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But hey we've got pandemonium in the municipal bond market following last week's Federal Reserve announcement -- forced one major bank to take emergency action to stem a massive decline in prices but Fox Business -- -- correspondent Charlie Gasparino.
Not only here with the exclusive on that there's breaking news on look for a -- It looks like to -- -- -- -- set to announce its charges against Jon Corzine and another employee in the -- -- -- apparently and exactly what they're gonna charge that Corzine with a 230.
You know everything every indication I got the last couple days following the New York Times report -- New York Times was first report this early in the week.
We've been reporting that.
All along civil charges was the likely outcome not from you -- are just as we broke it that it would be criminal charges those from the charges I think they're going to be around control issues.
Did he have the proper supervision of the fund where there and it's a story that we did -- Fox Business apparently two weeks I'd just check today.
After the implosion of MF global.
Did they have the pipes the -- brought this up the -- have the systems in place to make sure that everything ran right that you know if you had a liquidity crisis which is what happened at an ethical people pulling money.
Lenders stop lending them money.
It's the -- you know the form fund need to be the firm needed desperately cash.
And if you have a crisis like that that you don't take the customer money or at least when you do borrow from the actress -- You can't borrow from it that you put it back at some point that day they did not have those controls obviously.
And I think that's the -- of course -- -- does this and that's -- the CFTC saying it is indeed have a chart of Italy yes it would supersede the fifties he opposed the civil charges we do know there was a criminal probe.
And not like I said -- -- weeks ago fell flat as -- just it now reported.
We reported -- trading issues there its control she just again I'm recruiting -- And we should point out that Jon Corzine's that wasn't better -- be right what happened was.
The market smelled his -- and was kind of risky kind of not totally -- kind of risky.
They worried about the leverage at the fund how much he was borrowing.
He had a rating agency issue and that's when people started pulling money out of the -- didn't go to the market a very fearful following 2008.
Then he's not supposed to commingled funds like the cost because remember they'd -- brokerage accounts of of customers the -- commodities.
That's where the problems when -- back -- commingled it got lost.
-- those people got model most of their money back.
These charges I believe will reflect the lack of control issues.
Can you connect the dots he just did a breaking news item that the Federal Reserve is gonna start -- weighing capital reserve requirements for banks.
If their connection between talk about controls -- MF global that -- unpopular -- -- can't let nobody in terms that if liquidity controls and have a cash to back you up you know and ultraviolet protection -- that's a different issue because that's you know when MF global when Bear Stearns like they're playing watt what it's when -- -- -- went undercover and others that gives -- -- you have capital.
Right that's the stuff he's supposed to use for your -- for free trades and everything and to keep just in case things go bad from borrow from yourself.
-- customer funds money this kind of kind of related I mean in the sense you're supposed to -- when when things get bad -- -- your money out of your capital bouquet or you try to borrow from a bank.
When things you don't borrow from because if you do Barbara because I knew cat is where it's very -- was not it it's not want to borrow you have to put it back.
That day that's the law school -- high pop occasion I'm not gonna get into it but that's -- with you have to do.
Get into this beauty store because again because of what's going on as a that was passing we had eight and we just didn't happen and in a debacle the -- -- we had a crash essentially -- immediate bond market last week.
Following bit Bernanke's.
Maybe some -- he's gonna stop printing money -- right markets freaked out the beauty market in particular got very very very bad it was it was what what I describe as.
You know a real puke I mean this was you know this was very bad people start loading prices start declining what was interesting is that one -- Citigroup did step up to the -- Citigroup traders.
Were ordered in the office -- sources tell the Fox Business Network.
On Sunday basically to did the work trip to Prague to -- liquidity.
Because they really thought Monday was gonna get bad we should point out that one of the big things they did was it was a leveraged fund was delivered and that's a fund up all of a lot of money and invest.
Meaning that if the prices go the other way because of borrowed so much well guess what happen.
It blows up that -- that blew up -- we understand Citigroup stepped in and bought a lot of their paper at depressed prices something like 300 million dollars and that help.
When the market -- Sunday I but if you look at ripped a -- -- chart that that's the the publication falls Muni bond prices pretty pretty closely it's dedicated to ice worked him many years ago.
Are you could see where the where yields were going up -- -- prices were going down.
All the way to Sunday we we should point out that the Muni bond market has recovered so much is -- somewhat at this point still pretty bad still pretty pretty bloody.
But this was a fairly fairly fairly deep decline -- Muni bond prices.
That you know -- fund's liquidity and Citigroup.
But as you point out that they benefited because they bought it at depressed prices and they believe that the prices are gonna come back which they have so -- made maybe some money.
But Citigroup to step up to the plate on -- it's -- using funds could be you know no one knew that the Muni bond market was this bad.
You don't come in on Sunday to work on Wall Street in the summer he says that problem pretty.
Can't thank Charlie Gasparino Charlie had a time but I don't forget July 1 insider trading -- -- -- -- -- July 1 thing we'll talk about that tomorrow.
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