01.30.09
Posted in Uncategorized at 8:26 pm by optionplayer
New Talk of Who Escaped Madoff Scheme Sparks Anger
Bernard Madoff’s alleged massive financial fraud has sparked more outrage as news circulates a major U.S. bank may have cashed out early while other investors were left high and dry.
The New York Times reported on Thursday [Jan. 29] that JPMorgan Chase & Co. suddenly began pulling its money out of two hedge funds that invested with Mr. Madoff last fall before Mr. Madoff was arrested, but did not tell investors. According to the newspaper, JP Morgan said its potential losses related to Mr. Madoff are “pretty close to zero.”
JP Morgan Chase spokeswoman Kristin Lemkau did not return several calls seeking comment.
As lawyers and investors digested the story, they began questioning how big players may have been able to protect themselves from Mr. Madoff, while small investors were left exposed.
“Investors, particularly Europeans, who bought the leveraged notes issued by JP Morgan Chase are very angry and want to know what the bank knew and when it knew it,” said Keith Dutill, a partner at law firm Stradley Ronon Stevens & Young. “Many people bought those notes purely on the strength of the JP Morgan name.”
JPMorgan Chief Executive Jamie Dimon said in an interview with CNBC the JPMorgan notes were “protected” and he believed investors would “get most of their money back.”
U.S. officials arrested Mr. Madoff last month after he allegedly told his sons his investment-advisory business was “one big lie.” Mr. Madoff estimated the losses from his Ponzi scheme at $50 billion, staying afloat for years by using money from new investors to pay distributions and redemptions to existing investors, U.S. officials have said Previous Reuters Story.
Lawyers working on the Madoff matter said they are finding new evidence daily that big banks provided borrowed money to hedge funds that in turn put their clients’ money with Mr. Madoff.
“It is just shocking how many banks did this,” said Harry Susman, a partner at law firm Susman Godfrey, which is representing investors who claim they lost millions. “They seemed to be making loans backed only by Bernie Madoff’s separately managed accounts and no one seems to have checked those.”
While there is nothing inherently wrong with financing hedge funds and their ultimate investments, possible links to Mr. Madoff have unnerved some big banks’ stock holders, who worry about problems that are not known yet.
Analysts and reporters ask top financial industry executives about Bernie Madoff at every opportunity.
Wells Fargo & Co., the fourth largest U.S. bank, said it had to write off $294 million in the fourth quarter because Madoff’s alleged fraud hurt customers who then could not pay their loans back.
Other U.S. companies have been luckier.
Money manager Legg Mason Inc. said its Permal Group hedge fund unit has no Madoff exposure.
Ditto for Northern Trust Corp., whose chief executive told analysts on Wednesday [Jan. 28] the company has no exposure, even though some of its clients do. The biggest U.S. banks have not revealed any large Madoff problems.
But what may be good news for shareholders of U.S. financial companies infuriates wealthy investors who selected hedge funds and wonder why the managers were not more aware of red flags that others, such as JP Morgan, apparently spotted.
“I wonder why the fund managers did not find out that someone big like JP Morgan was pulling out and that they didn’t become more suspicious,” Susman Godfrey’s Mr. Susman said.
To some hedge fund investors and managers, the lax behavior is understandable, however.
“The more money these feeder funds put with Madoff, the more they started to look the other way. They did not want to kill their golden goose,” said an investor familiar with some of the funds that collected assets for Madoff, but who is not allowed to speak about them publicly.
Permalink
Posted in Uncategorized at 8:09 pm by optionplayer
Readers
Why with so much talk about the world in such a great hole created by excess etc that we allow the Oil companies liek Exxon Mobil announce record profits from Houston at 45 Billion plus ( remember these are the declared figures so through hedging and what they knew re Bush and the White House secret Oil policy, ( as that policy and documents have been made classified and stay in his library for 30 years !) has earn’t them amazing returns. Last year it is just 40 Billion
Should not these selective Oil groups that are caught up in the excess, whether it is Hedgers blew out of the water or small companies in the business or not who have sank- whilst a small clan have reaped many many Billions – probably Trillions.
Well it is not the first time that the Oil 7 have been rumoured to work the price- but now with the kaos economically- should not Obama tax them backdated to assist a remedy, for the present problems which are partly whatever your economic school , related to extreme OIl prices that lasted over 15 months.
any comment from the readers or industry, or should such topics be censhored.
