MF Global Files For Chapter 11 Bankruptcy Protection
FBN's Charlie Gasparino on the collapse of MF Global.
- Duration 5:58
- Date Oct 31, 2011
FBN's Charlie Gasparino on the collapse of MF Global.
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Al the first Jon Corzine -- -- -- being charged Goldman Sachs but was pushed out there so -- -- wanna set -- -- That he was the governor of New Jersey but he lost there in a bid for reelection and now.
It looks like his second act on Wall -- -- and ugly Corzine reportedly made big bets on Europe for the firm he's now the CEO of MF global.
Didn't go well within the last our MF global filing for Chapter Eleven bankruptcy protection -- Charlie Gasparino.
First reported the possibility this bankruptcy on Friday -- but all over.
And he's here with the very way.
Subs are not even a possibility I think what we said on the one at 130 show is that -- and investors would have made a lot of money if they listen to us and you know may be -- -- sign that they held it.
That the likelihood was that it would go to bankruptcy that this.
This sort of phony drama that I think you know that the media did a horrible job covering this story they covered it as if Lehman Brothers didn't happen and I'll tell you why a -- they made it like you know all these other players were gonna come in and -- MF global by its liabilities.
By pieces of the firm you don't buy that stuff into the at a bankruptcy it to you and bankruptcy because that's when you get a cheap.
And that's what's going on right now that legitimately and if that's exactly what I believe and that's what Bob Diamond.
The head of our Barkley was Smart enough to do by Lehman bankruptcy pick it up on the cheap.
As opposed to Ken Lewis at -- be a -- which bought Merrill at a very expensive price before it was about to go to bankruptcy and paid -- because Merrill Lynch was fifteen to -- -- final quarter two guys and we should we should point out some headlines.
The markets really told the story here today.
The bonds of -- global trading at.
At liquidation values that mean this thing is toes up did toast real interesting story and it's something I touched on last week.
On Friday no there is potential here for four Corzine and whatever -- -- -- company to be sued by investors remember they floated a bond issue.
In this summer that bond issue I read the prospectus on that and so mother investors who alerted me to it is very light on details may be -- he tales.
About their positions in Europe I -- think that let me let me finish -- -- -- think that.
If you have.
A major position in Europe you know when you and your -- thirty want to want whenever they aware that that may be should be in that the prospectus so investors know.
What type -- trade you do counteracting that view we should point out in all fairness to Jon Corzine.
Is the fact that.
Let's face it he -- make any any sort of secret that he was gonna do proprietary trading into this perspective seeing what -- public with it.
So they've there's a little give and take it but that's what people tell me there is potential like -- We should point out why did Jon Corzine do proprietary trading.
Well here's images using the vocal rule is -- -- All the big banks grading that the Paul Volcker from engaging in proprietary trading -- for the their own and -- global is not covered by had a huge Twitter fight about there's and I guess that was -- MF global from what I understand.
This does not seem to be caught the -- -- was not.
It's too small it's not and if that's it is not known as one of the systemically important banks so he saw a business model opening.
Rolled the dice he's going to make a lot of money doing this -- -- -- -- donut and he lost big to.
This is just briefly what I was gonna say I'm not to interrupt you but just to back a couple of people who -- just turning into this today and no Corzine's names are -- -- they should get what -- you know what those people missed -- big time right on the all of us from the -- absolutely but -- a former -- as a set of Goldman -- -- governor New Jersey PD is a well known figure what -- Just how did this happen how would what do I just don't happen.
Jon Corzine got booted out of Goldman Sachs didn't leave on his right thrown out.
By Hank Paulson who became then became treasury sector kind of interest and -- turn events he got thrown out because he was -- affirmative firm lost a lot of money making proprietary bets.
Not exactly like this but those were bets that we're tied.
-- -- hedge fund long term capital in ninety and 98 that demanded a bail out to -- that's one the first government led bailouts of the financial system to help Goldman Sachs lost a lot of money what do lost more if they didn't bail out if if there wasn't.
A a bailout of long term capital he gets thrown out.
-- before he was pretty pretty lousy manager he goes in to politics because.
Guess what he made something like 500 million dollars net allows picture -- rival Goldman Sachs went public and then him when this when wind wind when he was done in politics he got I guess he he lost to Chris Christie as governor.
Bob he was looking for what to do its interest in his friend had had an interest -- JC -- -- G.
It flat Chris flowers flowers runs JC flowers and private equity firm added interest in this.
Small brokerage firm -- MF global which by the way was involved in -- trading scandal two years before and that was completely deleveraging.
And get back to what it does best being a -- not taking risk.
He came in and -- -- 180 promise to do 180 on its business model which is what he did.
Be like the old Goldman Sachs speaking -- in -- market totally backfired and -- it it is just an immense.
You know you can't get a word on what that what they use in on Wall Street to describe something like this.
And it's it's it's it's obscene but it comes just as you probably can't say lost their blind I know OK and you know what.
That's what this really is that this is a monumental blow out the question is does junk was about third act here while I don't think so probably -- You know I just don't see how what happens it over -- remember art -- -- what the European bonds based mainly Italy and Spain which are.
I you know on the -- big -- bought them.
Basically right in the teeth of the crisis.
-- I mean if you talk about the absolutely worst could I have it could have been worse could have been -- -- the -- -- the worst trade ever.
While home as well I mean there's a lot of ordinary Charlotte there's.
This -- this destroyed -- got to run but one other quick we should point out court.
A lot of people that are losing their jobs at this firm enough to do with this and that's the problem is always the case there's always the case of like a lot of good people of Lehman and bear always opens.
Thank you Charlie okay all over the story as he said on Friday and then again today now we're gonna talk.