Financial News

[Jenksismyhero]

Well, since they published the same garbage last year or a few years ago. It's a pretty regular report for them.

 

 

 

But this study didn't specify HDTV's or smartphones. Just "television," which could be a $100 set from Walmart, or maybe a $50 Goodwill pickup. A "gaming console" could be a Nintendo 64. It just said "cellphone," which could be a cheap pay-as-you-go thing. The poor have the audacity to own cars (old beaters to get to their jobs that are probably 20+ miles away from their homes and for which there's no public transportation available). The reporting on this study by idiots like Hannity, though, will feature lots of images of fancy 60" LED TV's, PS3's, iPhones, etc. to drive that deceptive slight-of-hand home.

 

Being poor is about a lot more than not having the latest electronics, and having some relatively cheap entertainment devices to distract you from your otherwise grinding existence doesn't make you suddenly not poor. That's where the fundamental problem of these studies lies: focusing on a few material trinkets that do not actually reflect what poverty is or isn't.

 

Here's my problem with your take - it seemed to me by reading the summary of that report, that the point wasn't to say that no one in this country is poor, but instead to point out that what we perceive as "poor" isn't really poor so much as in a really s***ty spot. Is that a big enough difference to make a whole report and cause a cable news cycle to waste time on it? Eh, probably not. But I think when people think "poor" and "destitute" they think of the late 1920's-1930's when people ate a can of beans because that was literally all they could afford to eat (and often times that's how the media reports homelessness and poverty while relating that idea to the 30-40 million supposedly in that dire situation). The "poor" of today's society is a million times better than that kind of poor (or even the poor when compared to other areas of the world today). THAT is the point. Regardless of what kind of TV you have, or what kind of gaming console you have, those ARE luxury goods for the "poor" in the world.

 

Edit:

 

Here's the abstract btw:

 

Abstract: For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in “poverty,” but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as “in poverty” are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population. Poverty remains an issue of serious social concern, but accurate information about that problem is essential in crafting wise public policy. Exaggeration and misinformation about poverty obscure the nature, extent, and causes of real material deprivation, thereby hampering the development of well-targeted, effective programs to reduce the problem.

Edited December 16, 2011 by Jenksismybitch

[NorthSideSox72]

Well, since they published the same garbage last year or a few years ago. It's a pretty regular report for them.

 

 

 

But this study didn't specify HDTV's or smartphones. Just "television," which could be a $100 set from Walmart, or maybe a $50 Goodwill pickup. A "gaming console" could be a Nintendo 64. It just said "cellphone," which could be a cheap pay-as-you-go thing. The poor have the audacity to own cars (old beaters to get to their jobs that are probably 20+ miles away from their homes and for which there's no public transportation available). The reporting on this study by idiots like Hannity, though, will feature lots of images of fancy 60" LED TV's, PS3's, iPhones, etc. to drive that deceptive slight-of-hand home.

 

Being poor is about a lot more than not having the latest electronics, and having some relatively cheap entertainment devices to distract you from your otherwise grinding existence doesn't make you suddenly not poor. That's where the fundamental problem of these studies lies: focusing on a few material trinkets that do not actually reflect what poverty is or isn't.

I agree with this. However, I'd also agree with what kap is getting at - which is that for some significant % of people that are poor or low income, part of the reason they are there and not finding a way out is going to be their own choices. Note I said PART, by the way, and for SOME people. There are people who are low-income that buy a lot of stupid things. This also ties back to one of my favorite causes - financial education and the lack thereof.

 

Anyway, really, you are both right on this one. You can argue as to how many poor or relatively poor people have what % of situational fault their own, and how many of them make things worse by making stupid purchases, and no one really will have numbers to provide. But it isn't as simple or noble as you make it, nor is it as simple or completely self-driven as kap makes it.

