Also in this playlist...
This transcript is automatically generated
-- it's a warning Phil talked about MF global certainly when our top stories today's -- trying Gasparino new and that bubbles bankruptcy would happen before anyone else did.
And he reported that on this very show on Friday Citron is back with -- he got very latest now chapter two how and that it will unwind.
Quite you know I saw what happened with lean mean I have good sources that deal with them on a regular basis creditors and clients.
And basically said that there was no way does this company was gonna survive in its current form it just had too many liabilities.
It was a run on the bank put all together and I do -- you know major CEOs on Wall Street view on Friday.
At his dance they would do with with with potential buyers of the firm was a joke that there was no way to sell it.
What's gonna happen now is that you have.
-- -- Vultures picking at the pieces and one of those potential poker and -- sources tell the fox is that we're.
Is none of -- Charles Schwab what we understand is Charles Schwab is interest did.
In a piece of the business in a piece of their futures.
Business -- -- -- MF global when you take out the proprietary trading -- troubled accusing risk treating bonds.
Obviously trade the wrong bonds was it lost a lot money that's why they're out of business now.
They had this clearing business -- to execute trades for people who want to.
Execute and clear trades for people that are involved in futures commodities.
Are part of it's an institutional business part of it's a retail business mean average people who -- -- wanna buy a buy puts and calls.
That retail business is now with Schwab is dying and here's the sort of catch how much -- they want to pay for it.
Which sources -- -- Fox Business Network is they wanna pay next to zero fort upfront that may be a performance.
The on the back and how that -- do it.
-- when you put all this together this just shows you that this sort of hurdles that Jon Corzine is CEO of them have ever global faces right now.
The -- now whenever they're in Chapter Eleven bankruptcy.
It's called reorganization the theory is going to Chapter Eleven -- you might reorganize and survive in some way shape reform.
That I will tell you is probably not gonna happen that this is gonna quickly become -- liquidation because the businesses that they have to sell -- for a few businesses I believe they have.
A futures and equity business in India.
Which is pretty vibrates outside the US not really so attached to all the stuff they might be able to sell that but they'll have enough to sell.
The stuff like that that can make a difference and the stuff they do have to sell like this futures business I think about it.
What is -- futures clearing business its relationships.
Right now every major broker that was doing business with their institutional side.
Has gone to other places you know longer clearing to limit global they're not on the floor of the the -- -- -- -- -- -- to someone else retail.
Little different little stickier member retail customers don't -- commodities everyday so maybe there's a chance.
That they don't they could sell this at some point but from what I understand they're gonna sell it at almost close to zero that's what the -- look like.
-- that kind of ripple effects might this have are -- other firms are keeping united might be in similar situations or -- and that standalone and then the creditors and that itself.
Well I mean there's this is get the play out totally.
-- obviously there's a sale of the various pieces there's gonna be I talked a lot of people investors.
And analysts they talk about potential legal liability on in the global Jon Corzine they did a bond deal I believe was in August.
I -- I looked at the prospectus and so it so -- have a lot of investors there's not much mention in that bond deal about sovereign debt risk which is what imploded the firm.
You know in addition where was the board of directors investors are demanding to know that the board of directors do any due diligence to they have risk controls so there's a lot of place.
-- it's gonna play out still for Schwab of -- -- for MF global and Corzine.
Then there's a mid ocean over -- systemic risk there is really not here I mean I know the market is down like 212 points -- -- down a lot on your at this might have something to do with the traders.
Are notoriously stupid they just she trade on the headlines.
You know they don't think long term views.
I will say this that the the sort of what we can say about this it's not -- this is that we would suck big enough.
But this is -- -- this is a huge bankruptcy if you look at the numbers in assets you know what's up there it's up in the top ten clearly we're back.
Well I want to make this one of the point in addition it's it's the first casualty of the Euro crisis so we're likely seaboard is Corzine done.
I once said that John Thain was done.
When I broke the story not that he was getting booted from Merrill but that spent one point two truly -- million dollars.
On an -- street do that was totally insane right at Merrill's.
Right when Merrill's in big time trouble he came back now he doesn't -- -- Wall Street -- -- a CIT group.
But you know he's not really done.
You know there's always second acts of Wall Street though I just can imagine John Thain a student in Jon Corzine he's not -- work at a major firm.
You know maybe gets a job like -- had some -- bankrupt company but then again why would you give this guy bankrupt company he took a company would clean balance sheet.
And put in bankruptcy that's about the best consider politics act politics we'll see -- -- hopefully not New York please please please John stay -- Jersey to cut cut cut -- Well I don't have one but apparently the new --
Filter by section