KeNo's Housing and Economic Portal: Wednesday November 16 Housing and Economic stories

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In Corzine Comeback, Big Risks and Steep Fall - (www.nytimes.com) MF Global, a commodities and derivatives brokerage house, collapsed on Monday in the biggest bankruptcy on Wall Street since the failure of Lehman Brothers. The firm imploded after a big investment in European bonds — a bet he directed and defended as not particularly risky as recently as last week — led investors, clients and ratings agencies to lose confidence in the firm. The fall of MF Global, and the discovery that hundreds of millions of dollars were missing from the firm’s customer accounts, have now cast a dark cloud over Mr. Corzine’s legacy and reputation. Federal authorities have stepped up an inquiry into why the firm failed to keep its customers’ money separate from the company’s — a regulatory violation. MF Global was supposed to be Mr. Corzine’s comeback vehicle after New Jersey voters turned him out in 2009. Instead, the collapse of the firm appears to be a humiliating coda to the career of a one-time titan of Wall Street.

Ireland sees ECB "wall of money" to calm markets - (www.reuters.com) Ireland believes uncertainty aroundGreece will force the European Central Bank to pledge "a wall of money" to buy peripheral bonds to calm markets, the finance minister said on Wednesday. The ECB has been buying bonds of trouble states to ease the euro zone debt crisis despite opposition from Germany. The central bank's new president, Mario Draghi, appeared to indicate last week he was ready to continue buying bonds of trouble states although outgoing ECB chief Jean-Claude Trichet said his remarks had been over-interpreted. "They need to go into the market and say they have a wall of money here and no matter how much speculation there is we are going to keep buying Italian bonds and any other bonds that are threatened," Finance Minister Michael Noonan told state broadcaster RTE.

MF Global accounts shock leaves clients scrambling - (www.reuters.com) MF Global Holdings Ltd failed to protect customer accounts by keeping them separate from its own funds, said a top U.S. exchange regulator, another shock for commodity markets scrambling to contain fallout from the brokerage's bankruptcy. The revelation on Tuesday by CME Group Inc suggests Jon Corzine's MF Global violated a central tenet of futures brokerages. It could erode confidence in a market that for decades has enjoyed a sterling reputation for safety. MF Global cannot account for a large amount of customer money that was supposed to be kept separate from other funds, sources said, and regulators are scrambling to review the broker's accounts. The cause of the shortfall -- including whether the company pilfered client funds or merely cannot account for the money -- was not clear. The Federal Bureau of Investigation is showing preliminary interest in regulatory probes, a person briefed on the matter said.

Greece's Gamble Adds Hint of Arab Spring to Crisis: Euro Credit - (www.sfgate.com) Greek Prime Minister George Papandreou said last week that the Arab Spring is a lesson on democracy for the world. By asking Greeks to vote on terms of a second rescue package and holding a confidence vote on his own premiership, he risks provoking an unraveling of the euro. Papandreou is gambling that the more than 70 percent of voters who said in an Oct. 28 poll they want Greece to stay in the common currency will outweigh the 44 percent who called the bailout negative. "Democracy is alive and well and Greeks are being called on to rise to a national duty beyond the regular electoral process," he said, calling a parliamentary vote for Nov. 4 and a referendum that's likely to happen in January. The announcements sent stock and bond markets into a tailspin yesterday, driving Greece's two-year note yield to a record 88.81 percent, Italy's 10-year borrowing cost premium to Germany to 455 basis points, the highest since the euro's creation in 1999, and the euro to its weakest against the dollar in almost three weeks. Fixed-income markets in Greece fell further today.

Possible Nuclear Fission Detected at Fukushima - (www.bloomberg.com) Tokyo Electric Power Co. detected signs of nuclear fission at its crippled Fukushima atomic power plant, raising the risk of increased radiation emissions. No increase in radiation was found at the site and the situation is under control, officials said. The company, known as Tepco, began spraying boric acid on the No. 2 reactor at 2:48 a.m. Japan time to prevent accidental chain reactions. Tepco said it may have found xenon, which is associated with nuclear fission, while examining gases taken from the reactor, according to an e-mailed statement today. “Given the signs, it’s certain that fission is occurring,” Junichi Matsumoto, a general manager at Tepco who regularly talks to the media, told reporters in Tokyo today. There’s been no large-scale or sustained criticality and no increase in radiation, he said.