Stunning Market Development: Madoff Remains Free on Bail; Judge Orders Hank Paulson to Jail in His Place

WTF? NEWS

Published Irregularly Weather or Not We Feel Like ItAny Damned Time We Please

Important Dislaimer: In case any reader doesn't quite get it, this is parody protected under the first amendment of the Constitution of United Statements of America. If you don't like the law then feel free to go try and change it. If you are interested in further information on freedom of the press we suggest you start with John Milton's masterful essay "Areopagitica" (1644) http://www.uoregon.edu/~rbear/areopagitica.html

Markets Surge by 273 Points out of Confusion

Concluding that Hank Paulson had inflicted far more damage to the world economy than Ponzi-topper Bernie Madoff, U.S. Magistrate Judge Ronald Ellis kept Madoff out of the slammer today free on bail of $10 million. Instead Ellis issued a surprise sentence for Treasury Secretary Henry Paulson calling for his immediate arrest and imprisonment for what he described as "crimes against capitalism".

In commenting on the most curious extra-judicial event in recent memory Judge Ellis said that "Madoff had only conned people out of $50 billion" while Paulson had "managed to hoodwink the U.S. public and all three branches of the United States Government out of $700 billion!" His ruling argued, "we at least have a shot at tracing the Madoff money; good luck to anyone who thinks they can trace what the hell Paulson did with the TARP funds!" He said his unilateral decision to sentence Paulson was based on an obscure provision of 13th Century Salic Law stemming from disputes dating back to the Battle of Hastings in 1066 and the signing Magna Carta in 1215 AD (see http://en.wikipedia.org/wiki/Salic_law) that served as the underpinnings to the rule of law under Charlemagne. He admitted it was a bit of a legal stretch but made a strong point. Wearing a wig, Judge Ellis read aloud the entirety of his 73-page hand-written ruling in Latin to a stunned federal courtroom in lower Manhattan that was packed with reporters, various stakeholders and Madoff himself who was overheard whispering to his attorney, "Is he serious?"

When asked why Judge Ellis felt he could sentence a public federal official who has not yet been accused of any wrongdoing or been subject to any criminal investigation in a situation where he clearly has no jurisdiction whatsoever, Judge Ellis responded candidly that this was the only thing could think of that would quell public outrage at his decision at letting Madoff roam the streets. "It seemed like a fair trade to me. There was a sense of justice, that I will admit might at first blush seem a little perverted." When asked where on earth he came up with this idea, Judge Ellis said he had been inspired by Anthony Quinn's performance in the Biblical epic film "Barabas". In fact public reaction has been mixed.

Creating quite a stir, however, was the reaction of Harvard Professor Elizabeth Warren, chair of the Congressional Oversight Panel (COP) who has been stone-walled by Paulson and his gang of financial miscreants. Appearing on Lou Dobb's earlier this evening , "I think this bizarre twist of events may actually serve the public interest Lou. Maybe now Paulson will respond in writing to the balance of 26 unanswered critical and legitimate questions he has so far refused to answer!" (see 65-page COP report http://cop.senate.gov/documents/cop-010909-report.pdf). Warren also unveiled on-air the revamped cutting-edge COP website http://cop.senate.gov/index.cfm including the new much-touted blogging feature (http://cop.senate.gov/blog/). When pushed by Dobbs whether this was a bit of an all-too-transparent populist pandering and whether she would confirm rumors that Madoff has agreed to be a guest blogger she threw her both shoes at Dobbs and responded "Shame on you Lou. I am not going to comment on any true rumors!"

And now for the real stories...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDdj8PNsZyds&refer=home

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ah.k33EGzlcQ

Tata to Tata???? Formerly sprawling soon to be crawling?

