Madoff investor found dead of possible suicide, authorities say

December 23 2008

By ADAM GOLDMAN

NEW YORK

The founder of an investment fund that lost millions with Bernard Madoff was found dead Tuesday at his Madison Avenue office of a possible suicide, authorities said.

Authorities found the body of Rene-Thierry Magon de la Villehuchet just before 8 a.m. ET at his office of Access International Advisors, located on Madison Avenue a couple of blocks from Rockefeller Center.

A French newspaper is reporting that the 65-year-old de la Villehuchet committed suicide. The New York medical examiner spokeswoman says it has not determined the cause of death yet.

Madoff is accused of running a US$50-billion Ponzi scheme that wiped out investors around the world, with big funds like de la Villehuchet’s $1.4-billion Access International Advisers being especially hard hit.

A former business partner said that de la Villehuchet came from a long line of aristocratic Frenchmen, with the Magon part of his name referring to one of France’s most powerful families.

His fund enlisted intermediaries with links to the cream of Europe’s high society and jet set to garner clients. Among them was Philippe Junot, a French businessman and friend who is the former husband of Princess Caroline of Monaco.

De la Villehuchet, the former chairman and CEO of Credit Lyonnais Securities USA, was also known as a keen sailor who regularly participated in regattas and was a member of the New York Yacht Club.

He lived in an affluent suburb in Westchester County with his wife. There was no answer Tuesday at the family’s two-story house, which has a majestic view of a pond.

“He’s irreproachable,” said Bill Rapavy, who was Access International’s chief operating officer before founding his own firm in 2007.

De la Villehuchet’s death came as swindled investors began looking for ways to possibly recoup their losses. Hedge funds, which lost big to Madoff, are also coming up against investor lawsuits, since they had a fiduciary responsibility to protect their clients.

A handful of lawsuits have already been filed, all claiming that the hedge funds failed to properly vet Madoff and overlooked some red flags that could have steered them away.

Associated Press Writers Rachel Beck and Joe Bel Bruno in New York and Jim Fitzgerald in New Rochelle, N.Y., contributed to this report.

Source

FBI diverts anti-terror agents to Bernard Madoff $50 billion swindle

Madoff house arrest ordered as European banks reel

Madoff victims threaten legal action

UK: Council’s pension fund ‘caught up in Bernard Madoff’s Wall Street fraud’

Bank billions at risk from Wall Street Fraud

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Published in: on December 23, 2008 at 11:59 pm  Comments Off on Madoff investor found dead of possible suicide, authorities say  
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FBI diverts anti-terror agents to Bernard Madoff $50 billion swindle

December 22 2008

Brian A Pounds/Connecticut Post

From left; Doug Chavenello, president of Firefighters Union Local 1426, and Bob Smith, secretary, listen to the meeting of the Joint Retirement Board at Independence Hall in Fairfield. The town’s pension fund may have lost over $40 million in a scheme by Wall Street hedge fund manager Bernard Madoff

The FBI has been forced to transfer agents from its counter-terrorism divisions to work on Bernard Madoff’s alleged $50 billion fraud scheme as victims of the biggest scam in the world continue to emerge.

Only ten days after Mr Madoff confessed to his two sons that he had created a giant fraud, the FBI and the Securities and Exchange Commission (SEC), the Wall Street regulator, have narrowed the focus of their inquiries to ascertain which individuals and funds helped him. They are questioning other employees of Madoff Securities and are also examining the role of feeder funds that provided Mr Madoff with clients and capital.

It is understood that the US authorities believe it would have been impossible for the financier to have sustained a fraud of such magnitude over a number of years without significant assistance.

While the FBI and SEC trawled through documentation seized from three floors of the Manhattan headquarters of Mr Madoff, 70, more individuals and organisations who had fallen prey to the scheme were discovered. Members of the Fifth Avenue Synagogue, on the wealthy Upper East Side of Manhattan, are estimated to have lost about $2 billion (£1.4 billion) between them. Of these Ira Rennert, the chairman of the synagogue board, had about $200 million invested in the fund.

