Archive for the ‘money’ Category

Ponzi wiz Bernard Madoff sent to prison

March 13, 2009


It’s a little bit like seeing the devil,” said Burt Ross, a lawyer from Englewood, NJ who lost $5 million in Madoff’s swindle. Feeling betrayed, DeWitt Baker, an investor who lost more than $1 million angrily fumed “I’d stone him to death.” —-AP (03.12/09, Neusmeister, L; Hays, T)

Bernard Madoff, the personification of Wall Street greed and reckless extravagance has admitted guilt of pulling the biggest Ponzi scam in history. In the Federal Court of Manhattan, in New York, US district judge Denny Chin revoked Madoff’s $10 million bail and ordered the disgraced swindler’s confinement to a windowless room at the Metropolitan Correction Center instead of being comfortably holed in his lavish $7 million home at 133 E, 64th Street.

For defrauding his clients of $65 billion, at sentencing date in June this year, the former chairman of Nasdaq could get a life sentence—a maximum of 150 years in jail for perjury and financial fraud.

Without implicating anyone except himself, the apologetic Madoff who gave no comfort to his victims, pleaded guilty in all counts of fraud. In doing so, many believed his acceptance of full responsibility was a way to protect his wife Ruth, his family, and friends. His victims were fuming mad. Wall Street regulators ignored the flags of deception which allowed the once respected investment guru to operate without being caught for decades.

Thousands of defrauded clients in the United States and abroad include banks, charities, financial institutions, pension funds, retirees, and private individuals whose life savings and investments have been damaged. In their ranks are those who have suffered irreparable financial ruin with no chance to recover. At least one victim has been driven into committing suicide.

Some of Madoff’s Victims
——————————————Description———————Amount
Fairfield Greenwich Advisors—–investment firm————–$7,500,000,000
Banco Santander——————Spanish bank—————–$2,870,000,000
Bank Medici————————-Austrian bank—————-$2,100,000,000
HSBC——————————— British bank——————-$1,000,000,000
BNP————————————French bank——————-$431,170,000
New York University——————University——————–$24,000,000
Korea Teachers Pension———-Korean Pension Fund———$9,100,000
Marc Rich——————————fugitive financier————–Not available
Yeshiva University———————NY private university——–$14,500,000
Int’l Olympic Committee————–Olympic organizer———-$4,800,000
Zsa Zsa Gabor————————-actress————————$10,000,000
Diocese of St. Thomas—————Cath. Church (Virgin Is)—–$2,000,000
Source: http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

The imprisonment of Madoff is just the tip of the iceberg to the massive scandal that rocks Wall Street. Trust in the financial institutions is at an all time low. Many Americans adversely affected by the economic meltdown are demanding for accountability and prosecution of those responsible in the betrayal of trust. (Photo Credits: Acteon; Jason Smith) =0=

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Ponzi wiz Bernard Madoff sent to prison

March 13, 2009


It’s a little bit like seeing the devil,” said Burt Ross, a lawyer from Englewood, NJ who lost $5 million in Madoff’s swindle. Feeling betrayed, DeWitt Baker, an investor who lost more than $1 million angrily fumed “I’d stone him to death.” —-AP (03.12/09, Neusmeister, L; Hays, T)

Bernard Madoff, the personification of Wall Street greed and reckless extravagance has admitted guilt of pulling the biggest Ponzi scam in history. In the Federal Court of Manhattan, in New York, US district judge Denny Chin revoked Madoff’s $10 million bail and ordered the disgraced swindler’s confinement to a windowless room at the Metropolitan Correction Center instead of being comfortably holed in his lavish $7 million home at 133 E, 64th Street.

For defrauding his clients of $65 billion, at sentencing date in June this year, the former chairman of Nasdaq could get a life sentence—a maximum of 150 years in jail for perjury and financial fraud.

Without implicating anyone except himself, the apologetic Madoff who gave no comfort to his victims, pleaded guilty in all counts of fraud. In doing so, many believed his acceptance of full responsibility was a way to protect his wife Ruth, his family, and friends. His victims were fuming mad. Wall Street regulators ignored the flags of deception which allowed the once respected investment guru to operate without being caught for decades.

Thousands of defrauded clients in the United States and abroad include banks, charities, financial institutions, pension funds, retirees, and private individuals whose life savings and investments have been damaged. In their ranks are those who have suffered irreparable financial ruin with no chance to recover. At least one victim has been driven into committing suicide.

