Financial Business Review: MF Global’s Jon Corzine TALKS To Justice, Citigroup TARGETED For Breakup

The $1.6 billion in client cash that became missing at the time that MF Global Holdings Ltd. (MFGLQ.PK) collapsed was the subject of a meeting between the Department of Justice and Jon Corzine last week, according to the Wall Street Journal. Meanwhile, the former company’s assistant treasurer Edith O’Brien refuses to talk unless she receives immunity from prosecution.

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Even though Citigroup Inc. (NYSE:C) has a credit card division that is alone worth $60 billion, the entire bank’s value is estimated at $97 billion, according to the former Morgan Stanley (NYSE:MS) Chief Executive Phil Purcell, who still campaigns for the breakup of the big banks, and adds that, if the banks trade at half of book value, but possess business lines that would bring two to three times book, it’s a no-brainer: “The shareholder is getting cheated.”

Mortgage real estate investment trust sector stocks such as American Capital Agency Corp. (NASDAQ:AGNC) and Annaly Capital Management, Inc. (NYSE:NLY), are on watch following the Federal Reserve’s stimulus announcement of $40 billion per month in mortgage-backed securities purchases. Agency REITs are more difficult, as the resulting higher mortgage-backed securities prices will improve book values, but the lower rates should increase prepayment risk.

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