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MF Global: Lehman all over again? First victim of the European debt crisis? Or something even worse?
You may have heard by now that MF Global, a somewhat obscure Wall Street investment firm run by former Goldman Sacher and former New Jersey Governor Jon Corzine, imploded on Monday, declaring bankruptcy after failing to find someone to buy it. MF Global might also have illegally diverted money from client accounts to its own trading operations.
The firm is now being looked at as either (1) a sort of junior Lehman Brothers — which makes sense, as Corzine was trying to move MF Global into a spot in the much-reduced-by-the-financial-crisis firmament of investment banks — or (2) the first victim of the European debt crisis.
At MarketWatch, Brett Arends goes a bit farther, pointing out that MF Global's abrupt meltdown will directly affect average investors, because those investors' mutual funds and pension funds were mixed up with Corzine's wannbe Goldman and its risky bet on European sovereign debt.