Some of Madoff’s Victims
——————————————Description———————Amount
Fairfield Greenwich Advisors—–investment firm————–$7,500,000,000
Banco Santander——————Spanish bank—————–$2,870,000,000
Bank Medici————————-Austrian bank—————-$2,100,000,000
HSBC——————————— British bank——————-$1,000,000,000
BNP————————————French bank——————-$431,170,000
New York University——————University——————–$24,000,000
Korea Teachers Pension———-Korean Pension Fund———$9,100,000
Marc Rich——————————fugitive financier————–Not available
Yeshiva University———————NY private university——–$14,500,000
Int’l Olympic Committee————–Olympic organizer———-$4,800,000
Zsa Zsa Gabor————————-actress————————$10,000,000
Diocese of St. Thomas—————Cath. Church (Virgin Is)—–$2,000,000
Source: http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

The imprisonment of Madoff is just the tip of the iceberg to the massive scandal that rocks Wall Street. Trust in the financial institutions is at an all time low. Many Americans adversely affected by the economic meltdown are demanding for accountability and prosecution of those responsible in the betrayal of trust. (Photo Credits: Acteon; Jason Smith) =0=

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Tardy war compensation comes at the sunset of WWII Philippine heroes

February 19, 2009

The $787 billion spending package signed by US Pres. Barack Obama on February 17, 2009 has a special goody for the Filipino World War II veterans. After a long-drawn campaign to get compensation for fighting in the American-Japanese war, an estimated 15,000 war heroes will have a part of the $198 million earmarked by the US government.

“Only 15,000 surviving Filipino and Filipino-American WWII veterans whose names are in the Revised Reconstructed Guerrilla Roster (RRGR) of 1948 are qualified to receive the tax-free lump sum payment. The RRGR is kept in the state of Missouri although certified true copies are available in other official sites.”—Malaya (02/16/09, Ilustre, J)

The US Embassy in Manila is preparing to process applications next week that will give $15,000 for each elderly survivor (average age: 85 years) who is a US citizen and $9,000 for the non-US citizen. The cash reward doesn’t include the widows, children and dependents of veterans.

Of the 250,000 who fought with the US forces, about 6% (15,000) lived long enough be eligible for benefits. This opens the heart-breaking memories of the suffering Filipinos went through during the war and the injustice caused by the delay in the granting of compensation for the veterans.

Though the tardy award seems a victory of justice, one can sadly recall the thousands who valiantly fought, offered their lives, and died without seeing the liberation of the country. The horror of Bataan March must be an indelible reminder for all Filipinos. Let us pause and remember the heroism of those who died without seeing the fruits of the war effort. For them, we must pay respects and be eternally grateful. (Photo Credit: wtop) =0=

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Getting to know Charles Ponzi

January 13, 2009

Charles Ponzi (1882-1949) was a US immigrant from Lugo, Italy who swindled thousands of New Englanders in a postage-stamp scam in the 1920s. He popularized an investment which paid returns to investors out of the money paid by those who followed them rather than from profit. This illegal money operation was named after him. The Ponzi scheme as it is known today, evolved with many variations. Disregarding some differences in the swindling method, Ponzi had been sometimes referred to as the “pyramid scam.”

Promising 40% investment return against that which was offered by savings banks with only 5% yield, Ponzi convinced thousands of investors that he could make astounding profits on a buy and sell of international mail coupons. His scheme worked for sometime on the principle of “rob Peter to pay Paul.” Basically, it was a set-up of cash pay-off and distribution without real investment—http://www.sec.gov/answers/ponzi.htm

Ponzi’s fast money and high rate of return was too good to resist and many were snared into the fake investment operation. He became an instant millionaire who diverted the money of new investor-recruits to pay for those who invested earlier until the operation collapsed.

At the end of his financial fraud, only a third of the duped investors’ money was returned. Investors’ losses amounted to about $3 million to $7 million (about $75 million today)in those days. Ponzi was convicted for mail fraud and embezzlement, put to jail, and later deported. (Photo Credit: Wikipedia) =0=

Bernard Madoff, accused top Ponzi scheme artist is allowed bail

January 12, 2009

Ponzi scheme artist Bernard Madoff who was accused of swindling the business world of a staggering $50 billion had been granted bail against the assertion of prosecutors that he is a flight risk and an economic threat to the community. During the holidays while waiting for indictment, the former Nasdaq chairman sent friends and relatives diamond bracelets, jewelries, and gifts amounting to about $1 million in violation of a court-ordered freeze.

But Federal Magistrate Judge Ronald Ellis of Manhattan ruled that Madoff (who did not have prior convictions,) could stay in his luxurious $7 million Eastside Manhattan apartment with some additional restrictions— instead of being locked in jail.

