Showing posts with label con. Show all posts
Showing posts with label con. Show all posts

Sunday, December 14, 2008

Big Investors Get a Dose of Their Own

Bloomberg reports that "The Securities and Exchange Commission hadn’t examined Madoff’s books since he registered the unit with the agency in September 2006."

Meanwhile, some of the investors who were dumb enough to trust the goose have been identified. (We must always remember the American dogma that wealth is a virtue and that the wealthy must be more intelligent; else, how would they get welt
  • Director Steven Spielberg
  • Publishing and real estate tycoon Mortimer Zuckerman
  • New York Mets owner Fred Wilpon
  • GMAC (GM financing arm) Chairman J. Ezra Merkin
  • Philadelphia Eagles owner Norman Braman
  • French bank BNP Paribas
  • Tokyo-based Nomura Holdings Inc.
  • Spanish bank Santander, possibly $3 billion in losses
  • Britain-based bank HSBC, possibly $1 billion in losses
  • Zurich-based Neue Privat Bank
  • Yeshiva University in New York was an investor
And hedge funds (which have historically taken only investments from the very rich):
  • Fairfield Greenwich Group, possibly $7 billion in losses
  • Tremont Capital Management of New York
  • Maxam Capital Management LLC reports a loss of $280 million
  • Sandra Manzke, Maxam's founder and chairman: "I'm wiped out."
Senator Charles Schumer was one of the larger Congressional beneficiaries of Madoff campaign contributions. So too was New Jersey Senator Frank Lautenberg.

How to Make Money and Screw People

Forthcoming from Rotting Ideas Press: How to Make Money and Screw People, from the gliterati who brought you The Bonus, The Crash, and The Bailout. Pre-order your copy and get a free t-shirt!

Partial contents to include:
Better Business Advisory Boutique by Dick Fuld. The former chief executive of Lehman Brothers plans a comeback with a small advisory firm to harness his contacts in US companies once the dust settles on Lehman’s bankruptcy.
Fall and Fall Again. Robert Rubin tells how you too can be called on as an advisor to presidents even after conceiving one of the greatest financial disasters in economic history.
Effective Toadying on the Way to the Crash. Timothy Geithner, Neel Kashkari and others offer advice on Wall Street's most time-honored practice: saying yes clearly while having one's nose buried in the boss's ass.

How to Get into Harvard. An essential entry guide to the university key to destroying whole economies (even more than the Chicago School of economics!) Greatly enhance your odds of getting an advisory role in the new and improved Obama Administration.
How to Be a 'Brilliant' Criminal. Henry Kissinger, while not an economist, can provide unique insight into committing monstrous crimes while remaining a darling of universities, news media and governments around the world.
Stay Rich! Rob Others! Bernard Madoff shows the cost-effective way to the tried and true method of American corporate criminality. Commit crimes with tiny penalties while netting yourself billions! This is the finest instance of the law and economics thesis we've seen. Learn how to profit legally through criminal activity with minimal costs to yourself and friends.
And more more more! The best insider info on how to rob from the poor and give to . . . yourself!

Saturday, December 13, 2008

The Cult of Money

The rich have conned themselves. Decades of the pseudo-science, the dismal delusion — economics — had the Milton Friedmans, Alan Greenspans, Robert Rubins believing their own lies and the money-grubbing toads of Wall Street likewise believing while inventing further cons to deceive us out of our savings. Billions were made, now billions are lost. Sadly, the principle losers will not be the architects of the con but us. The bailout is just the beginning.

The newest development in Wall Street's Comedy of Errors — Bernard Madoff's ponzi scheme conning people out of some $50 billion. According to the BBC and other news organizations,
Some of the world's wealthiest private and corporate investors are reported to be victims of an alleged $50bn fraud by Wall Street broker Bernard Madoff.

Mr Madoff is alleged to have confessed to a huge Ponzi scheme (pyramid fraud).

Reports say the main owner of the New York Mets baseball team, Fred Wilpon, and former American football team owner Norman Braman are among the victims.