It is believed that J. Ezra Merkin, the president of the synagogue, introduced clients to Mr Madoff and gave him access to prominent Jewish charities and universities. The fund of Mr Merkin, Ascot Partners, had about $1.8 billion invested in the schemes.

At the weekend it emerged that Burt Ross, a former banker at LF Rothschild, and once the mayor of Fort Lee, New Jersey, was another victim. Mr Ross estimated that he had lost about $5 million, the bulk of his personal wealth.

Two classes of victim are emerging in the Madoff scandal: those who had a direct relationship with him and fund of funds investors, where one hedge fund invests in another. The biggest of the latter – so far – appears to be Walter M. Noel, who founded Fairfield Greenwich Group in 1983. Mr Noel marketed his investment services to the upper crust of the financial elite, introducing his international clients to Madoff funds.

Mr Noel ran his business from Connecticut, but about 95 per cent of his business was derived from overseas money. It is estimated that Fairfield Greenwich stands to lose $7.5 billion from the collapse of the Madoff scheme.

At the other end of the spectrum the town pension scheme in Fairfield, Connecticut — apparently unconnected to the fund belonging to Mr Noel – suffered a $45 million loss for its firefighters, police officers and teachers.

American regulators have sought to compile evidence against Mr Madoff, who is now electronically tagged and this weekend was placed on 24-hour curfew in his East 64th Street New York apartment.

The FBI and SEC are under increasing pressure from Washington to explain how they could have allowed a scam of such magnitude to operate and flourish – especially after a preliminary inquiry within the SEC found that it had been tipped off several times in the past decade about Mr Madoff’s schemes.

Harry Markopolos, a derivatives expert who once worked for a rival fund, spent ten years urging the SEC to investigate Mr Madoff. In numerous reports, including a 19-page document written in November 2005 entitled The World’s Largest Hedge Fund is a Fraud, Mr Markopolos picked apart the investment strategy of Mr Madoff.

Some claims by Mr Markopolos were anecdotal – “I have spoken to the heads of various Wall Street equity derivative trading desks and every single one of the senior managers I spoke with told me that Bernie Madoff was a fraud” – but vast chunks of his accusations involve detailed analysis of Mr Madoff’s investment strategy. He questions the way that Mr Madoff charged for commissions and alleges that Mr Madoff used the names of leading investment banks such as UBS and Merrill Lynch to lend credibility to his schemes.

He also claims that the overall investment strategy of Mr Madoff would have been impossible to carry out. Mr Madoff sought to lure investors with the promise of 12 per cent returns by buying blue-chip stocks and insuring against the possibility that their value would fall by selling derivatives – a process known as hedging. Mr Markopolos argues, however, that for Mr Madoff to have fulfilled such a strategy he would have regularly done more business than the entire New York market in those securities.

Barack Obama, the President-elect, has accused US regulators of being “asleep at the switch” after it emerged that Mr Madoff had been questioned by the SEC in 2006 but no fraud had been discovered.

Mr Madoff’s business has now been liquidated. He has been charged on one count of fraud and awaits trial.

THE BIGGEST LOSERS

Fairfield Greenwich Group (investment management firm) $7.5 billion

Tremont Group (hedge fund) $3.3 billion

Banco Santander (Spanish bank) $2.87 billion

Bank Medici (Austrian bank) $2.1 billion

Ascot Partners (hedge fund founded by J. Ezra Merkin) $1.8 billion

Access International Advisors (New York investment advisers) $1.4 billion

Fortis Bank Nederland (Dutch bank) $1.35 billion

Union Bancaire Privée (Swiss bank) $1 billion

HSBC (British bank) $1 billion

RBS (British bank) $599 million

Natixis (French investment bank) $554 million

Carl Shapiro (founder of Kay Windsor) $545 million

BNP Paribas (French bank) $431 million

BBVA (Spanish bank) $369 million

Man Group (British hedge fund) $360 million

Reichmuth & Co (Swiss private bank) $327 million

Nomura (Japanese broker) $304 million

Maxam Capital Management (fund of funds based in Connecticut) $280 million

EIM (European investment firm) $230 million

Aozora Bank (Japanese bank) $137 million

AXA (French insurer) $123 million

Yeshiva University (private, New York) $110 million

UniCredit (Italian bank) $92 million

UBI Banca (Italian bank) $86 million

Swiss Life Holding (Swiss insurer) $78.9 million

Great Eastern Holdings (Singapore insurer) $64 million

Nordea Bank (Swedish bank) $59 million

M&B Capital Advisers (Spanish broker) $52.8 million

Hyposwiss (Swiss private bank) $50 million

Banque Bénédict Hentsch & Cie (Swiss private bank) $48.8 million

Fairfield, Connecticut (town pension fund for firefighters, policemen and teachers) $42 million

