Love the note at the Madoff Trustee Site about Friday's "Meeting of Creditors" in the auditorium of U.S. Bankruptcy Court in lower Manhattan:
Due to the fact that this case involves a criminal matter, the Trustee does not expect that any member of pre-liquidation management of BLMIS will be present for examination.
The monster won't be there. So, villagers, leave your torches at home. And that goes for your whips, chains, guns, and cudgels, too. And also the sick and helpless Americans who depended on their organizations' investments with Madoff. Don't bring them, because, as court-appointed trustee Irving Picard also notes:
Meeting attendees are encouraged to arrive early as the Auditorium and overflow rooms have a limited seating capacity of 460 and attendees are required to pass through a security checkpoint before being admitted to the building.
For those of you who didn't get snookered by Bernie, BLMIS stands for "Bernard L. Madoff Investment Securities." Of course, the "investments" may not have existed, and if they did, they weren't secure.
One more note: Cash will not be handed out at this meeting.
This'll break you up: Revisiting the January 2007 Facebook parody from USC, directed by Mu Sun
While you're waiting for the stimulus bill to hook you back up:
• It's not you, it's my social-networking. Further confirmation in this morning's Daily News of something that thousands of you already know: Facebook's great for dumping a girlfriend/boyfriend/spouse. Catey Hillnotes:
A new poll finds that 48 percent of people under 21 and 18 percent of people ages 22-30 dumped a loved one via a social networking site like Facebook, the Daily Mail reported.
Note the generation gap. If dumping via the net had been so popular with people over 21 back in 2004, maybe the electorate would have broken up with George W. Bush. One major problem: Facebook didn't even exist in 2004.
With Dubai's economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.
The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai -- once hailed as the economic superpower of the Middle East -- looking like a ghost town.
As drug violence engulfs Mexico, a blue-ribbon panel blasted the U.S.-led drug war as a failure that is pushing Latin America to the breaking point.
"The available evidence indicates that the war on drugs is a failed war," said former Brazilian President Fernando Henrique Cardoso, in a conference call with reporters from Rio de Janeiro. "We have to move from this approach to another one."
The commission, headed by Mr. Cardoso and former presidents Ernesto Zedillo of Mexico and César Gaviria of Colombia, says Latin American governments as well as the U.S. must break what they say is a policy "taboo" and re-examine U.S.-inspired antidrugs efforts. The panel recommends that governments consider measures including decriminalizing the use of marijuana....
The three former presidents who head the commission are political conservatives who have confronted in their home countries the violence and corruption that accompany drug trafficking.
Bill Moyerstalks with two Times reporters last September about Wall Street's meltdown.
Almost lost amid the usual knee-jerk preaching to the choir that is the 21st century Nation are a couple of excellent stories — one of them scolds Barack Obama for relying on such dubious characters as economist/erstwhile Harvard prexy Larry Summers, and the other roasts Abe Foxman of the Anti-Defamation League.
In "Never Say You're Sorry,"Christopher Hayes points out the clay feats of Obama economic-world appointees Summers and Gary Gensler.
What's more, the defamation of Moyers escalated further. Following Foxman's fusillade, New York Times neocon William Kristol inserted in a regular column--yet another devoted as usual to the majesty of George W. Bush's leadership--an attack on Moyers for allegedly "lambast[ing] Israel for what he called its 'state terrorism,' its 'waging war on an entire population' in Gaza." Like Foxman, Kristol also implied that Moyers was guilty of racism.
Again, read the text of Moyers's remarks. Neither Kristol nor Foxman notes his stated belief that "every nation has the right to defend its people. Israel is no exception, all the more so because Hamas would like to see every Jew in Israel dead," or his deep concern about the growth of "a radical stream of Islam [that] now seeks to eliminate Israel from the face of the earth."
Yet despite the fact that Bill Moyers is, well, Bill Moyers, the Times editors not only allowed Kristol to deliberately distort and decontextualize his remarks; they would not allow Moyers to defend himself in his own words in response. After the PBS journalist submitted a letter to the editor, he was told, "We will not print that 'William Kristol distorts or misrepresents,' and the editors will not budge." They insisted that the letter be changed for publication to read, "I take strong exception to William Kristol's characterization," and they truncated much else.
Hmmm...Kristol has exited the Times's op-ed page. He probably wanted to pursue other opportunities.
Hayes's lively piece on Obama's appointees even throws in a couple of apt sports metaphors. More importantly, Hayes dredges up some valuable history regarding both Gensler and Summers.
