Just reading that MP Global, John Corzine's brokerage firm, has filed for bankruptcy, and is being investigated for improperly failing to segregate customer's funds from the brokerage's funds. Customers are out approximately $700M. Follow me over the fold for some thoughts.
I'm not sure who Corzine's customers were, so I have mixed feelings as far as the customers go. Those of the 1% using their Bush/Obama tax cuts as play money with MP Global to feed off of other's hard work - Fuck 'em. But I hate to think a union pension fund might have lost money too. One hopes they were prudent enough to avoid chasing huge returns and risk, but you never know.
What does bother me is that once again, we have capitalism gone awry. It appears that most of the losses stem from bets placed on Greek/Portugese/etc. debt. As I read back through my Adam Smith, my John Stuart Mills, etc. I continue to ask myself - what place do these scummy brokerage firms have in a capitalist society? Why do we allow them, along with hedge funds, private equity firms, and day traders? This is not capitalism at all, this is capital playing games with capital, failing to invest in our society, failing to put capital to use to generate long-term growth and income oppportunities that will benefit society, but rather just using $$ to create paper gains that create nothing.
And then, on top of it all, what do we do? We allow these people to pay taxes on the gains at a lower tax rate! At what point will this administration or Democrats in Congress stand up, marshall the energy of OWS and give us real regulation that ends this destructive financial excess? I'm not very hopeful, but until we do we'll see more and more of this. More and more brokerage firms going bust, pension funds sustaining losses, state pension systems taking hits and reneging on benefits, etc.
I fear for the future with every one of these stories. And you?