Globalisation debt & banking
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Good thing it wasn't Joe Hockey doing a naked front flip!!
Last edited by gobbledock; 18th Apr 2012 at 13:40. Reason: Was going visual and enjoying it!
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Reason: Was going visual and enjoying it!
Great posts guys, the exposure of these filth in suits needs to continue on a viral basis worldwide.
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Good Money for Bad
I'm surprised not many saw this piece of news earlier this week:-
Australia's $7 billion Euro contribution's 'very small': Swan
Your taxes at work!
Australia's $7 billion Euro contribution's 'very small': Swan
Your taxes at work!
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So do people here believe Rupert Murdochs charisma is what has led to his success? Is anyone questioning the news they read in the Murdoch press ? I am trying to be as diplomatic as I can be about this.
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Rupert the bear
Murdoch doesnt have charisma. What he did have was the knack to build up a business to the point where he became very powerful, rich and influential. After that it becomes 'write your own cheques'. Nothing beats being able to hold the balls of a nation, or several, in both hands and be able to squeeze them at will!
You don't become that powerful by being merely a kind hearted philanthropist with a penchant for golf. Capitalism is a game, and ol Rupes has had well over half a century to master it.
As for his ethics, general persona and anything else that is part of him
and his empire? Steaming turds!
You don't become that powerful by being merely a kind hearted philanthropist with a penchant for golf. Capitalism is a game, and ol Rupes has had well over half a century to master it.
As for his ethics, general persona and anything else that is part of him
and his empire? Steaming turds!
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Bill Black: Our System is So Flawed That Fraud is Mathematically Guaranteed
Friday, April 27, 2012, 3:09 pm, by Adam Taggart
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it."
- Frederic Bastiat
Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the US has descended into a type of crony capitalism that makes continued fraud a virtual certainty - while increasingly neutering the safeguards intended to prevent and punish such abuse.
In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system.
A warning: there's much revealed in this interview to make your blood boil. For example: the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcements actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.
Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70x greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Thrift Supervision, make?
Zero.
Similar dismal action was taken by such other financial regulators as the Office of the Comptroller of the Currency, the Federal reserve and the FDIC.
Where is the accountability?, you may be asking. Or perhaps, how did we allow things to get this bad?
To find out, click the play button below to listen to Part I of Chris' interview with Bill Black.
Bill Black: Our System is So Flawed That Fraud is Mathematically Guaranteed
Here's a link to the Akerlof paper:Looting The Economic Underworld of Bankruptcy For Profit.
Friday, April 27, 2012, 3:09 pm, by Adam Taggart
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it."
- Frederic Bastiat
Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the US has descended into a type of crony capitalism that makes continued fraud a virtual certainty - while increasingly neutering the safeguards intended to prevent and punish such abuse.
In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system.
A warning: there's much revealed in this interview to make your blood boil. For example: the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcements actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.
Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70x greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Thrift Supervision, make?
Zero.
Similar dismal action was taken by such other financial regulators as the Office of the Comptroller of the Currency, the Federal reserve and the FDIC.
Where is the accountability?, you may be asking. Or perhaps, how did we allow things to get this bad?
To find out, click the play button below to listen to Part I of Chris' interview with Bill Black.
Fraud is both a civil wrong and a crime and it's when I get you to trust me and then I betray your trust in order to steal from you. As a result, there’s no more effective acid against trust than fraud and, in particular, elite fraud, which causes people to no longer trust folks, economies break down, families break down, political systems break down and such if you don’t have that kind of trust. So that’s what fraud is.
But what my work focuses on is: what kind of frauds are the most devastating? And it turns out that the most kind of problems that we’re seeing, systemic problems and such, arise when we have, what we call in criminology, control fraud. And control fraud simply means when you have a seemingly legitimate entity and the person who controls it uses it as a weapon to defraud others. And so in the financial sphere the weapon of choice is accounting and the losses from these kinds of control frauds exceed the financial losses from all other forms of property crime combined.
So for example, in the current crisis, as with the prior ones, if you’re a lender there’s an easy recipe for maximizing fake accounting income. And it goes like this. You need four ingredients:
George Akerlof and Paul Romer wrote the classic article in economics about this in 1993. And their title really says it all in terms of the dynamic:Looting the Economic Underworld of Bankruptcy for Profit. The idea is you have a seemingly legitimate entity, the person at the top is looting it. They loot it by destroying it but they walk away wealthy. Of course, in the modern era we don’t necessarily, we may bail out the entity. So it may not even fail in that sense.