In doing so, he doesn't spare the Clinton Administration from its disastrous destruction of the Glass-Steagall Act, a strict banking law from the last Depression that, had it remained in place, would probably have prevented Wall Street from creating the current Depression.
Softly swayed by seemingly selfless actions, those charmed by the Clinton charisma do not recall that the Clintons helped to create the financial debacle the electorate now experiences. An audience content with celebrity, dazzled by a drama, and grateful for fiscal favors sees no reason to reflect upon what might have been had the Clintons not repealed the Glass-Steagall and Bank Holding Company Acts.
After only part of this morning's House hearing starring Harry Markopolos, there's little doubt that Bernie Madoff's true identity is Dr. Evil.
What else can one think when House members wondered aloud whether there are "mini-Madoffs" or "medium-size Madoffs" lurking in the Wall Street wastelands.
Markopolos answered in the affirmative and said he plans to "deliver a mini-Madoff to the SEC tomorrow," adding, "Hopefully they listen to me this time."
The House Financial Services Committee members agreed that this time the SEC will probably listen to Markopolos. There's no hint, however, of who Markopolos is talking about.
But speaking of Dr. Evil, Markopolos also pointed out (as I and some others have) that Wall Street's fraudsters couldn't pull off their schemes without Mayor Mike Bloomberg's proprietary sophisticated hardware/software machines.
There's no other way, many say, to conjure up the increasingly sophisticated financial instruments that ruined Wall Street and will no doubt ruin it again during the next bubble.
Bloomberg is supposedly the biggest philanthropist in America; he got the money from the sale of his machines on Wall Street.
Which leads to the question: How could Mayor Bloomberg not have known the various nefarious uses to which his machines could be put? Of course he knows.
Which leads to this: Wall Street's meltdown happened on his watch, and it was created by his pals — his customers — at the Street's big banks. So why didn't he stop it or at least see the signs of an impending disaster?
If not him, who? If not then, why not?
And now he wants another mayoral term to keep our streets supposedly safe when the only street he knows — Wall Street — has become the most dangerous stretch of pavement in the country?
Just wondering.
Markopolos didn't make that point, but he did say that the SEC operates at a tremendous disadvantage in trying to understand the complex schemes of the Street's white-shoed gangsters by not having nearly enough Bloomberg terminals. Give the SEC more Bloomberg terminals, he told the House panel, because the fraudsters and scamsters have them.
Wild-eyed Harry also has a beef with the press: He contended that a Wall Street Journal reporter (whom he didn't name) was very interested three years ago and was willing to fly to Boston to meet with Markopolos but that the reporter's editors were scared off by Madoff's power and reputation and nixed it. (For more on that, see Gary Weiss's post on Seeking Alpha.)
Treated with extreme deference, Markopolos is surely one of the most brash witnesses to testify on Capitol Hill in quite a while. And well-prepared — browse his lengthy (but entertaining) written testimony if you can't wait for the sound bites later today.
Of course, he can back it up, having warned a decade before Madoff confessed to his sons that Bernie was a fraudster.
At least, Markopolos can back it up for now. His hubris, his zealotry, his sense of certainty — they make you wonder whether Markopolos, like Madoff's scheme, is too good to be true.
Anyway, Markopolos's halo — or is it his intense eyes? — cast an eerie glow for now on the scene of perhaps capitalism's all-time worst disaster.
California Democrat Brad Sherman noted that Markopolos isn't just some "wild-eyed populist." Sherman was half-right. Markopolos is definitely wild-eyed — he has the look and tone of a zealot — but he's also the staunchest defender of capitalism one could imagine, and that includes Ayn Rand.
And imaginative, too. Markopolos raised the intriguing notion that retired Wall Street bigwigs, people with little or no hair, as he put it, should be hired by the SEC to replace the young whippersnappers who now infest the agency's lower ranks.
Markopolos reasons that veterans won't have to do it for the money, because they've already made theirs and that they would be foxes able to sniff out the rotten eggs in the henhouse.
This probably won't happen, unless these Wall Street veterans are suddenly imbued with that sense of civic responsibility that Barack Obama mentioned in his inaugural address.
In what's obviously a P.R. move, Citigroup says it's looking into pulling out of a $400 million marketing deal with the New York Mets.
Here's the current situation: Citigroup is supposedly on the hook to pay $400 million to the Mets for the naming rights to the unwarranted new stadium. Meanwhile, Citigroup, which has reported $28.5 billion in net losses since 2007, according to the Wall Street Journal, received a $45 billion bailout last fall from Henry Paulson's Wall Street giveaway TARP program.
