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Must Read: Presenting The MF Global Black Box: A Minute By Minute Breakdown Of The Doomed Broker's Last Week On Earth

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Thu, 12/15/2011 - 19:33 | 1985446 Benjamin Glutton
Benjamin Glutton's picture

sold 1.3 Billion in Commercial Paper through JPM but JPM kept the funds according to todays testimony by Corzine.

 

 

JPMugger bitchez!

Thu, 12/15/2011 - 19:35 | 1985454 Tyler Durden
Tyler Durden's picture

Read this to understand why JPMorgan, due to being one of only two tri-party repo clearers, effectively can do anything it wants in the capital markets:

A Rare Glimpse Into The Fed's Discount Window Courtesy Of The Brewing Lehman-Barclays Scandal

And then read this:

Tri-Party Repo Infrastructure Reform

...And then everything will start falling into place.

Thu, 12/15/2011 - 19:37 | 1985461 trav7777
trav7777's picture

they need to go to the bottom of the ocean

Thu, 12/15/2011 - 19:44 | 1985487 spiral_eyes
spiral_eyes's picture

I really wish more people would explicitly call them Motherfucking Global. It would nicely reflect the contempt and disgust we all feel for that snivelling reptile Corzine.

Thu, 12/15/2011 - 19:52 | 1985502 redpill
redpill's picture

If these morons had been just a bit more forward-looking when they got intially downgraded and insured they had a massive surplus in segregated funds, the IB deal would have gone through.  But it's sad they even got to that point.

 

A company that had weathered the torrid winds of the financial world since 1783, only to be brought down in less than a week thanks to beligerent bets and gluttonous leverage.  The arrogance and myopia is simply staggering.

Thu, 12/15/2011 - 19:55 | 1985522 Canaduh
Canaduh's picture

How interesting to see a firm sacrificed on Samhain.

Thu, 12/15/2011 - 20:05 | 1985570 youLilQuantFuker
youLilQuantFuker's picture

Wait. Can someone break this all down with Tweet like precision cuz I'm missing it.

Let's call it a ZHweet. It will help the ZH handicap or otherwise intoxicated community.

Thu, 12/15/2011 - 20:14 | 1985588 redpill
redpill's picture

 

- Corzine insists on making huge investments in risky Euro bonds, meanwhile his company is carrying 37x leverage and is losing money.

- Company gets downgraded due to the above circumstances

- Margin calls ensue after MF Global is downgraded to junk

- They run out of money and start using segregated client funds to cover their shortfalls elsewhere in desperate hopes that they get bought by Interactive Brokers

- IB hears about the shortfall in segregated funds and gets out of dodge

- Bankruptcy

- Some poor CME bastard named Mike Procajlo stays up for about 3 days (soldier!)  trying to figure out what the fuck is going only to realise it's a lost cause

- Where's the money Corzinowski?

 

Thu, 12/15/2011 - 20:19 | 1985605 WestVillageIdiot
WestVillageIdiot's picture

Thank you for the synopsis.  I know somebody whose uncle had money with MF.  I am trying to find out where he stands with his attempts to get his cash back.  The guy I know says his uncle is a douche bag so i don't really feel bad for the guy.  I'm just curious to know how many of these people will not see the return of their funds.

Don't forget what old Will said.  "It is not the return on my money that makes me nervous.  It is the return of my money that makes me nervous."  I am as guilty as anybody at chasing return.  I think I have finally broken myself of that habit.  I find I care about this stuff a lot less when I am not fighting for an extra nickel but losing a dollar.  Bury it in the backyard and sleep well. 

Thu, 12/15/2011 - 21:08 | 1985704 Cheesy Bastard
Cheesy Bastard's picture

Don't worry, the nickel will be worth more than the dollar soon.

Fri, 12/16/2011 - 00:29 | 1986026 alchemystic
alchemystic's picture

Already is, I checked the other day, $100 face value presidential dollars valued at about $5.95, $100 face value nickels valued close to $100, but hey, copper right now is a little down

Fri, 12/16/2011 - 02:02 | 1986136 Harlequin001
Harlequin001's picture

Aw c'mon, I mean anyone can make a $900,000,000.00 accounting error.

Happens all the time...

Some you win, and some you lose...

That's what 'suspense' is for, to be left hanging by the neck until dead.

