Taibbi Calls MF Global Scam 'Straight Up Embezzlement'

Taibbi is interviewed by Max Keiser. His segment starts at 12:30. While the general public still doesn't understand credit default swaps, the MF Global ripoff is just plain old-fashioned criminal theft. When you use Peter's money to pay Paul,

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Taibbi is interviewed by Max Keiser. His segment starts at 12:30.

While the general public still doesn't understand credit default swaps, the MF Global ripoff is just plain old-fashioned criminal theft. When you use Peter's money to pay Paul, it's not complicated. Matt Taibbi points out that no one seems to want to do anything about it, and it's making him furious:

Almost every story written about MF Global by any financial news outlet will contain the word "chaos," and describe the bookkeeping challenges of the firm’s last days as just too overwhelming for mere human beings to handle. The sources are almost always unnamed, but they all say the same thing – it was just too much math, too much! The Times’s Dealbook page offered one of the most humorous examples:

A flurry of transactions engulfed the firm in the week before it filed for bankruptcy, as $105 billion of cash shuttled in and out. Amid the chaos, the employees became overwhelmed.

''It's like being at the bottom of Niagara Falls,'' recalled one employee in a meeting with federal authorities, according to one of the people involved in the case.

It’s incredible that people are offering as a defense the idea that a financial company could be so overwhelmed by transactions that it could just lose track of $1.6 billion. If you’re so terrible at managing money that you can honestly lose a billion dollars – especially after swearing up and down to the whole world that you were the right choice to manage the cherished millions and billions of scads of farmers, ranchers, and other investors – you should go to jail just for that, just on general principle.

But most pundits aren’t saying that. Instead, it seems like like every financial reporter both in this city and in Washington is talking to the same five or six defense lawyers, buying their weak arguments, and offering the same lame excuses for the missing money, which should tell you a lot about how the Wall Street press corps managed to miss the warning signs for 2008 and other disasters.

Somebody from MF Global has to be arrested soon. The message otherwise to middle America is so galling that it boggles the mind.

It would be one thing if this was a country with a general, across-the-board tendency toward leniency for property crime. But we send tens of thousands of people to do real jail time in this country for non-violent offenses like theft. We routinely separate mothers from their children for relatively petty crimes like welfare fraud. For almost anyone who isn’t Jon Corzine, it’s no joke to get caught stealing in America.

But these people stole over a billion dollars, right out in the open, and nobody is doing anything about it. Instead, we get a lot of chin-scratching legislative hearings, and an almost academic-style public discussion about whether or not a crime even took place. If there aren’t arrests in this case soon, ordinary people will correctly deduce that it simply isn’t a crime to steal in America, if the thefts are executed with a computer by white people in suits.

Just as it was incredible when Florida authorities dragged their feet in the Zimmerman case, it’s incredible that people in Washington don’t see the implications of this continual non-decision on MF Global. Apparently they hope no one notices. The sad thing is, they might be right.

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