But here’s what Akerlof and Romer also said that was so critical as an understanding. They said these four steps, these four ingredients: it's just math. It is – and I’m quoting them now “a sure thing.” So you’re mathematically guaranteed if you do these four things to report, not just substantial income, but record levels of income.
The big thing about the seemingly legitimate entity when the CEO is the crook is, first, everybody reports to the CEO ultimately, right? So the CEO is the point failure mechanism where if he or she goes bad, almost everything may go bad as well. So all those things that we call internal and external controls, all report to the CEO and the CEO therefore can, as I’ll describe, use compensation, hiring, firing, praise, and such to produce the environment that will commit, create allies for his fraud. Now, note that what I’m saying. The CEO, the art of this is not to defeat your controls. The elegant solution as in mathematics is to suborn the controls and turn them into your most valuable allies. And therefore, for example, when you’re running accounting control fraud where your weapon of fraud is accounting and that weapon of choice in finance is accounting. You’re going to want to hire the most prestigious accountants as your outside auditors because it is precisely their reputation that is most valuable when you can suborn them. And, they give you that clean opinion that you just described that will help you deceive other shareholders. So one enormous advantage is internal and external controls come to the CEO level.
A second incredible advantage is the CEO can optimize the firm as a weapon of fraud. And the CEO can do that. Basically, this falls into two big categories. One, you can put it in assets that have no readily verifiable market value because then it's a lot easier to inflate asset valuations and to hide real losses. And the second thing you do is grow like crazy. And, of course, that is the essence of something your listeners have all heard about, and that is a Ponzi scheme. And so these accounting control frauds have strong Ponzi-scheme like elements, which is why they tend to cause such catastrophic losses.
But what my work focuses on is: what kind of frauds are the most devastating? And it turns out that the most kind of problems that we’re seeing, systemic problems and such, arise when we have, what we call in criminology, control fraud. And control fraud simply means when you have a seemingly legitimate entity and the person who controls it uses it as a weapon to defraud others. And so in the financial sphere the weapon of choice is accounting and the losses from these kinds of control frauds exceed the financial losses from all other forms of property crime combined.
So for example, in the current crisis, as with the prior ones, if you’re a lender there’s an easy recipe for maximizing fake accounting income. And it goes like this. You need four ingredients:
- grow like crazy
- by making really, really crappy loans but at a premium yield (yield just means 'interest rate')
- while employing extreme leverage, and
- while setting aside only the most trivial reserves or allowances for the
George Akerlof and Paul Romer wrote the classic article in economics about this in 1993. And their title really says it all in terms of the dynamic:Looting the Economic Underworld of Bankruptcy for Profit. The idea is you have a seemingly legitimate entity, the person at the top is looting it. They loot it by destroying it but they walk away wealthy. Of course, in the modern era we don’t necessarily, we may bail out the entity. So it may not even fail in that sense.
But here’s what Akerlof and Romer also said that was so critical as an understanding. They said these four steps, these four ingredients: it's just math. It is – and I’m quoting them now “a sure thing.” So you’re mathematically guaranteed if you do these four things to report, not just substantial income, but record levels of income.
The big thing about the seemingly legitimate entity when the CEO is the crook is, first, everybody reports to the CEO ultimately, right? So the CEO is the point failure mechanism where if he or she goes bad, almost everything may go bad as well. So all those things that we call internal and external controls, all report to the CEO and the CEO therefore can, as I’ll describe, use compensation, hiring, firing, praise, and such to produce the environment that will commit, create allies for his fraud. Now, note that what I’m saying. The CEO, the art of this is not to defeat your controls. The elegant solution as in mathematics is to suborn the controls and turn them into your most valuable allies. And therefore, for example, when you’re running accounting control fraud where your weapon of fraud is accounting and that weapon of choice in finance is accounting. You’re going to want to hire the most prestigious accountants as your outside auditors because it is precisely their reputation that is most valuable when you can suborn them. And, they give you that clean opinion that you just described that will help you deceive other shareholders. So one enormous advantage is internal and external controls come to the CEO level.
