The collapse of historic crystal and china maker Waterford Wedgwood today put 2,700 jobs at risk in the UK and Ireland on another day of gloom for retailers across the high street. The latest failure came as the axe fell on 850 staff at failed childrenswear chain Adams after administrators announced the closure of 111 stores. Manchester-based perfume retailer Passion for Perfume also joined the list of high street casualties in administration after cutting 194 jobs. And former high street giant Woolworths will shut its doors for the final time tomorrow with the closure of its remaining 200 stores in a collapse which is set to leave 27,000 staff out of work.
The collapse of historic crystal and china maker Waterford Wedgwood today put 2,700 jobs at risk in the UK and Ireland on another day of gloom for retailers across the high street.
The latest failure came as the axe fell on 850 staff at failed childrenswear chain Adams after administrators announced the closure of 111 stores.
Manchester-based perfume retailer Passion for Perfume also joined the list of high street casualties in administration after cutting 194 jobs.
And former high street giant Woolworths will shut its doors for the final time tomorrow with the closure of its remaining 200 stores in a collapse which is set to leave 27,000 staff out of work.
Conservative leader David Cameron called today for the abolition of income tax on savings by basic-rate taxpayers. And he said that pensioners' tax allowances should be raised by £2,000.
Conservative leader David Cameron called today for the abolition of income tax on savings by basic-rate taxpayers.
And he said that pensioners' tax allowances should be raised by £2,000.
It is not going to add up to the $50bn that, collectively, they may have lost, but the clients, staff and trading partners of self-confessed fraudster Bernard Madoff are at least trying to cash in what they do have to show for their business. The online auction site eBay is filling up with Madoff memorabilia, the promotional trinkets, emblazoned with the Madoff Investment Securities logo, that he gave out to associates over his almost five decades on Wall Street.Up for sale are backpacks, sweatshirts, t-shirts and a whole host of beach gear, reflecting Mr Madoff's oft-repeated personal history as a Long Island lifeguard in the Sixties who used his $5,000 earnings to start his own share trading firm. A beach chair was selling for $50 on eBay yesterday, a fleece picnic rug in a Madoff-logo canvas bag with drawstring pouch was available for $18. Someone whose family member used the services of Madoff Investment Securities is selling a beach towel that they were given with the company's logo on it.
It is not going to add up to the $50bn that, collectively, they may have lost, but the clients, staff and trading partners of self-confessed fraudster Bernard Madoff are at least trying to cash in what they do have to show for their business.
The online auction site eBay is filling up with Madoff memorabilia, the promotional trinkets, emblazoned with the Madoff Investment Securities logo, that he gave out to associates over his almost five decades on Wall Street.
Up for sale are backpacks, sweatshirts, t-shirts and a whole host of beach gear, reflecting Mr Madoff's oft-repeated personal history as a Long Island lifeguard in the Sixties who used his $5,000 earnings to start his own share trading firm. A beach chair was selling for $50 on eBay yesterday, a fleece picnic rug in a Madoff-logo canvas bag with drawstring pouch was available for $18. Someone whose family member used the services of Madoff Investment Securities is selling a beach towel that they were given with the company's logo on it.
The Madoff Double Bluff by iamthewitness.com
At first sight it was extremely refreshing. A white-collar financial crook raising his hands and pleading guilty to his financial crime. Th is has to be almost a first. Usually financial criminals when caught in the most obvious of wrong-doing plead 'not guilty'. The criminal can be caught boarding the plane, with a suitcase containing US$100mn of someone elses cash, with his mistress holding on to his arm, he will look into the camera with his most genuine 'Tony Blair look of sincerity' and say "What we have here is a misunderstanding.... " You make up the rest of the excuse, there is a million of them. So yes, an outright confession, "It was me, I chopped down the apple tree" is so against the current socio-political culture it was almost too good to be true. Especially given the pedigree of this perp, the CEO of one of the busiest and most prominent financial exchanges in the world. After his confession the world goes into shock, especially the Jewish world, since affluent members of this community had previously flocked to his door, seeking his world famous high returns. Since his arrest the press is full of people extolling his virtues as a decent human-being and "who would ever of believed it?". It would be so easy for this man to deny any wrongdoing because he could bring out an army of good character witnesses and he could just point at some suspect-looking goy in his hedge fund organisation to lay the blame on. So a truly heartwarming confession. And it was apparently made to his 2 sons, both of whom who worked for the fund and who had absolutely no idea that this fraud was being perpetrated, until such time as this astounding confession. But then I started to look more closely at the mix of investors who have lost money. About half of them are professional investing institutions. Look at this quote from the UK's Daily Mail newspaper (online) Madoff meltdown to lead to lawsuits "Full details of the exact losses are yet to emerge. Hedge funds and banks have so far admitted to having around £16billion with Madoff - only half of the total that is reckone d to have been lost. Some of the biggest casualties are Swiss private banks, which have taken hits amounting to about £2.5billion. Spanish bank Santander had £2.1billion of client money with Madoff. HSBC has admitted to lending about £600million to funds who wanted to use debt to gear up their positions with Madoff. RAB capital, the hedge fund that lost huge sums on investing in Northern Rock, has revealed that it is exposed to Madoff to the tune of around £6million." Now the confession does not look right at all. It is possible to accept the idea of a Ponzi scheme be played on members of the public, who are ignorant of how such schemes are worked, in fact the schemes are targetted specifica lly at such people. Yet Madoff would have us believe that he managed to convince professional