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Thursday, January 15, 2009

Great Recession Roundup — January 15, 2009

Items of Interest:

David M. Herszenhorn / New York Times:
Congress Moves on Stimulus Bill and Bailout Money — House Democrats on Thursday unveiled an $825 billion fiscal recovery package, a combination of spending and tax cuts aimed at putting millions of unemployed Americans back to work. And in a second major advance …

Elana Schor / TPM Election Central:
The Bernie Madoff Ponzi

Beth Healy / Boston Globe:
Madoff might not have made any trades -- Agency can't find evidence his funds bought or sold through his brokerage

As investigators try to untangle the scheme that Bernard L. Madoff hid from investors and regulators for a decade or more, one basic fact is emerging: He may not have been making any trades at all.

A federal agency that regulates brokerage firms says there is no record of Madoff's investment funds placing trades through his brokerage operation. That leaves only two options - either he was placing trades only through other firms, which would be highly unusual, or he was not placing any trades.

"There was no evidence of the Madoff broker-dealer executing trades for the [Madoff] investment adviser," said Herb Perone, spokesman for the regulatory group, the Financial Industry Regulatory Authority. A broker-dealer is any firm that buys and sells securities...
Barry Ritholtz / The Big Picture: Madoff Never Traded?
Nikiscevak / Bronte Media: Delicious Twist

Another View: Advice on Lawyers for Madoff Victims — Eric M. Rosenberg, an attorney and president of LitigationProofing, a firm that helps companies limit exposure to potential lawsuits, offers this view of what Bernard L. Madoff's investors should consider when they are choosing lawyers to seek recovery of their money: The extraordinary and still unfolding story of Bernard L. Madoff's reputed $50 ...

New York subpoenas hedge fund operator tied to Madoff — New York Attorney General Andrew Cuomo is investigating whether a hedge fund operator who lost big in the Bernard Madoff scandal ...

Cuomo Begins Inquiry on Financier in Madoff Case — The New York attorney general, Andrew M. Cuomo, has issued subpoenas in an effort to determine if the financier J. Ezra Merkin defrauded universities and charities when he invested their money with Bernard L. Madoff, a person with knowledge of the case said Thursday, The New York Times's Leslie Wayne reports. Mr. Cuomo's office is seeking [...]

Auditor in Madoff scandal gravely ill with cancer -- An accountant whose firm is being scrutinized for its work with reputed Wall Street swindler Bernard Madoff has been financially ruined by the scandal, and is now gravely ill with cancer, according to friends and relatives.

Cuomo Subpoenas Madoff Investor — Madoff investor J. Ezra Merkin was subpoenaed by New York's attorney general, over whether his funds defrauded nonprofit groups...

David Weidner / MarketWatch:
Madoff Outsmarted Inept Regulators

Infectious Greed:
Ponzi Scheme of the Day -- today my favorite alleged Ponzi scheme involves some Atlanta-based currency traders who the SEC says took investors for $25-million...

Q&A: Why Is Bernie Madoff Still Free? — A former prosecutor explains why Bernard Madoff is not behind bars despite his latest transgression
----Bernard and Ruth Madoff, in Mexico in May 2008Bernard and Ruth Madoff, in Mexico in May 2008

David Segal & Alison Cowan / NY Times:
Madoffs Shared Much; Question Is How Much -- To friends, they were “Bernie-and-Ruth” or “Ruth-and-Bernie,” a pair so inseparable that you wouldn’t mention one without the other. After nearly 50 years of marriage, they worked in the same Midtown Manhattan office, they traveled together, and they dined together night after night, just the two of them...

Dealbreaker: The Secret To Bernie Madoff's Success
Skbell1 / Don't Mess With Taxes: Madoffs, marriage and tax filing
Telegraph Finance:
Former head of General Motors' financing arm faces questions over Madoff — Former chairman of General Motors' financing arm subpoenaed as part of an investigation into the collapse of Bernard Madoff's 50billion fund empire...

Wall Street Powerhouses Invested Alongside Madoff -- There has been much debate among Wall Street veterans as to why major European investment banks suffered serious damage from the Bernard Madoff Ponzi scheme while our biggest U.S. investment banks escaped unscathed...

John M. / Housing Doom : SIPC Subterfuge? Primex Pentagram? Ponzi Paranoia Running Amok
The Man Who Will Prosecute the Bernard Madoff Case — He owns a rabbit, quotes Shakespeare, and recently nailed an opera-loving money manager on 12 counts of fraud...
Bailout Nation Saga

Eric Dash / NY Times:
U.S. Said Close to Giving More to Bank of America-- The government would provide a $20 billion capital injection and absorb as much as $98.2 billion in losses...

Peter Cohan / BloggingStocks: Will Bank of America get a $120 billion bailout?

Felix Salmon / Portfolio.com:
Nationalize Citigroup and Bank of America — Both Citigroup and Bank of America are down more than 20% in early trade today, and I imagine that Hank Paulson and Tim Geithner are starting work on yet another weekend deal of some description, since at this rate it seems that neither institution is capable of surviving in its present form much longer. They should embrace the inevitable and ...
Vanity Fair:
Fannie Mae's Last Stand -- How its deeply dysfunctional relationships with Congress, the White House, and Wall Street helped propel one of the world's most successful companies off a cliff...

Some even argue that Fannie and Freddie—“the toxic twins,” former Connecticut Republican representative Chris Shays called them—are to blame for the entire economic meltdown. They were “the match that started this forest fire,” according to John McCain...
Mortgage rates drop to a record low -- Interest rates on 30-year-fixed rate mortgages fall for the 11th week in a row.

Interest rates on U.S. 30-year fixed-rate mortgages dropped for the 11th straight week to a record low, according to a survey released on Thursday by home funding company Freddie Mac.

Interest rates on the 30-year fixed-rate mortgage averaged 4.96%, with an average 0.7 point, for the week ending Jan. 15, down from the previous week's 5.0%, according to Freddie Mac...
Calculated Risk:
LA Area Port Traffic Collapses in December -- Both imports and exports declined sharply in November, but just wait until we see the December trade numbers. Based on LA area port traffic numbers released today, trade volumes collapsed in December. Click on graph for larger image in new window. This graph shows the combined loaded inbound and outbound traffic at the ports of Long Beach and Los Angeles...

Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia