Sunday, October 18, 2015

Two Craziest Madoff Court Rulings In Same Week-Mets At Bat

First, let me send a big shout out to my long time pal Fred Wilpon, who everyone knows is the owner of the NY Mets.  I trusted in you that my favorite baseball team would once again be world famous and now that we are on deck to play in the World Series, this is the time to be offering stakes at a higher valuation. Go Mets!

Now, who would have guessed that near-on seven years later, there are still crazy and wacky cases still going through the court system, and that two of those cases would draw front page headlines in the same week. Its a Mad, Mad World!

The first case involves those smart folks over at global accounting and audit firm Ernst & Young, more affectionately known as E&Y. In that Bloomberg LP headline "Ernst & Young Confronts Madoff's Specter..
FutureSelect Portfolio Management Inc., which lost $112 million in its investment in the feeder fund, says Ernst & Young was reckless in its review. The purported assets weren’t just exaggerated; they didn’t even exist, FutureSelect says.

Ernst & Young calls its sign-off reasonable based on generally accepted auditing standards, which the firm “scrupulously” followed. The case boils down to second-guessing a review that can provide only “reasonable assurance” that a client’s financial statements are correct, the firm says.

“No audit of a Madoff-advised fund could have detected this Ponzi scheme,” Amy Call Well, an Ernst & Young spokeswoman, said in an e-mailed statement. “EY was not the auditor of any Madoff entity, we were among the many auditors of funds that chose to use Madoff as their investment adviser.”

Puhlease!!! Are you f--king kidding me?!

The next story is too classic for words, but the WSJ had a bunch of them when reporting that my old pal Noel Tucker from Fairfield Sentry won another lottery ticket this week when a Federal court judge ruled that Noel was allowed to 'break the trade' he made when he sold the $230 million claim he had filed with Irv Picard to a Cayman Island hedge fund. Noel puked on the claim and sold it for $70mil and two days later, Jeff Picower texted in the grave and told his wife to give up $7billion of the closer to $12billion that I sent his way. And that $7bil settlement made Noel's claim value go from $70mil to nearly $150mil. And the hedge fund guys were partying their brains out. Then Noel backed out of the trade before sending over the settlement documents and told the hedge fund guys to go fuck themselves. Then they sued...And guess what?

Oct. 15, 2015 1:02 p.m. ET
A bankruptcy judge agreed to undo the sale of a $230 million claim against Bernard Madoff’s liquidating investment firm, offering hopes of a higher recovery to certain Madoff investors.

Judge Stuart Bernstein of the U.S. Bankruptcy Court in Manhattan this week said he’d break off the sale of the claim, currently held by major Madoff feeder fund Fairfield Sentry Ltd. Fairfield, a British Virgin Islands fund that funneled nearly all of its investors’ cash to Mr. Madoff, had sought to undo a pending sale of the claim after a massive settlement with another of Mr. Madoff’s investors dramatically changed the playing field and drove up the price such claims were fetching on the secondary market.

In the litigation that arose over Fairfield’s bid to break off the deal with proposed buyer Farnum Place LLC, early rulings didn’t give Fairfield hope—that is, until the U.S. Second Circuit Court of Appeals weighed in. In an opinion issued last fall, the Second Circuit found that lower courts erred in declining to reconsider the sale and directed the bankruptcy court to do so.

Fairfield was granted a $230 million claim against Mr. Madoff’s investment firm, Bernard L. Madoff Investment Securities LLC, in connection with the losses its investors suffered when Mr. Madoff’s massive Ponzi scheme came to light in 2008.

Both Mr. Madoff’s firm and Fairfield went into liquidation after the fraud’s exposure.
airfield later agreed to sell that claim to Farnum Place for nearly $74 million, court papers show. Sales of such claims are common, as they help sellers get a quick payment and allow buyers to make a bet that they’ll collect more on the claim than what they pay for it.

Shortly after the claim sale was negotiated, however, a landmark $7 billion settlement with another of Mr. Madoff’s investors was reached that dramatically increased the amount of money available to repay those cheated in the fraud. As a result, trading prices for claims against Mr. Madoff’s firm soared, making the proposed sale of the Fairfield claim a potential windfall for Farnum Place but not such a good deal for Fairfield.

