OT: Harry Reid says the bailout is dead. http://www.marketwatch.com/news/story/Automakers-bailout-falls-apart-Senate/story.aspx?guid={01358784-ABDC-4333-8C55-2FA96BB138AE}&dist=hplatest
Let me be the first to state the obvious. There are people, MANY people, in prison for longer than 20 years for stealing $100 from a liquor store then failing a couple of drug tests. There is no punishment adequate for a man who stole 50 BILLION dollars, if you sentence a small time holdup man to life. AH... but this is different. He is rich (and... white?)
Prolly thought he could get away with the Ponzi initially while he got back onsides with his money (back in black, so to speak.) Looks like he kept guessing wrong as he got more desperate. But this doesnt mean that the whole thing was a Ponzi from the getgo. I think that Ponzi was an intermediate step to avoid catastrophe. Problem is, it only postponed it and made it that much bigger it looks like.
BTW, hope you arent long GLD tomorrow. Gets killed during hedgie redemptions. I bet it is back to 70 by the end of the week.
CR, as I read the complaint I was assuming the investors were a handful of extremely wealthy individuals. What did you see that led you to think they were hedge funds?
Never mind, CR, I found it on p.3 of Vasilescu's declaration. Institutional clients. And Goeff is right as well, it doesn't look like this was a Ponzi from the beginning, it just became one when the losses started to pile up.
New York-based Fairfield Greenwich Group runs the $7.3 billion Fairfield Sentry Ltd., a fund that invested in Madoff. Andrew Ludwig, a spokesman for Fairfield, declined to immediately comment.
I hope that the employee with $2 million invested took his/her loses instead of trying to get to the front of the withdrawal queue
I was making a tentative guess that that employee might have been the one to blow the whistle. It doesn't look like the authorities knew about this until after the meeting in Madoff's apartment--somebody there must have dropped a dime.
wow, i'm in the asset management biz and it's tough as nails to raise money....i am so pissed when a complete liar and fraud is able to raise BILLIONS....i'd kill for just 10m assets under management. rant off.
DCRogers writes:
So where does the "$50B in losses" come from if there was only $17B in assets under management?
There were $17B under management at the beginning of 2008, assuming Madoff's SEC filing can be trusted. We don't know how much might have been lost/stolen already at that point, nor how much has been deposited by investors since.
From the article on Yahoo, this is quite interesting as well: "Bernard L. Madoff Investment Securities LLC ranks among the top 1 percent of U.S. securities firms, according to the company's Web site.
In 2001, Barron's reported that Madoff's firm was one of the three top market makers in Nasdaq stocks and the third-largest firm matching buyers and sellers of securities on the New York Stock Exchange.
Could be some awfully illiquid securities out there now, with no market-maker behind them...
Uh, if you read the SEC press release it does not look real. Not real.... Not real.... Not real..... Blu....bluu.. bluu....bluuu.....
V
V .
V . .
V .
V . .
V .
v .
v .
V. .
V.
Of course, how do we know the $17 billion in assets under management/11-25 client numbers given to the SEC can be trusted, given that this guy by his own admission was engaged in a massive fraud? Doesn't jibe with the $50 billion loss estimate he revealed to his sons, which he presumably had no reason to lie about.
Ya know, I truly wouldn't mind of all that happened were these criminal gamblers making off with each other's assets thru Ponzi scheme or whatever. But it isn't. They're taking our whole real-world economy down with them.
If the guy had been making up gains of 1 to 1.5% per month and then ended up with $10 instead of $17 billion, it is more like ever other investor this year.
The $50? Who knows.
The trading business may not be directly involved.
He would have the skill set to fake the paperwork. Not an easy thing to do, but the guy had been a trader forever. This thing started a little over a decade ago, which means he would have been in his 60's.
Item 5 is listing total $ as $17B and number of clients as 23. However, this may not be accurate. (I'm not sure how advisor was setup or 100% sure on this, but each fund run by a hedge fund is typically 1 client. Thus, you can have 23 hedge funds equaling 23 clients in the SEC's definition but hundreds of clients.)