Fri, 12/16/2011 - 04:30 | 1986229 TruthInSunshine
TruthInSunshine's picture

I'm late to this party, but I see that Zero Hedge has yet again broken a hard news financial story-scandal that the Lame Ass Main Stream Media apparently is too incompetent and/or corrupt (I know that the latter is where my bet is on, given the octopus tentacles of all MSM proxy channels being owned by no more than 8 - how ironic- corporations) to do so itself (just like with the niceHFTfrontunning&tick-splitting-collocater-servers you have there story that 60 Minutes just barely scratched upon 2 years after ZH broke it open).

When Jamie BloodDiamond as custodian of JP Morgan & Lloyd BlankCheckThief as custodian of Goldman Sachs were asked why they imbedded their tentacles in the Fractional Reserve Federal Reserve as a means of robbing taxpayers & just about anyone they damn well chose to, they responded:

"Because that's where the money is."

If you or someone you know lost money and are now in the dark as to what happens, I can guarandamntee you that The Bernank, lauded scholar of the Great Depression and prestigious Federal Reserve Chairman, knows a boatload about how MF Global WAS imploded, given its status as a Primary Dealer, which allowed it special privileges vis-a-vis its Overlord, The Federal Reserve 'Bank' (and especially the New York Fed Branch, ex-stomping grounds of one Timothy Franz Geithner).

 

Here's a guest post article ZH ran two weeks or so ago (Pollock: So that's why you're calling Jon Corzine a chicken on CNN? Koutoulas: Yes, where's the money, Jon?), where I commented on what I knew then, regarding legal procedure that would have been appropriate pending even the remote possibility of commingling or draining/wasting of client accounts at MF Global, which, as it turns out, is moot, since all of the shenanigans (hundreds of millions of shenanigans) were done while the incompetent and/or corrupt regulators were literally all hands on deck, prior to MF Global's filing for bankruptcy:

http://www.zerohedge.com/contributed/pollock-so-thats-why-youre-calling-...

I am perplexed.

In a case like this, the first thing the attorney(s) for the clients having accounts at MF Global should have done is file an emergency motion for a temporary restraining order to prevent MF Global from accessing, utilizing, removing, moving, transferring or in any other manner disturbing those accounts as they stood as of the second of the filing of the bankruptcy petition of MF Global, and a motion to show cause as to why they haven't provided details of where such monies are now residing (which entity and geographic location), who has and has had access to such accounts/monies since (and prior to) the filing of the bankruptcy petition of MF Global, along with a corollary motion to compel the MF Global bankruptcy trustee to provide a detailed accounting of information relating to these accounts (as already stated above).

No sane judge would deny this clearly necessary relief given the very real dangers of waste, commingling, assertion of priority over cash and non-cash assets (including chattel) of the now bankrupt MF Global.

If this is a matter of creditors standing in line and fighting over priority, even if one assumes that any creditor of MF Global takes precedent over retail account holders, the above listed motions could all be granted, and the TRO could also be issued, as well, while things get sorted out, irrespective of insurance issues, such as Securities Investor Protection Corporation (SPI), etc.

Orders consistent with these motions would merely ensure that the status quo ante is maintained while the proceedings regarding MF Global's bankruptcy are sorted out (aka mitigate against improprieties and risk of wasting of monies held in retail accounts), as these risks lead to irreparable harm to those owed money or whom the MF Global trustee does or will owe refunds, monies, etc.

 

So...new modus operandi = do all criminal activity - when one is a primary dealer, headed by an ex-senator, ex-CEO of another Primary Dealer (i.e. Vampire Squid), and Obama Bundler, being part of the incestuous network of vipers that feeds off of and networks with The Federal Reserve 'Bank' & The Bernank, well before any measured steps towards the filing of your bankruptcy petition are prepared, because given your status on all accounts (pun intended), you're rubberstamped and bullet proof, with the worst case scenario being that you'll be on the receiving end of a 'get out of jail' card one way or another (even if by Presidential Pardon).

Sat, 12/17/2011 - 17:55 | 1990334 Mauibrad
Mauibrad's picture


Check it out Tyler, officially a new word, de-hypothecation

http://www.urbandictionary.com/define.php?term=de-hypothecation

Thu, 12/15/2011 - 21:22 | 1985745 Surly Bear
Surly Bear's picture

Yes, Tyler, thank you so much for covering this story. 

