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  • June 19, 2008 11:50 AM EDT by Elizabeth MacDonald

    Details of the Bear Stearns Hedge Fund Indictments

    Former hedge fund managers Matthew Tannin and Ralph Cioffi have been arrested by the Federal Bureau of Investigation, charged with securities fraud and conspiracy in connection with their management of two Bear Stearns hedge funds which collapsed last summer, a bellwether event in the subprime and credit crisis.

    The two are the highest level executives charged in the subprime mess to date.

    As we told you in an exclusive, the FBI and the Department of Justice are zeroing in on the role of hedge funds, now at the top of their hit list, with potentially more indictments against hedge fund managers in coming days (”Hedge Funds in the Crosshairs”).

    Separately, the FBI and Department of Justice have announced this afternoon the arrests of nearly 300 low to mid-level mortgage fraudsters, in an action dubbed “Operation Malicious Mortgage,” reports Fox DC correspondent Ian McCaleb.

    Close to 42 FBI field offices have been engaged in these operations since March 1st and are part of the crackdown on mortgage frauds that have contributed to the country’s housing mess, McCaleb reports, who adds that 406 have been charged.

    It’s a story we told you about first at Fox Business (”Why an Underfunded FBI Could Hurt You”).

    Arrests took place in Chicago, Dallas, Houston, Miami, New York City, Atlanta, Portland, Detroit, Phoenix, Seattle and Honolulu.

    Back to the Bear Stearns indictments. Hedge funds can pay their managers up to 20% annually out of the gains in their funds, giving them an incentive to inflate underlying assets or mislead investors about the health of their funds, law enforcement officials say.

    The former hedge fund managers’ lawyers have denied their clients committed any wrongdoing.

    I will let the charges speak for themselves, straight from the indictment:

    Cioffi, Tannin and others told investors that the High Grade fund invested in low-risk, “high grade” debt securities, primarily AAA and AA rated tranches of CDOs, enhancing its ability to generate returns through leverage.

    The defendants and others led investors to believe that the High Grade fund was only slightly riskier than a money market fund.

    By 2006, however, the fund’s performance had begun to decline…as a consequence of threatened investor withdrawals of money from the High Grade fund, Cioffi, Tannin and others opened the Enhanced fund in August 2006.

    The Enhanced fund invested primarily in CDOs [collateralized debt obligations], using substantially more leverage than the High Grade funad.

    Cioffi, Tannin and others told investors that the Enhanced fund would generate greater profits than the High Grade fund, but that the Enhanced fund would carry only limited additional risk.

    Cioffi and Tannin told…investors that they had invested their own money in the funds…critically important to investors because it expressed the managers’ faith in the fund.

    As of July 31, 2006, investors had invested a total of approximately $1.527 billion in the High Grade fund. When the Enhanced fund opened, many High Grade fund investors switched their investment to the Enhanced Fund.

    They did this, in significant part, because Cioffi and Tannin told, and caused others to tell, investors that they were moving their own personal funds from the High Grade fund to the Enhanced fund.

    Starting at least by March 2007, Cioffi, Tannin and others believed that the funds were in grave condition and at risk of collapse.

    Rather than disclosing the true state of the funds to investors and lenders, thus allowing an orderly wind-down of the funds, Cioffi and Tannin agreed to make misrepresentations in the ultimately futile hope that the funds’ bleak prospects would change and that their incomes and reputations would remain intact.

    In February 2007, the Enhanced fund reported a return of approximately -.08%, which was the first time that either of the funds had a negative monthly return. The High Grade fund reported a return of approximately 1.5%.

    On March 2, 2007, Cioffi hosted an informal meeting attended by Tannin and two other members of the funds’ portfolio management team.

    Cioffi talked about the extremely difficult month the funds had experienced in February, and stated that the funds had averted disaster and led a vodka toast to celebrate surviving the month.

    Cioffi directed those present not to talk about the funds’ difficulties with others, including other members of the fund’s team.

    Throughout March 2007, Cioffi consistently acknowledged to Tannin and others he was deeply concerned about the state of the funds, particularly because of the exposure to the subprime mortgage market.

    On March 1, Cioffi allegedly told a team economist at Bear Stearns: "Don't talk about [the February results] to anyone or I'll shoot you...I can't believe anything has been this bad."

