MF Global Trustee - Shortfall > $1.2 Billion

The word "missing" makes it appear that all they need to do is look under the seat cushions...

That causes me physical pain.

On a related - or rather as they insist UNRELATED[!!!!] topic

http://www.jefco.com/html/OurFirm/NewsRoom/PressReleases/2011/JefGrp_Letter%20to%20Shareholders.pdf

Interesting , thanks for posting. I only read it quicky but it does seem they did not discuss the ramping up of their business model. My understanding is they are a much larger business with capital needs far bigger than several years ago and dependent on the market for short term funding at a time when its larger competitors concluded the business model dead and became banks that issue cd's and borrow from the Fed)

Interestingly while the stock si off the lows of the morning, the 8.5's of 7/19 are trading lower.

"...And dependent on the market for short term funding..."

They said the exact opposite in the letter. You ought to read it.

Hmmm, but GS says RS is correct!

"With markets facing an increasing level of duress given issues in EU Sovereign markets, as
well as the recent focus on Repo markets given the MF Global bankruptcy and widening
spreads in the TED Spread and LIBOR/OIS, there could be incremental focus by regulators
on repo’s, funding mix, and duration of liabilities. Relative to peers, a higher percentage of
JEF’s balance sheet is funded by Repo’s and short-term markets (including repo, securities
lending, and sold securities not yet purchased). In the most recent quarter, 59% of JEF’s
total liabilities came from these three buckets vs. 36% for Morgan Stanley. Jefferies’ use of
Repo transactions is 26% of liabilities versus 15% at Morgan Stanley. Morgan Stanley
had historically been 25%-30% repo financed, but it has shifted to more stable
financing since the 2008 crisis."

Short-term sources of funds JEF MS C BAC JPM
Repo Book $10,936 $110,053 $223,612 $248,116 $238,585
Other sources of funds, short-term 13,659 149,733 214,669 161,199 185,159
Total short-term funding $24,594 $259,786 $438,281 $409,315 $423,744
Total liabilities $41,634 $724,845 $1,756,650 $1,989,376 $2,106,953
Repo as % of liabilities 26.3% 15.2% 12.7% 12.5% 11.3%
ST funding as % of liabilities 59.1% 35.8% 24.9% 20.6% 20.1%

Jail time for Corzine? How does this guy resign just as the ship hits the iceberg?

The narrative so far is that Corzine was very much in control. I don't think it's a stretch to assume they'll argue the opposite with regards to customer funds. Based on what I've read so far he should me made an eample of, yet I assume the opposite.

thank you dan rather.

MF Global’s officers admitted to federal regulators that before the collapse, the firm diverted cash from customers’ accounts that were supposed to be segregated:

Cash in customers’ accounts may be invested in allowable transactions, and MF was allowed to make extra revenue from the income. But what isn’t allowed, and what MF Global apparently admitted to doing, is to commingle customers’ money with its own and take money from customers’ accounts to meet margin calls on MF Global’s own allowable transactions. Even if all of the money is eventually clawed back and recovered, this remains an impermissible act. Moreover, full recovery—even if it is possible—is not the same as restitution. People have been denied access to their money, and businesses and reputations have been tarnished.

In layman’s terms, you may buy a Rolls Royce with customers’ excess cash, sell it at a profit, and pocket part of the profits. You may buy a Rolls Royce and try to resell it at a profit with your firm’s cash. But you aren’t allowed to take customers’ money to make the car payments on your firm’s Rolls Royce. If one engages in this impermissible activity, it becomes almost impossible to cover up if you have an accident driving your Rolls Royce.

http://pragcap.com/mf-global-revelations-keep-getting-worse

What happens if you take all the customers' excess cash and take a huge loss on the Rolls? Seems like that would be a big problem as well.