Fri, 12/16/2011 - 00:38 | 1986036 Oh regional Indian
Oh regional Indian's picture

Ahhhah! Nice. Putting a voice to "the" Tyler or "A" Tyler? Curious minds want to know!!! ;-)

ori

/this-that-and-the-4th-reich/

Fri, 12/16/2011 - 03:22 | 1986215 Mauibrad
Mauibrad's picture

Tyler, did you click down to this:

"Most articles have posited or assumed that the counterparty to the $6.3 billion European debt repo-to-maturity trades was a large Wall Street entity, such as Goldman, JP Morgan or even Nomura. This is likely not the case because regulatory filings of the broker/dealer unit indicate that, as of March 31, 2011, the counterparty was an affiliate of MF Global Inc." 

Much more on JPM in this at:

From:  http://english.economicpolicyjournal.com/2011/11/mf-global-bankruptcy-cheat-sheet-where.html

Sat, 12/17/2011 - 03:37 | 1989564 Tompooz
Tompooz's picture

wow.Never realized that Max Keiser was with PressTV at that time. The last few years have made him older. Tks for the links.

Fri, 12/16/2011 - 02:44 | 1986178 surfersd
surfersd's picture

I'm a commodity trader for 30 years and I got had 150k stuck there. have 60% back now another 12% coming next week. What is fucked up is that I saw it coming on the Wednesday before, but was traveling, called my IB in the AM on Friday morning talked to back office and they said no problem they'll send the wire. Called a buddy who managed a fund which I had about the same in and told him to get the money out. Couple hours later he texted and said our money was out. Didn't look into my bank until Monday thinking that my call to wire funds happened hours earlier. Unfortunately, my money never got out.

I ran a very large FCM energy commodity desk for a long time and for some wires to make it through and others were not able means something is seriously wrong. I do believe that I will get my money back, but the damage that has been done to the commodity market is irreparable. 

To listen to Barney Frank talk about hte need for more regulation makes me sick. Corzine's butt buddy Gensler recuses himself and then Corzine the CEO resigns after one day, so he can plead that he knew nothing.

Please I will give up by 28% to see these guys hang.

Gold bitchez

 

Mon, 12/19/2011 - 06:33 | 1993542 Cadavre
Cadavre's picture

Heard or read (maybe Celente said) - but 72% is about all you'll get back,

I am still trying to figure out what's going on behind the mirror - i mean come on - 1.2 Billion - that's chump change - it costs more than that to turn the heaters and lights on at the Rayburn Office Building CSPAN Studio - and what happened to all the receipts from all the congressional page kiddie porn CD's - shouldn't taxpayers be getting a royalty off that enterprise too, because, and despite whats any of em say  - cable  companies don't pay for CSPAN coverage - taxpaying cable company subscribers pay for CSPAN coverage (no subscribers - no cabel companies) AND those very same cable subscribers (and non sunscribers) also own all the real property and structures in DC - I just don't get it anymore.

America love - or - or - or put a big air tight tent over DC and have the Terminex guy pump it full of bug juice - whatever escapes through the seams can be used as chum.

Thu, 12/15/2011 - 20:36 | 1985638 youLilQuantFuker
youLilQuantFuker's picture

Claro. TY Pill.

Thu, 12/15/2011 - 20:21 | 1985606 Careless Whisper
Careless Whisper's picture

Approx. 1 a.m. - 2 a.m.  - CME learns the deficiency is real.

Note to CME: The person at the other end of the deficiency was once the CEO of GoldmanSachs.  It shouldnt take until 1 a.m. to figure this one out.

 

Fri, 12/16/2011 - 00:25 | 1986022 palmereldritch
palmereldritch's picture

Based on the disclosed discovery timeline, Corzine should be changing his name to Waldo

Fri, 12/16/2011 - 01:20 | 1986094 Leraconteur
Leraconteur's picture

Let me guess. Gen X or Millennial, right?

Learn to read and keep focus for more than 140 characters. Others who can are not going to be around to hold your hand and do your work for you.

Fri, 12/16/2011 - 11:59 | 1986941 UnderDeGun
UnderDeGun's picture

Really? You couldn't understand a simple written timeline? :sigh: (40 characters is right on for tweet-tards).