    On March 3, Cioffi told Tannin that at least “[w]e have our health and families [we] are not a 19-year-old Marine in Iraq…” Later that day, Cioffi told Tannin “the worry for me is that subprime losses will be far worse than anything people have modeled."

    As early as March 11, 2007, Cioffi had already concluded that “[w]e will be hard pressed to be up in [the High Grade fund] or [the Enhanced fund] in March.”

    Four days later, Cioffi wrote an email to a colleague stating that “I’m fearful of the..markets. Matt [Tannin] said it’s either a meltdown or the greatest buying opportunity ever, I’m leaning towards the former. As we discussed it may not be a meltdown for the general economy but in our world it will be.”

    Toward the end of March, the performance of the funds had deteriorated to the point where Cioffi expressed to a funds team member that, “I’m sick to my stomach over our performance in [M]arch.”

    In a March 30, 2007 email Tannin wrote to one investor: "You have chosen the absolute silliest time to redeem."

    Cioffi was also concerned about the fund’s liquidity position, especially that of the High Grade fund. Internal [Bear Stearns] reports showed throughout March 2007 that the High Grade fund was in an extremely precarious liquidity position.

    Cioffi was particularly concerned that he needed to sell the funds’ assets at unfavorable prices to meet margin calls from repo lenders. On March 14, Cioffi acknowledged to a team member that, “[wle do need to take positions down in [the High Grade fund]. We are getting loads of margin calls.”

    Cioffi, Tannin and others on the portfolio management team were so concerned about the High Grade fund that they discussed the possibility of merging it with the Enhanced fund.

    Cioffi and Tannin…continued to tout the funds throughout March 2007 in an effort to improve the funds’ liquidity positions by enticing more capital into the funds and by staving off any potential redemptions.

    Cioffi and Tannin told..investors throughout March 2007 that the market presented a buying opportunity.

    On March 7, Cioffi told a Bear Stearns broker who had more than 40 of his clients invested in the funds that Cioffi believed the market was such that, “we have an awesome opportunity.”

    On the same day, Tannin told the same broker, “I think [Cioffi] and I are in agreement that we are looking at some great possibilities for the coming months. I don’t know where you are putting your money now but I would suggest we speak about adding more to the fund. That’s what I’m thinking.”

    Similarly, Tannin told investors that he believed that the market presented tremendous “buying opportunities” and that Tannin himself was so confident in the funds prospects that he was going to add money to his investments.

    For example, on March 15, Tannin told an investor, that “[w]e are seeing opportunities now and are excited about what is possible. I am adding capital to the fund. If you guys are in a position to do the same I think think [sic] this is a good opportunity.”

    In an email message to another member of the portfolio management team at the end of March 2007, Tannin expressed satisfaction at his success in convincing investors to add more capital to the Funds: “If believe it or not - I’ve been able to convince people to add more money. . . . ”

    In contrast with Cioffi and Tannin’s representations to investors that the funds had tremendous opportunities to buy undervalued assets, Cioffi told Tannin and another team member on March 15 that the funds “have to be very light on the investment side and continue to raise cash in [the High Grade fund] and maintain cash in [the Enhanced fund],” primarily to meet margin calls.

    Despite his repeated representations to investors that he was going to add to his own investment in the Funds, Tannin never did so.

    On March 23, 2007, Cioffi started the process of transferring $2 million of his approximately $6 million investment in the Enhanced fund to another Bear Stearns hedge fund, Structured Risk Partners (”SRP”), for which Cioffi had supervisory oversight, effective April 1, 2007.

    SRP, as Cioffi knew, had recently experienced returns far superior to those of the funds. In fact, on March 22, 2007, in relating to [Bear Stearns]‘ president the returns of the funds and SRP, Cioffi stated, “at least [SRP] keeps getting better.”

    Despite receiving repeated questions from investors about his personal investments in the funds, a material factor in investors’ investment decisions, Cioffi never told them that he had transferred $2 million out of the Enhanced fund and into SRP.

    Moreover, Cioffi falsely informed [Bear Stearns] that he made the switch so that one of the SRP managers would have a personal investment in SRP .

    Both funds experienced losses for March 2007. The High Grade fund reported a return of -3.71% and the Enhanced fund returned -5.41%.

