We’ve also got a two-day Fed meeting that comes to an end today, and we’ll get the minutes from that this afternoon as well. I don’t expect an announcement of formal action, but I do expect to see some hints in the wording of something that would target mortgage-backed securities. That’s the same target area as QE1, and it could be a shot in the arm for the markets. Keep an eye on how all this is digested.
As you know I’ve been following this MF Global story very closely, and the more I read the more upset I get. MF Global was a big institution with a lot of positions—futures, options, stocks, ETFs—and they were all overleveraged by one gigantic egomaniac named Jon Corzine, Mr. Champagne Socialist, the former co-chair of Goldman Sachs and former New Jersey governor. This is a guy who preached more regulation at every level, and now he has MF Global on the brink of disaster. Of course, we don’t know for sure yet if he comingled funds from those customer-segregated accounts, but if he did, he should be wearing an orange jumpsuit for the rest of his life.
What’s worse is that a lot of the money he was playing with wasn’t even firm money: it belonged to his employees. MF Global had a wonderful crew of brokers, and as it turns out, these people were basically forced into buying company stock with their commission dollars. Sounds very Enronesque, doesn’t it? These are innocent, hard-working people whose careers and everything else could vanish because of one man. How could someone who is supposedly so smart be so dumb?