 Keep reading...

Monday, August 24, 2015

Stock Market Massacre: Madoff Says...

The past few days of stock market mahyem should not be (i) a surprise or (ii) a harbinger of any kind of "massacre." Then again, it depends on what your definition is when it comes to "massacre." Especially when it comes to Black Mondays. That said, the August 2015 stock market sell off will certainly be remembered...for being the type of market cycle event that was easily predicted and is typically repeated.

If you've been following "Madoff's Tweets" you know that I've been sharing the outlook of the smartest credit market and global macro folks I know during the past year; two of whom have been pointing to widening of credit spreads as being a fool-proof lead indicator of the where equity market indices will be on a 6-9 month forward looking basis. Aside, if simply because CNBC has been ranting and raving for the past year about the unicorns, the price of Tesla, and cheering the stupid over-reaching for a broad universe of stocks, you knew the writing was on the wall. Greece didn't scare you. China does...and Donald Trump should scare you more, especially when he announces that his choice of VP is Alec Baldwin.

The past week did remind me of October 1987; a crappy week, ending with a horrible Friday, and a following Monday that made every specialist on the NYSE shit the bed. The capitulation finally took place on that Tuesday morning, and then followed by markets gyrating less violently over the next few months, but generally headed higher for the next 4 years. Then there was the October crash of 1991. That blow-off came after a cycle of merger mania and culminated with the crash landing of attempted buyout of AMR.

The '94 sell-off was inspired by margin-fueled buying of Russian bonds--it was a long time ago, but that blow-off was credited to hedge fund Long Term Capital, whose bets on Rusky debt were emulated by every major bank, simply because they were all 'piggy backing' on what they thought was the best black box around.

The Internet Bubble of 2000 was simple to call. The writing was on every wall. And, even if the fall of 2008 market meltdown had Madoff's name attached to the tail leg according to the image below, we all remember that period for proving to be the washout from the financial market crapout that will go down in infamy.

What's my point? The chart to the right, which extends back to 1998 thru today, leads me to wonder whether breaking below 16,000 on the DJIA might lead to a decline down to 14,000 area. That would equate to a 20% sell-off, and a 20% sell-off brings the phrase 'recession' to mind. The fact is, when people feel poorer on paper, they don't spend as much money. No new 'Benz this year, that $20mil condo is put on hold. Restaurants suffer, etc etc. The emotional blowback that comes from 10% declines leads to tightening the belts. We call this austerity spending. And we all know what happens during austerity spending. Shit gets much worse.

16,000 is a relatively important 'level' because after it being a peak price in both 2000 and 2007, the markets roared through that level and have remained above that level for the last few years. However, charts are good indicators of where stock prices have been, not always a predictor of where stock prices will be. Bears and Bulls make money, Pigs get slaughtered.

I don't believe the world is coming to an end. I don't believe that events unfolding in China will trigger a global recession. I don't believe that oil will trade below $32 and if goes to $28, I'd recommend leasing a tanker and filling it up. If you country club types are still sitting on those energy MLPs...I wish you luck. You were sold a bill of goods when you bought them, you knew it and you were determined to throw caution to the wind.

This is a good time to buying dividend stocks that have just sold off 10%+. Its not a good time to buy Tesla stock. Its probably a great time to put in your orders for the upcoming Match Group IPO. During lousy times in the market, people want to hook up so they can get some kind of emotional and physical gratification when their financial statements are taking a toll on them.



Friday, July 31, 2015

Trump Sues Toilet Paper Co For Defamation and #DumpTrump Slogan

As much as I was hoping for a summer vacation from blogging, I almost peed my pants when I saw the headline "Trump Sues Toilet Paper Co..." Madoff Says: Even I can't make this sh*t up!

Here's the background: in advance of the first GOP "Debate Dump", it appears that a very creative initiative is pushing across social media to advance the #DumpTrump "movement"... (pun intended!)
To your left is an illustrative of a brilliant "portable TP" product; no standard toilet paper dispenser required; each individual mini roll of TP comes packaged within a plastic container and is perfect for those who are "on the go", "really need to go" and everyone here at ButtHole Heaven (aka Butner) is using it..Talk about being great for the can! LOL

Anyway, I'm hearing that Donald Trump plans to file a lawsuit to shut down this movement before he can take his next dump...

