The eighth largest bankruptcy occurred at the end of October. Did you notice? Did the economy crash? Nope. MF Global was a derivative dealer that invested in loans to European nations that lost value. Fortunately, the US central bank did not create new money to “bail out” this fraudulent, poorly managed firm. And fortunately the US Federal Government did not give tax receipts to the firm. The company failed and all its customers moved to new brokerages.
Many customers lost money, but those losses weren’t passed on to taxpayers via government bail-outs and weren’t passed on to people who own dollars via a central bank rescue.
A company failed. It happens every day. This time, only the company’s clients suffered, not people who couldn’t even explain a derivative, including this author.
Related wikipedia entry.