Good Morning Ladies and Gentlemen:
First of all, on Thursday night, we heard that the giant fund Madoff Investments was nothing but a Ponzi scheme. Bernard Madoff, the former Chairman of the Nasdaq was arrested Thursday night and admitted that his 50 billion dollar fund was nothing but a phoney. Here is the link:]
Madoff Confessed $50 Billion Fraud Before FBI Arrest
By David Voreacos and David Glovin
Dec. 12 (Bloomberg) -- Bernard Madoff confessed to employees this week that his investment advisory business was "a giant Ponzi scheme" that cost clients $50 billion before two FBI agents showed up yesterday morning at his
"We’re here to find out if there’s an innocent explanation," Agent Theodore Cacioppi told Madoff, who founded Bernard L. Madoff Investment Securities LLC and was the former head of the Securities Industry Association’s trading committee.
"There is no innocent explanation," Madoff, 70, told the agents, saying he traded and lost money for institutional clients. He said he "paid investors with money that wasn’t there" and expected to go to jail. With that, agents arrested Madoff, according to an FBI complaint.
This man was held in high esteem in NY and this event has certainly shattered Wall Street. My bet is that this firm has many failures to deliver on many bonds, which will certainly bankrupt other firms as you will witness cascading defaults. My bet is that this firm was short huge amts of silver and gold as they used the proceeds to fund redemptions and “profits”. The firm consistently reported above average profits. This year they reported flat earnings despite the huge downfall in the economy.
This fraud will be far reaching and create havoc for the regulators.
I would like to point out that this Ponzi scheme has been going on for 20 years. The auditors have a tiny 13 foot by 18 foot office. It seems that nobody saw anyone in their office during the day. Only a few entered the premises at night.
There were many people waiving red flags at this company but to no avail. Many will lose their entire savings.
As many of you know, the senate could not get the required 60 votes for the auto rescue. So our hero, George Bush will do his tarzan routine and rescue the industry for a month. He will supply the necessary funds to keep these guys alive until Feb or March and then let Obama do his thing.
Bloomberg has just learned that the Fed will not disclose recipients of the 2 trillion in Lending over the past year. Here is the link;
Fed Refuses to Disclose Recipients of $2 Trillion in Lending Dec. 12 (Bloomberg)
The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.
The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests….
As per the silver comex, I have been witnessing massive amounts of silver leaving the comex with nary an oz coming in. The total standing is around 31 million oz for December and a further 5 million oz for the non delivery month of Jan.
In gold 1.6 milllion oz are standing and only 1.24 million oz have been hit.
And now for economic news:
First retail sales:
US retail sales drop in Nov for 5th straight month
WASHINGTON, Dec 12 (Reuters) - Sales at U.S. retailers posted a fifth straight drop in November as gasoline sales took a record tumble, according to government data on Friday that showed consumers still shopping despite the recession.
The Commerce Department said total retail sales fell 1.8 percent to a seasonally adjusted $355.66 billion last month following a revised 2.9 percent plunge in October. Excluding motor vehicles and parts, sales were down 1.6 percent in November after a revised 2.4 percent October fall.
The November sales decline was slightly less than the drops of 1.9 percent for total sales and 1.8 percent for sales excluding motor vehicles forecast by Wall Street economists
surveyed by Reuters. Sales of furniture, electronics and clothing were up last month after decreasing in October.
Gasoline sales plummeted a record 14.7 percent after falling 12.9 percent in October. Prices at the pump have fallen significantly and that is reflected in the retail sales report, which compiles total sales by gasoline stations.
The economy continues on its spiralling downfall. The consumer is 70% of GDP.
The consumer is getting a little lift from the lowering of gasoline prices. The
US consumers' mood improves on massive price drops
NEW YORK, Dec 12 (Reuters) - U.S. consumer sentiment improved this month helped by falling gasoline prices, retail discounts and "tumbling" inflation expectations, but pessimism over the future tempered their enthusiasm, a survey showed on Friday.
The Reuters/University of
That was the highest since September and contrary to economists' expectations of a fall to 54.8, according to the median of forecasts in a Reuters poll. Their projections ranged from 50.0 to 58.0.
Despite the improvement, sentiment remains depressed by historical standards. The
This is not very good: It looks like
Foreign cenbanks dump agencies, hoard Treasuries
NEW YORK, Dec 11 (Reuters) - Foreign central banks extended a wholesale pullout of U.S. agency debt in the latest week, even as they ramped up their purchases of Treasury bonds amid a global credit crisis that has spared few nations.
The Federal Reserve's holdings of agencies held by offshore central banks fell for a 10th straight week despite the central bank's new program to purchase up to $600 billion in securities from government-sponsored enterprises like Fannie Mae
Agencies held at the Fed now totaled $848.51 billion, down over $17 billion in the last week alone and more than $120 billion in the past 2-1/2 months.
Treasury purchases made up much of the difference however, leaving overall
Overseas central banks, particularly those in Asia, have been huge buyers of
The Bank of America announced massive layoffs yesterday:
BAC Bank of
The debt deflation spiral continues as the economy falters. However the
We also learned that 2 trillion dollars of new money must be raised through bond sales. Since
We are heading for a hyperinflationary depression.
Speak to you on Monday