I often wish I was an economist so I could manage large sums of other people’s money. As it is I only have our handful of pocket change to manage. I don’t need an economist’s degree to keep track of our pennies, nickels and dimes. If you can count to one hundred you can manage those coins. I don’t have a degree in economics, but I know where every penny, nickel and dime of our money is located.
Jon Corzine, Bradley Abelow and Henri Steenkamp are or were managing huge sums of other people’s money. Now if you want to throw your own money around, that’s OK. It’s your money and you can do what you want with it. When you manage other people’s money you can’t throw it around, you have to know where it’s residing. In case the people want their money.
All three of these money managers claim they never gave any orders to use the people’s money they were holding. Somehow it seems the people’s money got wrongly used. If the money amounted to a few hundred dollars misusing it would be wrong, but the matter could be made right fairly easily. However, when the money misused amounts to way more than a billion it doesn’t seem like that can be straightened out so easily. The people who misused the other people’s money probably don’t have pockets deep enough to make the matter right.
If you were some little teller for a bank you would be required to be bonded. Then if you made off with some of other people’s money the bonding company would pay it back, and you would go to jail. Apparently if you are managing billions there is no requirement that you be bonded. “Trust me folks. I’ll take good care of your money,” that’s all they have to say.
I don’t know what the salaries of the people who were managing the money were, but I would almost bet they were six or seven figures. It would be interesting to know if Jon had a golden parachute for many millions of dollars when he resigned. Maybe that’s why Bradley and Henri haven’t resigned. They don’t have a golden parachute in their contract.
Jon is kind of interesting because he was a former senator and senators are responsible for managing trillions, not just billions. It seems like he had practice with large amounts of money. He should have been able to do the job, but he doesn’t know where the billion of other people’s money went. Has no idea. Never ordered the other people’s money to be moved.
If I were to solve this situation I think I would look for someone way down the chain of command, who could only afford a nub for a pencil, as the culprit. He didn’t have the experience, and only had a nub of a pencil. He was in way over his head with the big money. He just didn’t know what he was doing when he ordered billions of dollars of other people’s money wrongfully transferred. We wish he had been bonded.
The whole problem would be solved if M F Global was too big to fail. Alas, it wasn’t. It did.
John W. Robinson