investment companies to put their funds with him without any due diligence being performed. This is clearly nonsense. I have a cted as a professional consultant to major EC and US financial institutions on corporate and institutional credit risk and the idea that anyone in HSBC or Santander could authorise large investment without the internal checks and controls being employed is almost impossible. To try and believe that EVERY institution that invested in Madoff circumvented their internal control procedures IS impossible. Why is this important? Simple. If someone approaches the HSBC credit risk team, for instance, with a view to making a loan or investing a sum as large as £600m to what is ultimately a single institution (therefore a single counterparty credit exposure) a significant number hoops would have to be jumped through. Firstly there is the credit officer competence limit, which is the maximum amount that a single credit officer may be allowed to authorise. More than his/her limit must be referred up the credit approval food chain. In an institution like HSBC or Santander etc, £600bn or US$1bn will have been referred to the very top of the food chain, the banks' credit committees at the board level. This is an enormous sum and no lacky is going to be able to approve this by themselves, ever. When the credit committee are called together to review an application, everything is ready prepared for them, so they can cut to the chase . The lower levels of the credit approval process will have prepared a summary of all the application documentation, included in the meeting bundle, with the strengths, weaknesses, and other important credit risk points. This application will usually contain a set of audited accounts going back a minimum of 3 years and most likely 5 years. There will be a full credit breakdown of the investment profile of the business, Madoff's hedge fund, looking at how the fund obtains its returns; investment assets and investment methodology. After the committee is satisfied that all the issues and concerns have been addressed they will vote on the approval or otherwise. So there is no way that Madoff could have been pulling a scam. It would have stood out as clear as day to professional financial analysts, whose only job in life is to examine the management of companies and their reports and accounts, to make sure that all is in order. Its their job, its what they do. They are the world experts in spotting anomalies. The idea that all these professionals in all these companies were all duped is absolute nonsense. It is highly improbable that one such evaluation process could have been fooled, but all of them, never. A Ponzi scheme is easy to spot when you have the audited accounts and the full range of investment assets and investment metodologies employed. Also, this scam avoided the attention of all the funds employees; accountants, traders, auditors and the US regulators, all of whom are also financial professionals. This again is absolute nonsense. A ny company that I have ever worked for would have known internally that such business was being done, because they are all involved. For instance, a trader goes on buying equities from the worlds stock exchanges that go down in price for 5 continuous years, but the company just keeps giving him more money to top up the trading, continues paying his salary and even annual bonus. Absolute rubbish. But assuming this actually did happen, the market risk team would have been watching these losses, as would have the accountants. It is not possible to hide things like this internally for very long, months at the most; 20+ years, NEVER. So why plead guilty? The answer is simple. Look on the net and you will see that because this case is being labelled a fraud, it would appear that investors are going to be able to claim their investment back under the US government's financial fraud protection scheme. A judge has already given his approval in principle for compensation, w ithout any evidence having been presented and financial fraud being demonstrated in a court of law. And it would appear that there will never be such a demonstration in a court of law. Why? It would appear that all the funds financial records are mostly "missing" (rather like Dov Zakheim's US$1.4tn) and those few records that do survive are in a terrible mess. However, since the guy has pleaded guilty we do not need to demonstrate the fraud, because he says he is guilty. And look further on the net and you will see that these "victims" have also been told by the US tax authorities that they will probably also be entitled to claim back some taxes on these defrauded sums. Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand. And, as can be seen at the Daily Mail link above, the investors in this fund only get to litigate the fund directors against Lloyds insurers in London for even more compensation. Done properly the compensation could end up paying out far more than the original fund returns (yes this is sarcasm, it was bound to creep in eventually in yet another swindle like this). Would that I could believe that Madoff were a good guy who slipped and then became repentant. But given the facts, this simply cannot be true.
It's an interesting thesis, but I don't buy it.
In my experience of regulation most of the people looking at credit risk and financial stability NEVER look critically at conduct of business issues, and in particular the reality of the income. It's a matter of: "Never mind the Quality: feel the Width": the people doing the due diligence simply are not looking out for such issues - it's both above their pay grade, and outside their parameters.
I could give a specific parallel example in relation to Barings/ Nick Leeson and all that.
But see Michael Lewis and David Einhorn here
The End of the Financial World as We Know It
The real shrewdies - like Goldman Sachs - DID steer clear, and Harry Markopolos (who had nothing to gain by it) was warning about Madoff for many years, of course. ...maybe Madoff was bonking his wife. ;-)
As a failure of regulation, it's a Doozy, of course, and the article dissects that point pretty well, too.
re the compensation angle, I think that what might be available from a compensation fund will be de minimis against the liabilities anyway. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
he could just point at some suspect-looking goy in his hedge fund organisation to lay the blame on....(rather like Dov Zakheim's US$1.4tn)[this affair has nothing in common with Madoff's scam except Zakheim is a Jew]...all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand.
