When I was reading “Street Fighters – The last 72 hours of Bear Stearns, The toughest firm on Wall Street” by Kate Kelly, the news broke out that MF Global, one of the world leading broker for futures and options has filled bankruptcy.
According to the news, the collapse of MF Global was due to excessive risk taking by the firm in a bid to turn a traditional brokerage firm to an investment bank.
Reading “Street Fighters” is like watching a movie of the last 3 days of Bear Stearns before it was sold to JP Morgan for $2 per share. I can vividly imagine the same dramatic situation happened in MF Global during the past week.
What is different is that, unfortunately, MF Global failed to secure a buyer. Interactive Brokers abandoned the deal late Sunday evening due to $935m ‘missing’ customers’ funds.
Singapore investors is not spared from this disaster. Investors with account with MF Global Singapore may have a tough time to get their money back during the bankruptcy protection period.
Some local brokerage firms’ exposure to MF Global may also shake the investors’ confidence. Informed investors have started to withdraw their deposits since last week.
A few months after the fallout of Bear Stearns, Merill and Lehman followed suit. Would this incident signal a start of financial institution failures caused by Euro Debt Crisis?
Just look at the maelstrom created by Greek’s referendum, is the world ruled by Greece now?