A second incredible advantage is the CEO can optimize the firm as a weapon of fraud. And the CEO can do that. Basically, this falls into two big categories. One, you can put it in assets that have no readily verifiable market value because then it's a lot easier to inflate asset valuations and to hide real losses. And the second thing you do is grow like crazy. And, of course, that is the essence of something your listeners have all heard about, and that is a Ponzi scheme. And so these accounting control frauds have strong Ponzi-scheme like elements, which is why they tend to cause such catastrophic losses.
Bill Black: Our System is So Flawed That Fraud is Mathematically Guaranteed
Here's a link to the Akerlof paper:Looting The Economic Underworld of Bankruptcy For Profit.
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How hard it is to have an independent opinion
The list of Rupert Murdoch owned/controlled media can be viewed
List of assets owned by News Corporation - Wikipedia, the free encyclopedia
For many years I believed that if I read something in the newspaper or saw it on the news it must be right. The shame, the shame. For some reason I can't get that link to work. Anyway news corp own a massive portion of world media, which equals them almost owning a lot of our personal opinions on a range of topics which affect all of us. It could almost be said they own democracy. I will work on the link. My tech skills are rubbish
List of assets owned by News Corporation - Wikipedia, the free encyclopedia
For many years I believed that if I read something in the newspaper or saw it on the news it must be right. The shame, the shame. For some reason I can't get that link to work. Anyway news corp own a massive portion of world media, which equals them almost owning a lot of our personal opinions on a range of topics which affect all of us. It could almost be said they own democracy. I will work on the link. My tech skills are rubbish
Last edited by LHLisa; 30th Apr 2012 at 06:42.
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LHLisa, welcome aboard, to the real world!!
Good to have you on onboard! This world mimics the Matrix, things aren't as they seem and the masses are blinded. I think your eyes are opening up well enough for you to look into the Illuminati. Once you've studied up on this topic and taken a good look at the Rothschilds and Rockerfellers you will undersand clearly why media reporting is biased and corrupt. The crooks own the media outlets and control the content which manipulates the masses.
It's all a game.
Good to have you on onboard! This world mimics the Matrix, things aren't as they seem and the masses are blinded. I think your eyes are opening up well enough for you to look into the Illuminati. Once you've studied up on this topic and taken a good look at the Rothschilds and Rockerfellers you will undersand clearly why media reporting is biased and corrupt. The crooks own the media outlets and control the content which manipulates the masses.
It's all a game.
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Democracy
Murdoch owned and part owned media includes but is not limited to:
The Australian
The Weekend Australian
Australian Associated Press
News.com.au | News Online from Australia and the World | NewsComAu
The Daily Telegraph - including Sunday Telegraph
mX
Herald Sun - including Sunday Herald Sun
The Courier Mail
The Sunday Mail
Brisbane News
The Advertiser
Sunday Mail
The Sunday Times
The Mercury
The Sunday Tasmanian
Northern Territory News
Sunday Territorian
The list also includes dozens upon dozens of local community papers such as the Leader
Wall Street Journal
New York Post
Dow Jones and Company
Marketwatch
Financial News
The Sun
The Times
Sunday Times
Sun on Sunday
TV wise there is Fox(including the Simpsons - gotta love the Simpsons), Latvijas Neatkariga Televizija, Fox Italy Portual Phillipines Telecolombia, TV5 Riga, Sky UK Germany Italy NZ, and Star TV India and Greater China.
Magazines include Aussie Golf Digest, Donna Hay, GQ Australia, Inside Out, Live to Ride, Modern Boating and Fishing, Tattoo - my fave mag, Vogue Australia.
This is a bleeding big list. I have written it out for my own info and to shock myself as much as for anyone else! There are a lot more media outlets Murdoch owns and partly owns, but I am sure the above makes enough of a statement about the concerns of one person or one company having so much world wide power.
The Australian
The Weekend Australian
Australian Associated Press
News.com.au | News Online from Australia and the World | NewsComAu
The Daily Telegraph - including Sunday Telegraph
mX
Herald Sun - including Sunday Herald Sun
The Courier Mail
The Sunday Mail
Brisbane News
The Advertiser
Sunday Mail
The Sunday Times
The Mercury
The Sunday Tasmanian
Northern Territory News
Sunday Territorian
The list also includes dozens upon dozens of local community papers such as the Leader
Wall Street Journal
New York Post
Dow Jones and Company
Marketwatch
Financial News
The Sun
The Times
Sunday Times
Sun on Sunday
TV wise there is Fox(including the Simpsons - gotta love the Simpsons), Latvijas Neatkariga Televizija, Fox Italy Portual Phillipines Telecolombia, TV5 Riga, Sky UK Germany Italy NZ, and Star TV India and Greater China.