“The anxiously awaited bail decision does put additional restrictions on Madoff, including forcing him to come up with a list of items at his apartment and allowing a security firm to check on the items. The security company will also be allowed to search all outgoing mail from Madoff to ensure that no property has been transferred”.—AP (01/12/09, Neumeister, L)

The judge’s decision disappointed and infuriated many who were victimized by the fraud, supposedly the largest ever in financial history. They believed the accused swindler who was reportedly fitted with an electronic surveillance tag on his ankle got a “different brand of justice than the guy in the street.”

Madoff’s decades-long fraudulent business activity operated similar to a pyramid scam under the guise of a legitimate trading powerhouse which promised high investment yields with low fees. His company which started in 1960 attracted high profile banks, industry leaders, well-connected individuals, loyal friends, and rich celebrities. R. Thierry Magon de la Villehuchet, a prominent hedge fund manager-client who lost $1.4 billion committed suicide in his office in Madison Avenue last month.

In spite of the gravity of the accusations and the public clamor that Madoff be confined in prison, the judge’s decision to put him on house arrest shows how the legal system operates. Following the course of a criminal proceeding, it will take some time before a conviction, if apt for this case, will be decided.

Of course this isn’t consolation. The erosion of trust is astounding. At the back of this monumental fraud, the government regulators appear negligent for the red flags of fraud has been there for years. They have not done a good job in protecting American citizens—especially those ordinary investors on the street. (Photo Credit: Adam Crowe) =0=

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Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess

November 21, 2008

It is said that when a new president gets elected in the United States, Wall Street gets exuberant and the market becomes cocky. Renewed confidence and optimism bring an upward trend in stocks trading in America and the rest of the world. The upward trend hasn’t happened in President-elect Barack Obama, the Mr. Fix expected by many to deliver the world from this troubling economic mess.

Since the Great Depression (1930’s to the 1940’s,) America suffers from the worst financial downturn. On Friday, November 21, 2008, on midday trading, the Dow Jones Industrials (DJI) tumbled 67.47 points further, or 0.89 percent, to 7,484.82. The Standard & Poor’s 500 Index (.SPX) lost 8.85 points, or 1.18 percent, to 743.59. The Nasdaq Composite Index (.IXIC) was down 17.82 points, or 1.35 percent, at 1,298.30.

In spite of the $700 billion bailout, the market continues to slide. With the public confused of what is going on, economic planners need more money for bailouts to keep the economy on track and stable.

There are those who seriously doubt whether this will work as instability and business losses continue. Financial leaders like Ben Shalom Bernanke of the Federal Reserve and Henry Paulson of the Treasury have a short window period to work on before the full blown effects of the crisis appear early next year.

Joblessness at 6.5%, the highest since 1994, is expected to top 8.5% in 2009. It feeds the fire of uncertainty, raising doubts on the usefulness of helping the floundering US auto and banking industry.

More business close-downs are feared. The housing market has almost screeched into a halt leaving many homes in foreclosures. American auto manufacturers brace for bankrupcies. The public is spooked by advisories of store closings. Americans are angered and worried.

The usual honeymoon period given to an incoming administration may not last long as the impatient public can’t wait for the magical fruition of Obama’s promise during the campaign. A scramble to form a government cabinet to help the new president shows signs of old hands from the Clinton administration which make people to ask if it’s the same traditional politics that will be at play. Without guarantee of success, there is palpable anxiety over leaders with checkered past trying to reprogram the nation’s socio-economic direction.

Obama is in a bind. There is a growing belief that the recession will last longer than what has been experienced in recent history. Some are thinking that it can grow worse to precipitate the hapless conditions of the Great Depression. Though not much can be done by individual US citizens to prevent the worse, sensible measures like focusing on one’s job, belt-tightening in personal finance, and deciding wisely on investment strategies are recommended.

Global economies are suffering. The American sniffle has worsened and spread into a global pneumonia whose end result is basically unknown. A protracted economic malady is likely to bring instability and stagnation. It makes civil unrest and chaos more likely particularly in the poor countries where hunger is common.

Meanwhile, the public overwhelmingly craves that Obama comes victorious in reversing the ugly course of business. How best he can do it is subject to debate and entails vigilant waiting. While he prepares for his inauguration in January, Americans gripped with worry need to give him time and the benefit of the doubt. (Photo Credits: JSDart)=0=

RELATED BLOG: “Dr. Doom’s economic crystal ball & the need to say the truth” Posted by mesiamd at 10/30/2008

Layaway comes back

October 25, 2008

As a sign of difficult times brought about by the financial crisis, stores in America like K Mart, Marshalls, T J Maxx etc. are going back to the payment practice of layaway, a departure from the convenient credit card that modern-day Americans are used to. Lending institutions are tightening their borrower’s rules and store customers may use layaway to buy their favorite gifts for this coming Christmas.