 

[StrangeSox]

I agree with this. However, I'd also agree with what kap is getting at - which is that for some significant % of people that are poor or low income, part of the reason they are there and not finding a way out is going to be their own choices. Note I said PART, by the way, and for SOME people. There are people who are low-income that buy a lot of stupid things. This also ties back to one of my favorite causes - financial education and the lack thereof.

 

Anyway, really, you are both right on this one. You can argue as to how many poor or relatively poor people have what % of situational fault their own, and how many of them make things worse by making stupid purchases, and no one really will have numbers to provide. But it isn't as simple or noble as you make it, nor is it as simple or completely self-driven as kap makes it.

 

I don't think kap and I were disagreeing, really.

[Balta1701]

It just said "cellphone," which could be a cheap pay-as-you-go thing.

One can actually get an iPhone3G for free these days with a contract. If your family drops the home phone line, it's a fairly decent deal.

[StrangeSox]

Here's my problem with your take - it seemed to me by reading the summary of that report, that the point wasn't to say that no one in this country is poor, but instead to point out that what we perceive as "poor" isn't really poor so much as in a really s***ty spot. Is that a big enough difference to make a whole report and cause a cable news cycle to waste time on it? Eh, probably not. But I think when people think "poor" and "destitute" they think of the late 1920's-1930's when people ate a can of beans because that was literally all they could afford to eat (and often times that's how the media reports homelessness and poverty while relating that idea to the 30-40 million supposedly in that dire situation). The "poor" of today's society is a million times better than that kind of poor (or even the poor when compared to other areas of the world today). THAT is the point. Regardless of what kind of TV you have, or what kind of gaming console you have, those ARE luxury goods for the "poor" in the world.

 

Edit:

 

Here's the abstract btw:

 

Counter-point: inner-city ghettos, Appalachia, rural Ozarks.

 

And anyway yeah, nobody doesn't understand that poverty is at least somewhat relative. That completely misses the point. It's the huge blindspot in these types of surveys. Putting poor in scare quotes is an attempt to denigrate the actual difficulties that the poor face in an attempt to defend wealth privilege.

Edited December 16, 2011 by StrangeSox

[southsider2k5]

Counter-point: inner-city ghettos, Appalachia, rural Ozarks.

 

And anyway yeah, nobody doesn't understand that poverty is at least somewhat relative. That completely misses the point. It's the huge blindspot in these types of surveys. Putting poor in scare quotes is an attempt to denigrate the actual difficulties that the poor face in an attempt to defend wealth privilege.

 

Counter-counter point.

 

Those numbers don't add up to anywhere near 1 in 2, or whatever the garbage number was at the beginning.

[StrangeSox]

Counter-counter point.

 

Those numbers don't add up to anywhere near 1 in 2, or whatever the garbage number was at the beginning.

 

Good thing we weren't talking about that but about Heritage's dumb study, then.

[southsider2k5]

Good thing we weren't talking about that but about Heritage's dumb study, then.

 

You mean the thing that started the discussion and quickly turned to right wing ripping? Yeah.

[Balta1701]

Counter-point: inner-city ghettos, Appalachia, rural Ozarks.

 

And anyway yeah, nobody doesn't understand that poverty is at least somewhat relative. That completely misses the point. It's the huge blindspot in these types of surveys.

The real blindspot in those surveys is actually that they're somewhat correct in a sense...one can get things like a refrigerator, cell phone, even a fairly high-end TV for fairly cheap these days. Having satellite service doesn't bankrupt low income people any more.

 

The real issue is not the things that have gotten cheap enough to be affordable, the real issue now is the things that have become so expensive as to be unaffordable to people in the lower income levels...things like health care, transportation, food, housing, energy/heat, and education. That's the real scandal in these reports...the niceities actually have become cheap enough that you can have them without having to make very big sacrifices...but the staples, the things you actually need to build a stable life...those are the things out of reach.

 

Giving up your HDTV and your cell phone doesn't pay for a year of health insurance or a year of college for your kid. Giving up your X Box doesn't pay for gasoline or the surgery you need.

