Author: thestud

Madoff steals 50 billions [Copy link] 中文

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Post time 2008-12-17 01:22:56 |Display all floors


how come I don't see any?

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Post time 2008-12-17 01:56:31 |Display all floors

Reply #8 openaccount's post

why should you?

Are you all-seeing?

Look under your bed, maybe?

You can find signs, all-seeing one, most notably is their favorite banner and oft-employed recruitment tool -- the crap from Abu Gharib -- a long ago beaten-down subject, but a prominent showing from certain folks in this forum, it may be like a gang sign among them, what do you think, all seeing one?

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Post time 2008-12-17 02:28:01 |Display all floors

control the economy & now totally fukitup as well...

who could better than 'em at this time  

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Post time 2008-12-17 06:06:40 |Display all floors

Delete this thread

it is clearly racist and therefore has no legitimacy
"他不是救星, 他是一个非常淘气男孩" - Monty Python

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Post time 2008-12-17 07:06:11 |Display all floors


Originally posted by emucentral at 2008-12-17 06:06
it is clearly racist and therefore has no legitimacy

Ok lets just call him a Zionist Rat then as not all Jews are thieving scum and not all Zionists are Jews either as the other half of team Zion are Neo-Con Right wing Christians and neither half of team Zion actually practice their said religions but pray to that stone owl in Bohemian grove in California you know the one Emu? where they used to take kidnapped Black kids and burn them alive as an offering to bring them more wealth and power.
well lets look at other racist terminology then, how about Islamic Terrorist? often most muslims are referred to as such eventhough they are totally innocent.
seems to me that some white people seem to accept other races being called Niggers Wogs Paki Kaffer Chinks Nips slopes or Gooks but as soon as the word Jew is mentioned, some white people seem to wake up from their Zombified state of total disregard for racial slurs and say no no no that is not allowed. so Magnanimous of you to stand up for the Chosen people yet the Black people in the land your forefathers stole still live in Abject poverty forcefully Christianised and plied with alcohol to keep them out of ant social standing.
Very reminiscent of  what is still being done to the Inuit and the rest of the 1st Nations of America,is this action applied to all Aboriginal peoples due to the Zionists interest in Eugenics and understanding how  alcohol is processed more rapidly in the Aboriginals ?
Claiming to be the chosen people is racist but that is conveniently overlooked.
I fortunately dont have the handicap of religion to worry about such crap, and also the word Jew is not a racist comment but merely the affirmation of the religion. maybe if the word Kyke was used in the terminology then you would have license to make a complaint

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Post time 2008-12-18 00:31:43 |Display all floors

The Great Unraveling

Published: December 16, 2008

The stranger, a Western businessman, slipped into the chair next to me at an Asia Society lunch here in Hong Kong and asked me a question that I can honestly say I’ve never been asked before: “So, just how corrupt is America?”

His question was occasioned by the arrest of the Wall Street money manager Bernard Madoff on charges of running a Ponzi scheme that bilked investors out of billions of dollars, but it wasn’t only that. It’s the whole bloody mess coming out of Wall Street — the financial center that Hong Kong moneymen had always looked up to. How could it be, they wonder, that such brand names as Bear Stearns, Lehman Brothers and A.I.G. could turn out to have such feet of clay? Where, they wonder, was our Securities and Exchange Commission and the high standards that we had preached to them all these years?

One of Hong Kong’s most-respected bankers, who asked not to be identified, told me that the U.S.-owned investment company where he works made a mint in the last decade cleaning up sick Asian banks. They did so by importing the best U.S. practices, particularly the principles of “know thy customers” and strict risk controls. But now, he asked, who is there to look to for exemplary leadership?

“Previously, there was America,” he said. “American investors were supposed to know better, and now America itself is in trouble. Whom do they sell their banks to? It is hard for America to take its own medicine that it prescribed successfully for others. There is no doctor anymore. The doctor himself is sick.”

I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly more outrageous than the “legal” scheme that Wall Street was running, fueled by cheap credit, low standards and high greed. What do you call giving a worker who makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds — which Moody’s or Standard & Poors rate AAA — and then selling them to banks and pension funds the world over? That is what our financial industry was doing. If that isn’t a pyramid scheme, what is?

