MF Customer: $50M Commodity Account Gone

ancona

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When I read the entire story, on ZH I believe, I threw up in my mouth a little bit. It is absolutely disgusting that John Corzine is not being held on no bond in a federal holding cell. That man knowingly stole money from clients to cover his levered Euro area bond bets. This scumbag should be hung by his balls in the town square.

If every single cent is not returned to investors, and I mean quickly, this risks the destruction of CONfidence in the clearing system as it is currently operated.

Right now, the financial system is a faith construct, requiring the unwavering belief that your investment accounts will be handled exactly as promised. When that faith is shaken, all hell breaks loose. It is my greatest hope that every single person who had even the smallest little chip of information or knowledge of the movement of "segregated funds" in to the company trading account and in to JPM vaults, does hard time. And by hard time I don't mean a white collar country club like Sauffley Field, I mean Pelican Bay.
 

h4rdware

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This comes back to Milton's 'ways of spending' matrix - combined with the delusion that 'temporary fraud' is not fraud until it's 'called in'. At least, it was a delusion until the #3 crowd got backstopped by the #4 crowd below...


The 4 Ways Of Spending

1) Spend your own money on yourself (very discerning)

2) Spend your own money on somebody else (with definite limits but less discerning)

3) Spend somebody else’s money on yourself (too easy)

4) Spend somebody else’s money on somebody else (endless, bottomless pit)
 

ancona

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You're so right H4rdware, it is ever so easy to lose sight when it's someone else's money. That's the problem with our government as well. They find it all together too easy to spend our money.
 

KMS

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You're so right H4rdware, it is ever so easy to lose sight when it's someone else's money. That's the problem with our government as well. They find it all together too easy to spend our money.

Right, because no matter how bad they mess it up for us, they will still get paid in the end.
 

swissaustrian

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Sounds like a bit of bad risk managment by Highridge imho. They could have moved their money out before the collapse. Institutional investors of that size should have had the capacity to foresee the collapse of MFG. Afterall MFG bonds clearly indicated trouble weeks before the bankruptcy.
Probably, Highridge didn´t monitor it´s counterparties at all. The futures industry usually doesn´t pay a lot of attention to these risks. I´ve described this here: http://www.pmbug.com/forum/f13/gold-silver-cot-reports-show-traders-abandoning-comex-261/#post1555

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Regardless, it´s still theft and people should be in f.ck.ng jail. :doodoo:
 

ancona

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We will see some justice theater, with a few sacrificial lambs getting a few years of soft time and probation. Since it is a connected man who oversaw the whole mess, he will use the famous "It was a rogue trader" defense.

Our world has truly become a screwed up place.
 
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