Friday, November 18, 2011

Sympathy for capitalist dogs?

The collapse of Jon Corzines's MF Global--previously discussed here--was bad news for a lot of folks, from employees of the company (half lost their jobs straight away), to stockholders, to customers. There still remains some $600 million of missing customer funds, plus--since the bankruptcy filings--all accounts have been frozen.

Reuters reported yesterday that some of the frozen monies will be released, much to the great relief of many customers, no doubt. For a fair number of customers, it's been nearly three weeks since they could access their own funds. We're not talking about investments that people made with MF Global, we're talking about--in many cases--straight up cash accounts. And in some cases, these accounts were essential for people doing business.

John Crudele at the New York Post interviewed four MF Global customers who also happen to be commodity traders. Their accounts at MF Global were their business accounts; MF Global merely held their assets--as a brokerage firm--so they could trade on the floor. Since the collapse, they've been essentially locked out:
All of them were stung hard — not only because their money at MF disappeared overnight but also because they couldn’t even get on the floor of the exchange to conduct business. 
Their IDs had been revoked.
Commodities brokers getting screwed. Some people might say that they deserve their fate, that they're part of the "Wall Street Elite." But they're not all that elite. They work for a living--albeit in paper--and put in long hours. They risk their money--when they have access to it--on a daily basis. They have families, too:
Moe [one of the traders] had to draw $75,000 from a line of credit on his house to stay in business after his firm’s money — which also happened to be his personal dough — disappeared into MF’s rat hole. 
Two other traders I’ll call Meeny and Miney are middle-age guys, still paying for their kids’ college educations. Eeny, the fourth trader, is in his mid-30s and has two small children.
But these are also the same kinds of people getting mocked and jeered by the crowds at the Occupy movements. They are--for some--the enemy. And why? Because of the way they choose to earn their living. Do we know that they're all perfectly honest? No. But what we do know is that they got screwed because of Jon Corzine's arrogance and stupidity, and because the New York Federal Reserve gave MF Global special treatment because of Corzine's connections in Washington, D.C.

And to think, the admin was seriously considering Corzine for the post of Secretary of the Treasury.

Cheers, all.

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