Here's a better idea: Make the bank stay in the ill-fated scheme it can no longer afford, but force it pay the $400 million to the public — not the Mets — to help offset the billions in bailout money the public's already given the bank.
You're going to point out that the Mets would howl at having to give up that $400 million? Of course, but the team should have no reason to bitch. As my indefatigable stadium-expert colleague and Field of Schemes author Neil deMausepointed out January 14 on Runnin' Scared, the public's paying for $371.5 million of the new stadium.
So make the team give us back our money.
Of course, neither the team nor Citigroup will reimburse us. But it doesn't hurt to suggest it.
And don't think it's cynical to call this Citigroup maneuver to supposedly try to pull out of the naming deal a P.R. move. This morning's Journal story starts off with the idea that the bank is "eager to quell the controversy over how lenders are using government bailout money." The story adds:
In a statement Monday, Citigroup said that "no TARP capital will be used" for the stadium -- referring to government funds from the Troubled Asset Relief Program. But as it revisits the pact, Citigroup is essentially acknowledging that the volatile political climate could make it untenable for the bank to proceed with the deal.
Such liars the bank officials are. Technically they wouldn't be directly transferring TARP money to the Mets to pay for the stadium rights, but so what? Same public funds, different pocket.
Meanwhile, what a shrewd marketing move for the Mets: Name your team after the bank that's laying off thousands of people and getting bailed out by taxpayers who are so beleaguered that they can't even afford tickets to the games.
Speaking of naming rights that didn't cost us anything (at least for the names): Paulson's top aide at handing out the bailout money, Neel Kashkari, and the scamster named Bernie who made off with billions of other people's money.
Slapping Wall Street upside the head, Barack Obama lambasted the billions of dollars in bonuses the Street's bankers handed out to themselves while they simultaneously ask taxpayers for handouts.
Just another example of how much Obama sounds like the anti-Bush.
Mincing no words and obviously referring to this morning's unusually edgy Times story, "What Red Ink? Wall Street Paid Hefty Bonuses," Obama called the bonuses (which he rounded off to $20 billion from $18.4 billion) "shameful" and said that "now is not the time."
He added that he will bring that message directly to Wall Street.
The Times as Jimmy Cagney and the reader as Mae Clarke. It's about time.
A banner day for the New York Times.
Newspapers that don't go out for blood are worthless. The Times often should be itself flayed because it so often doesn't take full advantage of its tremendous resources and usually undeserved clout and instead exudes arrogance and condescension.
This morning, however, its reporters slapped on their fedoras and got the goods, and their editors snapped out of it, rolled up their Brooks Brothers sleeves, and laid it on us.
Like Jimmy Cagney shoving a grapefruit into Mae Clarke's face in The Public Enemy (1931), Ethan Bronner's "U.N. and Red Cross Add to Outcry on Gaza War" calls a war a war and shoves the details into your face during your breakfast before you have time to take your first sip of coffee:
International aid groups lashed out at Israel on Thursday over the war in Gaza, saying that access to civilians in need is poor, relief workers are being hurt and killed, and Israel is woefully neglecting its obligations to Palestinians who are trapped, some among rotting corpses in a nightmarish landscape of deprivation.
You can see that Bronner's piece doesn't fiddle around with the paper's usual stiff, officious lede followed by some boring, pseudo-analytical claptrap about how something affects decision-makers.
Bronner's second paragraph is the kind of thing you usually see as the lede of such a story:
The United Nations declared a suspension of its aid operations after one of its drivers was killed and two others were wounded despite driving United Nations-flagged vehicles and coordinating their movements with the Israeli military. The United Nations secretary general, Ban Ki-moon, called for an investigation by Israel for a second time in a week after the more than 40 deaths near a United Nations school from Israeli tank fire on Tuesday.
The paper's still not up to speed on the fact that many Jews, both here and in Israel (particularly in Israel), are angrily opposed to the war on Gaza.
The peace movement among Jews gets prominent play in the vibrant Israeli press and in other outlets around the world. But not in the U.S. media.
Enough of the negative stuff about negative stuff: The Times does deserve another kudos or two or three: Another example of today's fired-up Times is a Paris dispatch from veteran Alan Cowell, "Gaza Children Found With Mothers' Corpses":
The International Committee of the Red Cross said Thursday it had discovered "shocking" scenes -- including small children next to their mothers' corpses -- when its representatives gained access for the first time to parts of Gaza battered by Israeli shelling. It accused Israel of failing to meet obligations to care for the wounded in areas of combat.