Banks were sceptical that Mr Madoff could deliver the consistently high returns that he reported, and they were also put off by a lack of transparency at his investment firm. For these reasons, big Wall Street firms are notably absent from the long list of victims of Mr Madoff's alleged Ponzi scheme.Fabio Savoldelli, chief investment officer of Merrill Lynch Investment Management prior to its 2006 merger with BlackRock, sounded the warning internally years ago. One of Merrill's financial advisers, who deals with clients worth tens of millions of dollars, recalled Mr Savoldelli's suspicions of Mr Madoff's returns eight years ago. Two years ago, an internal Merrill report drawn up in connection with Merrill's European fund of funds group, concluded the group should not deal with Mr Madoff, the financial adviser said. "We had a red light on doing business with him. There was no transparency." However, a fear of alienating clients who had invested with Mr Madoff prevented many Merrill executives from voicing their concerns too loudly.
Fabio Savoldelli, chief investment officer of Merrill Lynch Investment Management prior to its 2006 merger with BlackRock, sounded the warning internally years ago. One of Merrill's financial advisers, who deals with clients worth tens of millions of dollars, recalled Mr Savoldelli's suspicions of Mr Madoff's returns eight years ago.
Two years ago, an internal Merrill report drawn up in connection with Merrill's European fund of funds group, concluded the group should not deal with Mr Madoff, the financial adviser said. "We had a red light on doing business with him. There was no transparency."
However, a fear of alienating clients who had invested with Mr Madoff prevented many Merrill executives from voicing their concerns too loudly.
Germany's ruling political parties have begun talks on a second economic stimulus package that could total up to €50 billion. But the negotiations may prove difficult because the Social Democrats oppose conservative plans for the program to include tax cuts.
(The problem is not the nsistence of certain quarters on tax cuts, the problem is opposition to it...
In talks on Sunday night, Chancellor Angela Merkel's Christian Democrats had given in to their Bavarian conservative allies in the Christian Social Union who had demanded tax cuts. The two parties agreed to raise the income tax base threshold to €8,000 from €7,664 and to start eliminating so-called "cold progression" under which tax payers are bumped into higher tax brackets even if inflation-adjusted incomes haven't grown. However, the SPD, which shares power with the conservatives in Merkel's grand coalition, doesn't want tax cuts and has even said it wants to raise taxes for top earners. "It will be very difficult to reach an agreement on the tax issue," SPD deputy chairwoman Andrea Nahles said. She said the conservative tax cut plans would mainly benefit medium and high-income groups and that it made more sense to cut welfare contributions because this would also help low-income households and thereby boost consumer spending.
In talks on Sunday night, Chancellor Angela Merkel's Christian Democrats had given in to their Bavarian conservative allies in the Christian Social Union who had demanded tax cuts.
The two parties agreed to raise the income tax base threshold to €8,000 from €7,664 and to start eliminating so-called "cold progression" under which tax payers are bumped into higher tax brackets even if inflation-adjusted incomes haven't grown.
However, the SPD, which shares power with the conservatives in Merkel's grand coalition, doesn't want tax cuts and has even said it wants to raise taxes for top earners. "It will be very difficult to reach an agreement on the tax issue," SPD deputy chairwoman Andrea Nahles said.
She said the conservative tax cut plans would mainly benefit medium and high-income groups and that it made more sense to cut welfare contributions because this would also help low-income households and thereby boost consumer spending.
('Welfare contribution' means emloyers' and employees' contribution for each employee to social security and retirement funds.) *Lunatic*, n. One whose delusions are out of fashion.
The head of the Germany's ifo Economic Research Institute, Hans-Werner Sinn, predicts that Europe's largest economy is facing its worst recession since the Second World War. In an interview with the mass circulation daily Bild, Sinn said the economic downturn will continue into 2010. Economic output is expected to decrease by at least 2 percent, he said, with dramatic consequences for the country's labour market. In 2010 Germany could see the number of people without a job increase to four million.
French viewers have for the first time watched prime-time television without advert breaks, as President Nicolas Sarkozy's media reforms got under way. Advertising is now banned on French public television between 2000 and 0600. It will be phased out by 2011. It is part of Mr Sarkozy's move to shake up public broadcasting. He says his plan will improve the quality of programming but critics say it is a power grab that will deprive state broadcasters of funds. France Televisions' board of directors chose to back the ban - which affects four main state-funded channels - last month.
French viewers have for the first time watched prime-time television without advert breaks, as President Nicolas Sarkozy's media reforms got under way.
Advertising is now banned on French public television between 2000 and 0600. It will be phased out by 2011.
It is part of Mr Sarkozy's move to shake up public broadcasting.
He says his plan will improve the quality of programming but critics say it is a power grab that will deprive state broadcasters of funds.
France Televisions' board of directors chose to back the ban - which affects four main state-funded channels - last month.
"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."