Magazines include Aussie Golf Digest, Donna Hay, GQ Australia, Inside Out, Live to Ride, Modern Boating and Fishing, Tattoo - my fave mag, Vogue Australia.
This is a bleeding big list. I have written it out for my own info and to shock myself as much as for anyone else! There are a lot more media outlets Murdoch owns and partly owns, but I am sure the above makes enough of a statement about the concerns of one person or one company having so much world wide power.
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LHLisa, control of the "printing presses" for propaganda and self interest have been going on since their invention, here is a quote I happen to have on hand from almost 100 years ago, only the names have changed. Nothing new under the sun.
Congressional record, Vol 54, Feb 9, 1917, p. 2947
In March, 1915, the J.P. Morgan interests, the steel, ship building and powder interests and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press in the United States.
These 12 men worked the problems out by selecting 179 newspapers, and then began, by an elimination process, to retain only those necessary for the purpose of controlling the general policy of the daily press throughout the country. They found it was only necessary to purchase the control of 25 of the greatest papers. The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; an agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies and other things of national and international nature considered vital to the interests of the purchasers.
These 12 men worked the problems out by selecting 179 newspapers, and then began, by an elimination process, to retain only those necessary for the purpose of controlling the general policy of the daily press throughout the country. They found it was only necessary to purchase the control of 25 of the greatest papers. The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; an agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies and other things of national and international nature considered vital to the interests of the purchasers.
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I have a choice to buy any of these papers, indeed any paper a newsagent sells. But where I don't have a choice, is the ABC. I have to pay for this left wing, self absorbed outfit, who are nothing more than a arm of the worst Govt. on record in this country. I don't have to watch it, but I have to pay for it. Pisses me right off.
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TG
You still don't get it. There is no left and right in this thread. There are some things that are not allowed to be debated - the big things. It doesn't matter what party is in power.
As for the ABC - search for the recent admission by the BBC that they contributed to the downfall of Mossadeq in Iran in '53.
PROPAGANDA
The ABC works for the people who really call the shots in this outpost of the empire.
From Fran Kelly ' And that ends our wrap-up of world news brought to you by the BBC and CNN'. The 'journalists' at the ABC should be ashamed of themselves.
You still don't get it. There is no left and right in this thread. There are some things that are not allowed to be debated - the big things. It doesn't matter what party is in power.
As for the ABC - search for the recent admission by the BBC that they contributed to the downfall of Mossadeq in Iran in '53.
PROPAGANDA
The ABC works for the people who really call the shots in this outpost of the empire.
From Fran Kelly ' And that ends our wrap-up of world news brought to you by the BBC and CNN'. The 'journalists' at the ABC should be ashamed of themselves.
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Step right up, read all about it...
LHlisa, interesting list of publications. As for what I presume is your favourites list which includes 'Tattoo' - if this is true and you are female then I want to marry you!!
I did notice you left off your list some of your other favorites, namely 'Flight Safety' - a socialist propoganda magazine penned by goverent whips, and 'Enema Fanciers Monthly' - This months main feature contained an article on how to self administer an enema made from lighter fluid, peroxide, sorbelene and a dash of Aloe. A must read.
I did notice you left off your list some of your other favorites, namely 'Flight Safety' - a socialist propoganda magazine penned by goverent whips, and 'Enema Fanciers Monthly' - This months main feature contained an article on how to self administer an enema made from lighter fluid, peroxide, sorbelene and a dash of Aloe. A must read.
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Why feel like your only choice are the papers? The internet has plenty of bloggers etc that have an un-biased perspective. You just need to find them.. 
When it comes to Finance, I like ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero A little US centric but still great for gaining a larger perspective.
When it comes to Finance, I like ZeroHedge | On a long enough timeline the survival rate for everyone drops to zero A little US centric but still great for gaining a larger perspective.
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My current favourite places for information on world events are "The Daily Show with Jon Stewart " and "The Colbert Report" .
