Not for a company that doesn't exist.

Former head of Nasdaq arrested and charged with conning folks out of $50 BILLION.

BBC NEWS | Business | Top investors 'hit by $50bn con'

I was replying to RA's suggestion for the big 3 to sell without warranty.

NPR had a story on him on Friday with a great quote from last year where he said "What ordinary people don't understand is that we're so heavily regulated (in the hedge fund industry) that it's simply not possible for anyone to do anything illegal and get away with it."

I love the condescension followed by the lie followed by the chutzpah. What a tool.

Similar to my post in the Atlanta courthouse shooting/verdict ...

There are just some people that deserve to die.

Sure they may have had a horrific childhood, chemical imbalance, whatnot etc. but some people just deserve to die.

Jeffrey Dahmer, the BTK serial killer etc.

* * * *

If he really did lose/cheat $50B from people, he deserves to die.

Yeah, I could probably try to sell my house but who is buying? Then I could just walk away but then I'm out $50k.

I do love how all the governor's who are being very vocal about rejecting any financial assistance for US automakers just happen to have foreign automakers in their states. Foreign automakers who have been provided financial support by their respective countries.

Media Life Magazine - Detroit papers will cut home delivery

Detroit is one of the last major two-newspaper cities, and soon it will become the first to stop home delivery on all but a handful of days and shift some of its focus to the web, in a major overhaul that highlights just how dire things have become for the nation’s major metropolitan papers.

In a move expected to be announced tomorrow, the Detroit Free Press and Detroit News will eliminate home delivery on all but their most lucrative days, presumably Sunday, Thursday and Friday.

Print issues will still be available at newsstands on other days, but they will be trimmed back from their current size, and the papers will encourage readers instead to check out daily digital editions available on their web sites.

The two papers, which are run through a joint operating agreement, are looking to save money on print and delivery costs, which have shot up over the past year with the rise in ink and gas prices.

At the same time, circulation and advertising have dried up nationwide, and that’s been especially true in Detroit, home of the Big Three automakers who are seeking a federal bailout to continue operation in the midst of a devastating recession.

The Free Press, which is owned by Gannett, and the News, which is owned by MediaNews Group, have already bought out dozens of workers over the past two years. Circulation at the papers has plummeted by double-digit percentages since 2003.

This next step is a drastic one, and it’s unclear whether it will work. After all, the internet has been one of the main culprits in the decline of American newspapers, who they have not yet figured out how to leverage new media advertising in an effective manner.

Forcing readers online to get the paper thus could turn out to be a foolish strategy.

Plus, one of the advantages of paid newspapers has always been home delivery, a fact the free Examiner chain has recognized and used to its great advantage, giving it the ability to sell a more upscale demographic to its advertisers.

Too, some see the print retreat as a defeat that could alienate older readers, a key demographic for newspapers who are unlikely to go online or even to the local newsstand to get their daily read.

But others think Detroit will be just the first in a long line of newspapers to go partly or entirely online. Earlier this year, the Christian Science Monitor became the most prominent paper to say it would pull back from daily to weekly print editions and instead concentrate on the web.

A handful of smaller newspapers across the country, including the suburban Phoenix East Valley Tribune and Madison, Wis., Capital Times, have also cut back their daily print editions to focus on the web.

The Detroit papers are already insisting that the print edition will not be entirely eliminated, and few of the anticipated job cuts from the move will affect editorial. Most will be made in production.

Details on the changes, including the impact on circulation and when the new plan will begin, will be filled in with tomorrow's announcement.

Yeah, this rumor has been swirling around here for the last week or so. I get the Free Press delivered every day. I read it more often than not. It will be sad not have that option everyday, especially when something of interest is going on, e.g., an election, the Kilpatrick stuff, the NHL playoffs, etc.

It's not surprising, but kind of depressing.

More signs of a rough retail season. Best Buy offers buyouts to 4,000 employees at its corporate headquarters......

http://www.twincities.com/allheadlines/ci_11238481

i've never understood buyouts or severance packages - if an employee is no longer needed by the company, why not just fire them? what is the financial benefit that i'm not aware of?

Firing employees leads to unemployment payments and higher unemployment insurance? It also leads to a decrease in goodwill. At some point Best Buy is going to want to hire back for most of these positions and they don't want a bad reputation on employee relations.