[StrangeSox]

You mean the thing that started the discussion and quickly turned to right wing ripping? Yeah.

 

The post you responded to had nothing to do with Victory's claim.

[StrangeSox]

The real blindspot in those surveys is actually that they're somewhat correct in a sense...one can get things like a refrigerator, cell phone, even a fairly high-end TV for fairly cheap these days. Having satellite service doesn't bankrupt low income people any more.

 

The real issue is not the things that have gotten cheap enough to be affordable, the real issue now is the things that have become so expensive as to be unaffordable to people in the lower income levels...things like health care, transportation, food, housing, energy/heat, and education. That's the real scandal in these reports...the niceities actually have become cheap enough that you can have them without having to make very big sacrifices...but the staples, the things you actually need to build a stable life...those are the things out of reach.

 

Giving up your HDTV and your cell phone doesn't pay for a year of health insurance or a year of college for your kid. Giving up your X Box doesn't pay for gasoline or the surgery you need.

Well, right, the focus on possession of a few material goods that are relatively cheap in our society and possessed by some in poverty as evidence that the poor aren't really poor exposes a deep ignorance of what poverty actually is or what it means.

 

edit: Read this to understand why trying to downplay the plight of poverty in this country is pretty insulting to tens of millions of Americans who struggle to get by every day.

Edited December 16, 2011 by StrangeSox

[southsider2k5]

http://www.cnbc.com/id/45697425/

 

Fannie, Freddie Ex-Officials Are Accused of Fraud

Published: Friday, 16 Dec 2011 | 10:48 AM ET

By: Reuters with CNBC.com

 

U.S. securities regulators sued former top executives at Fannie Mae and Freddie Mac on Friday, saying they misled investors over exposure to risky mortgages.

 

The U.S. Securities and Exchange Commission sued three former executives at Fannie Mae and three at Freddie Mac, including former Fannie Mae CEO Daniel Mudd and former Freddie Mac CEO Richard Syron. The civil charges were filed in two separate lawsuits.

 

The SEC said both firms have agreed to cooperate with the agency and have entered into non-prosecution agreements.

 

Freddie Mac and Fannie Mae have been propped up by about $169 billion in federal aid since they were rescued by the government in 2008.

 

"This is a lawsuit that should never have been brought in the United States of America," Mudd said in a statement on Friday. "Every piece of material data about loans held by Fannie Mae was known to the United States government and to the investing public. The SEC is wrong, and I look forward to a court where fairness and reason — not politics — is the standard for justice."

 

The SEC will hold a press conference at 11:45 a.m. to discuss the lawsuit. CNBC will stream the event online.

[Balta1701]

Civil charges but nothing criminal, I assume?

[Jenksismyhero]

The real blindspot in those surveys is actually that they're somewhat correct in a sense...one can get things like a refrigerator, cell phone, even a fairly high-end TV for fairly cheap these days. Having satellite service doesn't bankrupt low income people any more.

 

The real issue is not the things that have gotten cheap enough to be affordable, the real issue now is the things that have become so expensive as to be unaffordable to people in the lower income levels...things like health care, transportation, food, housing, energy/heat, and education. That's the real scandal in these reports...the niceities actually have become cheap enough that you can have them without having to make very big sacrifices...but the staples, the things you actually need to build a stable life...those are the things out of reach.

 

Giving up your HDTV and your cell phone doesn't pay for a year of health insurance or a year of college for your kid. Giving up your X Box doesn't pay for gasoline or the surgery you need.

 

But this is such bulls***. If you're going to use the argument "well if we don't pass healthcare reform people will be dying on the streets because 30 million are so poor already!" it's entirely reasonable to question how "poor" that 30 million really is. 30 million people in this country are not on the verge of dying on the streets anytime soon. They have a home, have food, and have luxury goods that cut against their claim that they're in such a poor financial position that they can't afford TO AT LEAST CONTRIBUTE to their healthcare, food, education, whatever costs.