Without fail I will see something on these shows which educates me in some way, and I am also guaranteed to almost p&@s myself laughing - or is that just my age showing. When life gets too much and the mods on the c c thread are really mean to me I can count on these two shows brightening my day. I have a huge crush on Jon Stewart at the moment. His show can be viewed on an I phone. Both are also on comedy channel on foxtel - more reasons for my shame ! Jon Stewart did a brilliant story on Murdoch last week, I dare anyone to watch it and not laugh out loud.
Without fail I will see something on these shows which educates me in some way, and I am also guaranteed to almost p&@s myself laughing - or is that just my age showing. When life gets too much and the mods on the c c thread are really mean to me I can count on these two shows brightening my day. I have a huge crush on Jon Stewart at the moment. His show can be viewed on an I phone. Both are also on comedy channel on foxtel - more reasons for my shame ! Jon Stewart did a brilliant story on Murdoch last week, I dare anyone to watch it and not laugh out loud.
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A good bit of research to be had if you have time asfollows:
- Jim Rickards is always worth listening to.
- Alex Jones, he is another 'open book'individual.
- Zero hedge at ZeroHedge | On a long enough timeline the survival rate foreveryone drops to zero
- Former Governor Jesse Ventura has 'seen thelight' and is on the trail of the fraudsters and puppet masters
- Ron Paul, America's only factual and seeminglyhonest Politician who is happy to 'open the book' on the smoke and mirror actblinding Uncle Sam's people.
And finally if you want a real eye opener research thechanges to America's governance over the past 6 - 12 months. They have managedto pull off the following:
- Started creating FEMA camp facilities
- Introduced the NDAA (snuck it in over Christmas)
- And removed the 4th and 6th amendments
Why? Quite simple actually. They are broke. The lastextension of the ceiling debt was done to buy them time and prepare for theoutcome of their coming complete economic and financial collapse. The increasein the debt ceiling has bought them maybe an extra 2 years, if that, toprepare. In fact 60% of that ceiling increased has been chewed up in under 8months, when in fact they had hoped the increase would buy them another4-5years roughly. They have been watching Europe, Italy, Greece and know thatpublic unrest, anarchy, riots and a complete breakdown of society will unfoldonce the masses realize their futures are shattered, their remaining wealth andvalues are gone and all is not what it has seemed.
Madoff Costs Surpass Victim Payouts as Strategy Fails
By Linda Sandler - Apr 30, 2012 2:00 PM GMT+1000Mon Apr 30 04:00:01 GMT 2012
Irving Picard, who said last year he hoped to pay investors in Bernard
Madoff’s defunct firm as much as $65 billion, has only put his hands on about $2.6 billion to actually give back to customers.
More than three years after Madoff’s epic swindle collapsed, Picard, the trustee responsible for liquidating the firm, has paid investors back about $330 million, while holding about $2.3 billion in customer accounts. About $6.4 billion that Picard has won in settlements with former Madoff investors is being challenged in court and is unavailable for disbursement. s Surpass Victim Pay-Offs as Strategy Fails
So far, winding down the Madoff estate has cost more than Picard has sent to customers, with total administrative spending as of March 31 at about $554 million, including fees for Picard, his firm and consultants he hired, according to his April 25 report. At the same time, Picard’s strategy of filing $100 billion of lawsuits to claw back money from Madoff winners has largely collapsed, as federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard’s claims.
“There is a huge risk about making predictions, because you can never be sure what a court will do,” said Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll LLP in Louisville, Kentucky. “People can object to his fees if he spent millions on litigation and promised a lot of stuff and it didn’t work out.”
Claim Prices Slump
As a result of Picard’s setbacks in court, bids for claims on the Madoff estate, which peaked at about 70 cents on the dollar in January 2011, now sell in “the low 50s,” said Joseph Sarachek, CRT Capital Group LLC’s managing director of claims trading.
The price also reflects the likelihood that the payoff for investors who lost money in Madoff’s fraud may be far off, Sarachek said. That in turn makes it harder for claimholders to sell their IOUs at attractive prices.
“It does look like the case is going on for several years,” he said.
Amanda Remus, a Picard spokeswoman, didn’t immediately respond to an e-mail asking if the trustee has revised his estimate of how much he will ultimately pay Madoff customers.
Picard’s latest estimate of the con man’s fictitious customer statements is $52 billion. That includes $17.3 billion in actual money invested, with the rest being the fake profits Madoff invented for customer statements. As of December, Picard estimated the total at $65 billion, before the withdrawal of some claims.