Source

Bad for investors, good for lawyers

City regulators probe Madoff’s London firm

Madoff’s UK arm holding £100m assets

Madoff house arrest ordered as European banks reel

Madoff victims threaten legal action

Banks and investment firms blamed for introducing clients to ‘$50bn fraudster’

By Stephen Foley in New York
December 17 2008

The victims of the world’s biggest fraud are raising harsh questions about how Bernard Madoff was able to run his $50bn (£33bn) scam for so long without his staff, the authorities or his trading partners noticing.

A firestorm of legal action is gathering as individuals who lost their life savings and charities threatened to pursue the banks and investment firms that made their ill-fated introduction to Mr Madoff.

“If this were a traditional bank robbery, the eyewitness reports would say Mr Madoff walked out with billions of dollars as someone held the door open for him,” said Jeffrey Zwerling, a lawyer representing some of the victims. “There is just no way that this happens without help of some kind.”

The fall-out from Mr Madoff’s arrest on Thursday is being felt around the world as banks, hedge funds, charitable organisations and thousands of well-to-do individuals tot up their losses. With each passing hour, new victims come to light, often in the tight-knit world of Jewish philanthropy, where Mr Madoff managed cash for numerous charities and for many of their biggest donors.

Christopher Cox, chairman of the Securities and Exchange Commission, the US financial regulator, said last night that he was “gravely concerned by the apparent multiple failures over at least a decade” and that he had ordered “full and immediate review of the past allegations regarding Mr Madoff and his firm and the reasons they were not found credible”.

More European finance houses confessed to losses, including Crédit Mutuel, France’s second-largest bank. Regulators in Spain said 224 investment funds in the country had been exposed and faced losses of €107m (£97m). Among the celebrity victims revealed yesterday is Uma Thurman. Her husband, Arpad Busson, had £145m invested with Mr Madoff through his hedge fund. A charity connected to Steven Spielberg, the Hollywood director, was already among the list of victims. UK banks HSBC, Royal Bank of Scotland and Santander – owner of Abbey and Alliance & Leicester – have previously admitted exposure of more than $5bn between them.

The breathtaking fraud, committed over many years by one of Wall Street’s best-respected investment managers, was uncovered only when Mr Madoff confessed to his two sons a week ago that he was “finished”. In a criminal lawsuit filed the next day, public claims that Madoff Investment Securities was managing $17bn of client money and had made double-digit returns every year for almost a decade were “all just one big lie”, he had told them.

Mr Madoff was running a giant pyramid scheme, paying out to existing investors with money coming in from new ones. But as the credit crunch began to bite, investment dwindled and there was a surge in requests to cash out. It proved to be his undoing.

Lawyers said the investment managers who recommended that their clients invest with Mr Madoff should have investigated his methods, which he had shrouded in mystery. They pointed to red flags going back as far as 1999, when Harry Markopolos, a securities industry executive, urged the SEC to investigate Madoff Investment Securities. Last year, investigators hired by potential investors urged them not to invest because they were suspicious.

The New York Law School – which fears losing $3m of its endowment fund – launched a lawsuit against one of its financial managers, Ascot Partners, Ascot’s boss, Ezra Merkin, and the auditor, BDO Seidman. The defendants “recklessly or with gross negligence caused and permitted $1.8bn, virtually the entire investment capital of Ascot” to be handed over to Mr Madoff, according to the suit. Separately, Yeshiva University said it was considering its options after it lost about $110m.

Mr Madoff is due in court today for a bail hearing. He was released on a $10bn bond last week but has failed to find the required three co-guarantors. Meanwhile, details are emerging of the two separate sets of books he kept: ones showing the real losses, the other detailing the fictitious trading and profits, which he would mail to investors.

