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In his first public comments about his crimes since he was arrested Dec. 11, Madoff, in a dark gray suit and speaking in a soft, husky voice, admitted to 11 charges. When the judge asked if Madoff understood he was under oath, Madoff broke into a brief coughing fit, then replied, “Yes.”
“Try and keep your voice up so I can hear you,” Chin said. The judge read the charges, including fraud, perjury, and money laundering. “Guilty,” Madoff responded.
Later, Madoff read from a six-page statement in which he revealed the scope of his deception - a scheme that cost duped investors billions of dollars. Madoff said he knew what he was doing was wrong, and criminal.
“When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients,” he said. But that ended up being impossible, he said, “and as the years went by, I realized that my arrest and this day would inevitably come.” [boston]
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“Try and keep your voice up so I can hear you,” Chin said. The judge read the charges, including fraud, perjury, and money laundering. “Guilty,” Madoff responded.
Later, Madoff read from a six-page statement in which he revealed the scope of his deception - a scheme that cost duped investors billions of dollars. Madoff said he knew what he was doing was wrong, and criminal.
“When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients,” he said. But that ended up being impossible, he said, “and as the years went by, I realized that my arrest and this day would inevitably come.” [boston]
Related articles by Zemanta
- Madoff could face 150 years in jail (guardian.co.uk)
- Feds Suspect Wide Circle of Co-Conspirators in Madoff Case (crooksandliars.com)
- Madoff set to plead guilty to fraud (guardian.co.uk)
- Madoff to plead guilty to 11 counts (dailyfinance.com)
- Madoff Investors Prepare for Court Confrontation (abcnews.go.com)
- Madoff May Face Victims at Upcoming Hearing (gothamist.com)
- Madoff trustee holds NY meeting for investors (ctv.ca)
- AP Source: Madoff Guilty Plea Expected Next Week (abcnews.go.com)
- $10K statue stolen from Madoff’s Florida estate (cnn.com)
- Feds: Jail Madoff without bail (cnn.com)
Image via Wikipedia
President-elect Barack Obama on Monday called the financial crisis one of “historic proportions” and said that he and the Bush administration are “united” in their efforts to get the economy back on track.
As Obama unveiled his economic team, he said there isn’t “a minute to waste” when it comes to rebuilding the economy.
“My commitment is to do what is required. President Bush has indicated that he has the same approach, the same attitude,” Obama said at a news conference in Chicago, Illinois.
Obama’s remarks came just hours after the federal government announced a massive rescue package for Citigroup — which President Bush said he’d spoken about with Obama before it was announced.
Obama said Monday that he has asked his newly formed economic team to develop recommendations for his economic plan, which he outlined Saturday, and to consult with Congress, the current administration and the Federal Reserve on immediate economic developments over the next two months.
In selecting his economic team, Obama said he sought leaders who share his fundamental belief that “we cannot have a thriving Wall Street without a thriving Main Street.”
Watch Obama call the economic crisis one of ‘historic proportions »
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“The match that lit this fire,” McCain said, came from the government-sponsored mortgage companies Fannie Mae and Freddie Mac, which backed risky home loans “with the encouragement of Sen. Obama and his cronies … in Washington.”
Obama shot back: “The biggest problem was the deregulation of the financial system. … Sen. McCain, as recently as March, bragged about the fact that he is a deregulator.”
It was a classic example of Washington finger-pointing. McCain and the GOP blame Fannie and Freddie — which were taken over by the government last month — because the troubled mortgage agencies’ biggest backers were Democrats who said they wanted to increase access to homeownership.
Meanwhile, Obama and other Democrats highlight Republicans‘ longtime focus on limiting regulations for the financial industry.
No single government decision sparked the crisis, but collectively the candidates had a point: Both parties in Congress played important roles in setting the stage for the ongoing financial meltdown.
They did so in moves that reflected not just their ideological priorities, but also the wishes of special interests that have spent millions aggressively lobbying Washington and contributing to lawmakers’ campaigns.
By not reining in increasingly risky investments made by Fannie and Freddie — and by keeping complex financial instruments known as derivatives free from most government oversight — Congress chose not to impose barriers that economists widely agree could have helped stave off the crisis that continues, even after lawmakers approved a $700 billion emergency bailout package for Wall Street.
