The Madoff Bunch: Here’s the Story

That's the way they became the Madoff Bunch!!!

These three entities (since AIG isn’t a person, except legally) deserve each other. One is obsessed with motherhood – willing to do the strangest things to be pregnant – and yet, can’t take care of a Yorkie.

Then there is Bernie. Bernard Madoff swindles billions away from a host of snobby elites (and yes, they were elite, else, Bernie wouldn’t know you or I) and has zero conscience about it. Imagine that. Even wants out of jail so he can save his wife’s assets and likely, do himself before he goes to the big house.

Bernie’s Victims:

$1.8 Billion : J. EZRA MERKIN: The chairman of former General Motors Corp. financing arm GMAC is a money manager at Ascot Partners LLC in New York, which is in charge of investing funds from Yeshiva University and numerous Jewish organizations. One his most vocal investors is Mort Zuckerman’s foundation which is out $30 million.

$300 Million : Fred Wilpon, co-owner of the New York Mets

Unknown: KEVIN BACON and KYRA SEDGWICK

 $280,000: PEDRO ALMODÓVAR: The Spanish filmmaker, known for productions like “All About My Mother“ and for launching the US career of Penelope Cruz.

Millions: JEFFREY KATZENBERG: The DreamWorks Animation CEO

Roughly $230 Million : ARPAD BUSSON/UMA THURMAN/ELLE MACPHERSON: Uma Thurman’s fiancé, Arpad Busson, manages a $12.5 billion hedge fund. Macpherson is his ex.

Millions: ERIC ROTH: The Golden Globe-nominated screenwriter of “The Curious Case of Benjamin Button”

$20 Million: NICOLA HORLICK: This British investing superstar.

 

None of this though is even close to the haircut, you, the American taxpayer will take in supporting AIG. $180 Billion up in smoke. $165 Million sent out in bonuses that, while, we may recoup them, what about the other $179.8 Billion??? (You might want to start trading CDS – Credit Default Swaps – to get back some money directly from the source.)

So, to wrap up this little trio of Faces of Crass Behavior, I compose this little ditty set to the Brady Bunch theme:

Here’s the story of the Octalady

Who was bringing up shitloads of weird babies

All of them had sperm donors, like their brothers

The youngest ones in foster care.

 

Here’s the story, of a man name Bernie

Who was busy bilking thousands of his own.

They were Jews and Gentiles – screwed all together,

Yet they were not alone.

 

Till the one day when AIG met this maelstrom,

And they knew that it was much more than a hunch.

That this group would somehow form a syndicate.

That’s the way they all became the Madoff Bunch.

The Madoff Bunch, The Madoff Bunch.

 

That’s the way they became the Madoff Bunch…

Sorry that my rhyme scheme is off.

But then again, these schemers and parasites usage of a rhythm method is about as likely to succeed as I am in getting the CEO job at JPMorganChase , dating the latest it girl, and trying out and playing for Fred Wilpon’s Mets this year.

I’m very tired of being the ball vs. the louisville slugger in the game of the United States of America’s economy/casino run by MBAs that are down with OPM – Other Peoples’ Money – and don’t  give reach arounds with their screw jobs.

I have no hope at this moment that our country is going to do better if we don’t send a  very strong message to these jokers of economic jihad that we Americans are fed up with the crying game after the c-sucker job of economic destruction.

Enough!

Economic Jenga: With the Big Three Automakers

It's your turn: Pull one of the Big Three.

 

In hearing the conflicting voices on the possible demise of the American car manufacturers, I am often stunned at the lack of understanding and the woeful, yet important, acknowledgement that their future is of a mutually-desired benefit to Americans. Voices of insanity, such as South Carolina governor Mark Sanford’s “Let them go,” comment, and others of conservative bent such as Richard Selby (Alabama), are not seeing much of the American forest for the dismal economic trees.

 

The auto manufacturers provide, directly and indirectly, millions of jobs and billions in tax revenues. Allowing one or two of these icons to pray a chapter 11 bankruptcy will solve their problems is an economic jenga game. What are the ramifications to America if unemployment rises to 9, 10 or 12% nationally (as unemployment usually peaks toward the end of recession, not the start) and we do not replace those once-high paying jobs with similar ones? Where does our future lie? I have yet to see an economic plan put forth by Republicans that makes this future sound.

 

Pulling the plug on the auto industry at this point in an economic crisis is foolhardy. Meanwhile, throwing over $100 Billion at insurance behemoth AIG seems reckless in light of their own celebrations. What has AIG done to make America great? Did AIG build tanks in WWII? Has AIG put you in a nostalgic mood of memories of a simpler time while in their product? Isn’t AIG just an economic criminal that we have given a second chance?

 

Before you snap to judgment and say, “let them fail,” realize that many of those “lazy” UAW autoworkers pay mortgages like you do, and could foreclose just as easily as your “other” neighbors did. Think about it.

 

This Jenga game could result in a more houses being foreclosed upon and more turmoil in heartland America. You really want to pull that piece at this point of economic fragility?

I'm just a mouthpiece. Reminder: must update my resume.

As of today, White House spokewoman, Dana Perino (above) said of the Bush administration supporting a bailout of the big three:

“There’s no appetite for that.”

“The purpose of the $700 billion was clearly intended for financial institutions, and we wanted to keep that whole.”

If Congress quits without taking any action: “then the Congress will bear responsibility for anything that happens in the next couple of months during their long vacation.”

 

These comments tell of where we are in the demise of Bush’s free-market Capitalism. His avid support of his fellow financiers (as the Bush’s made their money on Wall Street) to the tune of $700 Billion, but leave the average UAW worker to the devices of a “free market” that has been rigged against him, and run into a failing bridge abutment by the car manufacturers, oil companies and conservative ideology.