It would be very nice if Mr. Madoff helped the FBI uncover other similar schemes. Madoff now knows first hand the signs. That makes him a very powerful weapon tot he FBI if they can find a way to exploit that knowledge.
$2 trillion question from fox news and bloomberg FOXBusiness Demands Answers on Bailouts - FOXBusiness.com
Two months after Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke pledged to make the financial rescue plan transparent, we still don't know a lot about who is being helped and what troubled assets the government is buying up. The situation with the Federal Reserve's $2 trillion worth of new loans to troubled banks is worse. Exactly who's taking the loans, and what kind of assets is the Fed getting in return? We really don't know. .....
So Fox Business has begun actions to force the U.S. government and the Federal Reserve to share information about all these bailouts with you. If in 20 days the Treasury Department has not responded to our Freedom of Information requests, we are going to sue the Treasury for that information. The government and the Fed have no right to keep this information from you, the very people who are being forced to pay for these bailouts.
Friehling & Horowitz, Accountants, New City New
York (Rockland County) are the accountants for
Madoff, operating out of a single 13' x 18' room.
(maybe he was their only client?)
Thanks CR for posting this. Crazy, crazy, crazy stuff.
And RK:
Friehling & Horowitz, Accountants, New City New
York (Rockland County) are the accountants for
Madoff, operating out of a single 13' x 18' room.
Everything goes to hell, so the government throws in some money, hoping to tide the banks over until things get better. This makes the banks look good, causing folks to trust their money to the banks.
Two outcomes:
(1) The banks pull through, and we all end up being grateful for the TARP money.
or
(2) Like a Ponzi scheme, the TARP money makes the banks look better than they actually are. Eventually the collapse, taking out more innocents [more likely].
Regarding the $17 billion versus $50 billion number, the rumor is that Madoff had major funds under management that were not under an advisory contract and not reported to the SEC. The $50 billion number may be accurate, and might even be a bit low, and the number of investors might be far higher than the 15 or so reported to the SEC.
Moral of the story: never, ever give money to another person to be invested without an advisory contract and without transparency into what they will be doing with it.
I can't believe it. How did the SEC let this happen!
About 1990 Stotler and Co. went bankrupt and I had just become a Commodity Trading Advisor there. I had about $25,000 in managed money. Within a week, the CFTC audited me.
Oh, wait, I forgot. That was before Bush gutted all the government agencies which did oversight...
He's responsible so shouldn't he have to pony up the losses his neglect caused...?
The contrast between this story and the auto bailout is going to raise some hackles. Madoff defrauded his clients of more than three times the amount that was on the table for the Big Two.
lets say you've got a million dollars, if you're careful you can retire on that. a billion is a thousand people, 50 billion is only 50,000 people. if madoff laundered it, and I've no reason to doubt that he did, it would make him one of the richest men in the world - yet even he could'nt save gm singlehanded. crazy shit I tell ya
If any of you smart people are still reading this comment thread, would you please shed some light on rule 11.E(2) since Mr. Madoff has been censured and find for violation twice in the last 3 years?
2005: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided):
SEC RULE 11AC1-4 - THE FIRM FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SECURITY, AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMUS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SECURITY
2007:7. Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE FIRM SUBMITTED AN AWC THAT WAS ACCEPTED BY THE NASD FOR VIOLATIONS OF LIMIT ORDER DISPLAY AND LIMIT ORDER PROTECTION.
first??
First? No way!
The world asleep
OT: Harry Reid says the bailout is dead.
http://www.marketwatch.com/news/story/Automakers-bailout-falls-apart-Senate/story.aspx?guid={01358784-ABDC-4333-8C55-2FA96BB138AE}&dist=hplatest
Sounds like someone is in a pickle.
Better link: http://tinyurl.com/6jyspw
39 yes
26 no
so investors get nothing and he was hoping to pay his employees with what was left so he can die in peace in prison?
