Daily Archives: January 5, 2009

Walter must have spoken to the Madoff boys

Latest defense for Andy and Mark: they’re both too friggin’ stupid to know anything about Dad’s Ponzi scheme. I believe that’s going to be Noel’s story too. Here’s the scoop from Dealbreaker.com

In our ongoing saga to determine whether or not the Madoff sons, Mark and Andy, really had no idea their family business was a scam, we’ve said several times that one the one hand, how could they not, and on the other: FISH. We’ve received 387 pictures of the boysand they are posing with fish on every single one, sometimes with rods in their mouths, always with dumb looks on their faces. Fishing, quite literally, appears to be all they do, and we’re nearly convinced they might’ve had no knowledge of the Ponz. Today, a tipster intimately familiar with the Madoff brothers’ fishier pursuits (he would be the one you have to thank for the many family photos) writes with info that seems to strengthen the argument that the boys (or at least Andy) are innocent:

Surprised more people have not pointed out thatthe woman that was with Andy Madoff shopping in SoHo was his girlfriend Katherine Hooper not his wife Deb… they separated early last year…new girlfriend works for him at Abel Reels and this is not a joke…two weeks before the scandal broke he was bragging how she got a tattoo of his name on her ass.

While it is true that For What it’s Worth did post a picture of a bare-assed fisherman who might have been Mark Madoff but wasn’t, readers with delicate senses will no doubt note with gratitude that we have not posted a picture of Hoop’s derriere, with or without an “I Heart Andy” tattoo. Of course, if anyone can supply such a picture, we may reconsider our editorial standards.

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Full employment bill

K Street lobbyists raking it in as everybody wants a piece of the pie. Environmental groups alone want $405 billion but that leaves $595 billion for the rest of us to split. I don’t see why real estate agents shouldn’t receive commission payments based on what houses would be selling for, if they were selling.

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Is there anything the Chinese won’t adulterate and ruin?

A reader sends this link: Chinese drywall ruining houses in Florida.

Reid said his research indicates at least some drywall imported from China during the homebuilding boom years of 2004 and 2005 was made with waste materials from scrubbers on coal-fired power plants.

Those materials can leak into the air as gases combine with the moisture on an air conditioning coil to create sulfuric acid, which appears to be dissolving solder joints and copper tubing – creating leaks, blackening the coils and even causing the system to fail, Reid said.

They keep this up the Chicoms are going to solve our balance of trade deficit – already I find myself checking almost everything I buy for its country of origin and rejecting anything Chinese. I just don’t trust ’em anymore, for anything.

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Well you liked me when I had money

286331man-wearing-barrel-postersMustique neighbors shun Walt and Monica. To be fair, this dislike is not solely related to the Noels losing all their money – the neighbors seem to have invested their own money with FGG and don’t like the results.

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So what happens next?

Anyone’s guess – mine is that we’re in a holding mode until the One is elevated to President. Sellers are hoping that everything the Democrats say is true and that, notwithstanding the massive government spending that has already taken place yet inexplicably failed to make us all rich this time, this time it will be different. if they’re right – and I hope they are – then prosperity will return at the end of January, house prices will soar, Wall Street will rehire those 170,000 workers and the boom wil resume right where it left off. 

I have my doubts, but one thing that may help is that the media is so invested in Obama’s success that it just won’t let bad news creep in. The media talked down the economy during the entire Bush administration and, while its still doing that, I believe they do so only to be certain that the trillion dollar spending spree gets whopped in. Once it is, Hosannahs are in order.

Example: Just today, NBC announced that it was banning Ann Coulter from its airwaves, forever, and canceling her scheduled appearance to promote her latest book, “Guilty”.

But one network insider claims it was the book’s theme — a brutal examination of liberal bias in the new era — that got executives to dis-invite the controversialist. 

“We are just not interested in anyone so highly critical of President-elect Obama, right now,” a TODAY insider reveals. “It’s such a downer. It’s just not the time, and it’s not what our audience wants, either.” 

We’re in for years of this sycophancy – perhaps it will help.

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Confessions of a real estate bull (shitter)

CNN interviews the NAR’s former chief economist who admits that, now that he’s no longer employed as a flack, things don’t look so rosy for residential real estate. Gosh.

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I begged for a fresh picture of Bernie

And Fox and Clusterstock delivered. Not much, but at least he isn’t wearing a baseball cap as he leaves for court. I’m surprised that the man never read “Dress for Success” and learned that black raincoats are very much NOCD. Could that be what led to his downfall?

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Real estate transfer taxes end; women, minorities etc.