 

You say you can get an iphone 3gs for free with a contract. Ok, well you've just signed up for 2 years at a minimum of 50 bucks a month for a cell phone plan and some data. Premium cable costs how much? On top of cable costs? Internet at home? We're not talking about some trivial amounts of money here. We're talking about hundreds of dollars a month towards goods that people don't NEED, regardless if it helps them pass the time in their otherwise difficult and s***ty lives.

 

I just don't understand this passive acceptance of people who are spending YOUR MONEY when they're not 100% working towards getting away from the system that's spending YOUR MONEY. No one wants people to die. No one wants people to go hungry. No one wants people to be homeless. Why is it so bad to EXPECT that those people are doing everything they can to not have to be in that system?

[Balta1701]

You say you can get an iphone 3gs for free with a contract. Ok, well you've just signed up for 2 years at a minimum of 50 bucks a month for a cell phone plan and some data. Premium cable costs how much? On top of cable costs? Internet at home? We're not talking about some trivial amounts of money here. We're talking about hundreds of dollars a month towards goods that people don't NEED, regardless if it helps them pass the time in their otherwise difficult and s***ty lives.

How F***ing much do you think the cheapest home, wired telephone service costs in this country?

 

You know what's helpful being able to find a job? Being able to receive a call from an employer.

 

And yes, if they went without the $600 a year bill using your numbers for a phone that you can constantly have with you, they could afford to buy private health insurance 1 year out of a decade, if they're not already sick. And if they went without that bill for 10 years, they could buy 1 year at an in-state school. So, tradeoff, 40 years with no phone service and you can send a kid to an in-state college.

 

No wonder it's so hard for people in poverty to ever get out of it in this country.

[StrangeSox]

Why is it that "those people" have to sacrifice everything to a grinding, miserable existence just to get out of that life while being judged and condemned by those in higher social classes if they do anything other than work constantly? Why should they have to live an existence devoid of joy while I can live one of relative luxury with minimal effort simply thanks to my birth?

 

Poverty is a social issue, not an individual issue. The fact that it is not literally impossible to escape poverty, merely exceedingly difficult with little or no margin for error, is not exactly a strong defense of the current system. That not all poor people are literally starving to death is not a reason to put poor into scare quotes or decide that they don't really need medical coverage. The cost of a few of these luxury goods (luxury being defined as anything above subsistence living, in this case) that provide some entertainment at very low costs for an entire family are completely incomparable to healthcare or education costs.

 

The report does not specify premium cable or high-speed internet. It doesn't specify smartphones with expensive data packages. It doesn't specify HDTV's or PS3's or iPods. It gives some catch-all categories for modern cheap consumer electronics and a few services, many of which can be had for very cheap costs and provide high entertainment/$ value for an entire family, and yet a significant number of poor people still cannot afford these things. The Heritage study does not support the idea that many poor people are spending hundreds of dollars a month on cable and internet and phones. What it does support is that electronics are pretty cheap these days, so cheap that many poor people can afford them. That is as far as you can really take these conclusions.

 

Arguments that blame the poor for being poor because of laziness or bad morals are ignorant of the realities of poverty at best.

[Jenksismyhero]

Why is it that "those people" have to sacrifice everything to a grinding, miserable existence just to get out of that life while being judged and condemned by those in higher social classes if they do anything other than work constantly? Why should they have to live an existence devoid of joy while I can live one of relative luxury with minimal effort simply thanks to my birth?

 

Poverty is a social issue, not an individual issue. The fact that it is not literally impossible to escape poverty, merely exceedingly difficult with little or no margin for error, is not exactly a strong defense of the current system. That not all poor people are literally starving to death is not a reason to put poor into scare quotes or decide that they don't really need medical coverage. The cost of a few of these luxury goods (luxury being defined as anything above subsistence living, in this case) that provide some entertainment at very low costs for an entire family are completely incomparable to healthcare or education costs.

