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LORD COPPER: MF Global - victim of 'wild speculation'
November 01, 2011 - 11:46 GMT
It’s sad to see the travails of MF Global, which was suspended from trading on the London Metal Exchange yesterday as a result of the fallout from ceo Jon Corzine's bad bet on European sovereign debt. For those of us who have been around a while, we remember the original Gerald Metals brokerage business, the merger with Man, and then the various changes of name over the last few years.
They are a very professional team, and one of the few who
genuinely acted as a true broker to their clients.
Speaking to people in the London Metal Exchange business, there
seems a general agreement that the problems lay elsewhere.
Metals appears to be a healthy, profitable business.
Stepping outside the LME, though, it all looks a bit messy.
A new, high-profile investment banker and politician ceo seems
to have decided that being a broker wasn't good enough for him
- much better to get involved in prop trading, and, while
you're about it, why not grab a chunk of that cheap eurozone
debt that nobody else wants?
If you're a Master of the Universe, you know better than the
That's going to be scant comfort
for the employees who will needlessly lose their jobs, or the
investors who bought shares in the
Destroying a functional business isn't clever; tying a
commodity brokerage to a hope that the euro debt crisis would
be resolved quickly was probably not the way to go.
A few weeks ago, I questioned how
many successful rogue traders there were. Let's face it,
if, against all the odds, the euro debt had recovered, the
Masters of the Universe would have been able to tell the world
how clever they were. But making a bet that has the ability to
destroy the firm is a step too far.
Wild speculation like that is OK with your own money, not with
other people's jobs.
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