Wipeout

The Independent reports that many victims of Bernard Madoff’s gigantic Ponzi scheme still do not know that they are now destitute. In fact, I have been a little surprised at how little coverage a $50 billion scam has been getting in the US media. The report may indicate why:

Some victims of Wall Street’s biggest fraud – planned and carried out over decades by one of its most respected figures – are as yet unaware that their entire savings have been wiped out, financial experts in New York said yesterday. Such is the extent of Bernard Madoff’s alleged $50bn (£34bn) swindle, and so convoluted its paper trail of derivatives, that this weekend there will be Americans under the impression they are rich who are oblivious that their wealth had been placed in Mr Madoff’s apparently criminal hands, and is therefore now lost.

Enough details of the fallout were emerging yesterday to begin to judge the mayhem this one-time chairman of Nasdaq, and Democratic Party and Jewish charity benefactor, has wreaked. Those likely to have lost everything include a Jewish charity that had its $7m assets lodged with Mr Madoff’s firm, and had to lay off its staff on Friday, and Manhattan and Florida socialites. Many, in the words of an investigator, are now “destitute”. Corporate losers include Nicola Horlick (pictured, inset), the British hedge-fund manager known as “Superwoman” for her hectic private and business lives, whose Bramdean Alternatives seems to have lost at least £10m; and, reportedly, the Japanese brokerage house Nomura.

Madoff was a very large – but not ridiculously large – donor to Democrats. You’ll have to search his name at the Federal Elections Commission to get the details – their links are not persistent – but Madoff contributed some $161,000 – almost exclusively to Democrats (one exception, some money to Al D’Amato). Charles Schumer got rather a lot. So did the Democratic Senatoril Campaign Committee. They got a lot of Madoff’s money.

Do read the whole thing. It has more interesting tidbits.

And something that seems appropriate right about now.

A “Team Of Rivals” Irony

There is a huge irony playing out as Hillary Clinton supporters are bashing – hard – the lack of experience of Caroline Kennedy to assume Hillary’s Senate seat if Clinton is confirmed as Secretary of State.

“Caroline Kennedy, although I’m sure a fascinating and engaging person, simply doesn’t have the experience or Washington know-how to get it done for New York,” said Stuart Applebaum, president of the 100,000- member Retail, Wholesale and Department Store Union.

Applebaum, former chief house counsel to the Democratic National Committee and a Clinton delegate at the Democratic National Convention, blasted Kennedy for having failed to speak out against George W. Bush’s policies during the Republican president’s two terms.

“Her voice has barely been heard during these long last eight years as so many of us have worked hard against the policies of the Bush administration,” said Applebaum, described by prominent state Democrats as a “close ally” of Hillary and Bill Clinton.

It looks like Obama’s “Team of Rivals” is already degenerating into the exact same mess that Lincoln’s team of rivals did. Not to mention the fact that a lot of us were cautioning that Obama has zero experience as an executive, or very nearly so. Our warnings were dismissed by the media and the left (redundant). Now the now experience charges are back by proxy against an Obama ally – the charge directed by a Clinton ally.

Funny how this all works, isn’t it? As I stated in the linked post, a rivalry of teams is already forming. Obama will not have an easy time with his “team” at all.

Via Memeorandum

The Case Of The Missing Rat Sign

The Chicago Sun-Times reports that someone has been removing rat warning signs. Or at least one of them. The signs are posted by the city of Chicago after rat poison has been laid in an area. The signs have text that starts out: “Warning – Target Rats”. These are safety measures in case kids or pets get into the rat bait. But a Sun-Times photographer happened to get a picture of Rod Blagojevich ducking out the side door of his home to avoid the press. In the frame was that “Warning – Target Rats” picture.

The next day, the sign was gone.

The photo showed Blagojevich next to a city sign that said, “Warning” and “Target Rats” with a picture of a rat inside a bull’s-eye.