    One of the three largest investors in the funds (”Major Investor #I) told Cioffi on April 18 that it was considering a redemption of its approximately $57 million investment.

    Among other things, Cioffi falsely informed Major Investor #1 that he and the other portfolio managers had $8 million invested in the Funds and that this represented one-third of their liquid net worth.

    Cioffi failed to inform Major Investor #I, however, that he had recently withdrawn $2 million of his approximately $6 million investment from the Enhanced fund.

    On April 19, 2007, a member of the funds’ portfolio management team produced a CDO report (the “CDO Report”) that showed that CDOs held by the funds were worth significantly less than had previously been determined.

    In mid April Cioffi told a broker that there was no "buy interest on anything anywhere in this world or universe. I think we need to go into outer space to find new buyers of cdos."

    On April 22, Tannin recommended to Cioffi that they either shut the funds down or significantly change the funds’ investment strategies.

    In an e-mail message, Tannin advised Cioffi and another manager of the funds that, “over the last few months” he had believed that the funds should either be closed or “get very very aggressive.”

    In support of closing the funds, Tannin stated that the “subprime market looks pretty damn ugly . . .. If we believe the [CDOs report is] ANYWHERE CLOSE to accurate I think we should close the funds now. The reason for this is that if [the CDO report] is correct then the entire subprime market is toast. . . . If AAA bonds are systematically downgraded then there is simply no way for us to make money - ever.”

    Tannin concluded that, “caution would lead us to conclude the [CDO Report] is right - and we’re in bad bad shape.” Tannin noted the hurdles that they would meet if they adopted a “very aggressive” investment strategy, including whether investors would remain with the funds.

    Tannin then asked, “Who do we talk to about this? [Bear Stearns' president]? [Bear Stearns' co-president]? Outside counsel? (And here we have to be careful because our outside counsel is Bear Stearns’ counsel NOT our counsel - this is another very big issue we at least need to think about.”

    Tannin circumvented Bear Stearns’ email system by sending this email from his personal account to the personal email accounts of Cioffi’s wife and the other funds manager.

    Tannin cautioned Cioffi the next day against disclosing anything to other fund employees that could signal the extent of the funds’ troubles by stating, “I think we should be conscious of statements like ‘if we sold all the assets at the mark’ while we are on the desk. We have a lot to do - and we’ll do it - but I think it is important to keep everyone else as focused as possible.”

    Tannin and Cioffi never disclosed the gravity of the funds’ problems to investors or more senior [Bear Stearns] personnel. Instead, at a meeting on April 24, 2007, Cioffi, Tannin and others told senior [Bear Stearns] personnel that they were confident that the funds were in good shape and would continue to be successful.

    On April 25, 2007, Cioffi and Tannin hosted a conference call for funds investors during which they made misleading statements and omitted material facts.

    Tannin, in stark contrast to the grim views expressed in his email to Cioffi of just three days before, told investors: “So, from a structural point of view, from an asset point of view, from a surveillance point of view, we’re very comfortable with exactly where we are. . .. the structure of the fund has performed exactly the way it was designed to perform,” and “it is really a matter of whether one believes that careful credit analysis makes a difference, or whether you think that this is just one big disaster. And there’s no basis for thinking this is one big disaster.”

    Cioffi [later falsely claimed] that, “[tlhe next big redemption date would be June 30th, and as of now, I believe we only have a couple million of redemptions for the June 30 date. . . . I believe we have about 45 million in subscription, and 25 [sic] of that is from Bear Stearns and those will be for, I believe those are all for May 1st.”

    Cioffi failed to disclose the approximately $57 million redemption submitted by Major Investor #I, with whom Cioffi had met on April 18, 2007.

    Cioffi also omitted any reference to $67 million in redemptions scheduled for April 30 and May 31, 2007. As for the “June 30″ redemptions, while Cioffi stated that there were only “a couple million,” in fact, there were a total of approximately $47 million, which included a portion of Major Investor #ll’s $57 million redemption.

    Cioffi failed to mention that he had pulled $2 million from the Enhanced fund only 24 days earlier. Tannin failed to mention, despite contrary representations to multiple investors, that he had not added additional money to his investment in the funds. 