Others facing losses reportedly include French bank BNP Paribas, Japan's Nomura Holdings and Zurich's Neue Privat Bank.
The rich fall prey to their own con.

Again according to the BBC, Madoff has also said, "that he planned to surrender to the authorities but not before he used his last $200m-$300m to pay 'selected employees, family and friends'."

But here is the best part. Madoff ran a pyramid scheme that burned $50 billion. But, "If found guilty, US prosecutors say he could face up to 20 years in prison and a fine of up to $5 [million]."

So, if were not for the fact that he is now 70 years old, he might very well conclude that robbing $50 billion is cost effective. This pales when compared to the Wall Street conmen who, like John Thane of Merrill Lynch, are still seeking bonuses in the millions.

This is the nature of American justice. Steal a car, serve 5 years. Steal tens of billions, as Wall Street has done, get a bonus.

Monday, October 27, 2008

Bailout for BONUSES!

Weegee. "The Critic", November 22, 1943. The war was on. We were still in the Depression. Look familiar?
The sheer Audacity of Greed. This is why the architects of Christianity invented Hell. There has to be some place where justice is finally meted out to evil monsters who steal from us and run organized crime machines like Goldman Sachs, Merrill Lynch, Lehman, Bank of America, and on and on. The People need some assurance that sooner or later these revolting worms will get what the United States government is absolutely unwilling to do. Thus Heaven for the poor, Hell for the leaches who make us poor. (1)

What am I raving about? The Boneses for Wall Street execs. Bloomberg news has a report on the BILLIONS being set aside by Goldman Sachs and others to kick back to their financial charlatans this holiday season.

My guess is that Michael Bloomberg, if he says anything, will support these kickbacks. First, these thieves are his friends. Second, for years it has been their obscene pay — and theirs alone — that has sustained the broader obscenity of New York City real estate prices.

Things were already bad. Over a year ago, reports flashed across the journalistic radar of the multimillion dollar party that Blackstone head Stephen Schwarzman had thrown for himself. But now We the People are pulling their asses out of the fire. We get laid off. We lose our homes. And they get bonuses totalling billions and billions of dollars. Perhaps Andrew Cuomo or someone with a comparable sense of decency will go after these beasts. We can be sure it will not be anyone in Washington, DC, including, I suspect, Barack Obama if elected.

The Schwarzman 60th birthday bash in 2007 included $1 million for Rod Stewart. Schwarzman, a Republicon, has said, "I don’t feel like a wealthy person."
I'm trying to imagine some historical or fictional representation of the poor or regular people coming upon the trappings of wealth.

Perhaps A Night To Remember — the classic 50s film about the sinking of the Titanic — when the steerage passengers, initially barred from reaching lifeboats (fact), finally break through the gates and pass through the first class areas of the ship.

Or perhaps the experience of the French peasants on overthrowing Louis XVI and seeing, however briefly the staggering wealth of the monarchy (before the Reign of Terror and Robespierre et al. tried to make themselves monarchs in all but name) .

It should bring tears to our eyes. Or rage. But most Americans seem unmoved. Rather, people lionize, idolize — American Idolize — the rich. "Future, Heaven of the poor" said poet W. S. Merwin. "In the Future, I'll win the lottery, become a star baseball player, an actor. I'll be rich, so they are my peers." Needless to say, the rich do not agree. Years ago, when I lived in Boston, a report emerged during a surge of public opposition to a very modest tax increase: Of those who bought lottery tickets, most spent more on lottery tickets than they paid in taxes each year. Such is the state of our delusions.

For a moment, we were moved by the bailout, moved to flood Congress with calls and emails. So the first pass at a bailout bombed. But now it's old news. And people like "Joe the Plumber" — middle class people — can still seriously fret over 'tax and spend' Democrats, as if a lottery win were just around the corner, just about to make us millionaires and catapult us into the party with Michael Bloomberg, Stephen Schwarzman, Henry Paulson.

Where are our tears? If We the People have no sense of decency, how can we condemn the self-appointed UberVölk of Congress and Wall Street?


Digg!

