Wednesday, March 24, 2010

Former Goldman Head Seeks Special Fed Status for His New Firm

Jon Corzine, the former New Jersey Governor who was Goldman's CEO from 1994 to 1999, has just been named president of MF Global Holdings Inc.

MF was simply a futures brokerage firm. Corzine is going to change that by seeking "primary dealer" status with the Federal Reserve Bank of New York. Once a firm has primary dealer status a firm is in the club. Do you want to make money? Trade with the Fed. As I pointed out in January, the Fed shoveled money to the insider banks through the trading activities with these banks as part of their primary dealer operations.

The importance of this primary dealer status can be seen by the fact that seeking primary dealer status is the first significant move that Corzine has made since taking the helm at MF.

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