Far from being built on best practices, this legal Ponzi scheme was built on the mortgage brokers, bond bundlers, rating agencies, bond sellers and homeowners all working on the I.B.G. principle: “I’ll be gone” when the payments come due or the mortgage has to be renegotiated.

It is both eye-opening and depressing to look at our banking crisis from China. It is eye-opening because it is hard to avoid the conclusion that the U.S. and China are becoming two countries, one system.

How so? Easy, in the wake of our massive bank bailout, one can now look at China and America and say: “Well, China has a big-state-owned banking sector, next to a private one, and America now has a big state-owned banking sector next to a private one. China has big state-owned industries, alongside private ones, and once Washington bails out Detroit, America will have a big state-owned industry next to private ones.”

Yes, an exaggeration to be sure, but the truth is the differences are starting to blur. For two decades, a parade of U.S. officials came to China and lectured Beijing on the necessity of privatizing its banks, said Qu Hongbin, the chief economist for China at HSBC. “So, slowly we did that, and now, all of a sudden, we see everybody else nationalizing their banks.”

It’s depressing because China in many ways feels more stable than America today, with a clearer strategy for working through this crisis. And while the two countries are looking more alike, they appear to be on very different historical trajectories. China went crazy in the 1970s, with its Cultural Revolution, and only after the death of Mao and the rise of Deng Xiaoping has it managed to right itself, gradually moving to a market economy.

But while capitalism has saved China, the end of communism seems to have slightly unhinged America. We lost our two biggest ideological competitors — Beijing and Moscow. Everyone needs a competitor. It keeps you disciplined. But once American capitalism no longer had to worry about communism, it seems to have gone crazy. Investment banks and hedge funds were leveraging themselves at crazy levels, paying themselves crazy salaries and, most of all, inventing financial instruments that completely disconnected the ultimate lenders from the original borrowers, and left no one accountable. “The collapse of communism pushed China to the center and [America] to the extreme,” said Ben Simpfendorfer, chief China economist at Royal Bank of Scotland.

The Madoff affair is the cherry on top of a national breakdown in financial propriety, regulations and common sense. Which is why we don’t just need a financial bailout; we need an ethical bailout. We need to re-establish the core balance between our markets, ethics and regulations. I don’t want to kill the animal spirits that necessarily drive capitalism — but I don’t want to be eaten by them either.

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Post time 2008-12-18 03:15:07 |Display all floors

The Bernie Madoff Morality Tale

Andy Kessler, 12.16.08, 03:15 PM EST

From ''schlub'' to ''macher'' to ''goniff.''
Why, Bernie, why?

By all accounts, Bernard Madoff had a successful trading business and was a hitter on Wall Street. Bernard L. Madoff Investment Securities was one of the top three market makers in Nasdaq stocks, had over 600 brokerage clients and claimed to often contribute 10% of New York Stock Exchange trading volume, usually after the 4 p.m. market close.

Yahoo! BuzzSo why, inquiring minds want to know, did he perpetrate the largest fraud ever on Wall Street, some $50 billion? He had it made, so why risk it?

Well, for starters, if you leave the Tri-State area, very few people know what a market maker is. At the Palm Beach Country Club or the Boca Rio, the preserved specimens at cocktail parties know about cement or paper plants; their brokers at Merrill (or maybe Goldman) are their only ties to Wall Street.

"And what do you do?"

"I'm the third-largest market maker of …"

"Oh, my drink is empty."

Comment On This Story

Madoff was just another schlub ("worthless oaf" for you Yiddish-challenged) from New York with money. Get in line. Schlubs are a dime a dozen in the Sunshine State, contributors of hanging chads and everything.

So Madoff got the brilliant idea to start a money management business on the side. He didn't charge any fees, explaining that he would just make money trading stocks on the securities side of the business. Merrill Lynch (nyse: MER - news - people ) and every retail brokerage player perfected this business model years ago--it's called churning.

