Friday, Friday! Gotta get down on Friday!

Let’s take a turn around the internet , shall we Miss Bennett?

Someone, beside *me*, really has it in for Jon Corzine.  The story about MF Global has been on the frontpage of the NYTimes every day this week.  In some cases, there have been several stories per day.  The one from yesterday was especially negative, not only for Corzine but for what his relationship with Obama says about the president’s judgement (remember that his judgement was Obama’s selling point in 2008).  Earlier this year, Gary Gensler, the head of the CFTC was proposing a rule to restrict the very same kind of trading that Corzine’s MF Global was doing and like Brookesley Born back in 2000, Gensler was overruled, this time by Corzine himself and a bunch of his lobbyist dudes.

As a former sovereign debt trader at Goldman Sachs, Mr. Corzine wagered that the European regulators would backstop any default. So even as dark clouds circled over Europe, he sensed an opportunity. Starting in late 2010, MF Global began to accumulate short-term sovereign debt of countries like Italy, Spain and Portugal.

MF Global financed these purchases through complex transactions known as repurchase agreements. In these, the bonds themselves were used as collateral for a loan to purchase them. The interest paid on that loan was less than the interest the bonds paid out, earning the firm a profit from the spread.

While that practice is quite common, the C.F.T.C. wanted to crack down on such lending in those instances when customer funds were used. The C.F.T.C. proposal would have also banned the use of client funds to buy foreign sovereign debt.

It is unclear whether the firm used client funds to purchase the risky bonds of Italy, Spain, and other debt-laden European nations, but experts say it is not unusual for such transactions to be paid for with customer money.

A person close to MF Global said the firm did not use client funds to finance these trades.

Leading the government’s effort to curtail these arcane practices was Gary Gensler, the chairman of C.F.T.C., who had worked for Mr. Corzine at Goldman Sachs. Mr. Gensler pushed for the proposed change in October 2010, and planned to bring it to a vote this summer.

MF Global has four outside lobbyists in Washington, tiny by Wall Street standards. But it was Mr. Corzine who marshaled the firm’s response to the proposal, lobbying most of the agency’s five commissioners directly. One commissioner said he visited with Mr. Corzine in MF Global’s headquarters, and acknowledged being impressed by the Wall Street titan, said a person with direct knowledge of the meeting who asked for anonymity because the meeting was private.

The C.F.T.C. polices the markets for futures trades. Staff members there often do not have a Wall Street pedigree.

Mr. Corzine’s background in finance made him highly credible, agency officials said.

Mr. Corzine’s efforts culminated on July 20, as the agency was preparing for a vote on the proposal. That day, MF Global executives were on four different calls with the agency’s staff. Mr. Corzine himself was on two of those calls.

One of the calls was with Mr. Gensler. Both men are active Democrats, and served on financial panels together recently.

Shortly after the calls, Mr. Gensler, aware that he could not push the vote through, decided to delay the proposal indefinitely.

In Ron Suskind’s book, Confidence Men, Gensler comes off as one of the few good guys in Obama’s administration who has a background in finance and knows how players like Corzine work.  In a recent brief interview with CNBC when asked whether there were other Wall Street firms with a sovereign debt crisis, Gensler just smiled and said nothing.  Gensler wasn’t able to do much better than Born against Wall Street’s lobbying arm with the rest of the CFTC board.  The good thing is that the rule isn’t dead, it’s just delayed.  The bad thing is that Barack Obama was prepared to make Jon Corzine his Treasury Secretary if Geithner resigned.  Come to think of it, why *didn’t* Geithner resign?  Did the risky trades at MF Global scare Obama off?

As of last night, Corzine had lawyered up with a criminal defense lawyer and this morning, he resigned from MF Global.  What kind of influence he personally had with Obama’s White House may make for some interesting election year fireworks.  And let’s not forget OccupyWallStreet who may just help ignite some true voter pushback on the Obama administration.  Call me crazy but my tinfoil antenna are starting to pick up signals that the opinion makers are starting to be embarrassed by Obama and are concerned that according to the models they are running, he can’t win against Romney next year.  Nate Silver suspects that Obama may be toast.

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Good news!  Our national unemployment rate is down to 9%!  Isn’t that amazing?  Don’t tell anyone from Sanofi, Novartis, Amgen and Merck.  Let it be a surprise.

Also, don’t be surprised when the government is forced to revise that number upwards.

Meanwhile, in another bit of, er, good(?) news, the New York Times reports that the reports of increasing poverty are greatly exaggerated and anyways, poverty is not that bad these days.  You get food stamps!  See, if you’re not actually starving and suffering from kwashiorkor, you’re not really poor, even if you were solidly middle class last year.  This year, I will have paid more in taxes than required to support a family of four above the poverty level, next year I am at the poverty level. Good to know that impending homelessness, healthcarelessness and food stamps are not as bad as I think they will be.

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In the battle of the pundits, David Brooks squares off against Paul Krugman.  David, who is really Wormtongue in disguise, constantly points out that if you have a college education, you’re doing pretty well during this recession compared to the great unwashed masses who only have high school diplomas.  THOSE people can’t get jobs because they are unqualified.  Truly successful people have college educations.  Oh, wait, Steve Jobs dropped out of college after his Freshman year.  Well, surely he’s an exception.  Wait, Bill Gates also dropped out.  And so did Mark Zuckerberg.  Jeez, does anyone in Silicon Valley have a Bachelor’s degree?? Yes!  Steve Wozniak has one.  He got it after he became a millionaire at Apple from designing the Apple II.

But surely, SURELY, they are exceptions, no?  Actually, David, none of my friends with multiple advanced degrees are doing very well right now.  Oh, there’s plenty of work to do.  It’s just mostly unpaid.  The people who need the help the most can’t find the funds and these are not greedy entrepreneurs of the kind that Brooks would admire.  They’re just not getting funded.  Well, it’s only cancer and other diseases.  But I will be sure to tell my friends at Sanofi, Merck, Novartis and Amgen that they are fully employed and prosperous because they graduated from college.  Let’s not let reality get in the way.

Paul Krugman, on the other hand, says the educated are not getting jobs.  He says this because he looks at all those graphs and correlations and mathematical thingies that David Brooks probably didn’t study when he was in college.  And Krugman is living in the middle of pharmageddon central.  All he needs to do is stick his head out the window to hear the agonizing cries of the chemistry PhD at the Frick lab only a few blocks down the road who cannot find a job.

That’s why Krugman is a god and David Brooks is still just a Wormtongue, whispering sweet distractions into the moneyed class’s ears so that they don’t have to feel, well, *anything* really, while he tells the rest of us that we’re worthless without a college education.  And the college educated trudge all the way to the unemployment office.  “Hi-ho, Hi-ho, it’s off to un-work we go”

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And now for our musical interlude for all the high school graduates out there: