re: #524 Cannadian Club Akbar

So much for the notion that Corzine was a shrewd financier (going back to his days at Goldman Sachs), which I always thought was overblown. The firm he headed up is now circling the drain and may be bought out (though that deal looks like it might fall apart).

The tentative agreement is expected to wind down Corzine’s short tenure at MF Global. The firm, which about two weeks ago had a market capitalization of $612 million but now has a valuation of less than $200 million, was the eighth-largest futures broker in the U.S. entering September and the largest independent firm of its kind.

In the past 18 months, Corzine has expanded around the firm’s trading activities, which involve taking the other side of clients’ trades using money on MF Global’s balance sheet. As noted in the Deal Journal, such principal trading has long been performed by MF Global. But under Corzine’s leadership, that part of the business has grown. Last year a little over half the trading was done in bonds, with commodities, equities and currencies other areas of focus.

Did Corzine’s risk taking cripple MF Global? Some argue that he faced a perfect storm. Others say that he has long shown a tendency to gamble.

They point to Goldman Sachs’ major trading losses under his watch in 1994. “In trying to become what some dubbed a mini-Goldman (GS), Corzine’s MF Global may have leveraged its bets too much and may not have paid enough attention to risk management,” Reuters wrote this morning in summing up the complaints against Corzine.