Friday morning, Blagojevich left his house by the same back door, but there was something missing. The rat sign had been taken down, even though it was posted in a city-owned alley.

The Daley administration suspects the obvious: that the governor or somebody close to him saw White’s unflattering picture and yanked down the sign.

Amusing. But the Sun-Times also reports that Blagojevich may decide as early as Monday whether to resign or not.

Gov. Blagojevich will decide early next week — perhaps as early as Monday — whether he should resign, a source close to the governor told the Chicago Sun-Times.

Given Roddy’s history on this sort of thing, wouldn’t you think he’s auctioning his resignation off to the highest bidder? Who would that be?

If he promptly resigns and the criminal case against him suddenly collapses shortly thereafter, we can expect rampant speculation.

Mystery In The Lake

Jim Kennard and Dan Scoville have located yet another shipwreck in Lake Ontario. This time it is an amazingly preserved wreck of a “dagger-board” schooner, thought to be about 200 years old. The problem is that there is no record of such a ship sinking in the lake.

Rochester, New York – A rare dagger-board schooner has been discovered in very deep water off the southern shore of Lake Ontario near Oak Orchard, New York. Jim Kennard and Dan Scoville, shipwreck enthusiasts, located the schooner using deep towed side scan sonar equipment. Sailing vessels of this type were in use on the lakes for only a short period of time beginning in the very early 1800’s. This ship is the only dagger-board schooner known to have been found in the Great Lakes.

I last posted about Kennard and Scoville when they located the remains of HMS Ontario last June. These are two dedicated shipwreck hunters. They are calling for any help the public can give in trying to identify the ship.

Kennard and Scoville were kind enough to post a YouTube video of this ship:

Dominoes

The extent of the damage caused by gigantic Ponzi scheme revealed yesterday with the arrest of Bernard Madoff is only beginning to be assessed. But it looks bad – very bad.

New potential victims emerged of Wall Street veteran Bernard Madoff’s alleged giant Ponzi scheme, with international banks, hedge funds and wealthy private investors among those sorting out what could amount to tens of billions of dollars in losses.

New York Mets owner Fred Wilpon, GMAC LLC Chairman J. Ezra Merkin and former Philadelphia Eagles owner Norman Braman were among the dozens of seemingly sophisticated investors who placed money on what could prove to be history’s largest financial scam.

Giant French bank BNP Paribas, Tokyo-based Nomura Holdings Inc. and Neue Privat Bank in Zurich are also exposed, according to people familiar with the matter.

And at least three funds of hedge funds — which raise money from investors and farm it out to hedge funds — may have significant losses. Fairfield Greenwich Group and Tremont Capital Management of New York placed hundreds of millions of their investors’ dollars into funds overseen by Mr. Madoff. On Friday, Maxam Capital Management LLC reported a combined loss of $280 million on funds they had invested with Mr. Madoff.

“I’m wiped out,” said Sandra Manzke, Maxam’s founder and chairman. The Darien, Conn., fund of hedge funds will have to close as a result of the losses, she said.

There are a lot of investors that have been badly damaged, or utterly ruined by this fraud. The New York Times tries to draw a distinction between Madoff’s fund and hedge funds:

Mr. Madoff was not running an actual hedge fund, but instead managing accounts for investors inside his own securities firm. The difference, though seemingly minor, is crucial. Hedge funds typically hold their portfolios at banks and brokerage firms like JPMorgan Chase and Goldman Sachs. Outside auditors can check with those banks and brokerage firms to make sure the funds exist.

What they kind of leave out there is that it would appear that a number of hedge funds got burned in this – including at least one that is now going to have to close. The Times report also notes at least one charity that will have to shut down after losing everything to Madoff’s thievery.

If a run begins on legitimate hedge funds, this thing is going to snowball out of control. This one huge fraud could cause enormous damage to the entire financial system. Things were not looking particularly rosy before this. Now it is looking rather more grim.