Reid just predicted a stock market collapse tomorrow.
Between him and Chris "Bank Run" Dodd, these guys really know how to play the negatives.
39 yes
26 no
this sounds like its passed ?
Let me be the first to state the obvious. There are people, MANY people, in prison for longer than 20 years for stealing $100 from a liquor store then failing a couple of drug tests. There is no punishment adequate for a man who stole 50 BILLION dollars, if you sentence a small time holdup man to life. AH... but this is different. He is rich (and... white?)
shouldn't have put the "no way"... I will now sit and enjoy the pinnacle of my life
ot everyone has voted
Prolly thought he could get away with the Ponzi initially while he got back onsides with his money (back in black, so to speak.) Looks like he kept guessing wrong as he got more desperate. But this doesnt mean that the whole thing was a Ponzi from the getgo. I think that Ponzi was an intermediate step to avoid catastrophe. Problem is, it only postponed it and made it that much bigger it looks like.
BTW, hope you arent long GLD tomorrow. Gets killed during hedgie redemptions. I bet it is back to 70 by the end of the week.
CR, as I read the complaint I was assuming the investors were a handful of extremely wealthy individuals. What did you see that led you to think they were hedge funds?
47 yes
32 no
sounds like AYES are going to lose.
Crispy, is that the senate vote tally?
ew thread
yes
ew thread, tally done, tallywhackers. By by GM and the three headed doggie.
if they are voting then why is Reid saying it has collapsed ?
this is confusing
...investors were a handful of (FORMERLY) extremely wealthy individuals.
Yalt: Read their Form ADV it lists the the type of client.
I hope that the employee with $2 million invested took his/her loses instead of trying to get to the front of the withdrawal queue.
Gonna be a lotta CR visitors on line for friday bust up...
plus Madoff apparently admitted everything to the FBI
Methinks that because Madoff is 70 years of age, he is falling on the sword for some peeps.
Never mind, CR, I found it on p.3 of Vasilescu's declaration. Institutional clients. And Goeff is right as well, it doesn't look like this was a Ponzi from the beginning, it just became one when the losses started to pile up.
Yalt: from Bloomberg
Madoff Charged in $50 Billion Fraud at Advisory Firm (Update3) - Bloomberg.com
New York-based Fairfield Greenwich Group runs the $7.3 billion Fairfield Sentry Ltd., a fund that invested in Madoff. Andrew Ludwig, a spokesman for Fairfield, declined to immediately comment.
I hope that the employee with $2 million invested took his/her loses instead of trying to get to the front of the withdrawal queue
I was making a tentative guess that that employee might have been the one to blow the whistle. It doesn't look like the authorities knew about this until after the meeting in Madoff's apartment--somebody there must have dropped a dime.
Yalt, that theme sounds familiar (re: losses piling up).
So where does the "$50B in losses" come from if there was only $17B in assets under management?
OT: futures no likey tomorrow: SP -39
el presidento will step in, big nothingburger.
wow, i'm in the asset management biz and it's tough as nails to raise money....i am so pissed when a complete liar and fraud is able to raise BILLIONS....i'd kill for just 10m assets under management. rant off.
DCRogers writes:
So where does the "$50B in losses" come from if there was only $17B in assets under management?
There were $17B under management at the beginning of 2008, assuming Madoff's SEC filing can be trusted. We don't know how much might have been lost/stolen already at that point, nor how much has been deposited by investors since.
Perhaps the difference between the 17B under management and the 50B lost is the result of margin loans?
From the article on Yahoo, this is quite interesting as well:
"Bernard L. Madoff Investment Securities LLC ranks among the top 1 percent of U.S. securities firms, according to the company's Web site.
In 2001, Barron's reported that Madoff's firm was one of the three top market makers in Nasdaq stocks and the third-largest firm matching buyers and sellers of securities on the New York Stock Exchange.
Could be some awfully illiquid securities out there now, with no market-maker behind them...
Uh, if you read the SEC press release it does not look real. Not real.... Not real.... Not real..... Blu....bluu.. bluu....bluuu.....