Years ago, Cowell did a bang-up job writing such pieces day after day for the Times from apartheid-era South Africa. Now he's filing stuff about apartheid-era Israel.
Even the paper's editorial page this morning took off its kid gloves, dismissed its manservants and maids, and unleashed a sneer or two at its fellow Establishment members. Labeling the confirmation hearing for the new Secretary of Health and Human Services a "cuddly welcome for Mr. Daschle," the editorial board climbed down from the pedestal it has built for itself and started punching at the incoming Obama regime:
...The hearing before a Senate health committee was mostly a love-fest as senators from both parties expressed admiration for their former Senate colleague....
Unfortunately, the hearing did not tell us much at all about how the incoming Obama administration intends to pay for its emerging health care programs or how, for all of his smoothness at the hearing, Mr. Daschle will deal with the very real and very big differences his team has with Republicans on this and other vital issues.
Instead, the senators avoided asking such tough questions, and Mr. Daschle bent over backward to reassure Republicans that he would not try to ram anything too unpalatable down their throats....
A welcome dose of cynicism instead of the expected deadly dull civility and caution.
Yes, there are still some nits to pick in the Times, but this morning the paper emits a louder buzz than usual.
Tally-ho! Release the hounds! The paper usually acts more like C. Montgomery Burns hounding the beleaguered folk in Springfield. This morning, it's dogging a newspaper's proper targets.
While you're wiping the grapefruit off your face, click on these items, front-loaded this morning only with other Times pieces, most of which have surprisingly hard-hitting, newsy ledes...
The federal investigation that prompted Gov. Bill Richardson of New Mexico to withdraw his nomination as commerce secretary offers a rare glimpse into a long-simmering investigation of possible bid-rigging, tax evasion and other wrongdoing throughout the municipal bond business.
Three federal agencies and a loose consortium of state attorneys general have for several years been gathering evidence of what appears to be collusion among the banks and other companies that have helped state and local governments take approximately $400 billion worth of municipal notes and bonds to market each year.
Your own private Idaho.
When you can no longer afford even a night out in Boise, Idaho, your country's in deep financial trouble.
In a clever immorality tale about 21st century capitalism, the Wall Street Journal tells us this morning that people in the Intermountain West are having to give up meet and potatoes. Like many other families throughout the country, the average-American Capp and Muir families have had to stop spending and start saving.
No more nights out in downtown Boise. The Capps now have to stick close to their suburban home. But — the bad news keeps piling up — they've had to sacrifice cable TV! And they have teenagers in the house! (Memo to the parents: If you can't afford to put meat on the table, at least serve your kids Robot Chicken.)
Don't feel sorry for these hinterland families. The fact that they're desperately trying to save their money, instead of going into more debt, spells doom for the rest of us. By trying to extricate themselves from their own mess, they're just making it worse for all of us...and for themselves. Screwy, huh? Here's the explanation, per Evans's story:
As layoffs and store closures grip Boise, these two local families hope their newfound frugality will see them through the economic downturn. But this same thriftiness, embraced by families across the U.S., is also a major reason the downturn may not soon end. Americans, fresh off a decadeslong buying spree, are finally saving more and spending less — just as the economy needs their dollars the most.
Usually, frugality is good for individuals and for the economy. Savings serve as a reservoir of capital that can be used to finance investment, which helps raise a nation's standard of living. But in a recession, increased saving -- or its flip side, decreased spending -- can exacerbate the economy's woes. It's what economists call the "paradox of thrift."
It's more like a "Cash-22." I mean, you finally start acting responsibly, saving money instead of piling up even more outrageous credit-card debt and purchasing gizmos and gewgaws that relentless advertising has brainwashed you into lusting after, and that's bad for you, your family, and the country? More from Evans:
U.S. household debt, which has been growing steadily since the Federal Reserve began tracking it in 1952, declined for the first time in the third quarter of 2008. In the same quarter, U.S. consumer spending growth declined for the first time in 17 years.
That has resulted in a rise in the personal saving rate, which the government calculates as the difference between earnings and expenditures. In recent years, as Americans spent more than they earned, the personal saving rate dipped below zero. Economists now expect the rate to rebound to 3% to 5%, or even higher, in 2009, among the sharpest reversals since World War II.
The truth is that our economy demands that you continue acting like suckers by trying to live beyond your means. And when you stop being a sucker — like when you're laid off and you don't have a choice because you have to start saving your money to pay your bills and plan for the hard times — then you're blamed for not being a good citizen.