May be a little early to call this one but the formerly sprawling Tata Group (including its Tata Motor's ambitious plan to deliver a $2,500 car seems to be running out of gas quickly. Ratan "the Man" Tata very visibly promised over and over that he will deliver on-time the $2,500 micro-car named, with breathtaking originality, the Nano. Those plans have been scaled back and rumors, certainly apocryphal, are that he is re-engineering his Nano and is trying to convince Steve Jobs to put little wheels on Apple's fabulously successful micro-device so he can meet his pledge. But time is running short. After crapping out seeking money from big global investors (I thought he was supposed to be one of those a big global investor himself--no?) Ratan will take money from just about anyone and has resorted to doing a retail rights offering in his native India. People aren't exactly rushing out to sell their kidneys to get into this one.

Seems that the trophy-hunting Mr. Tata has severely misunderestimated the extent of the global financial crisis and owes $3 billion comin' due in June. In a spectacularly mis-timed effort to create a portfolio of international luxury brands including the very British Land Rover and Jaguar Ratan is folding in his wings. The Tata legacy has been around for 140 years and Ratan Tata (wow say that five times fast) has emerged as the symbolic success story and iconic entrepreneurial poster child for India asa serious global player.  (India has achieved the clearly non-alphabetic third position "I" in BRIC which as you can imagine has severely off pissed the Chinese due to its last place position in the curious acronym). Ratan,is the Indian equivalent of one part Al Gore, one part Richard Branson and a dollop of the Donald. As to his success, it is attributed to his Englophonic propensities or as he likes to says, "Dress British, think Yiddish"). As for delivering a $2,500 car to market  Tata might consider snapping up  GM's otherwise unsalable inventory of Hummers at market value, re-sell them for $2,500 and probably still make a profit.

Tata Motors Struggles to Raise Cash, Introduce Nano by Deadline

By Vipin V. Nair

January 12, 2009

Tata Motors Ltd., the maker of Jaguar cars and Land Rover sport-utility vehicles, must repay a $3 billion loan and aims to introduce the world's cheapest car this year. It is struggling with both.

The Indian car maker needs to raise cash by June to repay a bridge loan taken to fund last year's purchase of Jaguar and Land Rover from Ford Motor Co. The $2,500 Nano car, already delayed, is crucial to revive falling demand in the car maker's home market.

The global credit crunch has forced Chairman Ratan Tata to reconsider a plan to raise $600 million from investors abroad. Instead, the company is offering small investors up to 11 percent interest for three-year deposits after raising 41 billion rupees ($840 million) through a rights offer in October. Collapsing sales at Jaguar and Land Rover in the U.S. and Europe are echoed by plummeting demand for cars and trucks in India.

"They are now fighting on three fronts: their core business is collapsing, the small car project will have to prove itself and the global credit availability is a problem,'' said Rashesh Shah, chairman of Edelweiss Capital Ltd. "Companies don't open multiple flanks and go after every attractive opportunity. That is ambition, and that has affected them.''

Read Full Article at: http://www.bloomberg.com/apps/news?pid=20601087&sid=alQs3oaFa9Fg&refer=home

Surprise! Surprise! Bernie's (Almost) Surprise Birthday Present; better to give than receive?:

The sins of the father and husband are not necessarily the sins of the sons or the wife. But then again I guess we will find out soon.... in the meanwhile while there has been enough disgrace to go around for the next 30 generations of Madoffs this little article is a peak into the psyche of the little woman behind the man. A bit of a human interest story where there is otherwise very little human about the man to report.

A meeting with Mrs. Bernard Madoff

By Michael Skakun and Ken Libo, Jewish Daily Forward

December 18, 2008

We arrived, two scribes-for-hire, at the Madoff residence on Manhattan’s Upper East Side. “Queens High Baroque,” we said sotto voce in unison as we stepped off the elevator and into the vestibule of the Madoffs’ apartment. It was a wet day, and we quietly removed our galoshes.

We had been summoned by the lady of the house, Ruth Madoff, director of Bernard L. Madoff Investment Securities LLC and wife of the company’s owner, to help with a special project. We took no notes that day, about five years ago, but the scenes and quotes that follow have come to mind in recent days, and are told here as faithfully as memory allows.

The ample Madoff foyer and living room burst with what appeared to us as classical knockoffs, the regal effect spoiled by overexertion. Gold sconces lined the stenciled wallpaper, a Napoleonic-style desk stood to the side, and the Greek and Egyptian statues vied with each other to set a mood of antique decorum. Arabesque-styled Central Asian rugs beguiled our vision with looping patterns and impressive symmetries, further softening our footfalls.