Mr Madoff has told the FBI he acted alone. His sons, Andrew and Mark, work in a different part of the business and the Massachusetts Secretary of State, William Galvin, did not suggest his brother Peter was involved.

The victim: A charity devoted to the poor

As well as the super-rich circling Mr Madoff in his playgrounds of Palm Beach, Florida, and Long Island, New York, there are scores of philanthropic victims of his record-breaking fraud, the JEHT Foundation among them. Since it was formed in 2000, it has given away $62m to fund research, to lobby for progressive reforms, and to prop up projects in some of the most deprived areas of the US. It harnessed the fortune of the late real estate mogul Norman Levy, but the family’s money was invested with Mr Madoff, and is probably now gone.

Source

Bank billions at risk from Wall Street Fraud

A £516 trillion derivatives ‘time-bomb’

Not for nothing did US billionaire Warren Buffett call them the real ‘weapons of mass destruction’

By Margareta Pagano and Simon Evans
12 October 12 2008

The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world’s output: it’s been called the “ticking time-bomb”.

It’s a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it’s a market that is set to come to a crashing halt – the Great Unwind has begun.

Last week the beginning of the end started for many hedge funds with the combination of diving market values and worried investors pulling out their cash for safer climes.

Some of the world’s biggest hedge funds – SAC Capital, Lone Pine and Tiger Global – all revealed they were sitting on double-digit losses this year. September’s falls wiped out any profits made in the rest of the year. Polygon, once a darling of the London hedge fund circuit, last week said it was capping the basic salaries of its managers to £100,000 each. Not bad for the average punter but some way off the tens of millions plundered by these hotshots during the good times. But few will be shedding any tears.

The complex and opaque derivatives markets in which these hedge funds played has been dubbed the world’s biggest black hole because they operate outside of the grasp of governments, tax inspectors and regulators. They operate in a parallel, shadow world to the rest of the banking system. They are private contracts between two companies or institutions which can’t be controlled or properly assessed. In themselves derivative contracts are not dangerous, but if one of them should go wrong – the bad 2 per cent as it’s been called – then it is the domino effect which could be so enormous and scary.

Most markets have something behind them. Central banks require reserves – something that backs up the transaction. But derivatives don’t have anything – because they are not real money, but paper money. It is also impossible to establish their worth – the $516 trillion number is actually only a notional one. In the mid-Nineties, Nick Leeson lost Barings £1.3bn trading in derivatives, and the bank went bust. In 1998 hedge fund LTCM’s $5bn loss nearly brought down the entire system. In fragile times like this, another LTCM could have catastrophic results.

That is why everyone is now so frightened, even the traders, who are desperately trying to unwind their positions but finding it impossible because trading is so volatile and it’s difficult to find counterparties. Nor have the hedge funds been in the slightest bit interested in succumbing to normal rules: of the world’s thousands of hedge funds only 24 have volunteered to sign up to a code of conduct.

Few understand how this world operates. The US Federal Reserve chairman, Ben Bernanke, tapped up some of Wall Street’s best for a primer on their workings when he took the job a few years ago. Britain’s financial regulator, the Financial Services Authority, has long talked about the problems the markets could face on the back of derivative complexity. Unfortunately it did little to curb the products’ growth.

In America the naysayers have been rather more vocal for longer. Famously, Warren Buffett, the billionaire who made his money the old-fashioned way, called them “weapons of mass destruction”. In the late 1990s when confidence was roaring in the midst of the dotcom boom, a small band of politicians, uncomfortable with the ease with which banks would be allowed to play in these burgeoning markets, were painted as Luddites failing to move with the times.

Little-known Democratic senator Byron Dorgan from North Dakota was one of the most vociferous refuseniks, telling his supposedly more savvy New York peers of the dangers. “If you want to gamble, go to Las Vegas. If you want to trade in derivatives, God bless you,” he said. He was ignored.

What is a Derivative?

Warren Buffett, the American investment guru, dubbed them “financial weapons of mass destruction”, but for the once-great-and-good of Wall Street they were the currency that enabled banks, hedge funds and other speculators to make billions.

