interesting theories

Investors gave Bernie Madoff money because they trusted him. They gave Sam Israel money because they liked him—a gregarious, disarming goofball who, as a Wall Street apprentice, had invented an alter ego he called Captain Proton, a fearless superhero whose special powers were granted by vodka and cocaine. Now in his forties, he lived in a Westchester mansion, rented from Donald Trump for $22,000 a month, with an adjacent chapel in which he had built a replica of the Bayou trading floor alongside an 800-­gallon saltwater fish tank and a menagerie of rare reptiles. He’d also installed a high-end studio for jam sessions, where he’d play with the Allman Brothers’ drummer when the band was in town. He owned a fleet of Porsches and signed personal checks printed with the image of SpongeBob SquarePants…Once he’d welcomed his family home from a short trip standing in the driveway wearing cowboy boots, his wife’s bikini underwear, a lacrosse helmet, swim goggles, a life jacket, and a cape, then started screaming at his wife when she didn’t get the joke. [NYM, related]

Blogs. Read more »

According to one theory, yes. Read more »

Since 2008, Millennium Management’s assets have fallen from $13 billion to $7 billion. Given the shrinkage, one might attribute the departures of a whole bunch of portfolio managers to a cost-cutting initiative on the fund’s part. Such is not the case says people “familiar with” the firm’s thinking. Everything is just peachy over there, none of this has anything to do with a shrinking asset base, and if you must know, despite the fact that several of the former employees’ exits appear to be voluntary in nature (Matthew Karchmer, for instance, “left last month for a job as a portfolio manager at D.E. Shaw”), Millennium will have you know the so-called cuts were apparently founder Izzy Englander taking a hard line with some bum staffers.

The decision to cut a portfolio manager is based only upon his or her performance, said a person familiar with Englander’s thinking. “If you’re not performing, you’re gone,” he said. “You perform, you stay.”

Englander Brushes Aside Millennium Exits [HFA]

At least one guy says yes, though perhaps this is just an all to convenient way of blaming the government for something he’s been planning on doing all along. Funny how that happened.

Advisers say the estate-tax dilemma is especially awkward for heirs. “At least in December 2009, people wanted to keep their relatives alive,” says Ronald Aucutt, an estate-tax attorney with McGuire Woods in the Washington area. Now he and others are worried that heirs may be tempted to pull plugs on Dec. 31. Economists might call the taking of a life to reap a tax advantage a “perverse incentive.” District attorneys might call it homicide.

Congress is also apparently encouraging keeping appliances plugged in and close to the tub while going for a dip. Read more »