Here Comes The Politicization Of MF Global: Former Goldmanite Gensler Says MF Failure Example Of "Freedom To Fail"

Tyler Durden's picture

We find it supremely ironic that one former Goldmanite, in this case the CFTC's Gary Gensler, takes credit (doing the people's work this time?) for allowing the failure of what is now a documented criminal enterprise, MF Global, run by another former Goldmanite, Jon Corzine, and claiming this was nothing less than an example of "Freedom To Fail". The NYT quotes Gensler: "This was an example of a financial institution having the freedom to fail,” he said in response to questioning from Senator Carl Levin, the Michigan Democrat who chairs the Permanent Subcommittee on Investigations. “I don’t think there’s any taxpayer money behind this.”" No, Gary, there is just client money behind this. Anywhere between $700 million and $1.5 billion. Money that was stolen, and had MF global been bailed out, you, the CFTC and the US Government would have been complicit in a prima facie felony. So please - no need for the pathetic pandering to the lowest common denominator that only years of Goldman tenure can hone to this level of perfection. The only question is whether the CFTC, together with that other corrupt regulator which oddly enough is not yet run by a third Goldman alum, has the "freedom to jail."

More from NYT:

The top regulator tasked with overseeing the bankrupt brokerage firm MF Global said Thursday that the search continues for more than $630 million in missing customer funds, warning that the protection of client assets is essential to doing business on Wall Street.


Gary Gensler, chairman of the Commodity Futures Trading Commission, said his agency is still investigating the firm, a powerhouse commodities brokerage run by former New Jersey governor Jon S. Corzine.


“The most troubling aspect about the MF Global situation is the shortfall of customer money at the firm. Segregation of customer funds is the core foundation of customer protection in the commodity futures and swaps markets,” he said in prepared testimony. “Segregation must be maintained at all times. Simply put, that’s every moment of every day, down to the nano second.”

And here is how efficient Gensler is at enforcing "stuff"

Mr. Gensler first spotted a potential shortfall late last week, personally calling MF Global’s attorney to alert the firm. But it was not until around 2 a.m. Monday morning that the firm fully recognized the magnitude of the missing money. The disclosure sent bidders fleeing and the firm had no choice but to file for bankruptcy

All that is irrelevant: expect Obama to promptly make the pubic circuit claiming it is only due to his policies that MF Global was not bailed out, criminality be damned.

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TruthInSunshine's picture

If MF Global had owed Goldman & JPM money on counterparty derivative bets, you can sure as hell bet that MF Global would have been bailed out a la AIG style (i.e. 180% on the dollar).

bdc63's picture

yep.  this might even be a ploy to get the average joe to BEG for bank bailouts in the future (since OBVIOUSLY the bailout can now be seen as benefitting Main St as much as Wall St).

they are such scum I put NOTHING past them


max2205's picture


Pladizow's picture

This piece of shit says the type of things you would expect from some one who looks like:

Schmiegal + Crack Head + Aids/Cancer Patient + Crypt Kepper + Rat + Skeletor = Gary Gensler!

nope-1004's picture

Banks, brokers, and financial "innovators" can be lumped into one class:  Crooks.

White-collar-criminality is the new norm.  Corzine needs to go to prison.  Gensler needs an ass woopin'.


tickhound's picture

An example of "Freedom to Decide Who Fails"

Nascent_Variable's picture

Exactly.  White collar crime also presents a unique opportunity for one group - OWS.

This is the point that should be their rallying cry.  Everybody can agree that criminals on Wall Street should go to jail.  Focus on that, and the movement could really build momentum.

Plus, if they start by demanding Corzine be prosecuted, they can distance themselves from Obama and the professional left and establish themselves as a movement of the people, independent of party bickering.

Pitchman's picture

So right you are. But what of the FED PONZI?


Can you say; Counter Party Risk?  See how money, created out of thin air has exploded the worlds financial sector and, it can disappear as if it never existed: Evaporation of Wealth on a Vast Scale: How $Millions - Trillions Can Disappear



When it comes to financial terrorism, waged against the people, the President has abdicated his Constitutional Oath and that is an act of Treason.

