Former MF Global Chief Risk Officer Sacked For Doing His Job, Disagreeing With Corzine

Tyler Durden
Zero Hedge

Yesterday we noted how a CBO analyst may have been terminated for her conflicting views on model assumptions, especially when they veered away from the Wall Street-defined norm. Today, we find that the same approach to dissent may have been the reason why MF Global ended up taking inordinate risk, and ultimately blowing up, leaving over a billion in client money transitioning from liquid to gas phase overnight. According to Reuters,

“The former chief risk officer at MF Global who raised red flags about the firm’s aggressive trading bets told lawmakers that his warnings contributed to the firm’s decision to let him go in early 2011. Michael Roseman, who was ousted in January 2011 from the now-bankrupt futures brokerage, said he rang alarm bells about the firm’s exposure to European sovereign debt a year before the firm collapsed in late October of 2011.” Roseman’s statement on whether his skepticism to Corzine’s get rich quick scheme was the reason for his termination? ” ‘My views on risk certainly played a factor in that decision,’ Roseman told a House Financial Services subcommittee, about why he was asked to leave the firm.”

And so the status quo continues: any time anyone ever dares to disagree with broad misconceptions, whether it is regarding infinitely rising home prices, broad global compression trades, or the ability of European banks to onboard toxic CDOs in perpetuity is always promptly shown the door.

The flipside to this complete lack of checks and balances? Why the bailout culture of course, in which finding one company responsible for gross complacency would mean all are guilty. Which is nobody will ever go to prison as it would set the “worst” possible precedent ever: that one is ultimately responsible for their own stupidity. Said otherwise: the best qualification one can hope to add to one’s resume: “distinguished yes man with honors.“…

The article continues at Zero Hedge.

Also at Zero Hedge, Round Two Hearings Start, But Feasting on MF Global Continues and Presenting The Three Unscripted Sentences That May Have Cost Jon Corzine His Freedom

Read also, Under Twist, the Fed Has Purchased 91% of All Gross Issuance in Long-Dated US Treasuries

As Barclays showed a few days back, under Twist, the Fed has monetized virtually all, and specifically 91% of all gross issuance in the 20-30 year maturity bucket. In other words, Warsh is absolutely spot on, and once again we are left with an artificial market in which it is only the Fed that defines the UST curve shape by molding the long end. What happens when Twist ends? Will the 30 Year collapse? What happens when there is no explicit back stop to the long end? Is this the reason why Bill Gross yesterday said that he fully expects much more check writing by the Fed for the next ’12, 24, 36 months.” And how can it not…

Related:  Sort of. Deranged Obama: I pushed Dodd-Frank and Health Care Reform because of Christ.

Comments are closed.