If you want to join the #dumptrump movement and load up on this great gift product (Trust Me, this is also a a great investment in political campaign memorabilia) you can go directly to the campaign headquarters for this product by clicking this link

Monday, July 13, 2015

Summer Vacation for Bernie Madoff-Adios Donald Trump

The world is getting crazier every day, and the stuff that I did is pale in comparison to the bizarre way in which the world is turning.

1. Greece. Other than the fact that the people of Greece have morphed into an entitlement society and concurrently, the country has a 25% unemployment rate, Germany's determination to impose aggressive and egregious austerity measures on the Greek people is the wackiest position in the world. Yes, for the time being the can is being kicked down the road. And, Yes..because the Germans murdered tens of millions of people across Europe less than 60 years ago, the current generation is pre-programmed to be imposing shits. Hypocritical and Ungrateful are two phrases that come to mind (aside from Nazi Bastard) when considering that Germany's population benefited from the largesse and fair thinking of the Greeks during critical European government discussions that envisioned imposing strict austerity measures on Germans to cover the costs of post WWII rebuilding. Greeks are Good. They were the first democracy in modern times. They also have great beaches.

2. Donald Trump. The word 'fucking lunatic' doesn't cover it. The fact that media is playing exactly into his hands and has driven him to a vaulted position in the early 2016 Presidential election polls proves only two things: (i) Trump should have had the same luck when operating casinos in NJ--how many times did he bankrupt those properties?? (ii)-the people of this country are predominantly stupid, best illustrated by how easily-manipulated we are by the media.

I believe in the 1st Amendment. For you morons who don't know what that is (including the tens of dozens of knuckle head federal govt employees who I know are reading this), its the one that provides for Freedom of Speech. That said, Trump is entitled to say whatever he wants, as long he doesn't scream "Fire!" in a movie theater occupied by other people. Well actually, there are a bunch of things one can't say without breaking the law, and one would think Trump's comments with regard to Mexico and China might be included, but for the time being, they're just stupid and repulsive. The point is we can't blame Trump, we should blame the media outlets only make money if they make big ratings, and they only know how to make ratings by profiling train wrecks, natural disasters, terrorist attacks, crime, liars, cheaters and of course, sex. Trump probably earns a check mark for at least four of the above. But we really should be blaming ourselves. If we don't the turn the channel and go to something more intellectual like the Cartoon Channel, the media outlets will earn the viewer ratings and keep shoving shit through your TV screen.

Here's an idea: Donald Trump and Alec Baldwin run together on the same ticket. We can call it the Bloviator Party. If they don't get on any ballots, they should be forced to do what Baldwin promised to do if George Bush were elected president-give up his US passport and leave the country. And even though they are 180 degree opposites in terms of political beliefs, they've both been fired by NBC, and if you can't keep a job there for being a lunatic, where can you??

3. ISIS. What a cluster-fu*k. When you're in a fight with someone who is using a lethal weapon that aims to destroy society and human norms as we know it, you need to be (i) better at using that weapon, or (ii) you need to find a surprise weapon that cuts the heart out of your enemy. Their message is being delivered by and their combatants are being recruited by social media and the internet. To you fartbrains that believe "privacy policy" supercedes the need to use every tool available to prevent the metastasizing of the ISIS virus, you should take 2 minutes to contemplate what is more important: preventing your daughter from being recruited and blowing up an elementary school down the street from your house, or whether you give a shit as to who is reading your emails and knows who you called lately.

4. Iran. At risk of using a phrase that Donald Trump would use, trust me when I tell you that their government is not our friend. They are really not anyone else's friend other than those who want to (i) blow us back into mid-evil times with a nuclear bomb. The people of Iran are a different story. Their legacy of great thought-leadership extends back hundreds of years. OK, a bunch of which has always been dedicated to enslaving or wiping out Jews. Aside from that point, one could argue that generally speaking, humans are pre-programmed to procreate and evolve and continually advance. If not, what the f#ck is the purpose of being here? The point is that making any "deal" with the current regime in Iran is like a scene out of Laurel and Hardy. It's a big joke that will lead to a balloon blowing up in your face.  Let's break into their internet connections and the next 10 times anyone in Iran logs into the Internet, they get pushed a video of Bruce Jenner explaining why he is a transgender. And then have a clip of thousands of Iranians cheering in the streets. Social Media Propaganda 101. This shit works, trust me.

