Bernie Madoff waxes philosophic (2:45).
Earlier: Caption Contest Thursday: Madoff Maxes and Relaxes, Part II
Archive for January 2009
Bernie Madoff: “Don’t Take Anything For Granted…Such As, For Example, Ill-Gotten Gains. Ish Like That.”
By Bess LevinThis report is far more than a “he said, she said” argument between litigants. Instead, it connects the dots of the public record and other documents to prove that Lennar Corporation has a pattern of behavior over a sustained period of time of knowingly and willfully abusing the legal system to gain an unfair advantage over the less capitalized, smaller entities.
Uh oh.
Lennar Corporation (NYSE: LEN) treats their joint ventures exactly like a Ponzi scheme, pledging their older joint venture interests to leverage themselves into newer joint venture relationships despite operating agreements that prohibit this unauthorized movement of interests.
That’s alleged Ponzi scheme #1 for today. Can we match, or even exceed, yesterday’s trifecta again?
Update: JP Morgan issued this yesterday: “JPMorgan Thursday upgraded Lennar Corp to overweight from neutral.”
Woops.
Lenn-ron (.pdf) [The Fraud Discovery Institute]
South Korea said on Thursday it had arrested an elusive blogger accused of undermining the country’s financial markets with his doom-mongering, ending a case that has illustrated government unease with the growing influence of online gossip in the world’s most-wired economy.
See, because “elusive bloggers” are what’s wrong with modern economies today and if only we could get a handle on them we might not have had this problem. (That and mouthy congresscritters, short sellers, David Einhorn, Jim Chanos, John Paulson… you get the idea).
“Minerva”, who was arrested on Wednesday, has become a celebrated online guru in South Korea during the crisis. He gained instant kudos for what were seen as uncannily accurate utterances on the fall of Lehman Brothers and the crash of the Korean won, which plunged 26 per cent against the dollar last year.
Although some had speculated he might be a civil servant or even a market insider, authorities said Minerva was an unemployed university graduate without any substantial expertise in economics.
Oh. Apparently we forgot to add “unemployed university graduates without any substantial expertise in economics.”
In all seriousness, some clever talent spotter should give this guy UK citizenship and seed Minerva Capital, the dedicated Asian short fund.
Financial blogger arrested in South Korea [The Financial Times via the always excellent Alea]
Excellent: Job Loss Remains Within Expectations Bogus: Expectations Were Painfully Low
By Equity PrivateFueled by the increasing adoption of outsourced analysts in India and unattended fuel pumps that recite annoying sales on Hostess Cupcakes in perfect, unaccented English (both still illegal in New Jersey) over half a million jobs vanished in December, pulling unemployment up to 7.2% (a decade and a half high). At least 10% of the monthly figure is, however, accounted for by Citi and their heartless cancellation of the massive model train display this year. (Send your complaints to bobrubin@citi.com).
Frankly, we were expecting more like -800,000. What say you, DealBreaker readers? Good news in disguise?
Unemployment Hits 7.2%, a 15-Year High [The New York Times]
Richard here with great news and greater news. The great news: of every dollar you invested in our fund at the beginning of the year, you still have 72 cents. Not even sarcastically speaking, that’s really good (those who don’t think so are free to move their money to a fund run by Gendell). The greater news: my wife opened a new store which means more murses– those highly fashionable white leather man purses I sport around town– for me!
Lehman Private Equity Survives (WSJ)
Lehman’s PE firm Lehman Brothers Merchant Banking has reached an agreement, and been allowed to continue its existence. “The business has $4.5 billion under management, and holds stakes in more than a dozen portfolio companies including a Spanish railcar manufacturer to a U.S. bicycle-components maker.”
[...]
“The Lehman estate is also currently running a sales process for two other large Lehman private investment units — an $800 million venture capital arm and a roughly $10 billion real-estate private equity group. Given the slack market for those businesses, one possibility would to retain interests in those holdings as well, according to a person familiar with those deals.”