SIPC Payments
The $330 million he has sent to customers, out of the $2.6 billion set aside for them, contrasts with about $800 million they’ve received from the insurance program of the Securities Investor Protection Corp., which hired Picard and pays him.
SIPC, which is funded by brokerage firms, no longer expects Picard to pay all currently allowed claims of $17.3 billion in full, “based on current trustee assets, lawsuits filed, and the estimated possibilities for recoveries arising from that litigation,” the U.S. Government Accountability Office said in a March report.
Even if Picard gets all of the $9 billion he says he has raised, he would need another $8 billion or so to pay the claims, the GAO said.
“SIPC does not now expect this level of recoveries to occur,” the report said.
Picard Fees
As of March 31, Picard himself has been paid about $5.1 million in fees. His law firm, Baker & Hostetler LLP, has been paid about $262.2 million
in fees. All professional fees and expenses now stand at about $522 million, with about $31.7 million having been spent on general administrative costs such as office rent and telephones. By 2014, the bill will top $1 billion, Picard has estimated.
Most of the money Picard says he has raised came from settlements, not court victories for his lawsuits, and he is fighting to preserve his exclusive right to sue parties that allegedly profited knowingly from the fraud.
Some customers say he is usurping their rights. After a district judge in March upheld Picard’s $5 billion agreement with Jeffry Picower’s estate -- his biggest settlement by far--lawyer Helen Chaitman appealed on behalf of a client. Chaitman will“absolutely” take the case as far as the U.S. Supreme Court if necessary, she said in an e-mail -- a process that could take more than a year.
Picower Withdrawals
Picard’s 2009 suit claimed that Picower, one of the con man’s largest individual investors, should have known Madoff ran a Ponzi scheme when he withdrew $7.2 billion from the brokerage. Sarachek said Madoff claim prices were around their peak in January 2011, when a judge approved the Picower forfeiture, with $5 billion going to the Madoff estate and $2.2 billion to the U.S.
Some customers regard the Picower settlement as unfair because it stops them from suing the Picower estate themselves.
Picard says he can’t distribute the Picower money until there’s a final court order that can’t be appealed. He didn’t have to lock himself into waiting for finality, as Picower’s estate didn’t make that a condition of forfeiting money, Chaitman said in a court filing.
The delay in paying customers “is totally of the trustee’s own making,” she said. Chaitman has also challenged most of his fee requests.
“Unfortunately, Madoff’s victims have not received the benefits of Mr. Picard’s services,” Chaitman said in an e-mail.
Overlapping Claims
Picard opposes her right to sue the Picower estate, saying her claims overlap with his, which take priority as he is trustee. Moreover, if Chaitman wins the right to sue the Picower estate for her customers, and wins her suit, she may be choosing who gets the money. Only the trustee can claw back and allocate money allegedly stolen from Madoff customers, Picard has said.
Picard’s claim to an exclusive right to sue for Madoff recoveries has embroiled him in a battle with California Attorney General Kamala
Harrisover investment adviser Stanley Chais’s estate. Harris is trying to pursue a $270 million action against the estate, alleging Chais passed himself off as an “investment wizard” and collected fees for “doing nothing more than funneling all of his investors’ capital into an epic Ponzi scheme.”
Picard sued Harris Jan. 4 in U.S. Bankruptcy Court in Manhattan, saying her suit interferes with the collection of assets needed to help compensate Madoff victims. A Manhattan court hearing is set for May 17.
Tremont Group
Madoff customers also have challenged Picard’s $1 billion deal with Tremont Group Holdings Inc. and a $220 million settlement struck with the heirs of Norman F. Levy. Chaitman alleges that Levy, who died in 2005 at age 93, financed Madoff’s Ponzi scheme to the tune of about $100 bilion.
Picard also won’t pay out any more from the customer fund without a “final unappealable decision” on whether he owes them not only the money they invested, but also the fictitious profit on their brokerage statements, according to his website. The owners of the New York Mets baseball team, whom Picard had sued for $1 billion, were among those challenging Picard’s calculation of how they should be paid, until they reached a $162 million settlement that doesn’t require them to pay any
money for at least four years, if ever.