Permalink
01.22.09
Posted in Uncategorized at 8:34 pm by optionplayer
Middle East new envoy and now envoy for Afghanistan and Pakistan ! what stability do they truly search for or is this a way of developing the war machine !
Obama decisions seem closer to old world order continuing with questionable charatcers to what they suppodedly achieved beforehand !!
Holbrooke was more caught up in too many questiosn in Bosnia !!
Permalink
01.18.09
Posted in Uncategorized at 10:17 pm by optionplayer
Why? Bring him back from retirement , from the Jazz music scene etc
to face the crises of crises re the incompetent banks and thier past reckless lending etc !
Tories have nothing to rejoice , as their policies and speeches said nothing on the problem since it has been building these past 20 plus years !
so why bring back the old man , to please who for whom ! or just as a smokescreen as they have no real solutions so lets just bring back alternative spin!! A real banker / economist with a real track record of success would have been a better bet and help maybe to discussions in the house etc !!
wasted opportunity and i suppose who really cares as Tories are failing again to look electable
Permalink
01.17.09
Posted in Uncategorized at 9:39 pm by optionplayer
http://uk.youtube.com/user/thiaguoguoo let’s listen and all travel to Japan for fresh investors and so new funds !!
Permalink
01.13.09
Posted in Uncategorized at 10:30 pm by optionplayer
Mr Kelly said Ireland’s “reputational capital” had been damaged by “chancers” such as ex-Anglo Irish Bank chairman Seán FitzPatrick, who had been abetted by “buffoons” such as former financial regulator Patrick Neary, Minister for Finance Brian Lenihan and the Taoiseach.
In discussing the €110 billion given in loans to developers, Mr Kelly said a typical regional housing collapse in the US saw banks sustain a 20 per cent loss on these loans, but the narrowness of the Irish market increased the risk of “substantially larger losses” for Irish banks.
“The guarantees of Anglo and [Irish] Nationwide liabilities have a strong chance of being called in over the next 21 months,” he said. Extending the Government guarantee to these two financial institutions was “extraordinarily unwise” and could produce losses that the State cannot afford to repay.
The global financial crisis may have been positive for the Irish economy as it “stopped us dragging ourselves even deeper into our hole,” he said. “If it had taken another year or two, we would have ended up in an Icelandic-shaped hole, which is not to say that we won’t end up in one.”
Mr Kelly said the Government should abolish stamp duty on property, compile proper price and quantity statistics and restore competitiveness through a public sector pay cut of 10 per cent.
A paper by TCD economist Patrick Honohan on the banking crisis argued that capital injections in the banks were a prerequisite for recovery. The financial regulator needed to decide now which banks had systemic importance to the economy – in other words, are “too big to fail”, and which are “zombie” banks.
“The goal is to avoid the continued operation of an undercapitalised, error-prone bank with a flawed business model and administrative practices, a problematic customer base and a compromised management facing distorted incentives,” the paper stated.
Permalink
Posted in Uncategorized at 5:15 pm by optionplayer
The Wall Street Journal reported today that Spanish prosecutors are investigating how Santander lost client money through Madoff’s alleged fraud. A spokesman for the bank declined to comment when contacted by telephone. The official at the anti- corruption prosecutor’s office said Santander wasn’t a target of the probe.
Santander fell 24 cents, or 3.5 percent, to 6.60 euros by 5:14 p.m. in Madrid trading, valuing the bank at 52.9 billion euros. The stock is down 48 percent in the past year.
Optimal Fund
Clients of M&B Capital Advisers, a Spanish brokerage founded by Javier Botin, the son of Santander’s Chairman Emilio Botin, and Guillermo Morenes, husband of his daughter Ana Patricia, also had 152 million euros in funds at risk from the alleged fraud.
The anti-corruption prosecutor will be taking a close look at the relationship between Santander, the investment fund Fairfield Greenwich Group and the Madoff funds, the Journal reported. Fairfield had $7.5 billion with Madoff.
Investigators will also look into Optimal, the paper said. Santander said last month that individual customers in Spain face potential losses of about 320 million euros, mostly on structured products linked to its Optimal Strategic U.S. Equity fund, whose investments were executed by Madoff.
About two-thirds of losses incurred by Santander clients were borne by investors in Latin America, with Mexican customers losing $400 million, Argentine clients about $350 million and Brazilian customers $300 million, says the WSJ
M e a n w hi l e reading between the lines , one must say !
It is a disgrace and another example of contempt by the Spanish Bank on their South American Customers!!