Anything that carries a price can spawn a derivatives market. They are financial contracts sold to pass on risk to others. The credit or bond derivatives market is one such example. It is thought that speculation in this area alone is worth more than $56 trillion (£33 trillion), although that probably underestimates the true figure since lax regulation has seen the market explode over the past two years.

At the core of this market is the credit derivative swap, effectively an insurance policy against the default in the interest payment on a corporate bond. One doesn’t even need to own the bond itself. It is like Joe Public buying an insurance policy on someone else’s house and pocketing the full value if it burns down.

As markets slid into crisis, and banks and corporations began to default on bond payments, many of these policies have proved worthless.

Emilio Botin, the chairman of Santander, the Spanish bank that has enjoyed phenomenal success during the credit crunch, once said: “I never invest in something I don’t understand.” A wise man, you may think.

Source

Published in: on October 12, 2008 at 11:57 am  Comments Off on A £516 trillion derivatives ‘time-bomb’  
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Wall Streeters are just Welfare Recipiants in Disguise

Wall Streeters are just Welfare Recipients, in Disguise they just cost more to feed is all.

They are the Rich Welfare bums who need it the least.

Exactly 9 Years Ago Today: Fannie Mae Eases Credit To Aid Mortgage Lending

Lest we forget. History can say a lot.

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans. ”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.” Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market. In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s. ”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.” Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped. Fannie Mae, the nation’s biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings. Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites. Home ownership has, in fact, exploded among minorities during the economic boom of the 1990’s. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University’s Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent. In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent. Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings. In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups. The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

Compliments of One Mans Blog

Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

This means they made a small fortune on the poor for some time. Why is it the poor have to pay more interest? That one percent certainly adds up to a whole lot of profit.

There certainly are those who know how to make money off a stock market crash.

During the Great Depression there were those who made a fortune. Seems the as usual the rich got richer and the poor got very much poorer.

There are those who know very well how to create a crisis and profit from it. I see a pattern emerging.

One does have to wonder (in spite of all the legislation that has been passed over the years) how it is still possible this can happen.

Seems our law makers never really get it right. It could be they really don’t actually do anything to prevent it. Could be they just pretend to fix it.

People become confident things will be OK. They start investing again, until the next crash comes along. Then we all just repeat the same scenario over again. Maybe it’s just me. But I see the wool being pulled over everyone’s eyes yet again.

They mess up and the Government Bails them out. So where is the accountability. Seems anyone in American messes up and Government is there to bail them out. They can be as irresponsible as they want. NO FEAR the Government will give them YOUR MONEY. Meanwhile back at the ranch there are millions living in poverty and many are ending up on the streets every day.

Isn’t that comforting? Yes your Government is taking care of you?

Wall Street bailout: Report from the front

This is almost amusing Poor Suffering Wall Streeters BOY does my heart go out them and all the suffering they have caused. The poor, pathtic, lost souls, that they are.

October 11, 2008

Lehman Brothers Holdings Inc. Chief Executive Richard S. Fuld Jr., wearing tie, is heckled by protesters as he leaves Capitol Hill in Washington after testify before the House Oversight and Government Reform Committee.