The U.S. Supreme Court delayed a scheduled conference on whether it will consider an appeal by Madoff customers who say they should be compensated for loss of profits reported on their brokerage statements until after May 25, when it wants the U.S. Securities and Exchange Commission to weigh in on the subject. Allowable claims would treble to $52 billion if the judges agreed with the customers -- Picard’s current estimate of total fictitious profits in the Ponzi scheme.
The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).
By Linda Sandler - Apr 30, 2012 2:00 PM GMT+1000Mon Apr 30 04:00:01 GMT 2012
Irving Picard, who said last year he hoped to pay investors in Bernard
Madoff’s defunct firm as much as $65 billion, has only put his hands on about $2.6 billion to actually give back to customers.
More than three years after Madoff’s epic swindle collapsed, Picard, the trustee responsible for liquidating the firm, has paid investors back about $330 million, while holding about $2.3 billion in customer accounts. About $6.4 billion that Picard has won in settlements with former Madoff investors is being challenged in court and is unavailable for disbursement. s Surpass Victim Pay-Offs as Strategy Fails
So far, winding down the Madoff estate has cost more than Picard has sent to customers, with total administrative spending as of March 31 at about $554 million, including fees for Picard, his firm and consultants he hired, according to his April 25 report. At the same time, Picard’s strategy of filing $100 billion of lawsuits to claw back money from Madoff winners has largely collapsed, as federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard’s claims.
“There is a huge risk about making predictions, because you can never be sure what a court will do,” said Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll LLP in Louisville, Kentucky. “People can object to his fees if he spent millions on litigation and promised a lot of stuff and it didn’t work out.”
Claim Prices Slump
As a result of Picard’s setbacks in court, bids for claims on the Madoff estate, which peaked at about 70 cents on the dollar in January 2011, now sell in “the low 50s,” said Joseph Sarachek, CRT Capital Group LLC’s managing director of claims trading.
The price also reflects the likelihood that the payoff for investors who lost money in Madoff’s fraud may be far off, Sarachek said. That in turn makes it harder for claimholders to sell their IOUs at attractive prices.
“It does look like the case is going on for several years,” he said.
Amanda Remus, a Picard spokeswoman, didn’t immediately respond to an e-mail asking if the trustee has revised his estimate of how much he will ultimately pay Madoff customers.
Picard’s latest estimate of the con man’s fictitious customer statements is $52 billion. That includes $17.3 billion in actual money invested, with the rest being the fake profits Madoff invented for customer statements. As of December, Picard estimated the total at $65 billion, before the withdrawal of some claims.
SIPC Payments
The $330 million he has sent to customers, out of the $2.6 billion set aside for them, contrasts with about $800 million they’ve received from the insurance program of the Securities Investor Protection Corp., which hired Picard and pays him.
SIPC, which is funded by brokerage firms, no longer expects Picard to pay all currently allowed claims of $17.3 billion in full, “based on current trustee assets, lawsuits filed, and the estimated possibilities for recoveries arising from that litigation,” the U.S. Government Accountability Office said in a March report.
Even if Picard gets all of the $9 billion he says he has raised, he would need another $8 billion or so to pay the claims, the GAO said.
“SIPC does not now expect this level of recoveries to occur,” the report said.
Picard Fees
As of March 31, Picard himself has been paid about $5.1 million in fees. His law firm, Baker & Hostetler LLP, has been paid about $262.2 million
in fees. All professional fees and expenses now stand at about $522 million, with about $31.7 million having been spent on general administrative costs such as office rent and telephones. By 2014, the bill will top $1 billion, Picard has estimated.
Most of the money Picard says he has raised came from settlements, not court victories for his lawsuits, and he is fighting to preserve his exclusive right to sue parties that allegedly profited knowingly from the fraud.
Some customers say he is usurping their rights. After a district judge in March upheld Picard’s $5 billion agreement with Jeffry Picower’s estate -- his biggest settlement by far--lawyer Helen Chaitman appealed on behalf of a client. Chaitman will“absolutely” take the case as far as the U.S. Supreme Court if necessary, she said in an e-mail -- a process that could take more than a year.
Picower Withdrawals
Picard’s 2009 suit claimed that Picower, one of the con man’s largest individual investors, should have known Madoff ran a Ponzi scheme when he withdrew $7.2 billion from the brokerage. Sarachek said Madoff claim prices were around their peak in January 2011, when a judge approved the Picower forfeiture, with $5 billion going to the Madoff estate and $2.2 billion to the U.S.
