From the moment it was first reported that MF Global was in trouble, the story has centred on Jon Corzine, the former New Jersey governor and Goldman Sachs head who ran the firm after he was ousted from office.
That narrative is starting to change. As more of the story is uncovered and people realize just how much trouble the firm's management got MF Global into, there is growing support for the Dodd-Frank financial reform bill. For months this piece of legislation has been under attack, particularly from Republicans, who argue that it is overbearing and unnecessary.
However, because it's become clear that MF Global was leveraged 30 to 1, even after the desmise of Bear Stearns and Lehman Brothers, people are starting to see that even with all supposed additional oversight for banks that has been implemented since the worst of the financial crisis in 2008, it's still relatively easy for a big firm to go down. (Though MF Global wasn't systemically important, so its oversight may not have been as strong, it was no small fry.)
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These two story lines aren't competing narratives. In fact, they play into each other, and financial writer Roger Lowenstein has merged them into a must-read piece for Bloomberg.
His main point: Of all people, Mr. Corzine should have prevented such massive over-leverage. As the head of Goldman, Mr. Corzine chastised Long-Term Capital Management in the 90s when they needed a bailout because they were incredibly over-leveraged. On top of that, he was furious that LTCM's management bet so heavily on Russia not defaulting. Over a decade later, he's done the same thing with troubled European nations.
Take a read. It's worth it.