And the gerries fell for it. Now, all of a sudden, Madoff is a macher (a big shot, a mover). The ability to make someone money moves you to the top of the cocktail-party list. Madoff didn't advertise; he kept it exclusive, adding to its mystery and allure. And he didn't swing for the fences, he "produced" tortoise-like (steady) returns: 13.72% one year, 9.82% another. Goldilocks-esque. Not too hot or cold, just right.

It became known as the "Jewish T bill." Never mind that his option split strike conversion strategy was completely bogus. As everyone on Wall Street should know, you can limit the downside or enhance the upside, but not both--and certainly not for free. There are too many market makers--hey, like Madoff Securities--who will clip you for trading fees and risk premiums for a strategy like this to ever work. It's like putting $10 on red and on black at a roulette table. You win every time, except when 0 or 00 come up, which they do once every 19 spins.

But still, that doesn't explain the fraud.

OK, Madoff has left us some hints as to why. The first clue is that there isn't $50 billion sitting in some numbered Swiss bank account. In fact, it probably isn't a $50 billion fraud. There seem to be lots of problems with Madoff and numbers. The only facts we know are the claims of $17 billion in assets in his money management business, according to his filings with the Securities and Exchange Commission.

The market is down 40%, so perhaps there should be $11 billion left. Some of his customers, mainly hedge fund-of-funds and European banks, would use 3:1 leverage to magnify Madoff's "steady" returns, hence the $50 billion claim. If you're going to go down, you might as well go big and get something named after you. Why should Ponzi keep hogging the limelight?

So as far as we know, he didn't steal the $50 billion/$11 billion--he probably just lost it. He might have built a trading powerhouse, but he was god-awful as an investor. It happens all the time (Bear Stearns, Lehman Brothers (nyse: LEHMQ - news - people ), Citigroup (nyse: C - news - people ), Morgan Stanley (nyse: MS - news - people ), yadda, yadda, yadda …)

My guess is that this is what went down. Even though Madoff Securities was on the leading edge of automated trading, the business itself was becoming less and less lucrative. Everyone had the same computers. Spreads, the difference between the bid price and the ask price that became Wall Street trading profits, began shrinking. And the move to list stocks in penny increments instead of eighths (12.5 cents) whacked trading desks all over Wall Street.

So you make it up in volume. Beyond cocktail parties, Madoff really created the money management business to feed himself trades. But his strategy was garbage. He absolutely bombed as a money manager, but he desperately needed the assets under management to feed his trading operations, so he started to make the numbers up. As is usually the case, most don't set out to be crooks, but Madoff became one when his talents proved lacking. There is your "why."

It's not new. This was the Enron story: They lost tons in water ventures and Indian power plants, so concocted fraudulent entities to cover up their losses. Same for Sam Israel and his Bayou hedge fund. And even (without the fraud) the Citigroup/Wall Street story, too. They tried to be investors to make up the difference of their bread-and-butter business deteriorating and were awful at it, so they levered up in off-balance-sheet vehicles.

Who knows when the fraud started? As early as December of 1990, he was taking money from the Fairfield Sentry fund of funds. The bull market resumed in January of 1991 as Operation Desert Storm commenced. Madoff showed up years, as did most money managers. But 1994 was rough. So were 1996, 1997 and 1998, yet he did have double-digit years.

Since 2001 and 2002 were ugly, and Madoff showed "only" single-digit returns this decade, so my sense is that money kept flowing in and flowing in. The Tremont fund of funds and Nomura and European banks--my partner and I were out raising a hedge fund and couldn't raise a tarnished nickel from these groups. And we tried.

Public begging is humiliating. But funds of funds and banks were steering money into the Madoff machine. (Ah, schadenfreude delayed.) But it went beyond these so-called professionals or even the country club set; lots of great charities fell for his fudged numbers.

As in any classic Ponzi scheme, you pay old investors who redeem with new money. Sounds like not too many wanted out, until 2008. Now, $7 billion in redemption requests since the Credit Crisis began meant Madoff has made a complete circle, from schlub to macher to goniff (a crook, swindler or cheat).

Let that be a lesson. Learn a few jokes to tell at the club. Impressing the highball crowd with your investing prowess is a losing strategy.

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