Keep in mind that these are corporate positions...

I think Jan was pissed Michael fired someone who was about to quit.

BF's brother was just informed that it looks like his salary will be restructured or he'll be laid off. He'll find out the wizard's decision imminently :( sucks.

Any thoughts on the rate cut to 0.25%?

Personally, I'm getting really, really worried, and really, really angry/upset. Angry/upset because, as a taxpayer, it seems like I'm being stolen from left and right between bailouts and now what is essentially free loans to businesses.

I'm worried because I just can't understand how making it easier to borrow money fixes a problem that was caused by institutions (and people) borrowing too much money. We need to be paying down debts, not racking them up even further. I just don't see this fixing, or even really helping, things, and I honestly don't see any way out.

Casinos in AC have layed off thousands of employees over the past month including my mother. Despite great sales in the videogame industry, several companies are having major layoffs including Midway, Factor 5, and Turbine:

Midway trims fat, cuts to the bone - News at GameSpot

I'm highly concerned. It seems despite all the burning going on recently, people still are dancing around the fire instead of shaping up and putting it out. The dancers being big money that sees this as another extraction opportunity in different form.

All I can say is don't trust Wall Street, by all I can see they are out to screw us over again on the way down. I'm paniced enough I liquidated most of my long term portfolio (which I had just started to build). My personal wealth is back on the rise, which is bad for the overall health of the economy (easier to feed off panic than to predict brilliance, especially with these dimwits in charge of the companies).

Are you really that surprised? The same people who were trying to do anything they could to screw people out of money are... still trying to screw people out of money even when things are bad. I know I'm disappointed a little myself, but not all that unsurprised, unfortunately :(

SI

Was hoping the scrutiny would be high enough that they'd at least slow down, instead they seem to be getting bolder. Although some of the crooks cheating the crooks are starting to get caught at the edges... maybe the media will realize corruption stories are worth tracking.

The rate cut is just an official acknowledgment of what's been happening the last few months. Deflation is in full swing.

Yes, you're being stolen from and it's been going on for quite some time. It's much more blatant now as crisis = opportunity. The question you have to ask yourself is what, if anything, are you going to do about it?

The coverage on the Illinois governor has been quite thorough.

The idea here is to make bank to bank lending rates so low that they have to seek other higher yield lending options to generate revenues. Banks are finding the task of pricing risk incredibly difficult right now, so they aren't lending. In normal times, the overnight lending market can be quite robust and profitable. Not now. You're seeing almost no activity because banks are making nothing off of the deal. So by continuing to lower interest rates, the fed is hoping to force banks hands into actually pricing risk and stimulate lending (with falling rates hopefully trickling down to consumers).

Of course, the other elephant in the room is liquidity. Balance sheets are still incredibly tight, so banks are forcing lenders to pay a premium to reserve balance sheet and get loans. The two forces aren't aligned.

I think I was reading that actual fed rates have been negative...meaning banks are putting in the government treasury even if it loses money to avoid exposing themselves to risk. The rate cut therefore really doesn't matter.

which is why I believe January will see a retest of market lows and the spring home selling season will be critical to creating a floor and recovery in 2010. If the deflationary scare carries us into a poor home market through '09 we may push recovery off another painful painful year. Im not saying housing due to my job but housing due to all of the multipliers attached to the home prices nationwide. CDO, MBS, etc.

I don't know, what can I do about it? There don't seem to be any options besides going to work every day and hoping things will work out ok in the long run.

I guess I just don't get how we are going to spend our way out of this mess, when spending is the cause of the mess to begin with. To me it feels like the entire economy is a giant Jenga game, and no matter how good you are at Jenga there is only one eventual outcome.

I'll agree with you Fidatelo. We keep being told that household debt is crushing our economy, but as soon as people start saving and drop their debt (it dropped for the first time since they started tracking it just recently) everyone screams about how bad things are.

We're finally getting rid of the house of cards that's been building since the '90s, and everyone wants to prop it back up? I don't get it. We're going to print money hand over fist and that will make things better? I don't get it.

theyre not saving though, it's simply like you put $1,000 in a box at the back end of the closet and then opened it a week later to find that the Tens were actually ones.

