There are only two channels on the ForexLive dial today, Greece and MF Global.
The latest on MF comes from the CFO at Jefferies who said that after reviewing the financial records in merger talks, he did not believe there was a purposeful misuse of client funds.
“I think what we’ll probably see with MF Global — notwithstanding this current problem with their client money going missing, although I think that’s probably a mechanical problem — is that clients will get their money back in full,” he said.
A great column from Reuters says a “repo-to-maturity” accounting trick allowed MF to move bets on European sovereigns off the balance sheet and book a gain on the transaction at the time of sale.
The filings do not say how much of the gain was recognized upfront. But if it were a substantial portion, then these transactions would have frontloaded the firm’s earnings. That, in turn, may have helped cover the fact that MF Global’s core business was struggling.