Permalink
01.10.09
Posted in Uncategorized at 8:10 am by optionplayer
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=11472557&ch=4226720&src=news
Like so much of the Bush Administration there is mystery , not clear, large amounts of public funds, and a small group benefiting without accountability!
remember P Morgan got 25 Billion of these funds for what ? to pay 2008 bonuses for starters ! Goldman the same ! Citi too ! and the list goes on ! and 350 Billion has been alocated !wow
is this Daylight Robbery!
Permalink
01.08.09
Posted in Uncategorized at 5:23 pm by optionplayer
Madoff Con Hits Boston, Home to Victim Shapiro, Ponzi
Carl Shapiro’s name is chiseled into Boston’s largest academic and medical centers, testament to the roughly $80 million that he showered on the city in the past decade. Now it comes with a Bernard Madoff-sized asterisk.
Shapiro, a 95-year-old philanthropist, lost $545 million to Madoff, ranking him among the biggest individual victims of the world’s largest Ponzi scheme, data compiled by Bloomberg show. Now Boston, Carlo Ponzi’s adopted hometown, is bracing for the financial fallout.
“As a percentage of the population and significance of the charities involved, Boston was hardest-hit,” said Mark T. Williams, a professor at Boston University School of Management and a former Federal Reserve bank examiner. Shapiro “is Mr. Boston,” Williams said. “If Mr. Boston is hit, what do you think that does to Boston?”
Just as in Madoff’s base of New York, the alleged swindler targeted Boston’s wealthy Jewish families. Shapiro was atop the list. His 47-year-old namesake foundation, at 75 Park Plaza, lost $145 million because of Madoff. Shapiro and his wife, Ruth, are personally on the hook for about $400 million.
The foundation doled out most of its funds for new hospital buildings and cultural programs in Boston and Palm Beach, Florida, where the Shapiros also own a home. Harvard-affiliated Brigham and Women’s Hospital opened the Carl and Ruth Shapiro Cardiovascular Center last year. The foundation also pledged $27 million to the Dana-Farber/Brigham and Women’s Cancer Center as well as $15 million to Boston Medical Center for an ambulatory care center.
‘All Obligations’
The foundation says it plans to “fulfill all of its current obligations.” Shapiro didn’t return a telephone message left at his home.
He and his wife are the largest donors to Brandeis University in Waltham, 10 miles northwest of downtown Boston, giving more than $80 million to the nonsectarian Jewish- sponsored institution. The school didn’t invest with Madoff, according to spokesman Dennis Nealon.
For Shapiro, the financial pain may also have been personal. The first televised reports of Madoff’s scam were “a knife in the heart,” the Palm Beach Post quoted Shapiro as saying.
Shapiro gave Madoff $250 million 10 days before his arrest, the Wall Street Journal reported, citing unidentified sources. Madoff promised Shapiro he would get it back quickly and with interest, but never did, the newspaper said. The Shapiros have hired New York lawyer Steven F. Molo of Shearman & Sterling to represent them, the Boston Globe reported today, citing a family spokesman.
Harvard, Tufts
Institutions throughout Boston say they’re worried about future donations from groups that lost money by investing with Madoff. Several Harvard University-affiliated hospitals, the Massachusetts Institute of Technology, Tufts University, the Elie Wiesel Foundation for Humanity and a $40 billion state pension fund were exposed to Madoff through donations or investments.
Tufts said it lost $20 million by investing with Madoff through Ascot Partners LP, the New York fund run by J. Ezra Merkin. Merkin also faces a lawsuit from New York University, which said it had at least $24 million in losses after Merkin and his funds invested with Madoff.
“We knew the economy was in bad shape,” said George McCully, president of the Boston-based Catalogue for Philanthropy, which focuses on donor education. “But to have something like this come along, to have a guy in the for-profit sector cheat and steal others in the philanthropic sector, adds insult to injury.”
Looming ‘Void’
The $958 million Picower Foundation in Florida, which gave MIT a $50 million grant to fund the Picower Institute for Learning and Memory, plans to close because of losses at the hands of Madoff. Wiesel’s group lost $15.2 million.
Other institutions tied to Madoff include the Robert I. Lappin Charitable Foundation of Salem, Massachusetts, which was forced to close, ending trips for local students and teachers to Israel. Maimonides School, an Orthodox Jewish day school in Brookline, Massachusetts, lost $5 million, according to school board chairman Jeffery Swartz in a letter to parents.
