Jon Corzine-Former Chief of Goldman Sachs(yet another Wall Street Crook)...
Jon Corzine
Who is Jon Corzine: Why work in financial services? Jon Corzine reached the pinnacle of his Wall Street career at the age of 47, when he became CEO of Goldman Sachs. When he was forced out just five years later, he turned to politics. In two of the most expensive campaigns in U.S. political history below the Presidential level, he used over $100 million of his own funds to gain election first to the U.S. Senate, then to the governorship of New Jersey.
Biography: Jon Corzine was born in 1947 and grew up on a small farm in central Illinois. After graduating from the University of Illinois in 1969 and earning an MBA from the University of Chicago in 1973, he moved to Columbus, Ohio to work in banking.
In 1975, Corzine moved to New Jersey, having taken a job as a securities trader at Goldman Sachs in New York. In 1980 he became a partner at Goldman, one of the most prestigious and lucrative achievements in the financial services industry. Rising rapidly through the ranks, he became chairman and CEO in 1994.
As CEO, Jon Corzine engineered the transformation of Goldman Sachs from a private partnership to a public company. The initial public offering (IPO) of Goldman stock created a huge windfall for the partners, including Corzine. Indeed, Jon Corzine's current personal wealth is estimated in the range of $600 million.
However, Corzine was not universally popular as CEO, and was forced out in 1999. Then he turned his attention to politics. He had been a supporter of the Democratic Party, and had chaired a commission on capital budgeting in the federal government in 1997, under President Bill Clinton.
In 2000, Jon Corzine won election as a U.S. Senator from New Jersey. Reportedly bored and frustrated with Senate procedure, especially as a freshman in a body where seniority counts heavily, Corzine ran for governor of New Jersey in 2005, while still in his first Senate term.
Corzine ran for governor when New Jersey was in the midst of a fiscal crisis, with looming deficits despite years of accelerating tax increases. He campaigned as the candidate who would use his financial expertise to bring sound fiscal management practices to a state sorely in need of them.
Jon Corzine had a difficult term as governor. Many of his proposals for the fiscal crisis, such as leasing toll roads to private operators for one-time infusions of cash, or forcing mergers of small municipalities to consolidate local bureaucracies and services (a contentious issue in public finance), met with widespread opposition and failed. He had difficulties working with the state legislature, despite both its houses being controlled by his own party. Indeed, his first year in office, 2006, was noteworthy for a six-day government shutdown precipitated by the inability of the legislature and Corzine to agree on a budget in a timely fashion. During Corzine's term, taxes continued to rise in a state that already had one of the highest tax burdens in the nation.
Defeat in 2009: Despite spending over $30 million of his own funds in a reelection bid, versus about $8 million by his successful Republican challenger, Chris Christie, Corzine was defeated in a three-way race. By most accounts, Corzine has spent over $120 million of his own fortune in his three campaigns, one for the U.S. Senate and two for governor.
MF Global: Shortly after leaving office, Corzine became chairman and CEO of MF Global, then a leading financial futures and derivatives brokerage. Initiatives that he championed led to the firm's bankruptcy in 2011, tarnishing his reputation. Follow the link for details.
Lessons: The career of Jon Corzine, in both finance and government, has been marked by a number of spectacular highs and lows, often coming in quick succession after each other. Accordingly, many lessons from Jon Corzine can be drawn by the astute observer. Again, please follow the link for specifics.
The amount of customer money missing from the collapsed trading firm MF Global may be more than $1.2 billion — double previous estimates — the trustee dismantling the firm’s brokerage unit said on Monday.
But the surprise finding, which caught regulators off guard, may be overstated, according to a person briefed on the investigation. Some regulators say they believe that the trustee double-counted $220 million that had been transferred between units of MF Global, this person said.
Still, the much higher number highlights the disarray of MF Global’s records and raises significantly the hurdle for tens of thousands of customers seeking to get their money back. The trustee’s estimate represents a significant portion of customer funds held by MF Global.
Regulators suspect that as investors and customers fled MF Global in the last week of October, the firm used some of the customer money for its own needs — violating Wall Street rules that customers’ money be kept separate from the firm’s funds. Much of that money may never return. Now the challenge has grown for investigators trying to determine exactly what happened in those last frantic days. Just days ago, investigators believed that they were closing in on what they thought was about $600 million in missing customer funds, according to people briefed on the matter.
Regulators were relying on estimates from the firm and the CME Group, the exchange where MF Global did most of its business.But after weeks of reconstructing MF Global’s books, forensic accountants from Deloitte and Ernst & Young working for the trustee concluded that the account shortfall was much greater than originally estimated. Regulators have yet to verify the new numbers. While they are expected to raise their estimate above $600 million, it is unlikely to reach the trustee’s $1.2 billion figure.