Thu, 12/15/2011 - 20:01 | 1985555 WestVillageIdiot
WestVillageIdiot's picture

I will bet every penny we have to our name that had Jon Corzine run this company in 1784 they would have been out of business before George was inaugurated.  Probably much earlier. 

Thu, 12/15/2011 - 20:07 | 1985575 redpill
redpill's picture

Undoubtedly.  Make no mistake, this utter disaster is at the feet of Jon Corzine.  It was his insistance on the heavy investing in peripheral EU bonds and continued high leverage combined with weak earnings that caught the attention of ratings agencies to begin with.  Everything that happened since was a snowballing clusterfuck of incompetance and complete vacuum of leadership.  He is a total failure.  If there ever was a time to pierce the corporate veil, this would be it.

Thu, 12/15/2011 - 20:09 | 1985582 WestVillageIdiot
WestVillageIdiot's picture

Thank you for that.  I like your anger.

Thu, 12/15/2011 - 22:49 | 1985887 ljag
ljag's picture

I do not know what to think anymore. I am kinda lost on that "other side of the trade" thingy

Fri, 12/16/2011 - 03:05 | 1986195 Bringin It
Bringin It's picture

I am amazed that so few have pointed out the similarities with his (Corzine's) most recent turn on stage, prior to MFGlobal.

"When Jon Corzine was governor, the state of New Jersey invested $180 million of the New Jersey pension fund in Lehman Brothers, only months before Lehman went bankrupt. That was a very risky investment, and it was almost all lost."

http://www.app.com/article/20111205/NJOPINION02/312050011/Corzine-should...

It's so blatant!!!!!!! 

First they came for Lehman ... I did nothing.

Then they came for MF Global ... ...

Anyone who runs is a VC.  Anyone who stands still is a well disciplined VC

http://www.youtube.com/watch?v=S06nIz4scvI

 

Thu, 12/15/2011 - 20:16 | 1985598 Jumbotron
Jumbotron's picture

Actually Corzine is the reincarnation of this guy.......

http://en.wikipedia.org/wiki/William_Duer_%28Continental_Congressman%29

who caused this.....

http://en.wikipedia.org/wiki/Panic_of_1792

and ended up here......

http://en.wikipedia.org/wiki/Debtor%27s_prison

Which is what we need to turn Guantanamo Bay into for Corzine and his ilk.

Waterboard wishes and hide the soap dreams.

Thu, 12/15/2011 - 21:04 | 1985679 Mactheknife
Mactheknife's picture

Took the guys from IB two hrs to figure this out.  So...if stealing 1.2bil and lying to Congress doesn't get your ass thrown in jail, what will?  Oh wait...PROTESTING against assholes who steal 1.2bil and lie to Congress...that's the ticket.

Thu, 12/15/2011 - 23:06 | 1985904 hedgeless_horseman
hedgeless_horseman's picture

 

 

flag as awesome (1)

 

If only we could get people to understand that they should be protesting against assholes who steal 1.2bil and the assholes in congress who enable and protect them.

Fri, 12/16/2011 - 06:02 | 1986283 Calmyourself
Calmyourself's picture

"and the assholes in congress who enable and protect them."

+1.2 billion, the assholes who enable the entire stinking ponzi..

Fri, 12/16/2011 - 00:31 | 1986029 island
island's picture

And just to add evidence to your point, read this post:

"My Occupy LA Arrest"

http://myoccupylaarrest.blogspot.com/2011/12/my-occupy-la-arrest-by-patr...

.............

IMHO, any politician who knows about this, up to and including the POTUS, and isn't shouting about it, is a traitor to the people and our country.

Thu, 12/15/2011 - 20:00 | 1985547 Centurion9.41
Centurion9.41's picture

Don't forget the Refco legacy....

Thu, 12/15/2011 - 20:42 | 1985650 johnu78
johnu78's picture

PREACH IT BROTHER, PREACH IT!!!!!!!!!

 

-John
http://www.youtube.com/watch?v=Jo7a5BAj7FQ

Fri, 12/16/2011 - 07:22 | 1986332 Al Gorerhythm
Al Gorerhythm's picture

Instead of Motherfucking Global, How about as an additive ir Paulson stutter; Mother Fucking, M-m-m-missing F-f-f-Funds G-g-g-global.