See: HOUSING: To Solve The Problem You Have To Force Very Large Banks To Recognize Loses


THE FED’S DEBT SLAVERY ECONOMIC MODEL is the genesis of funding for the elite money power.  Such power concentrated in the hands of so few is the most pernicious corrupting force, for which all others follow.



- Inflection Point

TruthInSunshine's picture

It does bear repeating.

The 7 easy steps to controlling the world without doing any physical, mental or any other kind of work (let's call it, oh, I don't know - The Red Shield Method):

1) Buy off/bribe/blackmail/extort/destroy any lawmaker/politician/military officer who poses a risk of thwarting your plans. *Very important first step.

2)  Create fiat using nothing more than an computer/ledger entry, backed by nothing of inherent value, that has legal recognition, and in fact, is a monopoly currency with no legally recognized alternatives.

3)  Circulate such fiat via loaning it out, charging interest upon it.

4) Successfully get nations (war is a fantastic motivator to borrow), business entities and individuals (food is a great motivator) to borrow said worthless fiat that was conjured from thin air, and pay interest, pledging their real, inherently valuable assets in exchange for said worthless fiat (i.e. meaning that their real, inherently valuable assets can be taken if the conditions that make it impossible for them to repay the worthless fiat are [intentionally] induced).

5) Set the rate of interest payable on the loans of fiat that was conjured from thin air, solely at their discretion.

6) Supply more of such fiat, or withdraw fiat, to/from the system, at their discretion, bringing about inflation or deflation.

7) During times of large scale loan defaults, on the repayment of the fiat that they conjured from thin air, backed by nothing of inherent value, seize the most valuable assets that exist on the planet, many of which mankind depends on for its very survival.

Logans_Run's picture

Actually, I am wondering if this wasn't a "collateral squeeze" by GS or JPM. "Separate accounts be damned, this is a collateral call, pay up asshole."

kaiserhoff's picture

Smells like it, doesn't it?  There are no exchanges for this shit, and no solvent bankers left who can actually parse these trades, so where did the "margin" call come from?

Mr. Poon's picture

Umm, MFG does in fact owe JPM money, and a lot of it, on an unsecured line of credit.  Did you even read the bankruptcy filing?

And to Tyler's original article, the CFTC and the SEC do not have the "freedom to jail", as they are only able to assess civil penalties; all criminal charges have to be brought by the DOJ, by law.  Which, typically, involves extensive investigatory work, followed by an indictment, and then a trial, typically by jury, etc., because, you know, of all the Bill of Rights innocent-until-proven-guilty stuff.

Honestly, all the rhetoric around here would be a lot more compelling if there was a demonstration of even the slightest familiarity with the workings of the law.

cowdiddly's picture

Sorry Bud you can be indicted and arrested immediately at a crime scene. The news should have broke by Corzine being lead away in handcuffs. Now get back to CNBC where you belong.

tarsubil's picture

That's true. JPM is owed the most at 1.2 bn. The question then is how much toxic Euro bond crap did they buy up from the big players? How do the two compare?

Call me a cynic but I'm doubtful that Corzine ends up anywhere but on the beach looking good, feeling good.

The Big Ching-aso's picture

"Freedom to Bail.   Freedom to Fuck Up.  Freedom to Bonus."

Freedom's just another word for no one left to accuse.

Tsar Pointless's picture

"Life, liberty, and the pursuit of failure." The new American slogan.

BTW, upon hearing this news, the Average American...oh, who am I kidding here, right?

The Average American has been rendered thoughtless by years of Kardashian and Idol overload.

The continued fascist takeover of the world may proceed accordingly.

earleflorida's picture

when your working three part time jobs, seven days a week at the employers scheduled discretion, and your partner juggling between getting the kids off to school, and/or back home to be fed -  doesn't give one much time to follow the news,... especially when a roof over your head and food on the table are at maximum survival mode today

Divided States of America's picture

And to all the Goldmanites still employed at God's Shrine, its called the 'Freedom to receive bail'

DormRoom's picture

you have to apply the 'Madoff rule' to situations like this.  You have to steal tens of billions to be jailed.  Look @ Mozilla.. dude's still well tanned and free.


