The European debt crisis has taken down a U.S. financial firm. MF Global has filed for bankruptcy.
The futures brokerage, run by former Goldman Sachs exec and lawmaker, John Corzine, filed for bankruptcy protection after a series of bad bets on the crisis brought the firm to its knees.
Clients started to flee and partners no longer wanted to do business with the firm, after MF Global was forced by regulators to reveal the extent of those bad bets. MF Global is the seventh-largest bankruptcy in U.S. history based on assets.
And here’s one story with broader implications for the global economy…
The world welcomed a baby in India marking a milestone as the global population hits seven billion. The world’s human inhabitants have doubled over the last half-century, putting strain on water, food and other natural resources.
Elsewhere, it was a terrible day for the markets.
Remember that European debt deal everybody was all happy about last week? Well, investors scrutinized the deal over the weekend and returned in a selling mood.
In addition, a stronger dollar put pressure on U.S. manufacturing and commodity shares. But the pullback comes at the end of what has been the best month for stocks since 1991.
Some investors, like Larry Bach, are optimistic but cautious.
“I’m so excited, my 401K is going back up again, but I’m worried that it’s a big house of cards and it’s going to go right back down again.”
Looking at the numbers, the Dow slumped 275 points, a loss of 2.25%. And the rest of the market wasn’t far behind.
In Europe, the losses were bigger on a percentage term, with stocks down 3.2% in Germany and France, 2.7% down in the U.K.
Bottom line: MF Global imploded as bad euro debt bets spark investor stampede, global population hit seven billion and stocks tumbled sharply, but October was the best month since 1991.