NOTES

1.
I don't know much about the intellectual history of Western religion, but it has always seemed to me that religion played a terribly important role in mollifying a possibly restless serfdom. "Things suck now, and the Lords live off the fat of our labour, but someday we will be rewarded for our suffering." Thus the religious class taught the poor while, of course, allowing the rich to buy their 'indulgences' for entry to Heaven.

Today, the religious class roughly parallels the politically powerful. (Not quite right, because we worship before the feet of the corporate elite, too.) The rich corporate Titans buy their indulgences in the form of bribes (called campaign contributions) to politicians.

I don't think it's any coincidence that, as times have gotten worse in recent years and particularly as disparities in the distribution of wealth of grown ever more extreme, people are turning more to religion. Increasingly, Americans are abandoning any hope of a good life and praying instead for a good life after.

2. New York Times essayist and conservative idiot Ben Stein has some vaguely relevant blather about a year ago. It should surprise none that he was dead wrong on very nearly every point. But he has a cool Ivy degree and that annoying delivery, so he must have been right even though he was wrong. That's religion, folks.

3. The Bride Wore Ritzy. New York Times, 22 April 2008

Attack of the Bailout Behemoth

We've already heard that the insurance and automotive industries are nosing up to the trough for money money money from Uncle Sam — meaning Us. The US slot is payin' big time, and the bigger you are, the bigger you get!

The Christian Science Monitor has a nice little survey of the Mighty Morphin' Money Machine.

Now, the US (unlike the British) has included NO requirement that banks actually dole out the money they get. As many have noted, Goldman Sachs et al. could just sit on that pile of dough until hell freezes over — or until it's Bonus Time in Bloombergburg.

What the insurance industry or the car makers will do if they get on the gravy train is anybody's guess. But we can safely say it won't involve cutting insurance rates, lowering car prices, or guaranteeing a better product (e.g., affordable hybrid autos).

Back in the 80s the US car makers moaned and moaned and moaned — "boo hoo boo hoo, if only we could get a little breathing space from the Japanese, we could improve our cars and become more competitive". The Japanese gave in to the sob story, voluntarily restricted exports to the US.

What did Our Glorious Car Makers do? They raised prices.

The Shape of Things to Come.


SEE ALSO

Broken Securities Industry Still Has $20 Billion to Pay Bonuses. Bloomberg, 27 October 2008.
Five straight quarters of losses and a 70 percent slide in its stock this year haven't stopped Merrill Lynch & Co. from allocating about $6.7 billion to pay bonuses.

Goldman Sachs Group Inc. and Morgan Stanley, both still on track for profitable years, have set aside about $13 billion for bonuses after three quarters, down 28 percent from a year ago. Even some employees at Lehman Brothers Holdings Inc., which declared the biggest bankruptcy in U.S. history last month, will get the same bonus they received a year ago.


Merrill Brokers May Get Big Bonuses to Stay
. New York Times, 24 October 2008

Car makers may be next up for bailout. CNN, 27 October 2008


Digg!

Monday, October 20, 2008

Lloyds Chief Tells Staff They'll Still Get Bonuses

Think anything like this is happening here in the US. Frankly, I'm relieved. It pained me to think of millionaires and billionaires going hungry this holiday season -- unable to afford $20,000 bottles of wine, $1000 per ounce caviar. The thought is too terrible to contemplate.

The chief executive of Lloyds TSB, one of the banks participating in the £37bn bank bail-out, has promised staff they will receive bonuses this year despite Gordon Brown's promise of a crackdown on bankers' pay following the investment by taxpayers.

Eric Daniels has told employees that the historic government intervention will not change the behaviour of Lloyds, which is in the throes of the rescue takeover of HBOS brokered by the prime minister.

In a recorded message to employees, Daniels stressed that the bank faced "very, very few restrictions" in its behaviour despite the injection of up to £5.5bn of taxpayers' funds. "If you think about it, the first restriction was not to pay bonuses. Well Lloyds TSB is in fact going to pay bonuses. I think our staff have done a terrific job this year. There is no reason why we shouldn't," said Daniels.

Tuesday, September 23, 2008