Financial Meltdown (The World)

[Lady Uppercrust]

Heavens ! The thought of buying anything with a High Street label, fills one with abject horror.
One prefers to own a small vineyard in Riems, and bottle one's own bubbly, what.

[BoD]

Is that near Reims?

[BFG]

Heavens ! The thought of buying anything with a High Street label, fills one with abject horror.
One prefers to own a small vineyard in Riems, and bottle one's own bubbly, what.

Oh. So you are in trade are you?

How....quaint....

[Lady Uppercrust]

Certainly not ! Perish the thought.
One guzzles One's entire output, it's not available to common folk !
But you're welcome at the Chateau anytime you saucy little minx.

[BFG]

Certainly not ! Perish the thought.
One guzzles One's entire output, it's not available to common folk !
But you're welcome at the Chateau anytime you saucy little minx.

Thank goodness for that!!

For a moment I thought I was going to have to snub you for not being PLU...

[Kooky]

Last week's local news: Macquarie Bank puts on $750,000 Christmas Party on Cockatoo Island.

This week's local news: Macquarie Bank sacks approx 100 people.

Conclusion: got to pay for that party somehow.

[Lichtgestalt]

Or.... keep the good people happy and take the opportunity to sack the subprime employees...

[Joseph27]

With the big 3 automakers on their knees in Washington - it will be interesting to see when Congress buckles because there is no way they are letting these companies go under. Boy 2009 is sure shaping up to be a duesy.....

[Dinosaur]

Yes 2009 will sure be interesting. And is anyone still hanging onto Sterling????

Personally I think the Aussie dollar will perk up - I mean, all those minerals - it's got to add up to something hasn't it?

[baloo]

Personally I think the Aussie dollar will perk up - I mean, all those minerals - it's got to add up to something hasn't it?

Only if someone is buying them.

[Joseph27]

Don't know whats going to happen in Aus because retail here has gone off the rails - the part that is frustrating however is that people are trading illogically. Case in point - I buy Acers for $x dollars - however Acer just announced a blanked increase of 25% on all their range to cover currency depreciation. Thats fine - so my 20 units of X notebook bought at $1000 - now cost $1250 - however everyone is avertising them below $1000 to buy market share. I feel like I am in a surreal nightmare looking at whats coming - i.e. more expensive goods with diminished retail purchasing power which will naturally feed further cost reductions (i.e. fire more staff). I am anticipating a large jump in unemployment in Feb

[Kooky]

Don't panic, Joseph - Mr Rudd is giving all deserving people handouts so they can go out and Spend Spend Spend.

[Joseph27]

$1000 a kid - $1000 if you're old - a $1000 to spend on retail........ It is a whopping $10billion - if the media started talking this up instead of down people may actually start looking around thinking hey - I have an exta $30 a week from petrol coming down - my mortgage is $300 cheaper a month - I'm doing okay but instead chicken little is at work making the situation as bad as it can be. In this case perceptive defines the outcome so negativitiy will see us deep in recession next year - $10billion poorer....

[Burbage]

$1000 a kid - $1000 if you're old - a $1000 to spend on retail........ It is a whopping $10billion - if the media started talking this up instead of down people may actually start looking around thinking hey - I have an exta $30 a week from petrol coming down - my mortgage is $300 cheaper a month - I'm doing okay but instead chicken little is at work making the situation as bad as it can be. In this case perceptive defines the outcome so negativitiy will see us deep in recession next year - $10billion poorer....

That would be a good point if most Australians weren't already up to their eyes in debt as it is. Wait until January until the "Buy Now and Don't Pay For TWO YEARS!!" kicks in from Christmas 2006.

This economy must crash. This level of debt cannot be sustained. Once you max out you max out. And everyone is starting to realise that when they can't get any more credit, they're a lot worse off than if they had avoided the credit in the first place.

90% of the government handout will be used to pay off debts.

[baloo]

Yep. Wait for the AUD/US to reach .39, then transfer all available funds to AUD, wait another 6 months then go on a property spending spree.

It's all good

[Joseph27]

hey its okay when that kicks in because they just have to make payments of 3% of the residue which although subject to 28.9% interests is still affordable - of course the average customer will have had several top ups to that original amount some of which would have been deferred and some by installments. As the interests catches up - other bills are also coming in and before you know it your credit rating is screwed.