Kent Jarrell, a spokesman for the trustee’s office, stood by that figure, but he noted that it was preliminary.
It is unclear what was behind MF Global’s original lower estimates. Some authorities chalk up the inaccuracies to the firm’s sloppy bookkeeping, and only slowly discovered additional holes in customer funds over the last three weeks.
The search for MF Global’s missing money has consumed a growing number of authorities, including the Federal Bureau of Investigation and federal prosecutors in New York and Chicago.
These inquiries have increasingly homed in on the theory that much of the customer money had left the firm, the people briefed on the matter said.
Regulators currently suspect that MF Global — at the time run by Jon S. Corzine, the former Democratic governor of New Jersey — improperly used customer money for its own purposes in the days before filing for Chapter 11 protection on Oct. 31.
Investigators are considering two possible situations. One is that MF Global used the money to meet trading partners’ demands for extra cash, which could come back. The other is that it was used to cover trading losses, which would mean that the money cannot be recovered.
MF Global’s management, however, has maintained that some of the money is still sitting at clearinghouses and banks, according to a person close to the company. Though they have not disputed that some of the money is gone, these executives think that other funds were trapped after the firm rapidly unwound more than half of its trading book as it was collapsing.
No one at MF Global, including its former chief executive, Mr. Corzine, has been accused of wrongdoing.
Representatives for MF Global, the CME and the Commodity Futures Trading Commission declined to comment.
The trustee, James W. Giddens, held a four-hour conference call on Sunday evening with staff members in New York City and Chicago to discuss the latest shortfall numbers, according to Mr. Jarrell.
Ultimately, Mr. Giddens — under pressure from customers demanding the return of their money — decided to provide his fullest update yet on the progress of his investigation.
“He felt duty-bound to say” that more money was missing, Mr. Jarrell said.
In Monday’s announcement, the trustee said that his office controlled about $1.6 billion in customer funds, but most of that was already earmarked to be paid out. The trustee said he was close to exhausting those funds. But the person briefed on the investigation said that the trustee would soon be able to tap more than $1 billion in customer money that is trapped in Harris Bank.
Beyond the shortfall in customer accounts, Mr. Giddens’s office said it did not have access to money that was held in foreign subsidiaries of MF Global, which are under the control of trustees in those countries.
“While the trustee will pursue them vigorously, it has been his experience that recovery of these foreign assets may take more time,” the office said.
In a separate move on Monday, MF Global’s estate requested court permission to appoint a trustee to oversee the winding down of the firm’s parent company. Such an authority would replace the company’s existing board. The trustee would be responsible for coordinating responses to regulators, among other duties.
MF Global is still running on about $8 million in remaining cash, and has yet to secure additional financing to support it through what will be a long bankruptcy case, lawyers for the estate said on Monday.
The fallout from the collapse of MF Global has renewed calls for tougher regulation of the futures industry, which has long relied on the principle that customer money is always safe.
While brokerages can use customer funds, they must put up sufficient collateral. Days before its Chapter 11 filing, however, MF Global was taking what amounted to free loans from its clients.
If federal prosecutors determine that MF Global intentionally tapped the customer funds, they could file criminal charges. But in a speech on Monday, David Meister, the C.F.T.C.’s enforcement chief, said that his agency need not show intent.
“You should know the commission takes the laws on segregated funds very seriously,” Mr. Meister said.
MF Global trustee’s statement
Jon Corzine
Who is Jon Corzine: Why work in financial services? Jon Corzine reached the pinnacle of his Wall Street career at the age of 47, when he became CEO of Goldman Sachs. When he was forced out just five years later, he turned to politics. In two of the most expensive campaigns in U.S. political history below the Presidential level, he used over $100 million of his own funds to gain election first to the U.S. Senate, then to the governorship of New Jersey.
Biography: Jon Corzine was born in 1947 and grew up on a small farm in central Illinois. After graduating from the University of Illinois in 1969 and earning an MBA from the University of Chicago in 1973, he moved to Columbus, Ohio to work in banking.
In 1975, Corzine moved to New Jersey, having taken a job as a securities trader at Goldman Sachs in New York. In 1980 he became a partner at Goldman, one of the most prestigious and lucrative achievements in the financial services industry. Rising rapidly through the ranks, he became chairman and CEO in 1994.
As CEO, Jon Corzine engineered the transformation of Goldman Sachs from a private partnership to a public company. The initial public offering (IPO) of Goldman stock created a huge windfall for the partners, including Corzine. Indeed, Jon Corzine's current personal wealth is estimated in the range of $600 million.