So if you're going to risk.  risk tens of billions.  That's the lesson learned by big money.



Segestan's picture

So in other words .... the market is lawless. Only works when they need it to.

topcallingtroll's picture

It is just too hard to trace down all the money and gather evidence against the guilty parties. Give CFTC a break. They arent up to the task.

SheepDog-One's picture

Their federal regulator watchdog jobs are just too HARD to actually perform! But theyll keep the lavish pay, 'above the law' status all the same since their jobs are so 'important' and all.

slewie the pi-rat's picture

gensler is a bankster;  some say a "rothschild" cabal agent

quite the dog & pony show he's been staging for the last few years

way to bich-slap him, tyler!!! 


kaiserhoff's picture

Then they should send their fat paychecks and bennies to me.

Segestan's picture

I get that.. but if they need a break than what does that mean? are they not up to the task, is the task undoable .. what? They have a mandate to protect the public interest what break do they need.

karzai_luver's picture

They don't need a break, when you know that YOU are going back to the gvt backstopped "private" sector you don't burn those bridges.

As long as you rotate the same scum in and out they will always find it too tough a job.

They are stacking chips to use on the outside.

simple and in your face.


Segestan's picture

I tend to agree. What profession gets a break? None that is professional.

karzai_luver's picture

Gensler should be IN JAIL , the scum.

Do somethng you idiot twat.

We know there is FREEDOM TO FAIL, you and the other clueless shills demonstrate that every day.

What a clown show.

Mad Max's picture

Hell is far too good for this kind of person.

I hereby sentence him to New Jersey.  Camden, New Jersey.

alien-IQ's picture

there seems to be no limit to the spin these soulless motherfuckers will sink to in order to preserve their own kind.

fuck the pitchforks, break out the guillotine.

TheGameIsRigged's picture

Agreed - to watch the pom pom wavers at CNBC makes me physically ill.

They are ATTACKING Sean Egan of Egan Jones for their downgrade.  Are you f'ing serious?  THEY ARE DOING THEIR JOB you dumb f'ers!!


If people were going to jail for this stuff - it would stop happening - simple as that.

fuu's picture

Waterboarding all around!

"Mr. Gensler first spotted a potential shortfall late last week, personally calling MF Global’s attorney to alert the firm. But it was not until around 2 a.m. Monday morning that the firm fully recognized the magnitude of the missing money."

Careless Whisper's picture

I'm seeing so many stories about the 2 a.m. discovery of the "missing money" (aka the stolen money) that I'm starting to think that it was standard operating procedure to comingle client money with frim money, and all these stories are an intentional plant; just my opinion.


fuu's picture

It is just about the only way these firms have ANY money.

"I'm starting to think that it was standard operating procedure to comingle client money with frim money"

bania's picture

I think Vinny McCrudden put it best...

"...and that fucking corrupt fucking midget [G.G.]"

AcidRastaHead's picture

So who's freedom becomes trampled in the TBTFs?  Rhetorical.

LawsofPhysics's picture

One reason I now search for your avatar, nice.

Vergeltung's picture

very nice, full-hipped woman. +100

Biggvs's picture

expect Obama to promptly make the pubic circuit

Say what???

azzhatter's picture

I would love to punch Gensler in the dick

SRV - ES339's picture

... that would be anywhere north of the shoulder

Seasmoke's picture

the Goldman cockroaches are everywhere.......EXTERMINATE !

LawsofPhysics's picture

This fucknut misses the point.  The freedom to fail is obvious everywhere, it is the having to "suffer the consequences of the law and your actions" part that isn't working numbnuts.  Get the god damn guilotines out already.

Crash the fucking system already so we can find out exactly what the value of everyone's labor is. 

Josh Randall's picture

Isn't Gensler the corrupt POS that allows PM manipulation ? Like he is a beacon of Truth or something

Big Corked Boots's picture

Does anyone know where Corzine is? Has anyone seen him? Has that self-important bastard left the country or is he going to allow the authorities to arrest him?