    During May 2007, Cioffi asked [Bear Stearns] Pricing Committee, a group of professionals who were charged with overseeing the ultimate calculation of the funds’ NAV, to use higher values for some assets held by the funds in calculating the funds’ April 2007 NAV than the values that were set according to the Pricing Committee’s rules.

    The values advocated by Cioffi would have yielded an April 2007 return of approximately -6.5% for the Enhanced fund. When challenged by the Pricing Committee as to the basis for using the higher values of the funds, Cioffi was unable to produce any evidence supporting his alternative pricing method. Ultimately, the Pricing Committee rejected Cioffi method, resulting in an April 2007 return in the Enhanced fund of approximately -18.97%.

    On May 31, 2007, even after it became apparent that the final return for the Enhanced fund would be significantly worse than the estimated return, Tannin asked Cioffi, “do we give [Major Investor #2], whose identity is known to the grand jury] the -6.5 April or the larger down April?”

    Cioffi and Tannin also continued to misrepresent the funds’ financial status and redemption picture in an effort to stem the tide that ultimately resulted in the collapse of the funds. On May 3, 2007, Tannin informed a Repo lender that the funds anticipated no large redemptions.

    In fact, between March 1 and May 3, thirteen investors, including two of the largest investors in the funds and Cioffi himself, had requested redemptions.

    As late as May 30, 2007, Cioffi told an investor that “so far we have talked any June redemptions of note (other than about $5M) to pull their redemptions.” Many investors, whose cumulative redemption requests far exceeded $5 million, had not withdrawn their June redemption requests.

    On at least one occasion in May 2007, Cioffi falsely stated that he still had $5.5 million invested in the Enhanced fund, omitting that he had taken $2 million of that investment and put it into another hedge fund. 

    On June 7, 2007, investors were told that they could no longer redeem their investments in the Enhanced fund, regardless of whether or not they had already submitted redemption requests. On June 17, 2007, investors were provided the final April 2007 return of -5.09% for the High Grade fund and -18.97% for the Enhanced fund.

    On June 9, 2007, when the funds’ collapse was imminent, Cioffi stated that, “[ilf I can't [turn the Funds around] I’ve effectively washed a 30-year career down the drain.”

    On June 26, 2007, investors were told that they could no longer redeem their investments in the High Grade fund, regardless of whether or not they had already submitted redemption requests.

    Eventually, investors were told that the funds had both lost 100% of their respective values, resulting in a total investor loss of approximately $1.4 billion. 

    The United States Securities and Exchange Commission and others began investigating the funds’ collapse in the summer of 2007.

    As part of its investigation, the SEC requested that Bear Stearns produce documents and materials relating to the funds. While gathering the documents and materials, Bear Stearns learned that Tannin’s tablet computer, which he had used to take notes during 2007, and one of Cioffi’s notebooks, in which he had taken handwritten notes for the period January 1, 2007 to June 17, 2007, were both missing.

     

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DrDetroit

McCaleb's out of the loop but - as this indictment roles foward in process, one has to ask if Bernanke will second-handle the 30 billion bailout in motion for Bear Stearns. Where certain folks inside the beltway are promoting the 300 Billion Housing remedy be put on hold until 'allegations' against those few who received potentially favorable - but legal - sweetheart mortgage deals ? I would suggest Fox News also stands behind not only this group seeking the Housing aid be put on hold, but I suggest the Bear Stearns bailout be reversed entirely until these criminal allegations AND unsealed indictments to date are fully resolved. Makes sense huh ? Fox - it is your duty to follow through with promoting the Housing aid be put on hold until CountryWide and Dodd's can be resolve - following - as Larry Craig likes to say - 'Hand in Glove' - Fox ? You need to promote that Bear Stearns acquisition by JP Morgan be put on hold. Gee, a few people getting 'friendly backyard neighbor' rates vs. unsealed federal indictments - against Bear Stearns hedge fund managers - all the while JP Morgan gets to improve it's loser stock as it stands - by delivering confidence of the BS acquisition. I think the BS acquisition by JP Morgan potentially puts them in the cross hairs if you think about it. Myself ? I'd want nothing to do with CountryWide - yet ? Fox still runs ads for CountryWide - and at the same time questions their business ethics - Myself I'd want nothing to DO with a company that's going through unsealed indictments - and you can BET this is to SPOOK the criminals yet to be indicted - this didn't have to be unsealed yet. McCaleb doesn't have, nor will have access - it is NOT the policy of the FBI to even reveal how many 'offices' or 'branches' are carrying out and said investigation. Let's all demand JP decouples from Bear Stearns - or let's all agree that what happens to Bear Stearns - will follow right into JP's home turf.

