Rolling US Economy Into The Shitbin Thread

booyaaa!

With all the big numbers being thrown around since September, I thought it might be nice to put the $50 billion Madow torched into some perspective.

I live in Oregon. The population here is about 3.5 million. The total two-year budget for all state expenditures for 2007-9 was just slightly less than $50 billion. That includes more than half of all the K-12 school budgets for the state (the balance is paid from local taxes). It includes all state police, prisons, highways, social services, the university system, the parks and a whole raft of smaller stuff.

Madow single-handedly made that much money disappear. Impressive!

Rachel Bernie Madow

Oops. I meant to hit the double-f key, not the double-u.

yah totally amzing scam

i mean wtf srsly WTF

this is the best quote about the whole thing imo so far

Analyst Henry Blodget wrote on his blog Friday that some savvy investors figured Madoff was up to something because his returns were so high.

"Many Wall Streeters suspected the wrong rigged game, though: they thought it was insider trading, not a Ponzi scheme," Blodget wrote. "And here's the best part: That's why they invested with him."

ASOH! (audible schadenfreude over here)

Lolworthy quote. Utterly convincing, too. I will spread it around.

that's awesome Tombot.

Although Madoff's returns weren't really that high. They were just steady. He never overplayed his hand.

has there been any info as to like WTF THIS GUY WAS THINKING

His returns were just suspiciously consistent. xp

Reliable info on what he was thinking would have to be straight from the Madoff's mouth, and I'm sure his lawyer would advise him against that.

My guess: I suspect he didn't start his investment business intending to create a Ponzi scheme, but got there by small, fraudulent stages, by letting himself "touch up" the books during a disappointing quarter, thinking he'd fix it up later, when his genius really started raking in the big returns. Later, when the "I'm a genius" plan didn't work so well, but the Ponzi scheme was purring along smoothly, he just went with what was working for him.

I loled while on the treadmill today when CNN showed old footage of Madoff talking about how govt regulation made cheating on Wall St. virtually impossible and that the general public didn't really understand this simple fact.

Later, when the "I'm a genius" plan didn't work so well, but the Ponzi scheme was purring along smoothly, he just went with what was working for him.

― Aimless

Plus, once that sort of thing is going, and you've got more money on the books than you actually have invested, how do you get off the ride? I suppose you keep hoping for a big quarter to even things out, and maybe it eventually comes, but I'd imagine that the sort of person who'd dig that kind of hole once would happily do it twice. So you have ups and downs, periods of success and periods of near catastrophic failure, and through it all, you reassure yourself that your "financial genius" will finally see you through. And if not, well, at least it was a hell of a ride. Shit it seems to have worked just fine for decades...

yah thats pretty much what i figured - still v much looking forward to a thorough post mortem

http://images.huffingtonpost.com/gadgets/slideshows/735/slide_735_13964_large.jpg

this guys some sort of psycho

so is anybody on here getting ritholtz's book?

if it's going to be a logistical beatdown about how united states is becoming "socialist" then no; if it's going to be three-paragraph chapters with links to actual reporting, then yes

sorry, i love ritholtz but damn

The Real Great Depression

I like to think of it this way:

If we imagine subprime mortgage-backed securities as foetid botulism-tainted cans of meat all marked Grade AAA by unscrupulous meat inspectors (ratings agencies), and imagine the banks, insurance companies, hedge funds, and pension funds are the hungry customers who stocked up on these products for their winter food supply, then proceeding from this simple premise it becomes easy to imagine that all these hungry customers are now, dead, dying, or deathly ill from eating the tainted meat, and many of their rotting, bloated corpses are lying at the bottom of the well from which the world's economy draws its drinking water.

See! Economics is easy when you apply a little creativity!

This is why I drink gin.

that's a fantastic article michael.

ahahaha, I'm glad Mort Zuckerman got screwed. He's probably in a bar with McLaughlin, Tony Blankly, and that black dude with the Spike Lee glasses bitching and moaning about how he has to shut down his stupid magazine.

