I can definitely see the MF collapse being deliberately done, as it would cause many people to question the integrity of brokerage firms.
If it was done deliberately, Corzine is going to be let off the hook.
No, it wasn’t done to crater the integrity of the brokerage firms.
Why, why, why must so many Freepers assume conspiracies and agendas when nothing but feckless incompetence and greed are sufficient and better at explaining the actions of Corzine, Goldman Sachs, Countrywide, et al?
Corzine got into a European debt trade. It was done in isolation, away from the risk managers at MF Global. For all intents and purposes, Corzine was a rogue trader... but he was also CEO of the firm. He levered up on the trade (one of the few ways that smart people can go utterly broke) at levels exceeding 30:1.
The market turned against him, the European idiots never did (and still haven’t) worked out what they’re going to do about their debt mess, and someone made a margin call (go back to that 30:1 leverage and work out the math for yourself).
This is how Bear went down. This is how Lehman went down. This is how Iceland’s banks went down.
Corzine might skate, but if he does, it is because he’s so well connected to the Obama administration.
BTW, Corzine has done this type of trade before - while he was employed at Goldman, in the early 90’s. Back then, Goldman was a partnership and the partners were getting really pissed off with how their capital accounts were being drained by Corzine’s wrong-way trade. Google around and you’ll get the details.