June 19, 2008 at 12:28 pm

DrDetroit

from article: "It’s a story we told you about first at Fox Business (”Why an Underfunded FBI Could Hurt You”)." Liz, you should perhaps explore just becoming a private consultant, then you wouldn't have to associate yourself with Fox. It really damages your image if you ask me. So smart, so good at your job, on TV and in print - and yet ? you don't need Fox, Fox needs you. Either sellout and make sure you get 8 figures if you HAVE to forfeit integrity by being at Fox (but this is what everyone does, I won't even mention what O'reilly makes - although you probably have a pretty good idea, but then again, he's 'okay' - he does seem to convey he means well- even though he uses force of voice - where some blame Alexis for using punctuation because she doesn't command the vocabulary - O'Reilly probably could be criticized for the same verbally- but hey, he's human), then again, a TV show shouldn't be the kind of behaviour you'd see in a bar, and who'd EVER bring a live camera into a bar, my god - now THAT's quality programming ? ) - or I'd say - evolve. Myself, I will never ever ever tell someone to 'shut up' - I think at age 40, it's safe to say that's just not acceptable. I've always felt if I say to someone 'shut up' ? I'm trying to control them, because I'm unable to control my own emotions. So when people 'say' 'shut-up' they are really saying, " I can't control or maintain my own sense of well being ". This is something you have MASTERED, I have 101% respect for your stance when you listen to the other person, often staring forward, reverently thinking, and when it's your turn to speak, you have something to say - truly reflecting what they were saying, CLEARLY you listen. I used to see say- Hillary Clinton nod her head, and I thought that was interesting. You ? No one is as reverent as you are when people are talking in a group that I've seen on any TV presentation, I can't ever imagine you telling someone to shut up, I think you've mastered a sense of well being - it clearly shows, I don't think anything could bring you down - and it's not a bi-polar 'high' either - there is a perma-smile there. Don't condemn me for borrowing a mannerism, but that face scrunch into a smile ? I USED to see that and - I don't know, was kind of bothersome, now ? I use it ALL the time - it's almost like a reaction to entering a sun filled room - one closed their eyes, but you know ? it's not like the squint of critical evaluation I'll see from Glick, it's a squint, and a smile - and it shows you're really pretty darn happy in there - so aside from all my fox rants - and my inability to learn to focus on the BETTER aspects of people rather than the worse - really - Alexis is a decent person outside the professional realm I'm sure - mostly IN the professional realm, just some odd facial expressions that seem to say - unhappy. Anyway- whatever this thread was about keep up the great work, I have gripes with the Fox Network more so than the employees - the X-employees I see though don't have too many good things to say about Moody, or 'the second floor'. There is without DOUBT political bias with the network, which pretty much degrades it from being anything but entertainment for me - and it is, but your work productions are real, I can tell they are not biased - and in this day and age where journalism is often influenced by fear of 'the second floor' - you're seemingly strong enough to cut through all of that, and bring forth alethea ! (Truth in Greek).

June 19, 2008 at 12:47 pm

DrDetroit

oh no, parenthesis madness ! - I broke the rule of recursive parenthesis - and left one unclosed ! Oh well, I AM big on making sure I close any parenthesis I open, why ? I'd get a compiler error if not, no 'edit' function here like MarketWatch or so many other online forums. DrDetroit is BANNED on MarketWatch - my 29 other characters aren't though. I talk to myself entirely too much on those forums - but hey, anyone for Xenephobe ?

June 19, 2008 at 12:49 pm

DrDetroit

I'd promote you become a poster child for why we should clone ! but - truth is, it's not a genetic issue that makes you the role model I find you to be. who knows, if Fox Business is good enough for you, maybe I'm overly critical of the rest of the employee base. Intent matters I suppose. Competence matters too - You score well on both of those, maybe it's the never ending infusion of political nuances that gets to me from the rest of the employee base. At least I don't get partisan dichotomy from you - I'm going back to work and closing the browser until end of day !

