Monthly Archives: December 2008

Wait a minute, that’s my bank!

I bank with Greenwich Bank & Trust and a fine bank it is. But it merged with Westport National Bank four years ago and became Connecticut Community Bank and now that larger entity is being sued by defrauded Madoff investors. It’s Walt Noel and Fairfield Greenwich Group, writ small: Westport Bank took a couple’s money, charged them 4% a year for the privilege of having them watch over it for them and on December 12, the day Bernie was arrested, sent them a letter saying that, gosh, they’d invested the whole thing with Mr. Madoff and would the couple like them to write a letter to Mr. Madoff, asking that he give their money back?

I have great faith in Greenwich Bank & Trust and I trust them to keep my piddling earnings safe but back when I hunted stockbrokers my colleagues and I cheered when banks went into the  brokerage business. We were sure that they’d prove incompetent at suggesting wise investments and our subsequent paydays courtesy of arbitration panels proved us right. Never ever trust a bank’s retail “investment advisor’, is my advice. Certainly, don’t count on Westport National Bank to safeguard your money.

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Will the real George Lindemann Jr. stand up?

I’ve had trouble finding a picture of the young horse killer. Here’s one, taken from a 2007 Alumni letter that purports to be of George Sr. (I’ve also seen it identified as the younger). If it’s Senior, the poor bastard’s aged terribly, judging from a New York Social Diary celebrity post. Does anyone have access to Georgie’s mugshot?

 

"Ahoy, sailor!"

"Ahoy, sailor!"

UPDATE: Here’s the real McCoy, courtesy of reader Jess (and WireImage)

 

"Dig those glasses,Ariane!"

"Dig those glasses,Ariane!"

 

 

 

 

NY Social Diary (Lindemann on right) 

Credit: NY Social Diary (Lindemann on right)

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Did Bernie disclose all his assets today?

He had until 5:00 p.m. SEC hasn’t said whether they’ll make that list public but I’m sure it will come out – this story’s too much fun to keep things quiet. The Wall Street Journal suggests that Madoff would be wise to also disclose his offshore accounts but I don’t know – he’s already facing an almost certain life sentence, so how can he be punished further for perpetrating another tiny fraud?  I’d try to keep the accounts secret, “for the kids”. Of course, if I were a defrauded investor, I’d have already booked a flight to Mustique to see what’s in Noel’s villa’s walls.

Update, Jan. 1, 2009 (happy New year!): He disclosed, but, for now, the SEC won’t kiss and tell. Speculation by one commentator suggests that much of what’s left of the loot is in offshore accounts and the SEC wants to get to it before foreign countries seize it for their defrauded citizens. Fun, fun fun.

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Should house prices follow suit?

2008 wiped out six years of stock gains.

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Who is George Lindemann, Jr.?

 

Oh, Monica, how can you laugh? George is back to frying frogs and im sure puppies are next!"

"Oh, Monica, how can you laugh? George is back to frying frogs and I'm sure puppies are next!"

For anyone who missed the story, George Lindemann Jr. is the son of one of the wealthiest men in the world, George Lindemann Sr., of Greenwich and Palm Beach. George Junior grew up in Greenwich and graduated from Brown but his heart was set on being an Olympian. To further that end dad bought his boy Cellular Farm (one of dad’s fortunes was made in cellular communications) in Armonk, New York, just up the road from Greenwich. Georgie proved as inept at managing a horse farm as he was at riding and dad eventually grew tired of footing the bills for a failed venture. “Make the place profitable” he warned,”or I shut the place down.”

 

Georgie was in a panic. He’d spent $250,000 of his father’s money on “Charisma”, a jumper that was supposed to bring fame, and a subsequent improvement in fortunes, to George and cellular Farms. But the horse was a bust. Rather than admit defeat or plead with his father for more time, Georgie hired a professional horse killer to come up to Armonk and electrocute his horse. If you aren’t squeamish, here’s how a horse is killed for insurance purposes: the killer takes a heavy-duty extension cord and cuts off the female end, replacing it with two alligator clips attached by a long wire. One clip is attached to the horse’s ear, the other to his anus and the cord’s plugged into a wall socket. The lights flicker, the horse starts to fry and eventually his guts blow up, simulating a fatal case of horse colic. Horses are big and rot quickly so their bodies usually don’t hang around long enough for an insurance adjuster to view the corpse. Instead, the owner either buries it immediately or pays the local large animal veterinarian to sign off on the cause of death and then brings in the bulldozer. So long as the killer is careful not to leave obvious scorch marks around the anus, no one complains too loudly, especially if the vet is paid handsomely for his troubles.

Georgie was convicted of his crimes. Sentenced to jail, he never attended – in fact, as far as we can determine, he never even endured a full body cavity search – there are some things you just don’t do to the son of the richest man in town. He has retreated to Miami, Florida, where he now poses as a patron of the arts, philanthropist and all-around decent good citizen. His parents, of course, are best friends with Walter and Monica Noel. What a small world.

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Testimony to Teenagers’ Powers of Persuasion

Virginity pledges don’t mean much, study says. Okay, so the kids can’t write – they’re obviously prepared to sell real estate or stocks, however and the latter two pay far more than the former.