 

The report does not specify premium cable or high-speed internet. It doesn't specify smartphones with expensive data packages. It doesn't specify HDTV's or PS3's or iPods. It gives some catch-all categories for modern cheap consumer electronics and a few services, many of which can be had for very cheap costs and provide high entertainment/$ value for an entire family, and yet a significant number of poor people still cannot afford these things. The Heritage study does not support the idea that many poor people are spending hundreds of dollars a month on cable and internet and phones. What it does support is that electronics are pretty cheap these days, so cheap that many poor people can afford them. That is as far as you can really take these conclusions.

 

Arguments that blame the poor for being poor because of laziness or bad morals are ignorant of the realities of poverty at best.

 

Because they are entirely dependent upon society for what they have. So yeah, I think there should be a slight expectation that they're doing everything they can to not take more social dollars than is absolutely necessary. That means choosing not to have that 3rd kid because you can't afford it. Not having a cell phone because you can't afford it. Not having cable because you can't afford it.

 

No one blames the poor solely because of laziness or bad morals. But that plays a part, despite your refusal to accept it.

 

And I still don't understand how someone can read that report and come to the conclusion that "whelp, that's just a bunch of rich guys trying to show that the poor people aren't poor afterall!" It's putting poverty into a context. It's comparing "poor," as in entirely destitute and homeless, with "poor," as in not middle class or above. The end result being the poor in this country have it pretty good, especially compared to the poor in the past in this country, and the poor that exists currently in other parts of the world.

 

 

 

[StrangeSox]

The problem is that that end result is trite and insulting and belittles the struggles millions of Americans face every day through no fault of their own. Laziness and bad morals are neither necessary nor sufficient conditions for poverty. Hard work and good morals are neither necessary nor sufficient conditions for not being in poverty.

 

When you say that they are entirely dependent on society for what they have, you expose two ignorances. The first and most important is that the poor are not some separate group of others but one part of a continuum. Many if not most people below the poverty line are working poor, people who work their asses off just to barely get by, and sometimes even working two jobs isn't enough. It's not enough when some of the most important expenses, child care, food, medical care, education housing and energy, continue to climb at rapid levels. Many Americans above the poverty line are one or two bad events--the loss of their job, for example, or an expensive medical emergency--from falling into the economic pitfalls of poverty even if their income is above what the government uses to classify poverty. They aren't all or even mostly lazy, shiftless druggies (despite previous objections by you in the face of contradictory studies) being righteously punished for their poor ethics and moral failings. Economics is not a morality play.

 

The second is that structures in the very society you say they are dependent upon are what create generational poverty. We have one of if not the lowest economic mobility ratings in the OECD. The idea of boot-strapping yourself out of poverty is one that is created from a view of class privilege. You can see this post for an illustration of this. Saying that the poor in this country "have it pretty good" is pretty damn insulting.

 

edit: a timely addition from Andrew Sullivan!

Edited December 16, 2011 by StrangeSox

[Jenksismyhero]

The problem is that that end result is trite and insulting and belittles the struggles millions of Americans face every day through no fault of their own. Laziness and bad morals are neither necessary nor sufficient conditions for poverty. Hard work and good morals are neither necessary nor sufficient conditions for not being in poverty.

 

Come on. You're a smart guy, I don't understand how you continue to ignore basic common sense. If you (1) work your ass of and (2) make proper life choices you will more than likely not be poor. Is it a guarantee? No. If you do neither and win life lottery will you be poor? No.

 

When you say that they are entirely dependent on society for what they have, you expose two ignorances. The first and most important is that the poor are not some separate group of others but one part of a continuum. Many if not most people below the poverty line are working poor, people who work their asses off just to barely get by, and sometimes even working two jobs isn't enough. It's not enough when some of the most important expenses, child care, food, medical care, education housing and energy, continue to climb at rapid levels. Many Americans above the poverty line are one or two bad events--the loss of their job, for example, or an expensive medical emergency--from falling into the economic pitfalls of poverty even if their income is above what the government uses to classify poverty. They aren't all or even mostly lazy, shiftless druggies (despite previous objections by you in the face of contradictory studies) being righteously punished for their poor ethics and moral failings. Economics is not a morality play.