June 19, 2008 at 1:02 pm

John

Ok, please..this article is putting too much blame of the economic mess on Bear Stearns. Yeah, we had a housing market crash, and a auto market crash, and a lot of jobs were unexpectedly lost. We intelligent one's can see past fox news lies (which they get caught doing all the time, look it up on youtube) and deduce that the blame ALSO falls on the Federal Reserve, Alan Greenspan, and Ben Bernanke. If you have a hard time believing that, do some research and educate yourself.

June 19, 2008 at 1:12 pm

DrDetroit

P.S. I KNOW some of the stuff I push out as comments PROBABLY isn't balanced enough to show up in comments section, I get that. But I figure - might as well express opinion anyway, whether it's printed or not - if anything for entertainment value for you people - as that's what Fox brings to me - entertainment (I really do watch the main network for pure entertainment, and when I say that, I mean, almost on a Monty Python level, I mean, I don't take it at any serious level, come on ? Geraldo ? 2008 ? Missing persons report with Gretta ? that's not news, that's tabloid stuff, I even challenge myself to ask sometimes, why the story about the grizzly murders right before the story on Obama, or some yayhoo democrat- asking, is it to develop an emotional response over a story that was one of 100 that were the same that happen every day? used FOR the purpose of emotional manipulation ? Or was it used to bring ratings up so Fox can sell Head On or CountryWide ads (the advertisers on Fox are sketchy at best usually)). So, if my stuff is off the wall, may it provide a good laugh and don't push it through to comments section , if it hits the mark sometimes, may you push it through to viewers. I've grown tired of wildly active forums - I'm getting to the point where I don't derive much reward from posting away - from larger news media sources to - well - heh- Lucky Liz eh she says - ha ha - this is pretty much the only forum I have bothered to share insights anymore for the most part. I'll say this, your message on global growth is here to stay is one to meditate on, and I'll also say that somewhere this year I evolved to thinking - gee, you know ? the world is a terrific place, plenty of wonderful things going on with humanity - certainly some temporary political stressors - I personally like to say - there are laws - and then criminals - so I don't promote 'terrorist' short of saying 'criminal' and well - in that regard ? short of the media grabbing hold of the term ? There are still laws, and still people who don't follow them, that's nothing new in the wardrobe of human experiences. So to that, ? really ? Petro ? sure we'll ALL move on to a healthier energy solution in time. There are always going to be smalltime crooks in finance, or wherever, always some corruption I suppose, hopefully less via more educational opportunities. I think the internet offers great opportunity for access to education - and hopefully will contribute to a more rewarding global experience for humanity, who knows, maybe all life- but really ? who's to say whether it's fair or not that the tiger will be extinct by 2013, or the polar bear (LOVED the solar bear express title, ADORABLE - kudos to who came up with that). Now, heh, don't get me wrong, I'm not for wiping out ANY species - intentionally, nor any species through ignorance either. Anyway - life IS grand, my favorite meditation is that because life is interconnected, AND that I believe life is eternal in the full scope of the universe in all causality or potential causality ? Gee, JUST to be a part of it, sure beats nothing for eternity. And all in all ? given a choice ? nothing for eternity ? (of course, who'd be there to HAVE that choice) OR ? to be told ? live 40 years (to date) or 80 revolutions around a sun ? or 100 ? vs nothing ? Even to witness more suffering than I care ? I'd pick the option of life - sure. Why not. Seems if people adopt a model they are disconnected, they are more apt to exploit their surroundings, from a hedge fund - to slashing and burning for planting beyond the point of necessity for food for a given peoples. Seems globalism offers a better platform than nationalism to suggest people and life is not so disconnected. Holding onto THAYAAAT ? I do say - I've no need for some personalized afterlife plan, I hold that life is eternal, and I'm just glad to have opportunity to witness it ! Question is - how to encourage someone - that's say - looting a hedge fund - to realize the money they THINK they are taking, is REALLY backed by the entire communities participation into a common shared belief that the money will be worth anything to provide some means of fluidity/liquidity in mercantile exchange that beats barter. Money to me is a tool, it's a means, not an end. THAT's where people perhaps go wrong, thinking they can actually pocket it or hold onto it.

June 19, 2008 at 1:19 pm

Ron H.