Conveyance taxes are way down across New England. Maine, 44% less, Vermont 50%. Maine used its taxes to provide moderate income housing, which it certainly needs, so the loss of tens of millions of dollars will hurt. I was just in Portland which has an incredible stock of old (1880-1920) brick buildings, many of which are in great repair but others that have been foreclosed on and need help. The latter are going for a song – I wish I had the money to do something with one of them.

I suspect that states and even towns like Greenwich are about to discover how much they relied on real estate to round out their tax rolls. They’ll miss them, almost as much as New York will miss those taxable Wall Street salaries.

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Jewelry? What Jewelry?

So Bernie Madoff sent $1 million of jewels and other gifts (including a pair of  Hanuka mittens, value undeclared) to his brother and his sons Andy and Mark and now the government wants to jail him for violating the terms of his bail. Bernie’s in a hot spot because he can’t get the items back “despite every effort to retrieve them”. Gee, either the boys are really ticked at their old man or they did hie out for Patagonia. Either way, Bernie may be in trouble.

UPDATE: They’re really ticked. Bernie’s kids rat him out to feds for jewelry transfers.

ANOTHER UPDATE: Here’s a more cynical view of what transpired.

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Keeping up appearances

or 101 delicious meals made from cat food. A reader sent me this link to a current New Yorker article detailing the sad plight of Palm Beach Madoff clients hocking their jewels. I’ve already urged my New Yorker pal Nick Paumgarten to come revisit our fair city and follow up on the Antares boys and, of course, take a look at how the Noels are coping. Perhaps the spur of competition from a fellow writer will lure him out. What fun.

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Keep reaching for the stars

Haven for Tne New York Times Neediest

Haven for Tne New York Times Neediest

But keep your feet on the ground. This former estate of the Sulzbergers on Rock Rimmon Road had about a dozen buildings, a whole ton of acres and a somewhat silly price tag of $95 million when it came on two years ago – guess they didn’t consult with Casey Kasem. A reader points out that, had it been priced at a reasonable price – $35 million? – it might have sold back then and the owners would have had cash to invest with Bernie Madoff. Instead, it sat and in today’s market its predicted sales price is so discouraging that the current owners have pulled it off the market. Hey – even American Top 40 got cancelled eventually. It happens.

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This is rich and so was he

Another socialite who watched how Walter Noel operated and figured, “shucks, any moron can do that” and so started selling his own Madoff line of “investments”. Guest of a Guest .com thinks we’re going to see a whole slew of these types – who am I to gainsay him?

Update: Guest of a Guest is having fun digging into this “Arkie” Busson character – shared the island of Mustique with Noel, had an ex-fiance who was the sister of Walt’s son-in-law, tossed his investors in with Madoff, etc. The blogger asks why everyone’s dumping on Walter when Busson is as culpable – I’ll confess that I don’t read the sort of media that might mention the man so I hadn’t heard of him. Now that I have ….

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When they wrecked my motorcycle I remained silent …

crunch

crunch

because at least it wasn’t my hedge fund investment. Now Harley discloses it’s a Madoff victim. Oh, will this cruelty never end?

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Acid test

No, Doctor Leary, not that kind, but new construction pricing. A new house on Willow Road in Riverside came on the market today for $3.695. Looks like it’s about 3,156 sf above ground (including garage, if FAR guidelines were met), and 1,400 sf in the basement, which is finished. Four bedrooms up, one in that basement. Not much of a yard, I would imagine, since it’s on 0.23 of an acre, but a good street. Open house scheduled for this Thursday so I haven’t seen it yet. Will it sell? At what price?  The builder is asking $1,172 sf if you calculate by above-ground space, or  $804 sf if you use the basement as part of the number -I’m not sure I would. This will be interesting to watch.

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Funny, they never want their own industries regulated

Shippers ask Congress to regulate railroads. When even businessmen reject capitalism, it’s a wonder we’ve lasted as long as we have.

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SEC on Madoff investigation

Thanks to a reader, here’s testimony from today’s hearing (embargoed until 2:00 so if you’re on Central time, avert your eyes):

The Madoff Investigation
It is with this background in mind that I wish to discuss our planned
efforts to investigate matters related to Bernard Madoff and affiliated
entities.  On the late evening of December 16, 2008, SEC Chairman
Christopher Cox contacted me and asked my office to undertake an
investigation into allegations made to the SEC regarding Mr. Madoff, going
back to at least 1999, and the reasons that these allegations were found to
be not credible.  The Chairman also asked that we investigate the SEC¹s
internal policies that govern when allegations of fraudulent activity should
be brought to the Commission, whether those policies were followed, and
whether improvements to those policies are necessary.  In addition, he
requested that the investigation include all staff contact and relationships
with the Madoff family and firm, and any impact such relationships had on
staff decisions regarding the firm.