Thu, 12/15/2011 - 19:47 | 1985498 WestVillageIdiot
WestVillageIdiot's picture

Why would you want to fuck up the bottom of the ocean that way?  It is funny how evil we think Goldman is (rightfully so) and JPM seems to often get a pass.  The public has begun to understand how toxic Goldman is.  How long will it take them to realize how toxic JP is? 

Thu, 12/15/2011 - 21:51 | 1985786 bilejones
bilejones's picture

Because JPM is one of the notorious naked metal shorts.

Because CME settlements are increasingly ( by smallish guys) being requested in cash.

Because the CME ( like SLV and Gld) has far more out in paper metals than they hold in physical.

Because Mo Fo Global was the largest broker for individuals.

Because if the customer cash is gone they cannot settle trades and take delivery.

Why, one might expect a real hard smackdown to take place following these events, what?

Thu, 12/15/2011 - 19:54 | 1985517 Papasmurf
Papasmurf's picture

and stay there

Thu, 12/15/2011 - 20:00 | 1985553 disabledvet
disabledvet's picture

the implication is that MF was set up by the JP. I'm calling "long shot" on that one. Possible--but the money JP would have gotten is not going to cover the massive blow up this is going to cause in Europe tomorrow. Plus you get the attention of every committee in DC. In effect "this is an attack" under this scenario. I'm sticking with my "pinata got smashed" theory and it was every trader for himself. Corzine finally started trying to blame someone else for the fiasco. "I don't know" is not an answer but in fact "a question that leads deeper into the abyss." Can't you blame the lawyer? She was the first one to say everything was fine...as usual. Anywho we shall see if there's 30 billion missing in Europe which leads to the collapse of a major European bank tommorrow. I sense BofA is going to be nationalized...but who knows. Maybe the market will rally another 50.

Thu, 12/15/2011 - 21:59 | 1985808 sgt_doom
sgt_doom's picture

disabledvet makes many excellent points and overall I'm in agreement.

Corzine has never really been a member of the inner circle, so where as all this rigged trading and speculation was involved (as opposed to the much hyped "casino bets" etc.) Corzine truly was betting risky on his own very limited abilities.

Back when Corzine was at Goldman Sachs and "shared" the CEO post with Hankster Paulson, Paulson went ballistic on Corzine one day when Corzine, without Paulson's knowledge, began sounding out a takeover of the Mellon Bank.

The reason for the fireworks?  Mellon, together with DB Shaw, was doing a deal to take over B of A, through Nations Bank, which B of A later became in everything but name.

Corzine would have brought undue attention to Mellon and possibly the backroom deal going on (working B of A to do a non-hedged multi-billion investment in Russian bonds, which later went sour, thus making them vulnerable to the takeover by NationsBank Corporation).

Corzine does still have friends in high places, so he should be yet another bankster gangsta who ends up avoiding jail time --- but his pathetic butt, along with the Murdochs (Rupert and little Jimmy) should be behind bars by this time.

 

http://www.computerworlduk.com/news/it-business/3325313/jp-morgan-expands-deployment-of-fpga-based-supercomputer/

Fri, 12/16/2011 - 03:13 | 1986205 Bringin It
Bringin It's picture

"Corzine has never really been a member of the inner circle

You mean Jon Corzine, former head of GS? has never really been a member of the inner circle?  You're gonna have to share your defintion of inner circle I believe.

Thu, 12/15/2011 - 20:24 | 1985614 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Isn't the bottom of the ocean where the giant squid live?

Going home...

(Are they cannabalistic?)

Thu, 12/15/2011 - 20:48 | 1985662 Whoa Dammit
Whoa Dammit's picture

"Procajlo and senior management at CME have another call with MFGH, including Steenkamp and Ferber, who assure CME that they have drawn down all or substantially all of their line of credit — which has a limit of approximately $1.2 billion — but are not yet using the money."

So where did this money go? Does anyone here at ZH know?

Fri, 12/16/2011 - 00:48 | 1985758 fuu
fuu's picture

Corzine testified today that at 10 days out from the end they had not tapped either the secured or unsecured credit lines from JPM. Abelow didn't get asked directly about before the bankruptcy and did not answer about who the largest creditor presently is.

Thu, 12/15/2011 - 20:59 | 1985681 Freddie
Freddie's picture

"Way down upon the ocean - is where I want to be.."

Atlantis - Donovan 

http://www.youtube.com/watch?v=7_pvKEfTDk4

"Now go home and get your f**king shine box"

 

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