Icahn Thinks Bankruptcy Reform Would Help Banks (Reuters)
This is Icahn babbling on for roughly four/four and a half hours to the effect that bankruptcy laws aren’t as efficient as they could be. His (end) point is a solid one though:
“Private investment is a far more appropriate agent to revive these institutions, yet little is coming in,” he said, the reason being that distressed assets on bank balance sheets have artificially low values because of bankruptcy laws.”
It’s Jobs Day (Bloomberg)
We’ll see the numbers at 8:30 today, Consensus is calling for anywhere between -300,000 and -750,000.
Gators > Sooners For BCS Title (AP)
If you have a pulse you should all ready know this; that aside it was a decent game but it wouldn’t rate top ten of all time by any means.
TARP Program Under Fire (WSJ)
“The report faults Treasury on a variety of fronts: having no ability to ensure banks lend the money they have received from the government; having no standards for measuring the success of the program; and for ignoring or offering incomplete answers to panel questions.”
What’s horribly funny about all of this is that the panel thought the banks were taking the loans to lend it back out to the public, and then, for whatever reason, they thought they were going to get these people to answer questions. You just read that paragraph and kind of have to stare at it in a wondrous disbelief, like at any moment fairies and unicorns might pop into reality and everyone on the Hill can just live in their magic happy little land.
In related news, Bloomberg has an expose on how Paulson can’t get his dick out of the sand long enough to make some money for the US Government, because apparently that too was the point of the infusion. I have to give it to Goldman though, credit where credit is due and all:
“The Treasury would have held warrants for 116 million shares of Goldman Sachs under Buffett’s terms, which would be equivalent to a 21 percent stake when added to those currently outstanding. Instead, the dilution is 2.7 percent under the Treasury plan. Blankfein is the company’s biggest individual investor, with 2.08 million shares worth about $178 million today, according to Bloomberg data.”
–William Richards
At this point, all John Thain does is write memos announcing that his “friends” are running for the exits. Today is no exception. Will he start doing so for the mini Merrills leaving less voluntarily? We have it on good authority he just might.
$$$ NASDAQ Creates Index To Track Bailed-Out Companies [Clusterstock]
$$$ Citi backs foreclosure prevention plan [CNN Money]
$$$ “What would Gordon Gekko do? Cinema Reagan pairs ’80s flicks with the
guest lecturers that love them. Watch Wall Street again for the first time, and then hear former Lehman Brothers Senior VP Marcus Haupt blame Gordon Gekko for everything. (We advise you to leave your Dick Fuld mask at home.) Reagan Film Festival, first screening Jan 12, 7-10pm, DCTV (http://www.dctvny.org ), 87 Lafayette St (between White and Walker), 212-925-3429.” [Urban Daddy]
$$$ Vote for DB’s sibling site, ATL, for best law blog. [Weblogs]
[Via Dealbook, Bernie and wife Ruth hangin' on their yacht while visiting Saint Tropez a few years back]
Earlier: Bernie Madoff Maxes and Relaxes
Charlie Gasparino, calling in to CNBC and sounding like he couldn’t catch his breath, reports what we told you an hour ago.* That it “looks like Greg Fleming is working on his exit package.”
Earlier: Completely Unfounded, Possibly Baseless Rumor Of The Day, Bank of Amerillwide Edition
*I’d actually meant to ask for an under/over on how long it’d take for this to happen but got distracted by the package of jewelry that’d just arrived for me from Uncle Bernie.
CNBC reports that an 82 year old New York State man, Richard S. Piccoli (no, we absolutely did not make that up and though there is no apparent relation to Jeff Spicoli, this will not, in any event, prevent us from posting Jeff’s picture) took in at least $17 million since 2004. Apparently, he targeted the clergy. (That, we approve of heartily).
We think Jeff makes a fine poster boy for all things Ponzi, actually, after putting him up.
Brad Hamilton: Why don’t you get a job Spicoli?
Jeff Spicoli: What for?
Brad Hamilton: You need money.
Jeff Spicoli: All I need are some tasty waves, a cool buzz, and I’m fine.
We rest our case.
In any event, seems to be that one of the messages from the latest Ponzi schemes is: Don’t under any circumstances trust seniors with your money.
