Because MF Global wouldn't technically own the bonds during their term—they'd be given to the lender as collateral until they matured, when MF Global would repurchase them—it wouldn't have to publicly report swings in the bonds' value. But here's what was really appealing about this arrangement: Under accounting rules, MF Global could book the anticipated profits from the entire transaction up front, boosting its quarterly earnings. If the trades were big enough, they could make MF Global profitable. And they wouldn't even appear on the firm's balance sheet as debt.A detailed article about the events that led to the downfall of MF Global.
« Older Launched just last week, Calligraphica is the new ... | "OK. HOLY COW! OK, that's fine... Newer »
This thread has been archived and is closed to new comments