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Horse investments tank, Miami Philanthropist George Lindemann Jr. steps in to help.

 

"Kill him AFTER I'm done riding, you idiot!"

"Kill him AFTER I'm done riding, you idiot!"

The price of thoroughbreds drops 40% so Fairfield Greenwich Group’s Jeffrey Tucker will be selling into a falling market. Oh, what will we do, what will we do?!

Say, wait a minute, I’ve got an idea!

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Yeah, but can he produce steady returns for 30 years?

Paulson blasts hedge funds for restricting withdrawals.

Dec. 31 (Bloomberg) — John Paulson, who runs the $36 billion hedge-fund firm Paulson & Co., has some harsh words for his peers and their tendency this year to block or curb clients’ attempts to get their money back.

“We think it’s a mistake for managers to use gates and other tools to limit investor access to their funds,” Paulson wrote in a 2009 outlook to investors. “While we recognize the difficulties of the current environment, we think it is a manager’s responsibility to raise liquidity to meet the redemption needs of their investors.”

Paulson, 53, can make his case for client-friendly policies because he made money for investors this year. His largest fund, the $13 billion Paulson Advantage Plus has climbed about 38 percent through Dec. 19, according to the undated report, making it the best performer among multibillion-dollar funds.

Most hedge-fund managers have had a tougher year than Paulson.

Okay, he sounds like he might be legitimate, but you’ll notice you don’t see any mention of his never ever losing money, good market or bad. And I bet he wouldn’t let Walt tack on a 2-20% charge, either. Not good enough for FGG – sorry.

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Off to Mexico!

Jeffrey Tucker leaps Lisina over Rio Grande border

Jeffrey Tucker leaps Lisina over Rio Grande border

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Chris Dodd, Scoundrel

I made this point months ago (switching to WordPress has messed up my archival retrieving or I’d prove it) but I’m glad to see that our Senator’s crooked ways aren’t going unnoticed by the Hartford Current:

Chris Dodd

Oh give me a home loan: Sen. Chris Dodd never stood a chance at the Democratic nomination, much less the presidency. But that didn’t stop the chairman of the Senate Banking Committee from fleeing Washington during the prelude to the biggest banking collapse of our lifetime and moving his family to Iowa for the  caucuses. Once Dodd did finally come to earth (and back to D.C.), we learned he’d received special low-interest mortgage deals from Countrywide Financial, a company that made huge profits off predatory subprime loans and which his committee was supposed to regulate. Dodd first said he’d make public the details of the loan, then backpedaled and stonewalled reporters seeking answers. Dodd’s up for re-election in 2010 and his approval rating’s sunk below 50 percent. After a year like this, he might find winning another term a rocky ride.

The Current’s right that Dodd had exactly zero chance of winning the Democrat nomination and, no matter how large the man’s ego, he must have known that. What it doesn’t point out is that he is the Chairman of the Senate Banking Committee and used his “campaign” as an excuse to bilk the financial industry of millions of dollars in “campaign contributions” which weren’t spent in Iowa. Where did that money go? Not to pay his Countrywide mortgage – he got a special deal on that (and still refuses to release the loan documents) – I’d guess that if, say, he happened to have a nice little vacation cottage in Ireland that a search behind its walls might turn up items of interest.

Dodd and Rangle are seriously ethically challenged. Far be it from this non-Democrat to offer suggestions to Nancy Pelosi and Henry Reid but if they want “change” from the corrupt reign of Dick Chaney (he’s still the ultimate devil until January 20, right?) knocking these two frauds from their committees might be a good place to start.

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Noel’s New year Resolution

Dump Round Hill, make up with Andre and move into the kids’ house in Spain.

The Spanish real estate market is heading south, fast, so shuffling off to the Mediterranean coast might work an economy. I don’t know anything about Spain’s extradition laws but Walt’s 78 and you’d think a good lawyer could slow things down long enough to permit him to spend his dotage in the sun.

(hat tip: Instapundit.com)

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Blodget – “fix” housing by letting prices fall

I agree. All the propping up efforts advocated by the NAR, home builders and banks won’t solve the underlying problem which, as Blodget points out, is the inability of some homeowners to pay their mortgage. Falling prices don’t cause foreclosures, no income does. If we “hold the line” on prices through massive subsidies paid by one group of taxpayers to another, what have we accomplished?

I don’t really foresee a wave of foreclosures coming to Greenwich – or I hope one doesn’t – but the philosophy is the same: if you want to sell your house, you’re better off adjusting to reality than clinging to a 2006 price and hoping it will return. That may well be a very long wait.

Update: And here’s exactly what we don’t need – Congress expected to authorize bankruptcy judges to cram down mortgages. That’s great news for deadbeats, pad news, in the form of higher interest rates, for those who pay their bills.