Layaway plans aren’t free — most stores charge a fee for setting aside the merchandise, and ask for a down payment. Kmart requires customers to pay a $5 service fee and a $10 cancellation fee upfront, or put down 10% of the item’s cost, whichever is greater. Customers must make biweekly payments over eight weeks to pay the balance. In case of default, the item goes back into stock and the customer receives a refund, minus the $15.” Wall Street; Yahoo Finance (10/22/08, Bustillo, M.)

Layaway was popular in the Great Depression when credit crunch drove Americans to pay installments for merchandise to buy. It is again an option now that affordability and money have suddenly become scarce. Certainly, USA isn’t as different as different as Philippines when economic bad times strike. (Photo Credits: Crocidillicus.com; USCredit)=0=

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Truth, not only travel briefing, is the answer versus money laundering

October 16, 2008

With the deterioration of the economy, we have learned to be frugal—- traveling abroad simply. The clothes we wear and the money we bring are scaled in terms of affordability and status. Yet there are Filipinos who insist to be flashy like the “ritzy” PNP officer who carried a “bayong” of cash to an Interpol conference in Russia.

Eliseo de la Paz, a former director and comptroller of the Philippine National Police (PNP,) traveled in style with a group of Filipino law enforcement officers in the 77th General Interpol Assemby in St. Petersburg, Russia. We didn’t know if he dressed appropriately, but he was caught bringing P6.9 million of “contingency” funds, a shameful violation of smuggling and the international money laundering law.

It was disgusting that the senior PNP law enforcer and his defenders take the incident lightly. PNP Chief Supt Nicanor Bartolome, perhaps in an attempt to dampen the corruption implications of de la Paz’ action, announced all police officers traveling abroad must undergo mandatory briefing. Did Bartolome mean de la Paz and his group didn’t have one? Wouldn’t it be routine to have pre-departure orientations for Filipinos representing the Philippines abroad?

If Bartolome’s travel orientation’s goal is to educate us about the money laundering law which allows less than $10,000 of undeclared cash during travel, his plan is practically useless. It is a duplication of what is routinely done in international airports, airplanes, and customs offices.

Everybody knows, before reaching the port of entry, flight attendants bring in forms to make sure passengers don’t commit the error of breaking the law. In the customs, passports and money declaration documents are rechecked. There is absolutely no chance that de la Paz wouldn’t know this simple travel procedure, especially if it regards to concealing huge sums of money.

De la Paz brought P6.9 million in cash way beyond what was legally allowed. A retiree from PNP service, he and his wife must not even be part of the Interpol meeting in the first place. But they were there for a reason the public must know, held by Russian authorities that their counterparts in Manila wanted to pass like a fart.

If Bartolome wants to conceal this ignominious incident under the rug as most military men do for their comrades, why doesn’t he dig into the truth about de la Paz’ P4.5 million. The PNP officer claims he brings “personal” money in a conference. What will he do with that mind-boggling sum and how did he acquire it?

Bartolome asks why the Russian authorities didn’t catch de la Paz early on. But aren’t foreign delegates of meetings accorded respect and nothing like this is imagined to happen in St. Petersburg?

There goes the rub. Another Filipino official has disgraced himself and put the name of the nation in the sewers. Alibis, cheating, and corruption have been so entrenched among our officials. Who then will believe us if we are like this? (Photo Credits: Christian Science Monitor/Bennett; Banyuhay)=0=

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Parallels in the US and Philippine Presidential Elections

“If some think we have reached the pits in our standard for electing national leaders, they better observe what is happening in the US elections. We may be “shallow” and immature as an electorate but the current US electoral pool won’t have the right to sneer at us come 2010 (if ever elections are held at all).”—MyTy (10/17/08) (Photo Credit: MarkBerry)

With market still bleeding, corporate greed blamed for financial woes in Wall Street

September 17, 2008

With last week’s unprecedented government bail out of Fannie Mae and Freddie Mac to the bankruptcy of Lehman Brothers, the United States and the financial world are finding ways to avoid further meltdown in Wall Street. Spooked by financial uncertainties, money institutions are finding ways to avert market collapse.

American International Group Inc. (AIG,) the largest insurance company of the world, suffered losses as its shares fell down 92% after fool-heartedly insuring risky bonds. The Federal Reserve had to loan $85 billion to save the company from financial ruin which could disrupt markets and put the economy in jeopardy if its losses aren’t contained. This is in addition to the Treasury Department’s commitment to infuse up to about $100 billion in funds to the Fannies, America’s top mortgage lenders to keep them from going insolvent. Merrill Lynch, Bear Stearns, and Washington Mutual suffer money problems too, feeding uncertainty, confusion, fear and distrust in the banking system. At this point it is unclear whether these measures will reverse the on-going bleeding in the market.

