It’s bad news for a lot of people, but there’s a schadenfreudtastic silver lining: One of America’s most arrogant public figures takes a tumble.
Well, this one’s right up there with the most spectacular CEO disasters ever.
Yesterday, 18 months after Jon Corzine took over the helm of MF Global with the goal of building it into a real investment bank, he flew the company into a mountain.
Because part of becoming a real investment bank, apparently, is betting the company.
Jon Corzine bellied up to the global market tables, bet MF Global, and lost.
Specifically, the former head of Goldman Sachs and governor of New Jersey authorized his traders to scarf up $6 billion in bonds issued by Spain, Italy, Portugal, Belgium, and Ireland. The bet, presumably, was that the powers-that-be in Europe would bail out these and other bondholders to the tune of 100 cents on the dollar, because in our global bailout spree, that’s what powers-that-be do.
Suddenly the powers-that-be decided to force Greek bondholders to take a 50% haircut on Greek debt, which increased the risk that bondholders for Spain, Italy, Portugal, and other basket-case countries might actually be held accountable for their idiotic loans, too.
And when MF Global customers saw that Corzine’s traders had bet the firm and lost, they ran away screaming.