Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of futures broker MF Global
So what: At the center of the mess at MF Global is CEO Jon Corzine, a plan to turn the brokerage into a serious competitor to Goldman Sachs
At this point, Moody's
Now what: Like Lehman Brothers and Bear Stearns (remember them?) we're talking about a confidence business here. MF Global relies on customers and counterparties -- particularly counterparties that provide repo funding -- to keep the engines running. As we saw with the failed firms above, when confidence starts to drop drastically, it can be very, very tough to pull out of that tailspin. MF Global's assets total around $40 billion. At the end of 2007, Lehman Brothers' were at close to $700 billion. With that in mind, it would seem that a government-led deus ex machina is probably not in the cards, so investors may want to cross their fingers that Evercore is able to work some magic.
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