Some customers regard the Picower settlement as unfair because it stops them from suing the Picower estate themselves.
Picard says he can’t distribute the Picower money until there’s a final court order that can’t be appealed. He didn’t have to lock himself into waiting for finality, as Picower’s estate didn’t make that a condition of forfeiting money, Chaitman said in a court filing.
The delay in paying customers “is totally of the trustee’s own making,” she said. Chaitman has also challenged most of his fee requests.
“Unfortunately, Madoff’s victims have not received the benefits of Mr. Picard’s services,” Chaitman said in an e-mail.
Overlapping Claims
Picard opposes her right to sue the Picower estate, saying her claims overlap with his, which take priority as he is trustee. Moreover, if Chaitman wins the right to sue the Picower estate for her customers, and wins her suit, she may be choosing who gets the money. Only the trustee can claw back and allocate money allegedly stolen from Madoff customers, Picard has said.
Picard’s claim to an exclusive right to sue for Madoff recoveries has embroiled him in a battle with California Attorney General Kamala
Harrisover investment adviser Stanley Chais’s estate. Harris is trying to pursue a $270 million action against the estate, alleging Chais passed himself off as an “investment wizard” and collected fees for “doing nothing more than funneling all of his investors’ capital into an epic Ponzi scheme.”
Picard sued Harris Jan. 4 in U.S. Bankruptcy Court in Manhattan, saying her suit interferes with the collection of assets needed to help compensate Madoff victims. A Manhattan court hearing is set for May 17.
Tremont Group
Madoff customers also have challenged Picard’s $1 billion deal with Tremont Group Holdings Inc. and a $220 million settlement struck with the heirs of Norman F. Levy. Chaitman alleges that Levy, who died in 2005 at age 93, financed Madoff’s Ponzi scheme to the tune of about $100 bilion.
Picard also won’t pay out any more from the customer fund without a “final unappealable decision” on whether he owes them not only the money they invested, but also the fictitious profit on their brokerage statements, according to his website. The owners of the New York Mets baseball team, whom Picard had sued for $1 billion, were among those challenging Picard’s calculation of how they should be paid, until they reached a $162 million settlement that doesn’t require them to pay any
money for at least four years, if ever.
The U.S. Supreme Court delayed a scheduled conference on whether it will consider an appeal by Madoff customers who say they should be compensated for loss of profits reported on their brokerage statements until after May 25, when it wants the U.S. Securities and Exchange Commission to weigh in on the subject. Allowable claims would treble to $52 billion if the judges agreed with the customers -- Picard’s current estimate of total fictitious profits in the Ponzi scheme.
The case is Picard v. Katz, 11-cv-03605, U.S. District Court, Southern District of New York (Manhattan).
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You guys might enjoying reading the forum below, The Economy, Banking, Markets and Global Stocks discussion group is one of the Kitco forums. I started stacking PM's a year or so ago and found all the Kitco forums to be very interesting.
https://www.kitcomm.com/forumdisplay.php?f=30
https://www.kitcomm.com/forumdisplay.php?f=30
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Tax me for f&@k sake
Horror novelist Stephen king wrote a fantastic article in "the daily beast " website The Daily Beast called tax me for f@&k sake . He speaks of dousing private parts with lighter fluid - obviously not recommended.
It can be frustrating when our taxes are used to pay for things we don't utilise or believe in or agree with, like the examples of perhaps the abc or sbs . It may be frustrating that so much of our taxes subsidises private schools, which are often utilised by people with a little bit more spare change than those using public schools. And I don't support war, but my tax pays for war. It can be frustrating but that is the system. I am glad I pay tax for cancer research into men's and children cancer, even though I am not a child and don't have any men.
The idea of a fairer redistribution of wealth is spreading
It can be frustrating when our taxes are used to pay for things we don't utilise or believe in or agree with, like the examples of perhaps the abc or sbs . It may be frustrating that so much of our taxes subsidises private schools, which are often utilised by people with a little bit more spare change than those using public schools. And I don't support war, but my tax pays for war. It can be frustrating but that is the system. I am glad I pay tax for cancer research into men's and children cancer, even though I am not a child and don't have any men.
The idea of a fairer redistribution of wealth is spreading
Last edited by LHLisa; 3rd May 2012 at 23:25.