AP / Susan Walsh

I don’t fully understand how the $700-billion we are all donating to rescue Wall Street’s executives will be deployed, but I assume it will become clear in a few weeks when we are likely to see a report from the front along these lines: Hundreds of security personnel, some in riot gear, kept order at Congress’ much-anticipated bailout distribution site today on Wall Street. Earlier, dozens of relief trucks loaded with sacks of cash intended for needy financial executives had lumbered through the streets of lower Manhattan before dawn. An estimated 70,000 CEOs, CFOs, COOs, VPs and hedge fund managers hit hardest by the collapse of the credit markets will receive $10 million each in taxpayer money. By 7 a.m., they clogged Wall Street wearing tags issued by their former companies and the crowd was a sea of names like Freddie, Fannie, Lehman, AIG, Washington Mutual, Bear Sterns and Merrill Lynch. Congress had hired emergency-distribution veteran Oxfam International to oversee the operation. Oxfam’s spokesman Jack Rowley said that in the past weeks, needy recipients awaiting the relief drop have been housed in appropriate Manhattan hotels commandeered by the government as holding “camps.” The hotel/camps were chosen in the hopes the executives would be used to the routine, but authorities said conditions had become difficult, with Wall Streeters in some cases forced to share rooms ( try living like poor Americans on the Streets then Whine Boys) at the The Palace, the Four Seasons, The Ritz and the St. Regis. “The hygiene situation is appalling,” said Oxfam’s Rowley, “with the men’s locker-rooms attached to the day spas running out of Clubman aftershave, Armani cologne and Cartier eau de toilette.” ( try living like poor Americans on the Streets then Whine Boys) Rowley said food was also becoming a problem, and his people were putting out an emergency call to restaurants to donate more beef tartare, Dover sole, seared Hudson Valley fois gras, pistachio crusted filet au poivre and wild boar tagliatelle carbonado. ( try living like poor Americans on the Streets then Whine Boys) The denizens of Wall Street, though still among the world’s richest citizens, have been in crisis ever since they bet everything on shaky subprime mortgages , which then predictably collapsed. One executive, who insisted on anonymity, said it is unfair to point the finger of blame at Wall Street. “The middle class let us down,” he told reporters. “We tried to help these $40,000-a-year people by talking them into $3,000-a-month mortgages, which we could bundle into huge hedge investments, and what happens? Two years later they default into foreclosure, cratering our lucrative mortgage-backed securities. I guess that’s gratitude for you.” (OH they were so generous the kindness, the kindness and who are they tring to kid they did it for “profit”.). Congress cut costs at the distribution site by canceling the need for thousands of National Guard members. Instead, in a show of “solidarity with the American needy,” security was provided by a “coalition of the willing,” from such sympathetic states as Switzerland, Macau, Liechtenstein, Barbados, Monaco and the Cayman Islands. Although clad in riot gear, the security personnel also carried folders bulging with deposit slips from their local banks, offering the bailout recipients tax-free havens for their money. Authorities said preparatory operations had gone well, with C-130 cargo planes usually used by USAid to deliver rice to Third World disaster spots having landed at JFK at 2 a.m. They carried the first $70 billion of the $700-billion bailout fund. Waiting trucks were soon in position in lower Manhattan. At exactly 10 a.m., the Oxfam staff opened the truck cargo doors to reveal thousands of sacks bearing the stamp, “Gift to Wall Street from Main Street.” Instantly, the crowd surged forward. Men in Armani Collezioni charcoal 3-button suits with Salvatore Ferragamo belts jockeyed for position next to women in Mariella Burani black crepe blazers with drapped detailing matched with Gucci classic heels. Among them were the CEO’s of Fannie Mae (Daniel H Mudd From Fannie Mae makes 8.79 million a year and owns 18.3 million in shares) and Freddie Mac (Richard F Syron From Freddie Mac makes 3.40 million a year and owns 20.0 million in shares) — who will likely walk away from their companies with over $25 million each, as well as ex Lehman Brothers CEO Dick Fuld, (Better known as Richard S Fuld Jr From Lehman Bros Holdings made 71.90 million a year  and owns $436.8 million in shares).who got $480 million over the years in pay packages.

They all said they appreciated taxpayers helping them out now that they’re out of jobs. (MY  Interpretation of this statement, “Thanking the all day suckers, you the tax payer that is”).

Peacekeepers with bullhorns shouted for calm. Several reporters saw officers with tear gas guns tense up as the crowd began to chant, “Show us the money. . . .” International observers were concerned. “If we don’t get this finished in the next week, the situation will become acute,” said Oxfam veteran Gustav Yves-Pierre. “The risk of money riots is imminent.” He pointed out that many recipients were in arrears on yacht payments and club dues.