However, Corzine was not universally popular as CEO, and was forced out in 1999. Then he turned his attention to politics. He had been a supporter of the Democratic Party, and had chaired a commission on capital budgeting in the federal government in 1997, under President Bill Clinton.
In 2000, Jon Corzine won election as a U.S. Senator from New Jersey. Reportedly bored and frustrated with Senate procedure, especially as a freshman in a body where seniority counts heavily, Corzine ran for governor of New Jersey in 2005, while still in his first Senate term.
Corzine ran for governor when New Jersey was in the midst of a fiscal crisis, with looming deficits despite years of accelerating tax increases. He campaigned as the candidate who would use his financial expertise to bring sound fiscal management practices to a state sorely in need of them.
Jon Corzine had a difficult term as governor. Many of his proposals for the fiscal crisis, such as leasing toll roads to private operators for one-time infusions of cash, or forcing mergers of small municipalities to consolidate local bureaucracies and services (a contentious issue in public finance), met with widespread opposition and failed. He had difficulties working with the state legislature, despite both its houses being controlled by his own party. Indeed, his first year in office, 2006, was noteworthy for a six-day government shutdown precipitated by the inability of the legislature and Corzine to agree on a budget in a timely fashion. During Corzine's term, taxes continued to rise in a state that already had one of the highest tax burdens in the nation.
Defeat in 2009: Despite spending over $30 million of his own funds in a reelection bid, versus about $8 million by his successful Republican challenger, Chris Christie, Corzine was defeated in a three-way race. By most accounts, Corzine has spent over $120 million of his own fortune in his three campaigns, one for the U.S. Senate and two for governor.
MF Global: Shortly after leaving office, Corzine became chairman and CEO of MF Global, then a leading financial futures and derivatives brokerage. Initiatives that he championed led to the firm's bankruptcy in 2011, tarnishing his reputation. Follow the link for details.
Lessons: The career of Jon Corzine, in both finance and government, has been marked by a number of spectacular highs and lows, often coming in quick succession after each other. Accordingly, many lessons from Jon Corzine can be drawn by the astute observer. Again, please follow the link for specifics.
The amount of customer money missing from the collapsed trading firm MF Global may be more than $1.2 billion — double previous estimates — the trustee dismantling the firm’s brokerage unit said on Monday.
But the surprise finding, which caught regulators off guard, may be overstated, according to a person briefed on the investigation. Some regulators say they believe that the trustee double-counted $220 million that had been transferred between units of MF Global, this person said.
Still, the much higher number highlights the disarray of MF Global’s records and raises significantly the hurdle for tens of thousands of customers seeking to get their money back. The trustee’s estimate represents a significant portion of customer funds held by MF Global.
Regulators suspect that as investors and customers fled MF Global in the last week of October, the firm used some of the customer money for its own needs — violating Wall Street rules that customers’ money be kept separate from the firm’s funds. Much of that money may never return. Now the challenge has grown for investigators trying to determine exactly what happened in those last frantic days. Just days ago, investigators believed that they were closing in on what they thought was about $600 million in missing customer funds, according to people briefed on the matter.
Regulators were relying on estimates from the firm and the CME Group, the exchange where MF Global did most of its business.But after weeks of reconstructing MF Global’s books, forensic accountants from Deloitte and Ernst & Young working for the trustee concluded that the account shortfall was much greater than originally estimated. Regulators have yet to verify the new numbers. While they are expected to raise their estimate above $600 million, it is unlikely to reach the trustee’s $1.2 billion figure.
Kent Jarrell, a spokesman for the trustee’s office, stood by that figure, but he noted that it was preliminary.
It is unclear what was behind MF Global’s original lower estimates. Some authorities chalk up the inaccuracies to the firm’s sloppy bookkeeping, and only slowly discovered additional holes in customer funds over the last three weeks.
The search for MF Global’s missing money has consumed a growing number of authorities, including the Federal Bureau of Investigation and federal prosecutors in New York and Chicago.
These inquiries have increasingly homed in on the theory that much of the customer money had left the firm, the people briefed on the matter said.
Regulators currently suspect that MF Global — at the time run by Jon S. Corzine, the former Democratic governor of New Jersey — improperly used customer money for its own purposes in the days before filing for Chapter 11 protection on Oct. 31.
Investigators are considering two possible situations. One is that MF Global used the money to meet trading partners’ demands for extra cash, which could come back. The other is that it was used to cover trading losses, which would mean that the money cannot be recovered.