I am a truck driver from Los Angeles and I knew by the end of 2004 that the games these guys were playing, bundling worthless mortages into hedge funds, was going to drag the entire Stock Market down. Where were the regulators that should have known better? Prices in So. Calif. had already gone to ridiculous, and were now being carried along by loans that nobody should have qualified for. I hope half of the mortgage brokers go to jail also.

June 19, 2008 at 1:56 pm

DrDetroit

Ron H. Says: June 19th, 2008 at 1:56 pm I am a truck driver from Los Angeles and I knew by the end of 2004 that the games these guys were playing, bundling worthless mortages into hedge funds, was going to drag the entire Stock Market down. Where were the regulators that should have known better? Prices in So. Calif. had already gone to ridiculous, and were now being carried along by loans that nobody should have qualified for. I hope half of the mortgage brokers go to jail also. - I'm in your boat there. I think lax - if not zero regulation - enabled many to take the money and run. I have to stop embedding Woody Allen movie titles in my sentences. But - I think certainly this effort by the FBI is leading up to SOME post-regulatory void cleanup. if I recall, the US spent a LOT of time, money and effort finding out more than anyone should want to know about a blue dress with Clinton, so - I'm sure there will be 100x the efforts tracking down everyone who participated in exploiting loans presented as great deals at temporary low rates - only to reset. I saw this fellow 2 nights ago - I can't recall his name, X neil or Neil X - kind of looked like Bono - but he had a box he drew, showing that really, only 20% of US mortgages are part of this mess, further - iirc, that only 4% of ALL US homes are in jeopardy resulting from this mess. So, hmm - if US real estate is 12 trillion, 10% is 120 Billion, 1% 12 billion x 4 = 50 billion tops according to him - approx at stake. Something in his figures come to think of it sound like the UK's announced 3.5 % retail spending today/this morning predicted to be NEGATIVE. Everyone said - this just can't be. On the other hand, maybe it can be, maybe the almost 2 to 1 ratio of the sterling to the dollar has allowed spending on US goods- who knows, maybe the UK folks are shopping on Amazon buying products at a total bargain due to the weak dollar. I don't know how 50 billion equates to the hundreds, the 300 billion for example being considered to be set aside for home owner assistance. Other places I've read that the total damage from all of this mess is 6 trillion, 1/2 the US real estate sector. I don't have a grip on what's going on myself - anyone that reads my posts probably goes 'heh, yeah, that's for sure' ! But I DO know phony appraisals went out from the same company issuing loans - Washington Mutual. That CERTAINLY can't be too good - and I wager WaMu will get some visits from the FBI or SEC, or FTC regarding the fraud in pricing, or all 3 on the same day ! heh. Remember Paulson wants NEW agency changes - not unlike Negroponte's group. What was it ? Paulson wanted to consolidate Thrift with Comptroller ? AND the SEC? I forget. I do think there certainly was a sense of 'mayhem, those pesky terrorists are coming, no matter what' promoted from some media outlets - which for whatever reason, wasn't too healthy either. It certainly left a FEW people thinking, 'hey, why not get a long term commitment we know we won't HAVE to keep, because we're counting on some crisis in the US to render our debt negligible. OK OK OK Maybe I'm OFF target on that one. I just intuit it. It DOESN'T help that Fox promoted CountryWide and GMAC's DiTech so heavily - AND also promoted such a sense of helplessness. I mean, there wasn't even any coverage of Iraq, just Natalie Holloway as I recall. I used to joke - yeah, missing girl in the third world- America - Where's America ! last seen hmm... What couldn't Fox cover what happened to America ? Where'd SHE go off to ? Who did HER in - who said No to regulation only to have to say Yes to federal prosecutors in the end. The kids were left alone on the island too long this time - with the lack of regulation, Free Markets perhaps were never tested in Lord of the Flies eh ? Maybe Free markets can work only with high integrity people - real adults - who truly support their communities, sure - I'd say so, but the reality is, the human resources department of the idealistic organization called 'The Free Market' doesn't do any background checks on the folks it lets set up shop I guess, and that's in part what we are watching be cleaned up. What's worse ? an oil spill to cleanup ? or something that insults the integrity of the dollar - or worse - the integrity of US banks or lending institutions credibility (wrong word perhaps) ? Or worse, cleanup after a political event that has an expense so great it jeopardizes the currency of the nation having to borrow from China etc to pay for it. IS the war on Iraq causing undo stress on the US Dollar ? I've not considered this until this sentence. Are we stretching our debt too far into the future ? to 'thin' the value of the dollar today ? CAN the US really afford Iraq ? 3 billion a week ? Sounds like an ending to a Batman episode. On that note, I'm going to leave the questions alone and go make a large salad. I am HAPPY to discover that article today in the press about proton pump inhibitors - you know, Prilosec, Nexium - etc. (Prilosec is the #1 over the counter med in the US) news.google.com had a 'top drugs doctors won't take themselves'... I was taking the cheap proton pump inhibitor - same ingredient as prilosec - and my heart was killing me, pinching sensations, very disturbing sensations, then I read the back of the ant-acid bottle 2 weeks ago - noted the 'if you have chest pains, heart conditions' and thought, hmm - THAT'S odd for an ant-acid - only to find out TODAY why it was listed in the list of drugs that - well at least the doctors who contributed to the article - said they would never take - high increased chance for heart attack ! ugh! no friggin kidding in MY case, not sure about anyone else, but that's something to pass on, and look into, made sense to me as I read through the more fine grained causal factors as to just why the proton pump inhibitors also interfere with the heart ALL the while - being used JUST to decrease acid in the stomach - ugh! Self education, it never ends !