Im waiting for the .39c and then I can afford my place in Camberwell

[Kooky]

"There's a joke doing the rounds of finance workers in the [Sydney] CBD, given added poignancy by this week's decision by upmarket shirt maker Herringbone to go into voluntary administration. What's the definition of optimism in the finance sector? Answer: ironing five shirts on a Sunday night."

[smilie=gnigni.gif]

(Which of you has the biggest, cat-friendly spare room, then?)


Full article: http://www.smh.com.au/news/opinion/bad- ... ntentSwap1

[Burbage]

I'm looking at a 4 bedroomer on 2.5 acres with a brand new stable. Fancy living in a stable? As long as you're not Jewish and pregnant. Otherwise we'd never hear the end of it.

[Kooky]

Well it might not be a virgin birth but it would certainly be a bloody miracle.

[daffodil]

"There's a joke doing the rounds of finance workers in the [Sydney] CBD, given added poignancy by this week's decision by upmarket shirt maker Herringbone to go into voluntary administration. What's the definition of optimism in the finance sector? Answer: ironing five shirts on a Sunday night."

That's not funny - Financial Sector types would never do their own ironing.....

[Kooky]

Piss off the lot of them, I say - I might get a seat in the Ivy then.

[azzam]

Pretty amazing seeing who was right and who was wrong two years ago.
Who is Peter Schiff and where is he now?

[daffodil]

Piss off the lot of them, I say - I might get a seat in the Ivy then.

And Pigs might fly.

[cromasaig]

Nice post Azzam. Even allowing for some partial editing that's impressive. Wonder how many new clients are queuing outside his front door right now?

[Joseph27]

Heard this morning that 40% of US car dealerships had already closed - that is staggering but only a glimpse of the problem if the big 3 are to go. The scope of the problem is hard to grasp - there are simply miles of cars waiting to be bought but with a massive drop off in car sales in November there are simply too few people with the means of getting a new car. Giving 5, 10, 20 billion doesnt make the problem go away - it simply props up their accounts for a little while. I see Vauxal is doing a 9month break and paying staff at 30%. Maybe a way to go but car parts manufactures and other local supporting industries are going to face a very bleak start to 2009.

Investors chase missing billionsDecember 15, 2008 - 7:17AM
Investors scrambled to assess potential losses from an alleged $US50 billion ($76 billion) fraud by Bernard Madoff, following the arrest of the prominent Wall Street trader.

Prosecutors and regulators accused the 70-year-old, who was chairman of the Nasdaq Stock Market in the early 1990s, of masterminding a fraud of epic proportions through his investment advisory business, which managed at least one hedge fund.

Hundreds of people, investing with him through the firm's clients, entrusted Madoff with billions of dollars, industry experts said.

"Madoff's investors included captains of industry, corporations - some of which are publicly traded - that used Madoff almost as a high-yielding cash management account, endowments, universities, foundations and, importantly, many high-profile funds of funds," said Douglas Kass, who heads hedge fund Seabreeze Partners Management.

"It appears that at least $US15 billion of wealth, much of which was concentrated in southern Florida and New York City, has gone to 'money heaven,'" he said.

Federal agents arrested Madoff at his apartment on Thursday after prosecutors said he told senior employees that his money management operations were "all just one big lie" and "basically, a giant Ponzi scheme."

A Ponzi scheme is an illegal investment vehicle that pays off old investors with money from new ones, and is dependent on a constant stream of new investment. Because the invested capital is not earning a sufficient return on its own, such schemes eventually collapse under their own weight.

Madoff is the founder of Bernard L. Madoff Investment Securities LLC, a market-making firm he launched in 1960. His separate investment advisory business had $US17.1 billion of assets under management.

'Business as usual?'

About a dozen angry investors gathered on Friday in the lobby of the Lipstick Building in midtown Manhattan, where the market-making firm and advisory business are headquartered, demanding to know the fate of their money.

One woman said that when she called the firm's offices on Thursday she was told it was "business as usual."

Another investor groused, "Business as usual? Of course it's business as usual. We're getting screwed left and right."

