So, the folks out here on the Left Coast have largely been evicted from their encampments and, in looking for something to keep their faces on the front page, have decided to take on the shipping industry for no particular reason other than that they can. I’ve got a better suggestion. The centerpoint of the movement which has broad resonance is the web of greed and corruption that connects Wall Street and the political system. John Corzine of MF Global is a holiday season gift, putting a face on the crime.
For those who have been vacationing in Mongolia, Corzine was the chairman of MF Global, a commodities brokerage which made a losing $6.3 billion bet on European government bonds and, as they were going bankrupt, “borrowed” and lost some $1.2 billion from customer accounts. As the story unfolds, MF Global’s chief risk officer resigned in March as Corzine bullied the board into approving his European bond strategy; Corzine, his Chief Operating Officer, and his Chief Financial Officer have testified under oath that he did not authorize any inappropriate transfers and they do not know what happened to the client’s money; and an officer of the exchange where MF Global operated has testified that Corzine was at least aware of some of the transfers. As they say in the mainstream media, numerous investigations are under way, but as yet no indictments have been issued.
For a moment, the broader context: Commodities, unlike stocks, are regulated by the Commodities Futures Trading Commission rather than the Securities and Exchange Commission. The Commission’s chair is a former employee of Corzine’s at Goldman Sachs. Regulations allow commodity brokerage firms to use cash in customer accounts as collateral for government bond purchases made on company accounts. (Yes, you read that right – specifically CFTC Regulation 1.25.) When Corzine testified that he had not authorized any “inappropriate transfers”, the Senators were not sharp enough to ask what he considered to be an “appropriate transfer”. Corzine has successfully lobbied for these looser regulations. Many of the injured parties are farmers and ranchers who use commodity futures as conservative hedges; others are speculators.
And the political context: Corzine was a Democratic Senator and Governor of New Jersey. (Chris Cristie has been cleaning up some of the mess that he left.) More importantly, he has been a major bundler for Barack Obama, raising some $500,000 in this election cycle. And the icing on the cake – as the assets of MF Global have been quickly disposed of in bankruptcy, enough have gone to George Soros (the funder of uber-liberal Media Matters and MoveOn.org, which have been big supporters of Occupy Wall Street) to give him a $130 million overnight paper profit. Consider it recycling.
Enough? If the scandals of Fannie Mae and Freddie Mac were not enough; if the generous bailouts of the politically-connected banks under TARP were not enough; if the sweetheart deals in the Stimulus Plan were not enough; if the zero prosecutions for the 2008 fiasco were not enough; if the scandal of Solyndra was not enough; perhaps this is enough to convince the Occupy protesters – who largely support Obama – that the messiah’s administration is the most financially corrupt in a century.
This week’s brief video is the Gingrich interview which helped turn many leading conservatives against him: his attack on Mitt Romney’s success in free market capitalism – in response to a question about Gingrich’s success in Washington lobbying.