V
V .
V . .
V .
V . .
V .
v .
v .
V. .
V.
THERE WILL BE BLOOD.
seriously. people can't hear stuff like this day in and day out and not begin to react violently. effin unconscionable.
Of course, how do we know the $17 billion in assets under management/11-25 client numbers given to the SEC can be trusted, given that this guy by his own admission was engaged in a massive fraud? Doesn't jibe with the $50 billion loss estimate he revealed to his sons, which he presumably had no reason to lie about.
And he's a former Chairman of the Board of Nasdaq. Not a trivial fact, methinks.
Who were the auditors?
What were they doing?
Their exposure will catapult them into the Arthur Anderson grave.
Ya know, I truly wouldn't mind of all that happened were these criminal gamblers making off with each other's assets thru Ponzi scheme or whatever. But it isn't. They're taking our whole real-world economy down with them.
This is the same scheme from that movie "Boiler Room" w/Giovanni Rebisi or however it is spelled. Lie down with dogs.......wake up broke.
Just business as usual, nothing to get excited about.
jo6pac
The race to the bottom continues.
This is a bigger deal than the auto bailout failing. More evidence that our entire financial accounting system is broken.
Will somebody link to the Form ADV at the SEC please? I've poked around over there for 20 minutes, but I really have no idea what I am looking for.
Thanks!
Sounds like it is $10 billion.
If the guy had been making up gains of 1 to 1.5% per month and then ended up with $10 instead of $17 billion, it is more like ever other investor this year.
The $50? Who knows.
The trading business may not be directly involved.
He would have the skill set to fake the paperwork. Not an easy thing to do, but the guy had been a trader forever. This thing started a little over a decade ago, which means he would have been in his 60's.
When it rains, it pours.
correction .... meant $17 to $7 = -$10 billion
Thats a lot of money
You can't link to the ADVs because of the setup. I believe the correct 801- number is 67134.
Link to search:
Investment Adviser Search
Item 5 is listing total $ as $17B and number of clients as 23. However, this may not be accurate. (I'm not sure how advisor was setup or 100% sure on this, but each fund run by a hedge fund is typically 1 client. Thus, you can have 23 hedge funds equaling 23 clients in the SEC's definition but hundreds of clients.)
I bow down to the Master, Mssr. Madoff!
It's painful as it may be, but everyone of the hedge funds connected with this case:
IF YOU LIVE BY THE SWORD YOU DIE BY THE SWORD
It would be very nice if Mr. Madoff helped the FBI uncover other similar schemes. Madoff now knows first hand the signs. That makes him a very powerful weapon tot he FBI if they can find a way to exploit that knowledge.
How can Jas not have commented on this post? I was expecting at least one 'bankster' and one 'dopes' reference.
$2 trillion question from fox news and bloomberg
FOXBusiness Demands Answers on Bailouts - FOXBusiness.com
Two months after Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke pledged to make the financial rescue plan transparent, we still don't know a lot about who is being helped and what troubled assets the government is buying up. The situation with the Federal Reserve's $2 trillion worth of new loans to troubled banks is worse. Exactly who's taking the loans, and what kind of assets is the Fed getting in return? We really don't know. .....
So Fox Business has begun actions to force the U.S. government and the Federal Reserve to share information about all these bailouts with you. If in 20 days the Treasury Department has not responded to our Freedom of Information requests, we are going to sue the Treasury for that information. The government and the Fed have no right to keep this information from you, the very people who are being forced to pay for these bailouts.
Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Defies Transparency Aim in Refusal to Disclose (Update2) - Bloomberg.com
And he participated in regulatory activities!
The biggest killer of justice in society: Admiring the wrong people and actions.
FYI Madoff's 2 "senior employees" were his SONS!
The accountants, a 2 person "firm" in Long Island,
occupied a single 11 x 18 ft office. This was a
"captive" firm.
Friehling & Horowitz, Accountants, New City New
York (Rockland County) are the accountants for
Madoff, operating out of a single 13' x 18' room.