Hedge fund Tremont Group Holdings Inc., part of Massachusetts Mutual Life Insurance Company, invested $3.3 billion with Madoff. MassMutual itself may have $10 million at risk, according to a company statement.
Shapiro made his fortune in the clothing industry as founder of Kay Windsor Inc. in New Bedford, Massachusetts, according to the Web site of his foundation. He sold it to the Vanity Fair Corp. in 1971 and remained with the company until his retirement in 1976, according to the site.
For Boston-area charities, the future remains murky, Williams said. “The bigger story going forward is, ‘Who will be able to step up to the plate and fill the void?’”
Permalink
Posted in Uncategorized at 12:54 pm by optionplayer
Leaders must act together to solve the crisis
By Kevin Rudd
The stabilisation of financial markets and stimulation of the global economy will require unprecedented policy co-ordination among the world’s political leaders in 2009. Failure to co-ordinate in this way will slow recovery and reduce the aggregate impact of the stimulus packages being contemplated or implemented by individual governments. Worse, fragmented actions could yield incrementally to “beggar thy neighbour” policies that run the risk of accelerating rather than ameliorating the crisis.
The International Monetary Fund estimates the global economy needs a fiscal stimulus of at least 2 per cent, or $1,200bn (€882bn, £798bn), in 2009 to ward off the worst effects of the crisis. Economists acknowledge that much more may be required if shattered confidence sets off a spiral of deleveraging, declining asset values, falling income and rising unemployment.
Some action has been taken by individual governments through both monetary policy and significant fiscal stimulus announcements. The truth is much of this will not be delivered in 2009 but in later years. Also, some of the fiscal stimulus measures that have been announced are reannouncements and therefore unlikely to have any additional effect on growth projections. Individual national measures, meanwhile, will not capture the benefits of co-ordinated international action.
Such benefits are significant. First there are real and psychological gains. Stimulus measures from one country spill over to their trade partners, creating an additional boost. Co-ordination is also important to mitigate the volatility in currency and bond markets that can be an unintended consequence of uncoordinated policies.
Second, co-ordination is an important defence against beggar-thy-neighbour policies. We are already beginning to see worrying early forays into protectionism. The number of anti-dumping cases rose by 40 per cent in the first half of 2008 and there has been a gradual creeping up of tariffs. Even within their World Trade Organisation commitments, there is scope for countries to raise tariffs. If all nations put up tariffs to their bound rate (the highest rate consistent with their WTO commitments), exporters from middle and high income countries could face tariffs twice as high as current levels. Then there is the remaining challenge of concluding the Doha round – where lack of progress represents a continuing failure of global political will.
Third, international co-operation is essential because this crisis has important implications for developing countries. They did not create this crisis but have been badly damaged by it. The global recession in advanced economies has weakened export opportunities for emerging countries. In addition, the financial crisis has restricted credit flows – with spreads on debt to developing countries having widened significantly. This means many developing countries will struggle to finance their existing deficits, let alone fund the kind of fiscal rescue packages being contemplated by developed economies. Loans from multilateral development banks to developing countries totalled $41bn in 2007. This needs to be significantly increased across the board consistent with the World Bank’s recent decision to quadruple its lending. Aid must be increased, currency swaps need to be extended and the IMF must expand the scope of its short-term liquidity facility.
A fourth reason for co-ordinated action is the unprecedented opportunity the crisis presents to combine shorter-term stimulus requirements to boost growth and employment in 2009 with the longer-term requirement to lift global productivity growth and accelerate the transformation to a lower-carbon economy.
The development of a global response to this crisis is a complex task. The good news is that the Group of 20 summits in Washington last November and in London this April will have created a mechanism for effective, co-ordinated action – bringing together for the first time the main developed and developing economies, which represent between them 85 per cent of gross domestic product, 80 per cent of world trade and two-thirds of the world’s population.
In the immediate period ahead, G20 governments will need to work out the quantum of stimulus necessary for 2009 to offset the anticipated contraction in the private economy and the consequential impact on unemployment; to agree on the optimal content of stimulus policies to balance short and long-term economic needs; to co-ordinate the implementation of these measures; and to develop a medium-term exit strategy to ensure that surviving this crisis does not shackle us with long-term inflation.
All these measures will require unprecedented co-operation among governments. If we fail, the consequences will be grave. If we rise to the challenge, not only will we reduce the impact of long-term unemployment, but we will also have begun to fashion a new form of economic governance that the underlying forces of globalisation have long been calling forth.
The writer is Australia’s prime minister
Permalink
« Previous entries Next Page » Next Page »