Can you explain that please? Is this a reference to inflation or something? :confused:

it's a reference to deleveraging. The $1000 was never really $1,000. Sorry if I wasnt clear....not unusual for me. During the process of deleveraging, all balance sheets are seeing numbers that 'truly' dont exist.

I still don't get it or how this relates to gstelmack's point?

i got the feeling that G was saying that we havnt been saving and have caused this problem because we levered up. Now when we start saving we start telling people that if you save it's going to cause problems. My point is that saving has turned out to not be saving because the money is deleveraging around you so $1,000 turns into much much less while you've done nothing to cause this. This is not only on an individual level but clear all the way to the biggest corp and until this stops no one knows the true value of money, risk, or savings. So the only way to avoid the deflationary effects of this is to reinflate and hope that you reinflate as a counterbalance and not overshoot.

No, what I'm saying is that no matter what happens with the economy, the experts say it's wrong. "Everyone has too much credit!" "No one can get credit!" "Inflation is bad!" "Deflation is bad!" "Stock market needs a correction!" "Everyone's wealth was just wiped out!" "People should save money!" "People aren't spending enough at retail!"

The economy is finally correcting from its inflated position due to way too much borrowing, and everyone is all upset about it. Let it correct for crying out loud, most people would be much better with keeping our tax dollars and letting some companies go out of business so others that know how to run themselves can step in.

We had a major collapse of internet-related networking jobs in this area about 5-8 years ago, and all it did was lead to a bunch of startups and we're weathering the current "recession" just fine in this area.

I've got a friend who is a handyman, and his business is booming thanks to people keeping and fixing their homes rather than selling.

Just let it ride already...

unfortunately IMO, "Let It Ride" equals something equivalent to, if not worse than, the great depression and I, for one, do not want to experience it if we do not have to.

So explain to me how printing money to bail out corporations and allowing consumers to borrow more money will fix the problem? I think we are screwed at this point and the sooner we realise that and deal with it, the less harsh it will be (although it's going to be harsh no matter what, at this point).

All of these band-aids are doing nothing to fix the underlying, fundamental issues, and in fact are likely making things worse long term.

Im hopeful for a counterbalance to make the way down less drastic, stark, and damaging while this inevitable deleveraging occurs.

Umm, ok then.

Whoa, whoa, whoa, hold the boat.

Deflation:
http://dictionary.reference.com/browse/deflation

You put $1000 in a box, it ends up buying $10000 worth of junk when you open the box. That is deflation (ultra-simplified).

INFLATION is when you put $1000 in a box, open it, and you can only buy $100 worth of junk.

I try not to be a vocab-nazi, as I mangle things all the time, but your screwing up fundamental forces of the economy here.

What all this really means is that for years we have more money in relation to the amount of goods than there should have been, so prices should be HIGHER than they are supposed to be.

If you have 1000 goods in the economy, and 10000 dollars in the economy, each good should be priced at 10 dollars. If you leverage that 10000 dollars to 100,000 dollars, each good should be priced at 100 dollars. If you subsequently screw the economy, and deleverage down to 10000 dollars, the price of goods should be at 10 dollars.

The key to understanding what is going on is that prices have been in fairy tail land ever since the money went bonzo. They have stayed relatively fixed during this massive levering up and are actually behaving quite weirdly as we are levering down. Where the vacuum exists is in corporate balance sheets, that is where the leverage money has been going... not into real assets, so now that the lever is being kicked out from under them they are all collapsing.

They are trying to save their corrupted balances through 're-inflation' but what they are actually doing is taking real goods and trying to multiply them up to a level relative to their fantasy world. The end result would be inflation, and as far as I am concerned even three times leverage would be hyperinflation right now. It could potentially bankrupt everyone as the price of everything triples (ignore gas prices that anomaly is going to hurt bad at some point).

All right, I know I'm not making sense at the moment, there is so much going on I don't know where to start and I'm flustered. If we avoid trying to actively inflate things we will be all right, a lot of bastards are going to be out of business and a lot of good peoples savings hurt, but overall there will still be something to come home to. If they somehow convince the government to inflate further though, well we'll save some billionaires chances at staying billionaires, but they'll only be worth 100 milionaires in real dollars, and everyone else will be broke.

