said that they had found nothing incriminating in the emails forget to mention this one.
Edith O'Brien's appearance before the Congress just became potentially more interesting, although she could still plead the Fifth. I wonder if the email turned up because so did she.
Corzine will almost certainly claim that there was a mix up, and that he merely said to meet the margin call, but did not know it involved customer funds. He said, she said. Save the dress.
It also looks like the spin might be that it was a 'mistake' because they were mingling customer funds with 'excess firm funds' in some third account.
And then the Anti-Bernanke of the financial apocalypse vaporized the money and all traces of it. And everyone was happy, except for a few small specs.
No harm, no foul. Just a simple error. Fine and a wristslap and a promise to better when he gets back on his Street feet.
Great job Phil Mattingly of Bloomberg for snagging this Congressional memo and releasing it. I wonder which staffer slipped it. I'd book on GOP but I never really was a very sophisticated politico.
I still have major doubts for justice being done, but I do wish to see the customers released from their financial hell. Perhaps this will help.
Oh Jonny boy, the pipes, the pipes are calling....
Bloomberg
MF Global’s Corzine Ordered Funds Moved to JPMorgan, Memo Says
By Phil Mattingly and Silla Brush
Mar 23, 2012 4:04 PM ET
Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. (JPM) accounts in London, according to an e-mail sent by a firm executive.
Edith O’Brien, a treasurer for the firm, said in an e-mail sent the afternoon of Oct. 28, three days before the company collapsed, that the transfer of the funds was “Per JC’s direct instructions,” according to a copy of a memo drafted by congressional investigators and obtained by Bloomberg News.
O’Brien’s internal e-mail came as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify after being subpoenaed this week.
“Over the course of that week, MF Global (MFGLQ)’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers.
Vinay Mahajan, global treasurer of MF Global Holdings, wrote an e-mail on Oct. 28 that said JPMorgan was “holding up vital business in the U.S. as a result” of the overdrawn account, which had to be “fully funded ASAP,” according to the memo...
Read the rest here.
At the close there was breaking news regarding an email at MF Global identifying Jon Corzine as having ordered the customer funds transferred to meet a margin call. There is a more complete discussion and story of that topic above.
Gold and silver bounced back today, but they still finished up below key resistance. We'll have to see if they can continue to gain their footing and move higher next week.
Report Reuters UK: High Frequency Trading Distorts Commodity Prices
A dull day with only a little excitement as BATS exchange went IPO, and flubbed its own price quotes trading it for pennies, and a major error in APPl to the downside set off circuit breakers.
Other than that a snooze, with the usual uplift into the afternoon close after having been down most of the day.
Have a pleasant weekend.
"...How vainly seek
The selfish for that happiness denied
To aught but virtue! Blind and hardened, they,
Who hope for peace amid the storms of care,
Who covet power they know not how to use,
And sigh for pleasure they refuse to give,--
Madly they frustrate still their own designs;
And, where they hope that quiet to enjoy
Which virtue pictures, bitterness of soul,
Pining regrets, and vain repentances,
Disease, disgust and lassitude pervade
Their valueless and miserable lives...
But hoary-headed selfishness has felt
Its death-blow and is tottering to the grave;
A brighter morn awaits the human day,
When every transfer of earth's natural gifts
Shall be a commerce of good words and works;
When poverty and wealth, the thirst of fame,
The fear of infamy, disease and woe,
War with its million horrors, and fierce hell,
Shall live but in the memory of time,
Who, like a penitent libertine, shall start,
Look back, and shudder at his younger years."
Percy Bysshe Shelley, Queen Mab
This is an interesting article on MF Global and Jon Corzine more broadly.
It is the story of industry wide greed, influence peddling, and the weakening of the regulatory agencies in a combination of powerful persuasion and anti-regulatory ideology aggressively promoted by money from self-serving financial interests.
It is good to remember that attempts to regulate and reform the industry are blocked by a powerful minority at almost every turn, and that the CFTC has two Republican appointees who oppose most of the proposals that Chairman Gensler puts forward.
However, it is not clear at all what support Gary Gensler and his Democratic colleagues were able to obtain from the economic people in the Obama Administration, the tone of which was set by Tim Geithner and the now departed Larry Summers. The Obama Administration has been particularly hard on whistleblowers and internal dissent, and very quick to compromise on financial matters.
One thing that is lacking in American politics, that I have always admired in the Europeans, is the principled resignation. That is a tall order for a group of leaders who can barely scrape up enough moral fiber to take a principled stand, even on their own elected mandates, unless it is in the service of their rich and powerful benefactors in their ongoing game of thrones.
Vanity Fair
Jon Corzine’s Riskiest Business
By Bryan Burrough, William D. Cohan and Bethany McLean
"...Gary Gensler, a former Goldman colleague of Corzine’s, wanted to restrict the ability of a firm to invest its customers’ assets in sovereign debt and to use its customers’ cash to make loans to itself.
MF Global (along with the rest of the industry) freaked out, writing to the C.F.T.C. that the agency was trying to “fix something that is not broken.”
Corzine personally lobbied each of the C.F.T.C.’s commissioners, and after Gensler realized he didn’t have support from anyone, he was forced to delay a vote that was scheduled for July..."
Read the full article here.
