There may be no honor among thieves, but there has always been some small measure of dignity — even respectability — amongst the con men of the equity markets.
Apparently, there is no such corresponding code of honor amongst commodity trading firms.
I refer of course to the debacle that is MF Global. How on earth could $633 million in customer accounts simply disappear?
As it turns out, quite legally.
The regulations governing these customer accounts are 25 plus years old, according to a few insiders I spoke with. They gave the firms an ability to hypothecate (lend) client money, so long as it was only used to legally purchase investment grade sovereign debt.
So that was what MF Global did.
As originally conceived, client monies were only supposed to purchase US Treasuries. However,
http://www.ritholtz.com/blog/2011/11/con-mans-lament/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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