After billionaire Jon Corzine lost his bid for reelection to New Jersey governor Chris Christie, the financial world didn't wait long to lock down those market-manipulation skills Corzine honed when he worked as Goldman Sachs' CEO. MF Global Holdings, a global financial brokerage and trade-clearing firm, hired him last March to "return MF Global to profitability and capitalize on tumult caused by the financial crisis," reports the Journal. Corzine's plan to do that? Turn MF Global into "a mini-Goldman." Today, Corzine is expected to announce plans to expand into asset management, something Lloyd's Boys have been struggling with.
Mr. Corzine, who spent years on Goldman's mighty bond-trading desk, is pushing MF Global to take the sort of measured yet profitable risks with its own capital for which Goldman is traditionally known.
Measured? That doesn't sound like our Goldman.
Regulatory changes put in place by the Volcker rule might help Corzine in his quest to morph MF Global into a diversified, midsize investment bank. Late last year, he added a proprietary-trading desk, and he tapped Munir Javeri, who used to work at Soros Global Management, to oversee the desk and report directly to him.
That's one big advantage Corzine has over Lloyd Blankfein. To comply with the Volcker rule, which prohibits large banks from short-term trades for their own profit, Goldman has been getting rid of its proprietary-trading desks, which hamstring its ability to make profits — a big reason Blankfein (and Corzine) are also looking to competitive markets in Asia.
The Federal Reserve Bank of New York announced late yesterday that it selected MF Global and French bank Sociètè Gènèrale, whose rogue trader lost $6.7 billion, to "become the two newest securities dealers assisting the U.S. government in sales of Treasury debt," says the Journal. Remember when Volcker-rule skeptics argued that limiting oversight to large banks because that's the way the last financial crisis happened might not prevent another crisis in the future? No? Must be just us then.