M. White, don't bogart that gin.

http://www.huffingtonpost.com/dave-belden/mad-about-madoff-the-less_b_152153.html

yeah, it's not capitalism as per adam smith that's bad. it's the modern model of publicly traded corporations that seems to be utterly and completely fucked up.

http://cache.boston.com/universal/site_graphics/blogs/bigpicture/2008_pt3/06_17210625.jpg

Staff stand in a meeting room at the Lehman Brothers offices in the financial district of Canary Wharf in London September 11, 2008. Lehman Brothers eventually filed for bankruptcy - the largest bankruptcy in U.S. history - and was delisted from the NYSE, and later liquidated. #

i posted that article about 1873 in October! and Mackro Mackro, i think it was, told me that such comparisons are irrelevant. sorry this is a worthless post :)

Hey I posted it in October! Joshea was unconvinced about the comparison.

http://www.ritholtz.com/blog/2008/12/chicago-repudiation/

this is the best news I've heard in years

http://online.wsj.com/article/SB123025036865134309.html

retail is the new newspaper industry?

Of all the "Chicago Schools of" things, that one seems pretty thrown together.

this is from a british perspective but elliott's analysis doesn't seem wildly inappropriate for america, either:

http://www.guardian.co.uk/business/2008/dec/22/keynes-left-economics-economy

The bottom has been falling out of retail every holiday for years now. duh + shrug.

tracer the problem with that analysis for the US is that we already had an election and the winner has been showcasing his keynes steez nearly every weekend since?

Why are people surprised by ANY of this shit, by the way? The writing has been on the wall for brick & mortar shops for years. Of course all retail is going to slump when the entire country's economy faceplants. The writing's been on the wall for newsprint for even longer than retail, and by all accounts the management of most publications has never been what you might call adaptable or even competent. Businesses that we have known were on thin ice for almost a decade are in trouble for SURE!! Oh SNAP!!

there's no concrete evidence i've seen that obama seez any keynez steez as necessary beyond a two-year recovery program, which krugman warns won't be enough. the other stuff elliott says about the total lack of a center-left apparatus that actually draws longterm lessons from this and then puts policy in place to capitalize on those lessons seems pretty on point; the feeling i get so far from democrats is "yall screwed up, now it's going to take democrats to return us to the status quo" when the status quo is what got us into trouble in the first place.

^

there are so many unfounded assumptions in that graph its hard to know where to start

There's no upside for Obama to announce in advance that the gigantic stimulus package he wants Congress to pass asap will not revive the economy. He may or may not know it is true, but even if he knew it were true, he wouldn't want to say it.

That's pretty optimistic.

wait why is retail a dying industry like newspapers? im not sure i get it

macys was paaacked today btw -- im assuming its cuz of the sale prices -- got a wool argyle sweater for $25

Tried to buy a suit at Brooklyn Macy's today but their selection kind of sucked imho. Fuck an Alfani.

i just got a CK suit there during the huge tgiving black friday sales -- good deal and they adjusted it for me pretty inexpensively

retail's more just comically overbuilt in anticipation of a never-ending housing bubble

Optimism is my trademark move.

retail's more just comically overbuilt in anticipation of a never-ending housing bubble

yah there was a piece in the times this week about a town in the bay area that had transformed most of their old industrial sites into retail space and how drastically they've overbuilt - now that ppl have no credit to spend the town seemed basically fucked. the most damning thing was that despite the writing being on the wall new developments and stores were opening right through the summer. also there was no real acknowledgment of how unsustainable that kind of development was most of the civic leaders and businessppl interviewed had the attitude of "oh the next year will be bad but things will bounce back"

the stuff in the WSJ article was interesting to me, at least a little, in that the degree of difference between on-line and b+m retail was so marked - i'm not trending this shit for a living but from what i recall the decline is much less severe on-line than expected that has to be worrying news for retail ppl. i'm curious about how that will play out too, what the means for communities like the one i mentioned above and for any recovery in unemployment #s.

I think I read that Amazon's holiday sales were up considerably from last year. Which makes the comparison between brick and mortar retail and newspapers more apt -- both are being hit by a combination of recessionary pressures and increasing competition from online outlets.