Police later evicted the small group from the building.

Individual investors were feeling the squeeze elsewhere.

"I expect to get back zero," said Floridian Susan Leavitt, who invested through Madoff. "When he tells the feds he has $US200 million to $US300 million left out of billions, what can you expect?"

Two law firms, Milberg LLP and Seeger Weiss LLP, said Friday they had been retained by "dozens of individual investors" in Madoff Securities.

The two most prominent hedge funds that invested with Madoff were the $US7.3 billion Fairfield Sentry Ltd, run by Walter Noel's Fairfield Greenwich Group, and the $US2.8 billion Kingate Global Fund Ltd, run by Kingate Management Ltd.

Fairfield Greenwich Group said it was trying to determine the extent of potential losses and vowed to pursue recovery of any lost assets. The firm said it had been working with Madoff for nearly 20 years.

Fairfield Sentry and Kingate Global were among a small group of hedge funds to report positive returns for 2008; the average hedge fund was down 18%, according to data from Hedge Fund Research.

"People who came to us for portfolio construction were often already invested with Bernie Madoff. He had hundreds of clients," said Charles Gradante, who invests in hedge funds as a principal at Hennessee Group LLC. "Now his whole legacy is destroyed. He was God to people."

Prior to Madoff's arrest, investors had wondered how he was able to generate annual returns in the low double digits in a variety of market environments. Many questioned how US regulators were able to ignore numerous red flags with regard to Madoff's operations.

"Many of us questioned how that strategy could generate those kinds of returns so consistently," said Jon Najarian, an options trader who knows Madoff and is a co-founder of optionmonster.com.

In May 2001, Barron's reported that option strategists for major investment banks said they could not understand how Madoff managed to generate the returns that he did.

"We weren't comfortable with Madoff," said Brad Alford, president at investment adviser Alpha Capital in Atlanta. "We didn't understand how his strategy could generate the kind of returns it did. We will walk away from things like that."

More to come?

US stocks tumbled in early trading on Friday, with some investors citing the Madoff case as well as the failure of talks in Congress on a rescue for the US auto industry. The market later rebounded, with the Dow Jones industrial average closing 0.8% higher for the day.

Investors overseas were reeling from the alleged fraud.

Benedict Hentsch, a Swiss private bank, said it had 56 million Swiss francs ($71 million) of exposure to Madoff's investment advisory business.

Italian bank UniCredit SpA's fund management unit, Pioneer Investments, has exposure through its Primeo Select hedge fund, two people familiar with the matter said.

Bramdean Alternatives Ltd said almost 10% of its holdings were exposed to Madoff, sending shares in the UK asset manager crashing.

CNBC Television reported that Sterling Equities, which owns the New York Mets baseball team, had accounts managed by Madoff.

'Unfortunate set of events'

Madoff said "there is no innocent explanation" for his activities, and that he "paid investors with money that wasn't there," according to the federal complaint.

Prosecutors also accused Madoff of wanting to distribute as much as $US300 million to employees, family members and friends before turning himself in.

Charged with one count of securities fraud, he faces up to 20 years in prison and a $US5 million fine. The US Securities and Exchange Commission filed separate civil charges.

A hearing had been scheduled for Friday afternoon in US District Court in Manhattan on the SEC's request to grant powers to the court-appointed receiver to oversee the entire firm, as well as on the commission's request for a firmwide asset freeze.

But the hearing was canceled after the matter was resolved, said a deputy for US District Judge Louis Stanton. No other details were immediately available. The receiver, lawyer Lee Richards, had been appointed by the judge on Thursday to oversee assets and accounts of the firm held abroad.

Madoff's lawyer, Dan Horwitz, said on Thursday: "We will fight to get through this unfortunate set of events." His client was released on $US10 million bond.

Madoff is a member of Nasdaq OMX Group Inc's nominating committee. His firm has said it is a market-maker for about 350 Nasdaq stocks.

He is also chairman of London-based Madoff Securities International Ltd, whose chief executive, Stephen Raven, said the firm was "not in any way part of" the New York-based market-maker.

All equity trades involving the market-making firm will be processed as usual, the Depository Trust Clearing Corp told Reuters on Friday.

Reuters