Ruth Madoff, a petite blonde with a pert nose and quick movements, ushered us into a sunlit kitchen. We could see that the downpour outside had come to a halt. “We’ll be more comfortable here,” she told us. White cabinets swept from floor to ceiling. The Formica-topped oval table had an array of crystal-cut glasses brimming with cooled fruit juices.

Ruth’s taut, well-tended skin made her look a good 10, if not 20, years younger than she was. She was thin, sylphlike, giving further economy to the word “trim.”

Ruth shook out her curls as she sat herself down on a wicker chair. Her manicured fingers lay folded on her lap. “It’s heimisher in here,” she said. The spotless kitchen stood in warm contrast to the cold hauteur of the foyer. The Madoffs, we feared, had effectively exiled themselves from their well-appointed living room, reserved strictly for formality and occasion.

On the tabletop lay her spiral-bound, hearth-toned cookbook, filled with recipes she had culled from the great Gallic and American chefs, many graduates of the French Culinary Institute. She had charmed the likes of Emeril Lagasse, Daniel Burke, Daniel Boulud and Bobby Flay to conjure up dishes that would pass the strictest dietary laws. Among its tinted pages, recipes for vegetable gumbo jostled against those for paupiettes of baked salmon; wok-seared duck breasts nestled side by side with braised and cooked goose, garnished with watercress aglio-olio.

“Now we can get down to business,” she said, pouring herself a cup of hot tea. “Bernie is turning 65. Other men slow down; take it easy, not him. He’s got the whole world on his head.”

Ruth smiled wanly and brushed her hand through her soft, layered hair.

“I want to give him a birthday present he won’t forget,” she said.

We asked her what she had in mind.

“Maybe a surprise scrapbook, you know, pictures, photos, invitations, the works,” she said.

We let the idea settle in, and she continued.

“Oh, we’ll think of something, maybe interesting collage effects. What we’ll want is to bring out Bernie’s many facets,” she said.

But no sooner had she spoken than she caught herself.

Bernie, she said, was cautious, even circumspect, a man who liked the tried and true, things in their proper place. He never wanted to be caught off guard. But that is exactly what his wife was hoping to pull off, somehow to charm him without startling him.

At first, Ruth thought she knew exactly where to begin. She brought out photos of a smiling, gap-toothed Queens boy, bat at hand, ready to hit a home run. He had quite a swing in those days. Boy, could he send those balls flying.

But with each passing photo she hesitated, breathing more heavily.

Bernie, she observed, was a secretive man. “He likes to keep things close to his vest,” she said. She looked wistfully at the photos lying on the table.

Suddenly, she gathered the pictures into a heap. She looked wistfully out the window.

“Let me mull this over,” she finally said and whisked us out the door.

The next day we received a call from Ruth. We could hear the pause in her voice. It seemed touched with sadness. She had changed her mind. More time was needed, she said. She thought 65 was an age betwixt and between. Seventy, three score and ten, would give the fuller measure of a life, would be just the right moment to spring this happiest of surprises on Bernie.

Now, we have learned, it is Bernie who has sprung the unhappiest of surprises on investors around the world.

Meet the Dead Men Talking! Cause we need all the help we can get.

I'd like to introduce you to a few of of EPD's latest guest contributors:  George Washington  whose reputation was built upon murdering a poor, defenseless cherry tree that did nothing wrong to him.  Alexander "Shooter" Hamilton (that's right --the original Secretary of the Treasury, the man who brought you the New York Post and had worse aim with a pistol than Mr. Magoo). Last but not least, good ole Abraham Lincoln who has told me he can't take any more of this "Team of Rivals" crap. Asked me to personally send a note to Doris Kearns and tell her to zip it.  "She wasn't there and she really doesn't know what she is talking about."

These three columnists are people you can trust -even though  they're dead. And we hope to be recruiting more historio-bloggers like these three giants as we gain momentum and their agents see the wisdom in getting paid nothing to help save the nations. 