Note, if you don't mind playing on misery and panic, make some money now. My indirect oil short alone (yes I was a buyer as recently as the election and still know it will go up long term) made 40% one month, two gold transactions (my inflation fears cause me to avoid storing dollars) combine for 30% one month. Playing off this stupid auto bailout my GM short alone is 50% this quarter. Bah its endless.

Gah, the short story, its real goods that ultimately drive the economy. There is nothing about the U.S. that says our standard of living needs to fall through the floor, all the assets and goods are there. Our valuation of them is screwed. A lot of poor people are going to go through hell because people who didn't need any more money cooked the books to the boiling point.

LOL, a big +1.

It's all "wrong" because the situation is FUBAR, and the likely reality is that there isn't any "fix" that will actually fix anything, only delay what has become inevitable.

Bzzt.

There is virtually no such thing as "didn't need any more money".

I don't know when to shut up, but I wanted to mention I agree with gstelmack's latest post. Let it Ride is the capitalist force we actually need right now, just need to curb the excessive correction anyway we can. All that the greedy corp cows are doing right now is trying to make a pork cushion for their personal fall at everyone's expense.

There is a marginal return on the value of money, but not on the glee of acquiring it. If you have a billion dollars, another billion is not going to improve your standard of living, other than the impact on your pride and related ego benefits (feeling happy you are even richer than yesterday).

Unfortunately, your next billion needs to come from somewhere. You either personally create a billion dollars worth of new goods, or design/manage the system that creates such goods and charge a big fee for your intelligence... or you find creative ways to extract the billion dollars from somewhere else.

An economy can only support so many billionaires, in real value, obviously Wiemar Germany had quite a few of them.

Did a CEO need to sell credit-swaps they couldn't back in order to build their portfolio up another few billion... well yes if they wanted to get their bonus. But is it the same as someone needing their job to feed their family, well not in the way I measure value.

I don't want to debate the basic fundamentals of how 'greed is good', I know how capitalism works. Saying that such knowledge means I can't make value judgments on what I consider rude, bad, and ultimately short sighted behavior is just silly though. We judge people over stuff that has no bearing on our lives like their sexual or even fashion choices, I'm not going to hold back on judging people for widespread economic damage. Hell, I feel an asshat for feeding off the downward panic myself (and no I have no charitable intentions for the money, unless you count starting my own business someday).

Chrysler shutting down for a month. Will they reopen?

Chrysler shuts down all production - Dec. 17, 2008

I wonder if the US automakers have a contingency plan in case they don't get a bail-out. Perhaps shutting down for a month is their plan?

Just 2 extra weeks since they are normally down for Christmas. Of course, sounds worse if you say a month. Of course, they say don't expect to come back before Jan 19th... hmm.. I wonder why the 19th? Seems like something is going on Jan 20th, but just can't remember what....

ah, I see where you misinterpreted what I said. Im not saying the value went down per se. Im saying that because the balance sheets are in essence, 'lies', so when you went into the box of a $1,000 bill you looked in and saw 5 or 10 Tens. Not that the value changed due to its comparison to what it can buy but that it actually just vanished.

Stating they have willing customers but cannot close the deal due to lack of financing seems to be a ploy to get in on the TARP money. Their sales dropped like a rock in 2007 and 2008 regardless of whether or not financing was readily available.

I noticed that there are reports that Obama is considering extending the Bush tax cuts rather than letting them expire. The thought is that since the Fed Loan rate is nearly 0%, the only way to further ease the burden on U.S. citizens would be to keep Bush's tax cuts in place. Allowing them to expire could very well be seen as a tax increase by the general public and could create more worries for the average citizen.

It would appear that for every scandal, there was at least one person (if not several) who thought something was fishy long before the shit hit the fan.

Today's installment comes from Erin Arvedlund who, in the spring of 2001, wrote an article in Barron's that questioned exactly how Madoff made his money. I heard her interviewed on NPR this morning, but since their transcript isn't up yet, I'll link to her article on portfolio.com from yesterday.



Once upon a time, it was fashionable for free market conservatives to mock "liberals" for professing a certain skepticism as to whether all the dealings on Wall Street were necessarily above board. I sincerely hope that one of the lasting results of this whole mess will be greater oversight and an acknowledgement that unbelievable returns may not necessarily be the result of financial wizardry, but in fact the result of illegal or at least highly risky behavior.