Here is a look at how Congress’ actions on two key fronts became significant factors in the financial crisis:
Read the rest at USATODAY
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Goldman Sachs Group Inc. won the backing of Warren Buffett, the world’s preeminent stock-picker, as the Wall Street firm seeks to raise cash from investors whose faith in the investment-banking business model has been shaken.
For Goldman, Buffett’s endorsement came at a price. Berkshire Hathaway Inc., led by the 78-year-old billionaire, is buying $5 billion of perpetual preferred stock with a 10 percent dividend. Berkshire also gets warrants to buy $5 billion of common stock at $115 a share at any time in the next five years. The common stock closed yesterday at $125.05, providing Buffett with an instant paper profit of $437 million.
“It’s a hell of a deal for Buffett,” said Brad Hintz
Read more at Bloomberg.com
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Image via Wikipedia Lehman says it will go into Chapter 11. CEO Richard Fuld will almost certainly end up being loathed more than the heads of Drexel, Long-Term Capital Management, or any of the firms that failed in the S&L crisis. His mark as a symbol of Wall Street’s monumental greed and stupidity will live long after he is gone.
Outside New York and the global financial community, Fuld has less name recognition than the giant panda, Yang Yang, in the Atlanta zoo.
More at issue than Fuld’s legacy is that U.S. taxpayers will bear the burden of the failure of his company and other financial firms, not just in the next year but over time. The Treasury may get money to cover the bill by pushing the deficit higher and borrowing money by selling bonds – most of which will be snapped up by China. The IRS will want its pound of flesh at some point. That money may come from the pocket of the working man, or, in the future, from payroll deductions of his children.
It is a shame that Henry Paulson and Ben Bernanke are the only people with a “vote” when it comes to spending the government’s money on emergency funds for banks. In reality, that money may not be paid back. More bank failures are likely. Some pessimists, including NYU economics professor Nouriel Roubini and Wilbur Ross, see that number going as high as 1,000. The FDIC does not have the capital to handle that level of depositor obligations.
More at MSN.
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Image by Getty Imagesvia Daylife
Wreckage from a massive crisis on Wall Street could prompt the Federal Reserve to do an about face and once again cut a key interest rate this week or possibly later this year, economists said Monday.
Just a few days ago, a rate cut appeared largely off the table. Now it has emerged as a possibility as the Fed prepares to meet Tuesday against a backdrop of historic upheaval in the U.S. financial system.
Lehman Brothers Holdings Inc., the country’s fourth-largest investment firm, filed for bankruptcy protection on Monday. And, Bank of America is buying Merrill Lynch in a $50 billion deal.
“It puts a Fed rate cut back on the table,” said Stuart Hoffman, chief economist at PNC Financial Services Group.
Seeking to calm frazzled markets, President Bush assured the country his administration is “working to reduce disruptions and minimize the impact of these developments on the broader economy.”
More at MSN
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Image via Wikipedia The fate of the world financial system hangs from a thread today after the New York office of the Federal Reserve stood up to the big Wall Street financial houses on Sunday and essentially told them, “thanks but no thanks” on their request for a bridge loan to nowhere.
It’s about time. For years, the country’s major broker-dealers and banks have competed with each other to become the No. 1 underwriter of loans, bonds, mergers, mortgages, swaps and equities. The industry’s compensation system is focused on rewarding managers who took big risks, and could bring home top rankings in dealmaker lists.
All the while, banks figured that if they really got into trouble, the federal government would back them up with taxpayer funds. And the government reluctantly complied twice this year, backing up the reckless behavior of high-flying bankers at Bear Stearns in March, and Fannie Mae and Freddie Mac last week with loan guarantees costing untold billions.
But when Lehman Brothers chief Richard Fuld came to the Fed with his hand out on Friday, the central bankers had finally had enough – and told the banking industry that it needed to come up with its own solution to its problems. In meetings over the weekend in New York that must have frozen the veins of bankers used to bullying the government into doing their bidding, the government left Lehman Brothers and all its creditors out to dry, figuring it was better to let the financial system burn to the ground than to risk any more of the Federal Reserve’s withering balance sheet.
More at MSN
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