DJIA 8550 -79 VIX 57.26 Gold 840.40 +19.90 Oil 48.32 +2.01
Madoff Victims: Big Banks, Hedge Funds, Celebrities
The list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes is growing, snaring some of the world's biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.
AP Graphics
Bernard Madoff
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The alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to the Wall Street Journal.
Among the world's biggest banking institutions, Britain's HSBC Holdings, Royal Bank of Scotland Groupand Man Group, Spain's Grupo Santander, France's BNP Paribas and Japan's Nomura Holdings all reported that they had fallen victim to Madoff's alleged $50 billion Ponzi scheme.
The 70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.
Some investors claim they've been wiped out, while others are still likely to come forward.
"There were a lot of very sophisticated people who were duped, and that happens a great deal when you've had somebody decide to be unscrupulous," said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulator in charge of monitoring investment funds like the one Madoff operated.
The extent of the potential damage prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier.
"I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job," Nicola Horlick, the manager of Bramdean Alternatives, which has 9 percent of its funds invested in Madoff's scheme, told the British Broadcasting Corp.
"All through the credit crunch this has been apparent," Horlick added. "This is the biggest financial scandal, probably, in the history of the markets."
Mikey Says:
This adds to the wall of worry. Cash is on the sidlines and is scared to death.
On the good news side the Fed is getting ready to cut rates again but the way it is being reported is that it is not a good thing. When the Fed started to cut the rates in Aug 2007 it was a good thing.
Gold is having it way now at 825 but in my mind it is just returning to its beakdown and will meet resistance near these levels. Gold and bonds are the last investment standing and that is where they are all hiding. Last year they were all hiding in Oil and the commodities and we know how that one turned out. Patience is the key and I will look to add on to my DZZ somewhere is the mid to low 20's if it gets there.
Last night 60 Minutes aired a doomsday report on the next wave of mortgage failures, That would be true expect one thing. THE RATES WILL RESET LOWER THAN WHEN THEY WERE MADE. A fact they did not mention.
In summary, this story is timed perfectly with the be safe senario. It tells you you can't trust anyone and nothing is safe. Driving interest rates lower. As I write this the 30 bond is at 2.98%. Again rotten stories appear and drive rates lower when they need to be lower. They now say lower rates don't matter. Mikey says they do.
Cramers Says
Cramer: This Game Is Rigged
Everyday investors are losing faith in the market, Cramer said during Thursday’s Mad Money. They’re cashing out and taking their money elsewhere.
Who can blame them? Big money managers are pushing stocks up and down on a whim without regard for the underlying companies’ fundamentals.
It is this total disconnect between the market and basic investing principles that has made it hard for the little guy to trust stocks, Cramer said. To them, it looks like the big money is manipulating the action.
Cramer blames lack of regulation. The Securities and Exchange Commission under the chairmanship of Christopher Cox has done away with virtually any and all regulation that democratized the market and leveled the playing field. Only a complete reversal will restore trust.
“You do have every reason to distrust everything this market throws at you,” Cramer told viewers.
Mikey says:
This is the message and Cramer is another Capt Obvious
They will continue to hammer this message down our throats until everyone has bought it. I have seen this movie before and know how it ends. I will give away the ending...It ends good. Mikey
The beat goes on ....Mikey
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