European Financial Crisis Claims First US Victim, Greek Trojan Horse Boomerang? MF Global Not TBTF

Jon Corzine is ex Goldman Sachs, who helped the Greeks hide all their debt in order to enter the Eurozone (trojan horse). Now the Eurozone exposure to MF Global is causing their collapse. The ripple effect should impact US financial services firms to the point of additional bankruptcies IF the US government doesn't BAILOUT any more TBTF.



Boomerang.



It turns out the American Achilles Heel is GREED and DEBT.

Amplify’d from www.forbes.com

MF Global Bankruptcy's Biggest Losers

Today MF Global became the first casualty of the European debt crisis leaving behind dozens of unpaid creditors.

Jon Corzine’s MF Global filed for Chapter 11 bankruptcy today after a tumultuous week that including the firm’s stock plunging 67%, record quarterly losses and revelations over the firm’s European debt exposure. MF Global said it had total assets of about $41 billion against liabilities of almost $39.7 billion.

In a filing with the Southern District of New York bankruptcy court the New York firm reveals 50 firms that are owed the largest amounts of money by MF Global. MF Global noted in it’s bankruptcy filing that it’s “unable to determine the precise number of holders of its debt securities” but that debt securities are held by more than 500 holders.

Many of the names on the list appear to be vendors and companies that provided services for MF Global. A global IT consultancy out of Fairfax, Virginia, Headstrong Services, is owed $3.9 billion.

JPMorgan Chase and Deutsche Bank are the largest unsecured creditors on the list. JPM’s claims add up to about $1.2 billion while Deutsche Bank’s multiple claims reach roughly $1 billion. Both are listed as trustees for notes they’ve likely sold to investors so the amounts don’t reflect their own exposure to MF Global.

Meanwhile the firm’s largest shareholders are Fidelity’s asset management group Pyramis Global Advisors with roughly 14 million MF Global shares, or 8.4% of the firm’s common stock. That’s followed by Guardian Life Insurance Company’s 12.8 million shares and further down the list TIAA-CREF with 9.5 million shares.

Shareholders are typically at the bottom of the bankruptcy totem poll, and San Diego State University professor of finance Dr. Dan Seiver says they should expect recovery of “next to nothing.”

Here’s a complete list of shareholders who hold more than 5% of common stock as of September 30, 2011.

Fidelity                                 13,917,938 shares                   8.44% common stock RS Investments*                              12,879,811                                    7.81% Fine Capital Partners                           21,504,101                              7.37% Cadian Capital Management              10,180,286                              6.17% TIAA-CREFF                                     9,520,582                                5.77% Piper Jaffray                                        9,132,597                                5.54% Dimensional Fund Advisor                 8,920,497                                5.14% Rydex Security Global Investors        8, 456, 992                              5.13%

*RS Investments is an independent subsidiary of Guardian Investor Services LLC (GIS). GIS is a wholly-owned subsidiary of The Guardian Life Insurance Company of America. A spokesperson for the company says shares in MF GLobal were actually held by RS Investments’ RS Partners Fund (RSPFX) and not Guardian Life, and adds that  RS Partners Fund has since sold its entire position in MF Global and is no longer a shareholder. Read more at www.forbes.com

 

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