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California Dreaming

According to this blog, Fortune magazine’s come out with the ten worst real estate markets for next year and California’s holding down 8 of the 10 spots. I won’t argue with their pick of Stockton, CA – my Sarah goes to college there and between meth addicts, foreclosures and unemployment, the place is in deep trouble. But I agree with the blogger’s quibble over Fortune’s naming of Washington D.C. We’ve just elected a Democrat and are embarking on a trillion dollar plus spending spree. If history is our guide, much of that money will stay in Washington and the extra billion bureaucrats needed to dole out the leftovers will need a place to stay. I’d buy Washington.

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You ask, we get

“Any pictures of Tucker?”

Jeff Tucker testifying on "The Importance of being Earnest"

Jeff Tucker testifying on "The Importance of being Earnest"

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Uh oh – a whiff of tax fraud for FGG?

The feds are sniffing out Madoff’s offshore accounts but here’s the bit that might just warm Walt and Monica’s champagne this evening:

Investigators are especially interested in whether Madoff and some of his investors used funds based in offshore tax havens to evade American taxes, the paper said, citing a person who was briefed on the investigation and remained anonymous. 

The paper said, according to the person, the likelihood of charities improperly allowing their donors to shift money offshore and foreign banks withholding American taxes on Madoff accounts were also being scrutinized. 

Regulatory filings indicate the involvement of at least a dozen offshore entities with Madoff’s firm, the paper said.

According to the paper these include funds linked to the Fairfield Greenwich Group, which lost $7.4 billion of its investors’ money to Madoff, Tremont Group Holdings, which had $3.3 billion invested, and several Swiss banks.

On Wall Street, you can usually impoverish little old ladies without incurring much more than a severe frown and perhaps a wrist tap from the regulators but cheating the IRS? I wonder whether orange is Walt’s color?

Update: from the NYT

Fairfield Greenwich operates affiliates in offshore havens like the Cayman Islands. At another affiliate, in Bermuda, Amit Vijayvergiya, Fairfield Greenwich’s chief risk officer, managed flows into Sentry, its largest fund that was a main recipient of money that had been invested with Mr. Madoff. It also runs Fairfield Sentry in Ireland, one of Europe’s largest offshore havens, and a joint venture in Singapore, a leading Asian haven, called Lion Fairfield Capital Management.

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It’s not news to this blog’s readers but …

New York/Boston real estate prices have more to drop, according to the WSJ.

But that doesn’t mean these cities are skirting the worst of the housing bust. Rather, markets where price declines have been slightest may be in worse shape, because prices still have further to fall before enough buyers step in to bring housing activity to normal. Meanwhile, heavy foreclosure activity in hard-hit areas like Phoenix, Las Vegas and San Diego are bringing prices into equilibrium. Those cities may be closer to a turnaround.

In October, single-family-home prices in the New York metropolitan area were down 12% from the all-time high they reached in 2006, according to the S&P/Case-Shiller home-price indexes. That is roughly half the decline registered by the 20-city index and well short of Phoenix’s 41% drop. A separate index of New York-area condo prices was down just 4% from its peak.

Part of the reason New York housing prices have held up is that lot of New Yorkers are holding on to their homes rather than selling for less than the Joneses got last year. Esty Lobovits, a 31-year-old lawyer in Manhattan, has been looking to buy an apartment since the summer but says she isn’t willing to pay what she considers to be inflated prices. Many apartments she has viewed are empty or filled only with staged furniture, and brokers are more aggressive, sometimes following up with her broker even if Ms. Lobovits hasn’t placed a bid.

Although sellers have been open to negotiation, Ms. Lobovits says prices haven’t budged as much as she would expect. About two months ago she looked at a one-bedroom, first-floor apartment for about $700,000, roughly $100,000 more than comparable apartments. “I haven’t seen any steep lowering of prices,” she says. “It’s a little surprising to me that [sellers] wouldn’t want to be more aggressive.”

In the language of Wall Street, with asking prices not dropping to levels where bidders like Ms. Lobovits will pick them, the market isn’t “clearing.” The Federal Reserve Bank of New York noted in its “beige book” survey of regional conditions this month that many would-be buyers have opted to rent out their apartments rather than sell, driving rental prices lower — particularly in higher-end buildings.

While New York is probably an extreme example, its inertia is being repeated in many of the other housing markets that have yet to see sharp declines. Some owners with hefty mortgages can’t face selling their house for less than they owe, but also, many don’t want to sell at a steep discount to what a house down the street might have fetched two years ago.

But in California, housing sales have picked up considerably, as buyers take advantage of foreclosed homes. In October, sales of existing, detached homes was more than double the year-earlier level, according to the California Association of Realtors. In the Los Angeles area, single-family-home prices are 34% below their peak, according to S&P/Case-Shiller, while prices in San Francisco and San Diego are down 36%.

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Will 175 Round Hill Road be next?

The sad truth in this world is that lawyers and lawsuits are expensive, especially when you’re involved in $50 billion frauds. News today that Walt Noel’s partner in misfeasance, Jeff Tucker, has been forced to stop all construction on his Saratoga horse farm and plans to ship the nags to the glue factory - unless Walt introduces him to that horseflesh into cash machine, George Lindemann Jr., once of Greenwich, now of Miami.

The fun’s just beginning for Fairfield Greenwich Group and its principals – stay tuned for bargain opportunities in Mustique, South Hampton and Greenwich.

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