5. The markets. Pretty simple-short gold and try to get yourself private market shares of Palantir Technologies . If they're smart they'll never go public. The company should be valued at $1tril if Uber is worth $50bil. Think the personal-data-capture-power of Facebook, Google, Twitter, Instagram and ten other platforms combined, add in the computing powers of Point72, Renaissance Technologies, Hudson Trading, Goldman, DE Shaw, Tinber Hill, then multiply by 5 and blend into a mega meta data machine on steroids. That's the power of Palantir.

Beyond that, the price of oil is probably going to go up more than it will go down in the next 12 months. The Fed won't likely raise interest rates before the end of the year. Corporate debt issuance will remain robust for the foreseeable future and equity market prices will gyrate not much more than 10%-15% on the down side and probably no more than 5% on the upside for the balance of the year. Go the Hamptons or Nantucket and relax. The rest of the summer is going to be hot, thanks to global warming.

I could go on and on, but I've decided to take a break from long form writing and instead, for the rest of the summer I'll just tweet stories that make me smirk.

Monday, May 11, 2015

Dead Men Tell No Lies-Dimes DiPascali Now Deceased

From: Bernie Madoff
To: Frankie D.

I told you that smoking cigarettes would kill you, you dope. And, now you're dead. Well, now that you're in that great big fishing boat in the sky, you can sing "I did it my way" all day long. Ok, so maybe Sinatra's tune could be re-worded to "I did it Bernie's way!"

As much as you would have likely been sent to a camp, being a rat and dropping counterfeit dimes on long-time co-workers would hardly have endeared you to anyone "on the inside."  The good news is that my hot chick gal pal Erin Arvedlund is going to memorialize for you eternity in a follow-on book, and from what I hear, this one is going to be a great beach reader for mystery fans. Chock full of conspiracy theories, hit men and hidden treasurers.

You did everything I told you to do, and you made yourself a boatload of money along the way. You even managed to buy yourself a six-year long, stay-out-of-jail card. You didn't spend a single night in jail and the Key Stone Kops never found the buried treasure. Pretty impressive stuff. Worthy of inscription on any tombstone!

My condolences to your family.

Thanks for the memories!

Friday, May 8, 2015

Condolences to The Cohns. Sonny Was A Great Bagman!

To: Marilyn & Marcia
From: Bernie Madoff

My sincere condolences. Sonny was a swell guy, and with his long time friendship and business partnership, he helped swell our wallets and helped fill the fuel tank for our flights on the "CohMad 1" jet to Switzerland..Those were the days!

I think about him often and still keep this photo in my wallet!

I will always remember his dedication to the causes that mattered most (his bank account) and his determination to make sure you girls always lived like queens. And, that donation to North Shore Hospital was a true masterpiece of self-serving PR philanthropy--I won't stop laughing over the fact that your name sits over the front entrance to the emergency room entrance with a big sign that displays "Marilyn and Maurice Cohn Trauma Center." Talk about poetic irony! Brilliant!!

Trust me when I tell you there are still lots of folks over at Glen Oaks and Boca Rio who would love to know how he stayed above the fray and managed to not only avoid the silver bracelets, but how he persevered and never paid a dime towards the SEC's judgment and how for the past seven years, and until the day he passed, he managed to get one court delay after another without forking over a penny to Irv Picard.

Some of the great stories that we will all remember include the following snippets:
1. Not everyone gets an eternal mention in Wikipedia!

2. How many of us get top billing with ABC News?? 

3. And that house in Amagansett? A beauty!! What a great ROI too!

4. One of the best settlements in history. He proved what I always knew about those muppets at the SEC!

5. Duck and Jab. Duck and Jab. He was like a champion prizefighter!

6. One for the judicial record books!

My thoughts to you and the family. Sonny is now at that great golf club in the sky.
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