MF Global has been rumored to have held significant positions in European debt. It appears to us that taking a 50% "voluntary" haircut on Greek debt last week, along with MF's offsetting CDS hedging protection being declared worthless as the default was "not a credit event" is the likely culprit.
Everyone thought Greece would be the first domino...and thanks to the Greek default being MOPE'd into a "non-issue" for bond holders...MF Global has become the first domino.
Hold on...and pass the popcorn Sterling!