One man, Pierre said, told him he feared that if he could not follow through on a $100,000 pledge to the Yale capital campaign, his son would not be accepted early admission, and perhaps not at all, which would interrupt his family’s four-generation membership in Skull and Bones. “That’s why I’m here,” said Yves-Pierre. “Whether it’s the starving in Ethiopia or this, a human being can’t look away when tragedy is unfolding.” Those on the trucks worked feverishly, handing out 110-pound (50-kg) bags of cash, each containing $10 million. As money managers, recipients are expected to invest it and live off the interest, but officials were concerned that with yield rates on treasuries and bonds so low, the $10 million won’t generate enough, and Wall Streeters will have to dip into their new principal to pay for such essentials as Sothebys auctions, Tuscan vacations and caretaking for their Aspen ski houses. Many of those in line found it difficult to wait for hours in the sun and some, on the point of collapse, retreated to their BMWs, and idled with the air conditioning on. As predicted, there was only enough for 10 percent of those in line. It was a poignant sight as tens of thousands headed empty-handed back to their hotel-camps while the luckier recipients struggled to their cars balancing the heavy sacks on their heads. Some relief workers wept openly at the heartbreak. Source

Year of the Bailout

September 09, 2008 

Want a federal bailout? Get in line. Now that the Treasury Department has finally announced its rescue of mortgage giants Fannie Mae and Freddie Mac—at a cost of up to $100 billion each—isn’t it time to start tallying up all this largesse? A hundred billion here, a hundred billion there, maybe it doesn’t seem like much at first. But before you know it, you’ve drained the treasury of the world’s richest country. And besides, more rescues seem to be coming. Here’s a tally of the bailouts so far:

The stimulus package. Maximum taxpayer cost: $150 billion What taxpayers got: Free money, up to $1,200 from the government per household, to spend as they wish. Early research shows most recipients have used the money to pay down debts or boost their savings. Good for them, but bad for the economy, which benefits most in the short-term from spending, not saving.

Bear Stearns. Maximum taxpayer cost: $29 billion. What taxpayers got: Prevented an even worse meltdown in the financial markets—at least for a while.

Fannie Mae and Freddie Mac. Maximum taxpayer cost: $200 billion. What taxpayers get: The mortgage market won’t completely collapse. Interest rates may even drop a little and credit gets a bit easier.

IndyMac and 10 other banks. These insolvent banks had billions in deposits that were taken over by the Federal Deposit Insurance Corp. Taxpayers won’t foot the bill directly, because FDIC takeovers are funded by insurance that banks pay for. But those premiums are likely to rise across the industry, and banks may pass some of that cost onto consumers. What taxpayers get: They don’t have to worry about losing their deposits just because their bank acts reckless. So far, all these bailouts add up to about $400 billion the government could end up doling out to keep key parts of the economy solvent. As the zeroes and the billions mount, we tend to get a bit numb to the magnitude of the number. But it’s big. The savings and loan fiasco of the late 1980s—perhaps the biggest government bailout since the Great Depression—cost taxpayers a mere $130 billion. And $400 billion dwarfs government spending on most other things. It’s equivalent to more than half of the nation’s total annual budget for defense or for Social Security payments. And it’s more than one tenth of all federal spending in a given year. Worse—there’s more to come. Here are some of the bailouts still in the works:

The Detroit automakers. A bill working its way through Congress would commit up to $6 billion in low-interest loans to General Motors, Ford, and Chrysler. Some are pushing for loans of up to $50 billion. Yeah, they’re loans, not grants, and theoretically, the companies would repay them. Unless…something…happens.

More banks. The FDIC says it’s closely watching 117 problem banks at risk of insolvency. Those banks control about $78 billion in assets. Then there’s the daily drama of troubled Lehman Brothers, where investors wait to see whether a white knight will surface, cash in hand, or a Bear Stearns redux takes place. Source

Well we now the Banking bailout cost 810 Billion


The $700 Billion Bailout: One More Weapon of Mass Deception

September 22,2008
By Richard W. Behan
The American economy needs help, but there are other, far more equitable ways to accomplish it.

It is necessary only to assure the financial survival of Wall Street banks and brokerages, the administration’s most loyal supporters and its greatest political contributors — and in large measure the cause of the financial meltdown the country is facing……


Now I am going to retreat to my hoval and eat my bread and water like a good Slave.

Published in: on October 10, 2008 at 11:50 pm  Comments Off on Wall Streeters are just Welfare Recipiants in Disguise  
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