Jump to content
House Price Crash Forum
ParticleMan

A Bunch Of Global Mf-Ers

Recommended Posts

http://www.forbes.com/sites/halahtouryalai/2011/10/29/will-mf-global-be-saved-this-weekend/

Things went from bad to worse this week for MF Global.

The commodities and derivatives brokerage firm reported fiscal second quarter losses on Tuesday that sent its share price plummeting nearly 50% and 67% on the week. The firm, run by former New Jersey governor and former Goldman Sachs chief Jon Corzine, then saw its credit rating cut to junk by Moody’s and Fitch making borrowing costs higher.

Reuters reports that MF Global is working this weekend to sell all or part of its business. MF Global has reached out to major banks including Barclays, Citigroup, Deutsche Bank , Jefferies Group Inc , JPMorgan Chase, Macquarie Group Ltd , State Street Corp and Wells Fargo, according to Reuters.

“If it gets done, it needs to get done by Monday,” a source told Reuters. “Whether it gets sold in parts or pieces, they are in good shape to orchestrate this process.”

MF Global”s problems trigger not-too-old memories of fall 2008 when some of Wall Street’s most powerful financial firms’ fates were determined over the course of a weekend. In fact, it appears some of the players remain the same. The Wall Street Journal reports that J. Chris Flowers is amid those trying to make a deal work for MF Global. Flowers you might remember from the 2008 financial crisis–he had a hand in nearly every major deal that went down that fall including Bank of America‘s purchase of Merrill Lynch.

MF’ Global’s predicament shows just how severely the European debt crisis can hit a U.S. financial firm. It’s, so far, the best example of how the debt problems of Europe can spread to the U.S. As Forbes editor Bob Lenzner pointed out this week MF was overloaded with Euro debt when most smart money was getting out of it. Lenzner writes:

There is just no good rational decision for Jon Corzine’s MF Global — with a market capitalization once of some $500 million– owning $6.3 billion European sovereign debt. Especially as most of the smart money hedge funds had been short Greece, Portugal, Ireland, Spain and Italy since the summer of 2010– and enjoying the repurchase at a fraction of their wily and early short sale. Moreover, Corzine’s MF Global was buying short term debt just as all American money market funds were desperately trying to reduce their exposure to European sovereigns. This is called going against the grain with a vengeance. Stupid– and a tad grandiose.

(this is their prop trading outfit, before anyone asks - not the funds)

Share this post


Link to post
Share on other sites

It would seem that this piggy had its face so full in the trough that it didn’t see when all the other piggies legged it to other troughs and now the slaughter man loometh with only one target in sight.

Share this post


Link to post
Share on other sites
The firm, run by former New Jersey governor and former Goldman Sachs chief Jon Corzine

I made a recent discovery:

Master of the Universe = Wildebeest

Here we see a highly sophisticated bank trader following an astute 'contrarian' approach by using HFT to jump ahead of momentum chasing fund managers. Just outside of the field of view, to the right, is the open mouthed crocodile, in this case Greece.

wildebeests-jumping-kenya_28400_990x742.jpg

Edited by _w_

Share this post


Link to post
Share on other sites
There is just no good rational decision for Jon Corzine’s MF Global — with a market capitalization once of some $500 million– owning $6.3 billion European sovereign debt. Especially as most of the smart money hedge funds had been short Greece, Portugal, Ireland, Spain and Italy since the summer of 2010– and enjoying the repurchase at a fraction of their wily and early short sale. Moreover, Corzine’s MF Global was buying short term debt just as all American money market funds were desperately trying to reduce their exposure to European sovereigns. This is called going against the grain with a vengeance. Stupid– and a tad grandiose.

Sounds as though they were betting on someone picking up Greece's tab. Talk about all your eggs in one basket though :unsure:

Share this post


Link to post
Share on other sites

Moral hazard writ large.

well, the boss was a Public elected governor, and worked for the squid as well.

he has no experience of the real world.

Share this post


Link to post
Share on other sites

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8859103/MF-Global-close-to-asset-sale-and-bankruptcy-after-European-debt-bets.html

The futures brokerage, which was spun out of the British hedge fund Man Group in 2007, employs more than 2,000 people, about 700 of them in London at its Canary Wharf office.

MF Global could announce it is filing for bankruptcy protection as early as today, the Wall Street Journal reported, and also announce a deal with Interactive Brokers, the newspaper said.

The brokerage has also reportedly lined up a number of restructuring advisers and bankruptcy specialists should it fail to strike a deal.

MF Global, which is run by former New Jersey Governor and Goldman Sachs executive Jon Corzine, rattled investors last week after disclosing a $191.6m quarterly loss and $6.3bn exposure to the debt of several European countries including Spain and Italy.

Still I'm sure it's nothing to be concerned about....

Share this post


Link to post
Share on other sites

No doubt Corzine will end up working for some central bank or the IMF in due course.

His in-depth knowledge of sovereign debt will be invaluable - unlike the bonds his company bought :rolleyes:

Share this post


Link to post
Share on other sites

No link yet, just announced on tv.

MF lists up to $50 million in debt in court filing.

$7.3B customers funds on deposit (Aug 31)

Deutsche bank, JP Morgan, Bloomberg are among their creditors.

Share this post


Link to post
Share on other sites

No link yet, just announced on tv.

MF lists up to $50 million in debt in court filing.