Early on December 17, 2008, we opened an official investigation into the
Madoff matter.  Since then, we have been working at a rapid pace to begin
this important work.  On December 18, 2008, we issued a document
preservation notice to the entire Commission informing them that the Office
of Inspector General has initiated an investigation regarding all Commission
examinations, investigations or inquiries involving Bernard L. Madoff
Investment Securities, LLC, and any related individuals or entities.  We
formally requested that each employee and contractor in the Commission
preserve all electronically-stored information and paper records related to
Bernard L. Madoff Investment Securities, LLC  in their original format.
Over the next few days, we met with senior officials from the Commission¹s
Division of Enforcement and the Office of Compliance Inspections and
Examinations, known as ³OCIE,² to ensure their cooperation in our
investigation and our ability to gain access to their files and records.  We
also met with the Chairman¹s office to seek information and documentation
relevant to the investigation.

On December 24, 2008, we sent comprehensive document requests to both the
Division of Enforcement and OCIE specifying the documents and records we
required to be produced for the investigation.  We requested that all
responsive documents be provided to our Office by January 16, 2009.  In
addition, we made several formal expedited requests to the SEC¹s Office of
Information Technology for searches of the e-mails of former and current
employees and contractors for information relevant to the investigation,
both at headquarters and the New York and Boston Regional Offices, and have
already received and are in the process of reviewing these e-mails.
We have also already begun efforts to obtain additional resources to assist
the Office in undertaking this investigation.  We are securing additional
office space and administrative assistance and hope to add four new
investigators to our Office¹s current investigative team.

We have also begun identifying the particular issues that need to be
investigated and are reviewing and updating daily the list of witnesses that
we plan to interview.  We intend to begin conducting these interviews
immediately and, for example, have already scheduled a meeting with Harry
Markopoulos for later this month for an in-depth interview on the record.
We have also already met and spoken with numerous individuals informally as
part of our initial investigative efforts.

It is our opinion that the matters that must be analyzed regarding the SEC
and Bernard Madoff may go beyond the specific issues that SEC Chairman Cox
has asked us to investigate.  We believe that in addition to conducting a
thorough and comprehensive investigation of the specific complaints that
were allegedly brought to the SEC¹s attention regarding Mr. Madoff and the
reasons for the SEC¹s apparent failure to act upon these complaints, as well
as the staff¹s contact and relationships with the Madoff family and firm and
their impact on Commission decisions regarding Mr. Madoff, our oversight
efforts must include an evaluation of broader issues regarding the overall
operations of the Division of Enforcement and OCIE that would bear on the
specific questions we are examining, and provide overarching and
comprehensive recommendations to ensure that the Commission fulfills its
mission of protecting investors, facilitating capital formation and
maintaining fair, orderly and efficient markets.

At this early stage, I thought it would be useful to identify the specific
issues related to Bernard Madoff that, as a preliminary matter, we intend to
investigate or review.  Obviously, as the investigative efforts are just
beginning, I am not in a position to provide any conclusions or findings
with regard to the allegations that have been raised and do not wish to make
any preliminary judgments before we have had a chance to analyze all the
information.  In addition, as underlying evidence relevant to the work of
the Office of Inspector General could also be relevant to the pending
criminal or SEC investigations into possible violations of the securities
laws, I am being mindful not to comment on anything that may affect or
interfere with those investigations.

The following are specific issues that we currently intend to investigate:
(a)        The SEC¹s response to complaints it received regarding the
activities of Bernard Madoff, including any complaints sent to the Division
of Enforcement, OCIE, the Office of Risk Assessment and/or the Office of
Investor Education and Advocacy.  We plan to trace the path of these
complaints through the Commission from inception, reviewing what, if any,
investigative or other work was conducted with respect to these allegations,
and analyze whether the complaints were handled in accordance with
Commission policies and procedures and whether further work should have been
conducted;

(b)        Allegations of conflicts of interest regarding relationships
between any SEC  officials or staff and members of the Madoff family,
including examining the role a former SEC official who allegedly had a
personal relationship with a Madoff family member may have played in the
examination or other work conducted by the SEC with respect to Bernard
Madoff or related entities, and whether such role or such relationship in
any way affected the manner in which the SEC conducted its regulatory
oversight of Bernard Madoff and any related entities;