To where this economic woes will end is anybody’s guess. For ordinary citizens, the uncertainties that shake the market bring new realities and offer opportunities to reassess where their investments will go. In spite of their efforts to improve their finances, people have been gripped with scary concerns about jobs, higher taxes, social security, healthcare, retirement and the future in


The financial crisis had been predicted since the Clinton administration. When the stock market slumped in 2000, the housing market boom that followed built unrealistic expectations and over-taxed the lending system. After a long run of profitable home buying and selling, prices slumped in 2006 and continued to the fall thereafter. In the midst of mounting mortgage debts, many borrowers were unable to pay their loans, forcing them to default. The accrued losses quickly mounted, triggering the current financial crisis.

The crisis caused by multifactorial reasons didn’t happen overnight and the blame is shared in many fronts. Corporate greed of Wall Street is partly responsible. CEO’s and money managers, pandering on their interests, rake astronomical profits in overseeing stocks and investment funds to the disadvantage of regular shareholders. Government regulators were remiss in protecting the public when they did little to restrict flagrant money lending schemes and shady business deals of corrupt opportunists.

The Congress on the other hand had been slow in updating the laws that regulate the business of Wall Street. Loans in banks were approved by mortgage lenders in spite of the borrower’s questionable ability to pay. The bullish optimism among house-buyers had caught them ill-prepared for the ups and downs of the market. Investigation and prosecution of corporate malfeasance and abuses had been inadequate.

To promote stability, the government has little choice but to bail-out the floundering companies at the expense of tax payers. To clean up the mess, it has to recognize the weaknesses and failures of the system that lacks oversight. With a huge trade deficit, America needs a correction and tougher regulations in the financial markets to avoid further damage to the economy.

The adverse effects of this economic downturn have serious repercussions on the economies abroad. There is volatility of stocks traded abroad. There is worry across Europe, Asia and Russia. If the confidence to USA’s financial institutions weakens or altogether lost, economies worldwide will suffer affecting the most, the poorest nations.


T
axpayers, shareholders of investments and portfolio owners have to foot the bills to keep the economy going. They scramble for solutions to counter depreciation of homes and restore confidence in doing business. They need to bring back the profits in the stock market, lower the cost of borrowing, and stimulate the growth of businesses.

Yet new policies instituted by the emergence of global economy stand on the way. Saddled with debts and the on-going war on terrorism, the US finds itself in weaker economic footing now than in the past. If the American economy suffers further and reversal of the financial turmoil comes late, a possible worldwide recession can result to social and political instability.

The lessons learned from past hardships—the great depression and the world wars however make Americans resilient and hopeful. As they watch the events unfold, they try to find a wiggle room to solve their problems to escape the worst. The Bush administration is doing unprecedented measures to do just that, though its choices for solution are pretty limited. Photo Credits: Gingerbugjones; BeebsandChi; Steely.scott)=0=

Like Filipinos, Americans Have Money Troubles Too!

July 16, 2008

In an article by Glen Curtis (Investopedia.com,) an interesting graph from US Bureau of Economic Analysis caught my attention. It’s a telling illustration of our floundering savings rate when the cost of living around us is skyrocketing.

Waking up to a world threatened by economic uncertainty and global recession, Americans are unable to save enough for the future. They have pressure from poor countries who ask them (plus their rich counterparts in the developed world) to share and redistribute wealth worldwide to stave off scarcity and famine.

But like Filipinos, Americans are aching in their pockets too. They don’t save as much money as before.

Burdened by impulse buying, house mortgages, and rising costs of credit card debts, the average personal savings rate of Americans is negative 0.5% in 2005, a time when they dug deep into their savings and spent all their incomes. This was close the worst savings rate in 1933 at the height of the Great Depression when savings rate plunged to negative 0.7%.

Today, the US income savings rate is about 0.5%, far short of the recommended 10%, to protect from unexpected money troubles in the future. According to experts, a savings below 5% of income brings serious possibility of financial ruin. They advise an allowance of at least 6 months of salary savings to cushion for any unforeseen change in our cash needs—unemployment, loss in natural disasters, illness, divorce, death in the family to name a few.

More belt-tightening is required of us to avoid becoming a bankruptcy casualty. We need to work harder and longer. It’s important to know where we are in our finances so we can make the needed corrections before our money situation worsens.=0=