MF Global’s management, however, has maintained that some of the money is still sitting at clearinghouses and banks, according to a person close to the company. Though they have not disputed that some of the money is gone, these executives think that other funds were trapped after the firm rapidly unwound more than half of its trading book as it was collapsing.
No one at MF Global, including its former chief executive, Mr. Corzine, has been accused of wrongdoing.
Representatives for MF Global, the CME and the Commodity Futures Trading Commission declined to comment.
The trustee, James W. Giddens, held a four-hour conference call on Sunday evening with staff members in New York City and Chicago to discuss the latest shortfall numbers, according to Mr. Jarrell.
Ultimately, Mr. Giddens — under pressure from customers demanding the return of their money — decided to provide his fullest update yet on the progress of his investigation.
“He felt duty-bound to say” that more money was missing, Mr. Jarrell said.
In Monday’s announcement, the trustee said that his office controlled about $1.6 billion in customer funds, but most of that was already earmarked to be paid out. The trustee said he was close to exhausting those funds. But the person briefed on the investigation said that the trustee would soon be able to tap more than $1 billion in customer money that is trapped in Harris Bank.
Beyond the shortfall in customer accounts, Mr. Giddens’s office said it did not have access to money that was held in foreign subsidiaries of MF Global, which are under the control of trustees in those countries.
“While the trustee will pursue them vigorously, it has been his experience that recovery of these foreign assets may take more time,” the office said.
In a separate move on Monday, MF Global’s estate requested court permission to appoint a trustee to oversee the winding down of the firm’s parent company. Such an authority would replace the company’s existing board. The trustee would be responsible for coordinating responses to regulators, among other duties.
MF Global is still running on about $8 million in remaining cash, and has yet to secure additional financing to support it through what will be a long bankruptcy case, lawyers for the estate said on Monday.
The fallout from the collapse of MF Global has renewed calls for tougher regulation of the futures industry, which has long relied on the principle that customer money is always safe.
While brokerages can use customer funds, they must put up sufficient collateral. Days before its Chapter 11 filing, however, MF Global was taking what amounted to free loans from its clients.
If federal prosecutors determine that MF Global intentionally tapped the customer funds, they could file criminal charges. But in a speech on Monday, David Meister, the C.F.T.C.’s enforcement chief, said that his agency need not show intent.
“You should know the commission takes the laws on segregated funds very seriously,” Mr. Meister said.
MF Global trustee’s statement
11/16/11 Federal Reserve of San Francisco comes to HSU
I along with the department took video of this event. I was unable to take footage of the entire event unfortunately, but I did get David Lang’s presentation as well as a short portion of a question and answer period.
There were also presentations from students from an Economics class. Each group had to play the role of private central banking head for each of the 12 Federal Reserve branch banks. They had to make policy suggestions for the Federal Reserve banking system going forward.
Some of the groups had the right idea with the suggestion to remove the extra 0.25% interest being paid on excess reserves being held with the Federal Reserve. This is a big problem and those groups got it right.
David Lang presented first, and a notable point is that at the 14 minute mark in the video he explained that the Federal Reserve banking system paid back $78 billion to the US Treasury in 2010. It needs to be noted that he did not discuss the interest that the Federal Reserve charges interest on the currency in circulation. What about $189 billion paid to FRB on interest to service the debt in 2010? Wiki, a much less reputable source than the GAO reports this number as $164 billion. Regardless, it is more than double what the Federal government spends on education.
The fact that money, the US Dollar, a Federal Reserve debt note, an instrument of debt, is on the bottom portion of the balance sheet of the Federal Reserve, the liabilities side, is direct proof that each US dollar gains interest and that the Federal Reserve system is paid interest on that same debt, the national debt. David Lang and Yelena Takhtamanova both specifically showed the balance sheet of the Federal Reserve banks, and ‘Currency in circulation’ can clearly be seen as a liability. As we know the government does not have to issue debt in order to create currency but the Federal Reserve does anyway, to keep control of the debt slaves… I mean US taxpayers.
I along with the department took video of this event. I was unable to take footage of the entire event unfortunately, but I did get David Lang’s presentation as well as a short portion of a question and answer period.
There were also presentations from students from an Economics class. Each group had to play the role of private central banking head for each of the 12 Federal Reserve branch banks. They had to make policy suggestions for the Federal Reserve banking system going forward.
Some of the groups had the right idea with the suggestion to remove the extra 0.25% interest being paid on excess reserves being held with the Federal Reserve. This is a big problem and those groups got it right.