So here is the first glimpse of our new commentators.  Okay- I know. Georgie's a little bloodied and beat up ( just like the dollar itself upon whose green parchment George's mug appears) --Abe's got a little bit of that Johnny Depp/Keith Richards/Pirates thing going on.  So what if Shooter Hamilton looks a bit like Heath Ledger, (may he rest in peace and win the Academy Award).

After much deliberation and handringing  I decided- maybe just maybe -- what this country needs is some good old-fashion  leadership to restore its credibility and rebuild confidence in itself. (Our current crew in Washington has done a fantastic job in flipping out every domestic and foreign investor - large or small- on the planet). Who better than these guys- dead or alive-who've been with us all along and have alot invested in this increasingly dubious experiment called democracy and even more dubious system of resource allocation called capitalism. Perhaps they can help us fnd something we lost along the way known as our "legacy". As we rapidly approachthe highly endangered species list facing extinction due to our own stupidity, it is not too late. A rendezvous with destiny?  Hell no! Just a confrontation the Chinese who own $2 trillion of our debt.

With these new columnists from history we now have our own versions of Maureen Dowd, Thomas Friedman and David Brooks. Here are people  from the government and, remarkably, they are here to help, share their wisdom and shed some light on an increasingly dark mood that is sweeping across the globe like wildfire. But we need to laugh again: at our delusions, at our folly and at our ourselves. No civilization under siege (did you ever watch that snake eat itself on Animal Planet?) has ever recovered without humor- however dark and tasteless it may be. So god damn it! Makes us laugh! Stay tuned. They'll be back regularly in Dead Men Talking and the Presidential Advisory Council here exclusively at EPD.  As George Washington told me (in the spirit of Albert Einstein) "If I had known this is what would happen to the world, I would have lied to my father about the friggin' cherry tree!"

                            

    

Here She Comes... Professor Elizabeth Warren; head of COP and Kashkari Castrator

Neel, watch those family jewels cause she's coming after both of 'em.

Why? Because we know you are smart as hell, and a real rocket scientist to boot but unfortunately you belong at NASA not as the front man for the agency intended to restore confidence in the global markets. Gets some serious media training quickly or get the hell out of town. Not that there is anything cheery going on but you look as if you have never smiled in your entire life and haven't had a bowel movement since you left Goldman Sachs. You exude   arrogance but hubris belongs in Greek tragedies not in history's greatest financial calamity-- particularly one that you managed to exacerbate with your brilliant bailout ideas. You've somehow managed to create instant financial global warming. No fossil fuels were even used. Forget about the Nobel prize. When you testify and you don't know something just try saying "I don't know Professor Warren but I will get you an answer as fast as humanly possible." TARP is something we should put over your head whenever you appear in public.  Lighten up bud! Seriously!

Panel Steps Up Criticism of Treasury Over TARP

By Michael R. Crittenden

JANUARY 9, 2009

WASHINGTON -- The U.S. Treasury has failed to reveal its strategy for stabilizing the financial system, not answered questions asked by a government watchdog, and has done nothing to help struggling homeowners, a report being released Friday charges.

In the most scathing criticism yet of Treasury's implementation of the $700 billion financial-rescue package, a draft report being issued by the five-member congressional oversight panel said there appear to be "significant gaps" in Treasury's ability to track hundreds of billions of dollars of taxpayer money.

Related Article:

Treasury Plans to Better Track TARP Funds (1/09/09)

"The panel's initial concerns about the [Troubled Asset Relief Program] have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury," said the draft report, which found that the department has "not yet explained its strategy" for stabilizing the financial markets.

The report faults Treasury on a variety of fronts: having no ability to ensure banks lend the money they have received from the government; having no standards for measuring the success of the program; and for ignoring or offering incomplete answers to panel questions.

The bipartisan panel, headed by Harvard Law School professor Elizabeth Warren, reserved its most strident criticism for Treasury's approach to dealing with the foreclosure crisis at the root of the economic turmoil. The draft report noted that Treasury hasn't used any of TARP's $700 billion to help borrowers refinance or deal with mortgages that are worth more than the market value of the homes they are tied to.