Granted, legacy costs are at the heart of the economics of the possible demise of these 3 companies. But none of the typical union workers are responsible for the ineptitude of poor car designs, lobbying for fuel efficiencies counterintuitive to effective cars or bringing in foreign-own model types without restrictions on labor agreements.

What the union worker did was ask for pensions, livable wages and health care benefits.  Many, many employees receive pensions in government work, and other outlets. Health care is at the heart of the American diabetic economy: consuming too much and suffering the consequences in the future. Livable wages have to exist. It would be hard to argue that we need more $9/hour workers in the marketplace, unless your a multi-millionaire cum billionaire aspirations.

Whatever the faults are, the cracks in the economy can not be rebuilt on foreign consumption alone and minimal investments in ourselves. If we neglect any part of our economy, we are fating those particular workers to a more painful transition than what all ready exists.

 

Play Jenga during economic strength, not weakness.

 

 

 

 

 

Oh No!: Lehman Brothers 158-Year run is at a close likely

I wanted to write about Carlos Zambrano’s no-hitter today. But with Hurricane IKE, my region’s rainfall of 7-9 inches in two days, and now, Lehman Brothers going under, I suppose the financial crisis is most important.

 

It should have come as no surprise. The investment bank, by some metrics, the 4th largest in the USA, has been on the ropes for months. According to Deal Book:

Lehman made its bankruptcy filing late Sunday in New York, reporting $639 billion in assets and $613 billion in debt. In legal documents, Ian Lowitt, Lehman’s chief financial officer, blamed the bankruptcy on a loss of liquidity that caused a ” chain reaction of adverse economic
consequences.”

Wow. More than a 1/2 trillion of debt. Nice Debt-to-Equity ratio. It is a wonder it lasted this long. But it should not have surprised. This market is filled with bad paper passed by big players around the world.

What is sad is a Maryland professor of economics are all ready discounting this news stating this morning on NPR, “well, in 2 weeks, this news won’t be remembered.” Really Doctor? People won’t remember that 3 big hitters are in a financial freefall?

I think people will trace a path through Northern Rock, Countrywide, MBIA, Ambac, Bear Stearnes, Fannie Mae, Freddie Mac, IndyMac, Lehman Brothers, AIG, Merrill Lynch and whomever is next up in “The Price is Wrong” Financial Meltdown of such epic proportions not seen since 1929-1933. Yet, why worry?

The FED has got their back. Wrong. (At least Lehman found that out.)

For an interesting and thorough Wikipedia read, go to this link about the subprime crisis. Good Show!

Write downs by banks:

Company	Business Type	Loss (Billion $)
UBS AG	bank	$37.7 bln [1] [2][3]
Citigroup	bank	$39.1 bln [4] [5] [6][7]
Merrill Lynch	investment bank	$29.1 bln [8] [9][10]
Morgan Stanley	investment bank	$11.5 bln [11] [12][13]
Crédit Agricole	bank	$4.8 bln [14]
HSBC	bank	$20.4 bln [15][16][17]
Bank of America	bank	$7.95 bln [18][19][20]
CIBC	bank	$3.2 bln [21]
Deutsche Bank	bank	$7.7 bln [22] [23][24][25][26]
Mizuho Financial Group	bank	$5.5 bln [27]
Barclays Capital	investment bank	$3.1 bln [28]
Bear Stearns	investment bank	$2.6 bln [29] [30]
Royal Bank of Scotland	bank	$15.2 bln [31][32][33][34][35]
Washington Mutual	savings and loan	$2.4 bln [36] [37]
Swiss Re	re-insurance	$2.04 bln [38][39]
Lehman Brothers	investment bank	$3.93 bln [40][41]
LBBW	bank	$1.1 bln [42]
JP Morgan Chase	bank	$5.5 bln [43] [12][44]
Goldman Sachs	investment bank	$1.5 bln [45] [11]
Freddie Mac	mortgage GSE	$4.3 bln [46]
Credit Suisse	bank	$9.0 bln [47][48]
Wells Fargo	bank	$2.9 bln [49][50]
Wachovia	bank	$11.1 bln [51][52][53][54]
RBC	bank	$1.2 bln [55] [56][57]
Fannie Mae	mortgage GSE	$0.896 bln [58]
MBIA	bond insurance	$3.3 bln [59]
Hypo Real Estate	bank	$0.580 bln [60]
Ambac Financial Group	bond insurance	$3.5 bln [61] [62] [63]
Commerzbank	bank	$1.1 bln [64]
Société Générale	bank	$3.0 bln [65] [66]
BNP Paribas	bank	$0.870 bln [67] [68]
WestLB	bank	$2.74 bln [69][70]
American International Group	insurance	$11.1 bln [71][72]
BayernLB	bank	$6.7 bln [73]
Natixis	bank	$1.75 bln [74]
Countrywide	mortgage bank	$4.0 bln [75][76]
DZ Bank	bank	$2.1 bln [77]
Fortis	bank	$2.3 bln [78]
ICICI Bank	bank	$0.264 bln [79]
IKB Deutsche Industriebank	bank	$3.45 bln [80]
Aozora Bank	bank	$0.397 bln [81]
Dresdner Bank	bank	$3.49 bln[82][83]
HBOS	bank	$7.06 bln [84][85][86]
Lloyds TSB	bank	$1.32 bln [87]
Bank of China	bank	$2.0 bln [26]
ICBC	bank	$0.448 bln [88]

 

Lehman didn’t even take huge writedowns. Meaning: how much are these guys lying about their losses? Do they even know their losses? Are they going to fess up to the multi-trillion dollar nature of this?

The Perfect Storm has reach a Category 5 stage. It is still off the coast of this nation. But I have a sense it is going to hit rather soon…