Monday, December 5, 2011

Jon Corzine: the misunderstood billionaire?

Michael Daly offers a fascinating piece about Jon Corzine, his rise, and the collapse of MF Global in The Daily Beast. Much of it is of the same tenor as Bob Shrum's panegyric that I discussed previously. For instance, Daly makes a point of painting Corzine with the kindest possible brush, such as:
What made the looming disaster more perplexing was that Corzine is not a Madoff or some other type of Wall Street greedster.
I don't personally know Jon Corzine. I know Shrum does; I'm not sure about Daly. But regardless, trying to carve out a place for Corzine in all of this where he is either innocent or unaware of wrongdoing at MF Global seems to be a stretch. Daly glosses over an issue that is critical here, one that I raised in my previous bit:
He raised MF Global’s stature by persuading the Federal Reserve Bank of New York, whose president is his old Goldman pal William Dudley, to name it one of only 20 “primary dealers” authorized to underwrite U.S. government debt.
Daly offers this as some sort of success for Corzine, but it was nothing more than unwarranted favoritism. And it is exactly the kind of thing that should be pointed at and criticized, when it comes to the financial sector. MF Global didn't have the assets or the structures to be a primary dealer; giving it that privilege was one of the reasons why it was able to take and justify the risks Corzine wanted it to take, one of the reasons why it collapsed. And the missing money demonstrates how foolhardy the Fed's decision was here.

No amount of reminiscing on Corzine's past absolves him this, of using his political connections to open doors that should have remained closed for a company in MF Global's state.

Still, Daly's piece is good and well worth the read, as long as one remembers Corzine's arrogance and greed. Because it's still there, no matter how much spin is applied.

Cheers, all.

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