"Treasury needs to be clear as to what, if anything, it has done, and if it insists on taking credit for private sector efforts, it must explain what 'help' means," the draft report said.

Treasury is responding to political pressure with a plan to better track what banks are doing with billions of dollars invested by the U.S. government.

For banks, it could ratchet up pressure to make loans they consider imprudent given economic uncertainty and the difficulty increasing the number of deposits that underpin their business.

Treasury Assistant Secretary Neel Kashkari, who leads the TARP program, said the Treasury plans to use already available quarterly data to compare lending by banks that have received TARP funds and those that haven't. The Treasury plans to collect monthly data from some of the largest banks that have received capital injections from the federal government.

Mr. Kashkari, in a speech in Washington, noted that the Treasury still has roughly $75 billion to distribute to banks as part of its $250 billion capital-injection program. "This capital needs to get into the system before it can have the desired effect," he said.

A Treasury spokeswoman said there is no time frame for instituting the new measurements and that details of the data to be collected remain uncertain.

Read Full Article at: http://online.wsj.com/article/SB123147360470067363.html?mod=WSJ_myyahoo_module

Here is a random clip of Kashkari doing the moonwalk during additional Congreesional Testimony (this clip is for serious wonks only)

Econolypse Now: Buffet's Insurance Companies Seized by Regulators; Master of Float Sinks, World Financial System Follows

I recently tried out the above thought experiment/scenario on the world's number one death spiral economist. He clearly had not seriously considered the worst-of-all-possible-worlds headline but he readily acknowledged Buffet's extraordinary appetite to take on catastrophic risk with his massive arsenal of cheap capital, known as float. (See Oracle of Omaha's balls-to-the-wall forward bet on S& P and other indices http://www.ft.com/cms/s/0/45446192-bbec-11dd-80e9-0000779fd18c.html) This famous economist's studied reaction was, well, stoic. I believe he was having a true Fruit of the Loom moment. Gotta watch out for those Black Swans!

So my friends (how could anyone ever expect to be elected president using that expression?) just contemplate the above hypothetical headline as you read the "Cheat, Love, Pray" article below that I have once again gone out of my way to make convenient for you by using my personal highlighter of truth. No thanks are necessary. Someone's gotta keeo an eye on of the world for you. Everyone else is out to lunch. But don't worry, I'm all over it. Get some sleep, but take good care of that mattress-- you may need it.

love, sticky ;)

p.s. started reading OoO's biography "Snowball"-- boy, was Warren a dork growing up! makes Bill Gates look like George Clooney-- the tome is 800 pages so I'll have to get back to you after he's made his first billion. How's this for weird-- he used to drive around in a hearse.

Cheat, Pray, Love

by James Surowiecki

January 12, 2009

Along with slashed payrolls, rising foreclosures, and plummeting stock prices, 2008 brought another unwelcome development: a surge in bank robberies, which were up more than fifty per cent in New York. This wasn’t shocking: we typically expect property crimes to rise in hard economic times. There is, though, one crime against property which bucks this trend: defrauding investors. On Wall Street, fraudulent schemes tend to thrive during economic booms, and to blow up when times turn tough. While bank robbers are getting busier, the Bernard Madoffs are starting to get caught.

Madoff is just the latest in a long line of fraudsters who took advantage of investor euphoria. Time and again, as asset markets have become frothier, fraud has flourished. During England’s South Sea Bubble, in 1720, a host of bogus joint-stock companies arose, including one that described its enterprise as “nitvender,” or the selling of nothing. The boom of the nineteen-twenties featured men like Arthur Montgomery, who ran a Ponzi scheme promising investors four-hundred-per-cent returns in sixty days, and the Match King, Ivar Kreuger, who sustained match monopolies all over the world with forged bonds and doctored books. More recently, the stock-market bubble of the late nineties gave rise to enormous frauds at companies like Enron and WorldCom.

Read Full Article at: http://www.newyorker.com/talk/financial/2009/01/12/090112ta_talk_surowiecki