(c)        The conduct of examinations and/or inspections of Bernard Madoff
Investment Securities LLC by the SEC and an analysis of whether there were
³red flags² that were overlooked by SEC examiners and inspectors (which may
have been identified by other entities conducting due diligence), that could
have led to a more comprehensive examination and inspection, including a
review of whether the SEC violated its own policies and procedures by not
conducting timely reviews or examinations of Bernard Madoff¹s activities and
filings; and

(d)        The extent to which the reputation and status of Bernard Madoff
and the fact that he served on SEC Advisory Committees, participated on
securities industry boards and panels, and had social and professional
relationships with SEC officials, may have affected Commission decisions
regarding investigations, examinations and inspections of his firm.
In addition to these specific issues and depending upon the information that
we learn during the course of our investigation, we plan to consider
analyzing the following broader issues, as appropriate:

(a)        The complaint handling procedures of the Division of Enforcement,
including a review of how complaints are processed, internal incentives that
may affect the decision whether to take action with respect to a complaint,
an analysis of which complaints are brought to the Commissioners¹ and
Chairman¹s attention, and whether tangible and specific complaints are being
reviewed and followed-up on appropriately;

(b)        The OCIE examination and inspection procedures, including an
analysis of what policies and procedures were then and are currently in
place, whether these policies and procedures are being followed and/or
whether there are gaps in these policies and procedures relating to
operations involving voluntary private investment pools, such as hedge
funds, because they are subject to limited oversight by the SEC, and whether
any such gaps may lead to fraudulent activities not being detected; and

(c)        The relationships between different divisions and offices within
the Commission and whether there is sufficient intra-agency collaboration
and communication between the Agency components to ensure comprehensive
oversight of regulated entities.

Obviously, this is an ambitious investigative agenda, but I firmly believe
that the circumstances surrounding the Bernard Madoff matter may very well
dictate a more expansive analysis of Commission operations.  Moreover, it is
my view that at the end of these investigative efforts, there needs to be
more than just the potential identification of individuals who may have
engaged in inappropriate behavior or potentially failed to follow-up
appropriately on complaints, but rather an attempt to provide the Commission
with concrete and specific recommendations as appropriate to ensure that the
SEC has sufficient systems and resources to enable it to respond
appropriately and effectively to complaints and detect fraud through its
examinations and inspections.

           Of course, even with a limited staff and with many of our
auditors and investigators already engaged in ongoing matters, some of which
should simply not be halted even in the face of a significant priority such
as this one, I understand that it is critical that our investigative efforts
be conducted expeditiously.  I fully understand that it is crucial for the
Commission, the Congress and the investing public that answers be given to
the very serious questions regarding the SEC¹s earlier efforts relating to
Mr. Madoff in a prompt and swift manner.  For this reason, as I mentioned, I
am mobilizing additional resources to ensure that our Office makes every
possible effort to conclude our investigations and reviews as soon as
possible.  We are considering preparing reports on a ³rolling basis² ­
assuming that we can identify discrete issues that may be resolved
separately and expeditiously ­ so that some conclusions may be provided very
shortly.

Finally, I can assure you that our investigation and review will be
independent and as hard-hitting as necessary.

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It’s summer in Patagonia

Mark, Andy and catherine Hooper

Mark, Andy and catherine Hooper

So why not go fly fishing? Madoff’s crowd in New York, including his two fishing fool sons, Mark and Andy, are still being paid and there’s nothing to do in Manhattan, so a quick (permanent?) trip south of the border might be in order. Bernie’s employees in London weren’t so fortunate – they were cut off with no pay the day their boss was arrested. But then, the Madoff boys don’t work in London, do they?

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Great moments in real estate pricing

29 Byfield Lane

29 Byfielicingd Lane

Do you remember this new construction on Byfield Lane? It came on in April at the interesting price of $9,495,000 and dropped rather precipitously to $5, 198,000. Even that 45% price cut didn’t work so the builder’s trying a different tactic: he deleted the listing today and brought it back on at $5,998,000. If that doesn’t do the trick, nothing will.

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The sky is falling! The sky is falling! Oh, wait – never mind!

Oooh, I HATE when this happens!

Oooh, I HATE when this happens!

Sea ice back to 1979 levels.

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Who is the unfortunately named Nettie Noel?

Unfortunate because her last name and her attendance at a debutante ball have given rise to speculation in “DealBreaker” that the Noels may be selling off their assets,to wit, children. Nettie is certainly not one of the five fabulous Noel girls – they’re much too old for such goings on and were married off to dad’s partners in crime long ago, but perhaps a niece? Inquiring minds want to know.

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