David Lang presented first, and a notable point is that at the 14 minute mark in the video he explained that the Federal Reserve banking system paid back $78 billion to the US Treasury in 2010. It needs to be noted that he did not discuss the interest that the Federal Reserve charges interest on the currency in circulation. What about $189 billion paid to FRB on interest to service the debt in 2010? Wiki, a much less reputable source than the GAO reports this number as $164 billion. Regardless, it is more than double what the Federal government spends on education.
The fact that money, the US Dollar, a Federal Reserve debt note, an instrument of debt, is on the bottom portion of the balance sheet of the Federal Reserve, the liabilities side, is direct proof that each US dollar gains interest and that the Federal Reserve system is paid interest on that same debt, the national debt. David Lang and Yelena Takhtamanova both specifically showed the balance sheet of the Federal Reserve banks, and ‘Currency in circulation’ can clearly be seen as a liability. As we know the government does not have to issue debt in order to create currency but the Federal Reserve does anyway, to keep control of the debt slaves… I mean US taxpayers.
Humboldt State University (Northern California) hosted Federal Reserve Representatives
HSU econ department to host visit from Federal Reserve Bank; presentation and mock open market scheduled Wednesday
Donna Tam/The Times-Standard
Posted: 11/14/2011 02:09:29 AM PST
The Feds are coming to Humboldt, and it's not for pot.
The Humboldt State University Economics Department is hosting representatives from the Federal Reserve Bank of San Francisco to discuss the Federal Reserve process and policy.
Economics lecturer Norman Maynard said he hopes it's a learning opportunity for the general public as well as his students, particularly given the concern surrounding the country's economic health. He said the event, which is from 4 p.m. to 7:30 p.m. Wednesday at ScienceB 135 on campus, is a good opportunity for anyone who is interested in the Federal Reserve's influence and policy.
”I think anybody who wants to know how should we evaluate the public policy and how should we interpret this public movement and (is interested in) learning what the Fed is and what it does would benefit,” Maynard said.
The event starts with a presentation from bank representatives on the open market and new monetary policy, followed by an economic forecast, which will also review the current state of the economy. After a short break, scheduled for 5:20 to 5:40 p.m., HSU economic students will make presentations on how monetary policy is decided before engaging in an open market simulation.
There will also be some opportunity for a question and answer period afterward.
The visit is part of the Federal Reserve's outreach efforts. Maynard said he thinks it will be beneficial to people with all levels of experience with monetary policy, including business owners or protesters like the tea party members or those within the Occupy Wall Street movement. Both groups, and many others, have expressed frustration with the country's economic structure.
”I think it will certainly provide context,” Maynard said. “What exactly is this thing that they're criticizing -- what criticism makes sense, what criticism doesn't line up with what the Fed really is.”
IF YOU GO:
What: Federal Reserve Bank of San Francisco presentation
When: 4 to 7:30 p.m. Wednesday
Where: ScienceB 135, HSU
Donna Tam can be reached at 441-0532 or dtam@times-standard.com.
Donna Tam/The Times-Standard
Posted: 11/14/2011 02:09:29 AM PST
The Feds are coming to Humboldt, and it's not for pot.
The Humboldt State University Economics Department is hosting representatives from the Federal Reserve Bank of San Francisco to discuss the Federal Reserve process and policy.
Economics lecturer Norman Maynard said he hopes it's a learning opportunity for the general public as well as his students, particularly given the concern surrounding the country's economic health. He said the event, which is from 4 p.m. to 7:30 p.m. Wednesday at ScienceB 135 on campus, is a good opportunity for anyone who is interested in the Federal Reserve's influence and policy.
”I think anybody who wants to know how should we evaluate the public policy and how should we interpret this public movement and (is interested in) learning what the Fed is and what it does would benefit,” Maynard said.
The event starts with a presentation from bank representatives on the open market and new monetary policy, followed by an economic forecast, which will also review the current state of the economy. After a short break, scheduled for 5:20 to 5:40 p.m., HSU economic students will make presentations on how monetary policy is decided before engaging in an open market simulation.
There will also be some opportunity for a question and answer period afterward.
The visit is part of the Federal Reserve's outreach efforts. Maynard said he thinks it will be beneficial to people with all levels of experience with monetary policy, including business owners or protesters like the tea party members or those within the Occupy Wall Street movement. Both groups, and many others, have expressed frustration with the country's economic structure.
”I think it will certainly provide context,” Maynard said. “What exactly is this thing that they're criticizing -- what criticism makes sense, what criticism doesn't line up with what the Fed really is.”
IF YOU GO:
What: Federal Reserve Bank of San Francisco presentation
When: 4 to 7:30 p.m. Wednesday
Where: ScienceB 135, HSU
Donna Tam can be reached at 441-0532 or dtam@times-standard.com.
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