$7.3B customers funds on deposit (Aug 31)

Deutsche bank, JP Morgan, Bloomberg are among their creditors.

what they need in the US are a decent set of Stress tests.

Share this post


Link to post
Share on other sites

I know a guy who works for MF global. I'll see if I can find out any info on what's going on in their offices.

They can't be very busy.

Just read somewhere that the bloke who's in charge is sat a reading a book - cos he's just started chapter 11 or something.

Share this post


Link to post
Share on other sites

MF Global files for Chapter 11 bankruptcy protection

http://www.bbc.co.uk/news/15519124

US brokerage firm MF Global has filed for Chapter 11 bankruptcy protection after revealing £4bn of eurozone debt exposure.

The US brokerage, which has 2,000 staff worldwide including 600 in London, is said to be planning to sell its assets to rival Interactive Brokers Group.

Shares in MF Global were suspended by the New York authorities on Monday.

JPMorgan Chase and Deutsche Bank are the firm's two biggest creditors.

JPMorgan is said to have a claim of more than $1.2bn, while Deutsche Bank is owed more than $1bn.

Shares in JPMorgan fell 3.3% on the news of MF Global's Chapter 11 move, while Deutsche Bank's US-listed shares lost 8.7%.

Deutsche's shares in Europe were also hit, down 8.6%.

Share this post


Link to post
Share on other sites

They can't be very busy.

Just read somewhere that the bloke who's in charge is sat a reading a book - cos he's just started chapter 11 or something.

:lol:

Share this post


Link to post
Share on other sites

I know a guy who works for MF global. I'll see if I can find out any info on what's going on in their offices.

They are a "global brokerage firm"?

Who pays for their bad debts?

Is it banks or such as IFAs getting another levy (like they did for Lifemark, Keydata) or both or someone else?

Share this post


Link to post
Share on other sites

History may not repeat...

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

Refco, Inc. filed for chapter 11 for a number of its businesses, to seek protection from its creditors on Monday, October 17, 2005. At the time, it declared assets of around $49 billion, which would have made it the fourth largest bankruptcy filing in American history. However, the company subsequently submitted a revised document, claiming it had $16.5 billion in assets and $16.8 billion in liabilities. Refco also announced a tentative agreement to sell its regulated futures and commodities business, which is not covered by the bankruptcy filing, to a group led by J.C. Flowers & Co. for about $768 million. However, other bidders soon emerged, including Interactive Brokers and Dubai Investments, the investment division of the emirate of Dubai. These offers were for a time rebuffed, as the Flowers-led group had a right to a break-up fee if Refco had sold this business to anyone else. Carlos Abadi, involved in the Dubai bid, said that the Dubai-led group offered $1 billion for all of Refco and was rejected. However, the bankruptcy judge in charge of the case deemed the break-up fee unjustified, and the Flowers group withdrew its bid. The business was instead sold to Man Financial on November 10. Man Financial kept the majority of the Refco futures businesses after selling Refco Overseas Ltd (Refco's European operation) to Marathon Asset Management who then relaunched the business as Marex Financial Limited.

... but it sure does rhyme...

Edited by ParticleMan

Share this post


Link to post
Share on other sites

I made a recent discovery:

Master of the Universe = Wildebeest

Here we see a highly sophisticated bank trader following an astute 'contrarian' approach by using HFT to jump ahead of momentum chasing fund managers. Just outside of the field of view, to the right, is the open mouthed crocodile, in this case Greece.

wildebeests-jumping-kenya_28400_990x742.jpg

http://www.zerohedge.com/news/presenting-bond-blew-mf-global

Reaching for yield (and prospectively capital appreciation) while shortening duration had become the new 'smart money' trade as we saw HY credit curves steepen earlier in the year (only to become the pain-trade very quickly). The attraction of those incredible yields on short-dated sovereigns was an obvious place for momentum monkeys to chase and it seems that was the undoing of MF Global. The Dec 2012 Italian bonds (of which MF held 91% of its ITA exposure in), as highlighted in today's Bloomberg Chart-of-the-day, appears to be the capital-sucking instrument of doom for the now-stricken MF.

Share this post


Link to post
Share on other sites

FSA says MF Global UK in "special administration"

LONDON (Reuters) - Britain's financial watchdog confirmed on Monday that MF Global UK Ltd's administration by KPMG is to be conducted under the new Special Administration Regime (SAR) devised for investment firms.

The Financial Services Authority said it was the first time it had used SAR since it was adopted in February 2011 following the collapse of Lehman Brothers.

Earlier, MF Global Holdings Ltd filed for bankruptcy protection in the United States after a tentative deal with a buyer fell apart.

The SAR has advantages over ordinary corporate administrations including a quick return of client assets, the FSA said.

http://uk.finance.yahoo.com/news/FSA-says-MF-Global-UK-special-reuters_molt-2032912639.html?

IFAs on the hook again?

Share this post


Link to post
Share on other sites
Is this due to the CDS market?

How could it be?

IFAs on the hook again?

There's only two extraordinary things about this otherwise very ordinary filing :-

1/ The number of fools involved

2/ The quantity of money from which they're about to be parted

Share this post


Link to post
Share on other sites

There's only two extraordinary things about this otherwise very ordinary filing :-

1/ The number of fools involved

2/ The quantity of money from which they're about to be parted

Surely you mean the quantity of money about to be parted from hard earned taxpayers to cover losses and ensuring no bankers is seriously stressed. As we know from the Fukishima thread, stress is more deadly than radiation.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 277 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.