(maybe he was their only client?)
Thanks CR for posting this. Crazy, crazy, crazy stuff.
And RK:
Friehling & Horowitz, Accountants, New City New
York (Rockland County) are the accountants for
Madoff, operating out of a single 13' x 18' room.
Didn't anybody learn from the Bayou Capital bust?
It's just like the TARP money.
Everything goes to hell, so the government throws in some money, hoping to tide the banks over until things get better. This makes the banks look good, causing folks to trust their money to the banks.
Two outcomes:
(1) The banks pull through, and we all end up being grateful for the TARP money.
or
(2) Like a Ponzi scheme, the TARP money makes the banks look better than they actually are. Eventually the collapse, taking out more innocents [more likely].
The epitome of Wall Street:
YouTube -
Couldn't find the clip for the most intense scene of Wall Street but Martin Sheen's quote as father Carl Fox sums it up:
"What you see is a guy who never measured a man's success by the size of his WALLET!"
May more perp walks follow this one
Regarding the $17 billion versus $50 billion number, the rumor is that Madoff had major funds under management that were not under an advisory contract and not reported to the SEC. The $50 billion number may be accurate, and might even be a bit low, and the number of investors might be far higher than the 15 or so reported to the SEC.
Moral of the story: never, ever give money to another person to be invested without an advisory contract and without transparency into what they will be doing with it.
Madoff is an enemy combatant.
Gitmo.
50 Billion Ponzi? Does not even come close to the congressional Ponzi.
Pleeaase
I can't believe it. How did the SEC let this happen!
About 1990 Stotler and Co. went bankrupt and I had just become a Commodity Trading Advisor there. I had about $25,000 in managed money. Within a week, the CFTC audited me.
Oh, wait, I forgot. That was before Bush gutted all the government agencies which did oversight...
He's responsible so shouldn't he have to pony up the losses his neglect caused...?
The contrast between this story and the auto bailout is going to raise some hackles. Madoff defrauded his clients of more than three times the amount that was on the table for the Big Two.
What's interesting is that he left the court immediately, after signing for 10 million $ bail. What damage can he make anyhow?
lets say you've got a million dollars, if you're careful you can retire on that. a billion is a thousand people, 50 billion is only 50,000 people. if madoff laundered it, and I've no reason to doubt that he did, it would make him one of the richest men in the world - yet even he could'nt save gm singlehanded. crazy shit I tell ya
where is hollywood in all this. why are not they making movies about this. this is cool shit.
Anonymous | 12.12.08 - 1:46 am |
Thanks for the link!
If any of you smart people are still reading this comment thread, would you please shed some light on rule 11.E(2) since Mr. Madoff has been censured and find for violation twice in the last 3 years?
2005: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided):
SEC RULE 11AC1-4 - THE FIRM FAILED TO DISPLAY IMMEDIATELY CUSTOMER LIMIT ORDERS IN NASDAQ SECURITIES IN ITS PUBLIC QUOTATION, WHEN EACH SUCH ORDER WAS AT A PRICE THAT WOULD HAVE IMPROVED THE FIRM'S BID OR OFFER IN EACH SUCH SECURITY; OR WHEN THE ORDER WAS PRICED EQUAL TO THE FIRM'S BID OR OFFER AND THE NATIONAL BEST BID OR OFFER FOR EACH SECURITY, AND THE SIZE OF THE ORDER REPRESENTED MORE THAN A DE MINIMUS CHANGE IN RELATION TO THE SIZE ASSOCIATED WITH THE FIRM'S BID OR OFFER IN EACH SECURITY
2007:7. Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE FIRM SUBMITTED AN AWC THAT WAS ACCEPTED BY THE NASD FOR VIOLATIONS OF LIMIT ORDER DISPLAY AND LIMIT ORDER PROTECTION.
Are these pretty common or a big deal?
Thank you.
OMFG. Unbelievable. Been in business for 48 years. The SEC is completely asleep at the switch.