Oh well, Wall Street's worse-than-usual greed may have caused this problem, but we New Yorkers can be part of the solution. Bailouts of Wall Street haven't worked, so why not try to rescue some other downtowns?
Road trip to Boise!
Now that you know that the real goniffs are yourselves instead of people like Bernie Madoff, you're free to click on the following news items...
As European diplomats sought a cease-fire, Israeli troops poured into Gaza City, expelling residents and shooting militants. Meanwhile, Israeli troops suffered casualties from so-called "friendly fire."
New Yorkers who consume five or more drinks in one sitting face increased risk of HIV and other STDs, according to a new study from the city Department of Health.
Though never charged with a crime, Muhammad Saad Iqbal spent six years in American custody, during which he says he was secretly taken to Egypt and tortured.
A JetBlue passenger who was forced to cover up a T-shirt that read, "We will not be silent" in Arabic and English before boarding a cross-country flight won a $240,000 settlement from...
Patrick Littaye, 69, [co-founder of Access International Advisors,] invested all of his own money with Bernard L. Madoff Investment Securities LLC last year, enticed by the firm's positive returns as other hedge funds slumped. His error was compounded because he borrowed money to increase the return on his investment, leaving him with $4 million in personal debts, Littaye said in telephone interviews from Jan. 2 through Jan. 4. He declined to specify the amount he had lost.
"I'm going to sell everything I have and start over," Littaye said from Brussels, adding that he planned to subsist on his French social security payments. "For Access, we'll go to our investors over the next couple of weeks and we'll see what they think of us."
Littaye's partner, Thierry Magon de la Villehuchet, chose a different course. The 65-year-old co-founder and chief executive officer of Access was found dead Dec. 23 at his office in New York. Villehuchet killed himself after it became clear he wouldn't be able to recover the funds he and his clients invested with Madoff...
The sons of Bernard Madoff, who is accused of orchestrating a massive Ponzi scheme, told prosecutors last week that their father violated a court-ordered asset freeze by mailing them jewelry, watches and other items, his lawyer said.
In a further sign of the sheer enormity of Bernard Madoff's alleged $50 billion Ponzi scheme, on Monday a count-appointed trustee announced it had mailed claim forms to 8,000 former customers--an irate army of investors that is still only a fraction of the total number who may have been defrauded.
Waltz With Bashir, a movie that sprang from a previous Israeli invasion of Lebanon, won Best Picture from the National Society of Film Critics. A free Madoff Watch T-shirt to the reader who suggests the best title for the first movie spurred by Israel's current invasion of Gaza.
On an overseas trip while Rome burns, Mike Bloomberg is acting as if term limits remained intact and he couldn't run for another term.
The mayor's in Israel, having a "blast," as the Post puts it, during the invasion of Gaza.
While the rest of the city's inhabitants are facing an onrushing New Depression, Bloomberg is occupied with the occupiers. Focusing primarily on getting his aides to make sure he stays alive, the mayor's not exactly concentrating on the crisis back home. How does a New York City mayor keep schools, health clinics, transit service, and libraries from being slashed? He dunno.
It has been a year of record misery: the largest bankruptcy, bank failure and Ponzi scheme in U.S. history; $720 billion in writedowns and losses by financial institutions; $30.1 trillion in market valuation wiped out.
A proud father wanted the best for his daughter on her wedding day, but the fairy-tale event turned into a $100,000 fiasco that ended with the blushing bride kneeling over the toilet vomiting...
A Long Island couple whose wedding celebration evaporated in a cloud of carbon monoxide is still furious over unpaid expenses for the ruined reception...
In the past year, The New York Times Co. has slashed the dividend it pays investors by 75%, cut the companywide head count by 8%, raised the newsstand price of the flagship paper while merging its sections, and consolidated two New York area printing plants into one.
Big steps, but apparently not big enough. The world's foremost newspaper brand ended 2008 with its stock price down more than 60%. To raise $225 million to pay down long-term debt, the company is planning a sale-leaseback of part of its Renzo Piano-designed headquarters. It is also actively shopping its minority stake in the Boston Red Sox baseball team.
Like every other newspaper publisher, the Times Co. is grappling with an unprecedented collapse in print advertising and a dramatic slowdown in online ad growth. In the first nine months of 2008, revenues fell 7%, to $2.2 billion. Meanwhile, net income--which was boosted in the year-earlier period by the sale of the company's broadcast unit--plunged 92%, to $27.3 million. The company, which has roughly $1 billion in debt, is negotiating with lenders over the more than $600 million in loans that are coming due this year and next.
