MF Global hole widens to $1.6 billion

KPMG, the bankruptcy administrator of the former financial services company MF Global revised upwards the estimation of the shortfall in customer custodial accounts. It seems that Jon Corzine, the CEO of MF Global authorised the embezzlement of customer funds through commingling (using the cash left in margin accounts for collateral in their own transactions).  The claims from commodity traders using MF Global accounts are now $6.9 billion, out of which 3.9 billion will be returned by the trustee in the upcoming week. It holds an additional $1.4 billion in reserve, thus leaving it with a gap of $1.6 billion in claims.

Who is still holding toxic Italian debt ?

The Italian yields have cooled-off a bit, revolving around the 6.50%-7.00% area, partially due to the ECB rather frequent interventions and on the news that Mario Monti, a former European Commisioner, will lead the Italian government.  Spanish yields on the 10y benchmark are still high up there at 6.31% after recent weak macroeconomic news and French 10 year bonds rose today to 3.72%. The most solid European country, Germany, which reported today a 0.5% quarterly increase in GDP and its 10 year yields stand at 1.81%. Who is taking this loss ?