 

By the very definition of establishing different classes that accept different type of government benefits, then yes, they are a seperatly identifiable group. I don't participate in food stamps, unemployment benefits, medicaid, etc etc. Nor do other Americans. And I forgot how this argument always ends - anyone who is not rich has made every proper decision in life, only they've been screwed in one or way or another, and they are entirely innocent of any blame whatsoever. Also, every poor person in this country is a single mother with three children. I forgot there are 30-50 million of them around. It's a shame that just by existing they always are, and always will be poor. Nevermind that people on a daily basis buy homes they can't afford, decide to have children they can't afford, purchase goods on credit when they have no money to pay, etc etc. Everyone that has ever been poor in this country is that way only because of the pre-birth societal hurdles placed upon them by the ruling class.

 

 

The second is that structures in the very society you say they are dependent upon are what create generational poverty. We have one of if not the lowest economic mobility ratings in the OECD. The idea of boot-strapping yourself out of poverty is one that is created from a view of class privilege. You can see this post for an illustration of this. Saying that the poor in this country "have it pretty good" is pretty damn insulting.

 

I like how you completely ignored the qualifier. Apparently living in a society that provides with you a home, food, education and healthcare when you can't afford it (with little to no expectations for that aid), all while allowing you to have other material goods (cheap or not) is not pretty good compared to the other poor people in the world. How dare I contend otherwise.

 

 

[StrangeSox]

Come on. You're a smart guy, I don't understand how you continue to ignore basic common sense. If you (1) work your ass of and (2) make proper life choices you will more than likely not be poor.

 

The core problem is that this "basic common sense" is empirically wrong, and the rest of your wrong ideas flow from it. You continue to moralize poverty and insist that it is a result of personal failings.

[Balta1701]

MF Global’s story, as you will soon understand it, raises serious concerns for any investor. That the activities that led to MF Global’s collapse were possibly legal (!) is stunning. The details are complex, but follow them through to the end and you will see all of the problems of our system — political corruption, excess leverage, focus on short-term profit at the expense of survival — in one sordid affair.

 

The MF Global story contains six elements that I found astonishing:

 

1. What MF Global did with client monies was “technically” legal (though it probably violated the spirit of the law).

 

2. Britain’s leverage loopholes provided a back door for U.S. firms such as Lehman Brothers and MF Global to “re-hypothecate” client assets — and leverage up.

 

3. As a result of MF Global’s lobbying, key rules were deregulated. This allowed the firm to use client money to buy risky sovereign debt.

 

4. In 2010, someone from the Commodities Futures Trading Commission recognized these prior deregulations had dramatically ramped clients’ exposure to risk and proposed changing those rules. Jon Corzine, MF Global’s chief executive, successfully prevented the tightening of these regulations. Had the regulations been tightened, it would have prevented the kind of bets that lost MF Global’s segregated client monies.

 

5. None of MF Global’s Canadian clients lost any money thanks to tighter regulations there.

 

6. Little noticed in this affair is (once again) the gross incompetency of the ratings agencies. Had they not been maintaining “A” ratings on Spain and Italy, MF Global could not have made its disastrous bets there.

Post

[southsider2k5]

Post

 

The first assumption is dead wrong. They didn't collateralize the investment like they were supposed to. Contending the broke the "spirit" of the law is garbage which would have led to #5 being just fine. It is illegal in the US to do what Man did.

[southsider2k5]

CFTC running the three and out offense... PUNT!

 

http://www.washingtonpost.com/business/cft...EE5O_story.html

 

CFTC puts off until July date for derivatives rules to take effect; will be 2 years after law

 

By Associated Press, Published: December 19 | Updated: Tuesday, December 20, 10:01 AM

 

WASHINGTON — Federal regulators have put off until July the date for rules to take effect bringing oversight to the market for derivatives, the complex financial instruments blamed for helping precipitate the financial crisis. That will be two years after enactment of the 2010 financial overhaul law mandating the rules.

 

The Commodity Futures Trading Commission announced Monday its second extension of the effective date for the rules. The original date under the law was last July 16, which the CFTC had extended to Dec. 31. The regulators haven’t been able to complete writing many of the rules. They say their complexity has delayed the process.

 

Derivatives are traded in a $600 trillion market worldwide. Their value hinges on an underlying investment or commodity — such as currency rates or oil prices.

 

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[Balta1701]

And I'm sure it's just a coincidence that this happened right after they failed to get the budgetary boost they requested to be able to pay for their expansion.

[NorthSideSox72]

What Man did was illegal. The loophole scared me too, but I looked more into it, and we now know more of what went on. Here are some pieces of info to help clarify for you and others...

 

1. The CFTC rule in question is about reinvestment on behalf of client cash, and does not apply to taking the money out of customer accounts. That law - the one with the big fat wall between customer and prop accounts - was clearly and demonstrably violated. That law may need changing, I'd agree there, but it didn't matter in this case.

 

2. For as much gruff as SOX gets in this forum for being burdensome, I'd like to point out that violations of SOX one way or the other may be the lynch pin in getting Corzine in fail. Basically, for money movements on this scale of any kind (even if spread over multiple transactions), Corzine and the CFO and probably others would be required to directly sign off on it. So even if Corzine claims he didn't know (see #3 below), it doesn't matter, because he had to know legally. Either he knew, lied to Congress and tried to cover it up... in which case he is going to jail. Or he didn't know and was signing s*** left and right not paying attention to major stuff, he violated the law, and... he is going to jail.

 

3. Corzine not only knew about this, he was one who was materially pushing his strategies and even doing some of his own trading. So he has personal, trader-level responsibility here for these actions, legally, and beyond just his role as CEO. He's in deep s***.

 

4. No one will like to hear this, but, when Terry Duffy (CME Group head) goes out there and says the system isn't broken, he is sort of right. He's wrong on a macro level, but in terms of this exact situation, he is right. CME Group was in the offices of MF Global on Wednesday, doing an in-person audit, and everything tied out. Thursday and Friday the money movements started occurring, and the daily reports sent to CME by MF were incorrect (can't say yet if they were falsified, missing data, whatever, but they were wrong). IB discovered Thursday and Friday the money was missing, which is why they pulled out of the potential buy. The movements made by MF were seen as temporary by the people who did it, either because they wanted to just get the sale done or they thought they could dig back out of the hole. Either way, since MF checked out on the audit, looked OK on the reports for two days, and was meeting its capital obligations to the clearing house and counterparties, there was no reasonable way for CME Group to know what was going on. This was multi-level, short term criminal enterprise, and all the laws and rules in the world would not have stopped it.

 

5. Here is the really s***ty thing for the futures world that a lot of people aren't seeing. All throughout this financial crisis of the past 3-4 years, all sorts of parts of the financial markets were getting slammed - swaps and OTC derivatives, mortgages and MBS', equity options, indicies, bonds... all had their crises, all looked terrible, and all now look like the bad guy. Listed futures, meanwhile, stayed remarkably clean and stable throughout. In particular the FCM's, who weren't entangled like the big IB's, were real winners in all this. And then, MF Global happened. Of course, the thing that destroyed MF was their prop business, not the futures brokerage. But that doesn't matter to much of the public. Futures are now evil.

 

6. One thing that WOULD have prevented this, is the Volcker Rule. I'll bet that rule is in place within 2 years in some form.

 

Please go back to your regularly scheduled sniping.