Another Democratic politician is now demonstrating how his economic theories can be shattered by economic reality.
Former Democratic Senator and Governor Jon Corzine — who as recently as this spring was considered on Barack Obama’s the short list as a new Treasury Secretary — may have singlehandedly killed the large Wall Street firm MF Global Holdings, Ltd.
As Chairman and CEO of MF Global, Mr. Corzine bet on the sovereign bonds issued by European countries with $6.3 billion of the firm’s own money. The company is now tottering between bankruptcy and insolvency.
The irascible Democratic politician ignored warnings that his bets on sovereign debt of Italy and Spain were foolhardy. This is not the first big financial mistake Corzine has made. In 1994 he brought steep losses to Goldman Sachs when he made currency bets and the British pound fell. In 1999 he was pushed out of Goldman as Chairman.
Corzine is a hard driving figure who spends whatever it takes to reach his goal. He spent $62 million of his own money to buy his way into the United State Senate from New Jersey election — waging the most expensive Senate campaign race in history. During the campaign Cozine refused to release his income tax records. When Goldman went public he was reportedly worth $400 million.
He also spent $38 million in his race for New Jersey governor in 2005. Considered one of the most liberal governors in the country he was defeated in 2009 by Republican Chris Christie.
In the Senate Corzine was the co-author of the reviled Sarbanes-Oxley regulations and sought to impose restrictions on individual choices for 401(K) retirement accounts. He played a key role in getting Senator John Edwards to be on the Democratic presidential ticket with Senator John Kerry. Edwards is facing criminal charges of using campaign funds to pay for an out-of-wedlock child he fathered while still married.
While New Jersey Governor , Corzine sought to raise the state sales tax, one of the highest in the country from 6% to 7%. His Democratic legislature stoutly opposed him and resulted in a state government shutdown. Corzine won and today the state suffers one of the highest sales taxes in the nation.
Governor Corzine also sought to sell the state’s highway system to allow it to issue bonds to raise further funds for the state government. The plan would have added $32 billion to the state debt. The Democratic legislature railed against that plan and prevailed.
Now Corzine is back in the private sector working his economic magic. Only this time his bet on high European debt may have cost him his job, his company and burned thousands of investors who put faith in MF Global. As of this posting trading on MF Global has been suspended. A new owner, bankruptcy restructuring or liquidation are the options he faces today.
It all sort of makes sense, doesn’t it?
He’s also too flippin’ dumb to fasten his seat belt.
Having lived in NJ 30+ years, I can tell you that the best thing that Christie did was to get this corrupt, arrogant, Marxist schmuck out of office.
One wonders how Corzine accumulated that kind of wealth ($400 million) with poor bets and poor decision making? Or was he making bad bets with other peoples money? I think that is the case with many politicians.
like bookies, the politicians get the “juice,” or a cut of the action regardless of outcomes
so do the global financial titans.
Plus they buy politicians.
Certainly, Corzine tried this time as well. He probably misjudged the scale of the game. No matter how successful one has been in the past, there is always a higher league.
The short answer was that when things were rocking and rolling in the zeros, it was impossible to not make money in the financial sector, especially if they’re heavily into real estate. A rising tide will lift a sinking boat – for a while.
I keep hearing that he “spent his money” for this election and that election. As a point of clarity, it’s general knowlege that he was reimbursed for ALL his expenditures from campaign war chests. This is guy doesnt spend anything HE has…that’s one of the first principles you learn at Goldman…risk OTHER people’s money first. Please correct me if I have it wrong, but I’m pretty sure he didn’t suffer ANY loss running for any office.
Accumulating European sovereign debt is like trying to turn a profit from socialism.
Profiting from capitalism requires producing more than one consumes which is the opposite of socialism.
Of course most senators of both parties tend to think the grass on the socialist side of the fence is always greener.
“Accumulating European sovereign debt is like trying to turn a profit from socialism.”-norm
Excellent point.
I have one quibble, though. Accumulating European sovereign debt IS trying to turn a profit from socialism.
When Corzine left NJ, his last words, between tears, were “long live the progressive movement”. Corzine is a devious soul who has done much harm to many people, especially the working class here in NJ. I imagine he is quite happy with the results of his dirty work. I wonder, though, why did he travel to Africa a few months ago? Was he stashing his cash?
He was betting on government bail outs – the same way Goldman Sachs makes money. It worked pretty well for him up until now.
will pop up again
According to Tyler Durden over at Zero Hedge blog, bankruptcy may be the least of Mr. Corzine’s problems in the MF debacle:
http://www.zerohedge.com/news/someone-going-jail-mf-global-caught-stealing-hundreds-millions-customers
“…Mr. Corzine bet on the sovereign bonds issued by European countries with $6.3 billion of the firm’s own money.”
It looks like around $700 million of that was not, in fact, the firm’s own money.