June 19, 2008 at 6:52 pm

Rob

It seems like corruption is becoming the norm in this country. Integrity is out the window.

June 20, 2008 at 11:09 am

DrDetroit

Reading a post from yesterday - since there was no new article, I decided to re-read what was here - I reached a new insight regarding 'free markets'. I see people go on about 'no regulation' and 'let the markets be'. It was on my post above regarding Lord of the Flies - a novel most typically read in high school - where children live alone with no adult supervision on an island. I think 'free markets' might work out so long as TRUSTWORTHY, RELIABLE ADULTS are participants. so, here 403 people so far indicted, yesterday the two Bear Stearns 'fellows', is it time to ask ? Is zero regulation, or no regulation a sane concept when we have this kind of track record ? I mean, clearly, there are some SLEAZY people involved here in the sub prime mess. I am tempted to say - 'free markets' with no regulation, just look at oil futures ! - is not a good or sane idea. I keep going back and forth, I lack the analytical skills to discern whether oil futures are sky rocketing due to a falling USD in relation to other currencies (I applied this concept in reverse trying to understand how 3.5 % retail spending came through on UK's report yesterday morning, when a negative growth was expected, even the hosts on the financial program (Bloomberg I think) were saying 'let me double check this here' - only I was questioning whether it really WAS 3.5 % because they were buying goods perhaps over the net in America) OR whether oil futures are being artifically driven up by - well - those that would LOVE to see the price of oil climb (the paranoid theory) OR are oil futures going up because people that USED to invest through trusty real estate, etc, are now taking their chances in oil futures, thus causing an artifical rise in demand- 'as if' it's really in demand. Oh well - no new articles today ! means back to work for me ! I used to enjoy dialog with a handful of journalists online who ran forums with better access to threads, topics, etc. Wish this window here under MacDonald's articles offer more structure for commentary - thoughts etc. I find the articles usually CHOCK full of data to reflect on, more so that the typical articles I find on other financial sites. Peter Brimelow on MarketWatch often brings in some neat data to support his points, but that all fell apart when he discerned Israel would be attacking Iran because gold went down - or was it up, either way, I can't imagine a world where causality was THAT primitive. There was a Twilight Zone episode once where this man had all these contraptions and 'things' in his apartment, someone came in, he'd go "Don't touch that, an earthquake will happen in Chile" next day - Earthquake in Chile, the person returns and the old man explains what causality extendeds from what objects and events in his room, uh, I just don't think the world works like that, so Brimelow- PLENTY of data or NOT in an article, I think blew a circuit on that. I honestly can say - I can't foresee MacDonald losing. She's simply ON every time- not unlike Tim Russert when I saw him, of ALL places, on the Bill O'reilly show, and I do say - it was rewarding, he made a comment that he believed HIS job was to simply gather as much data as possible, BE critical and neutral - and let the chips fall where they will based on how the audience or readers/viewers would make up their own minds. I find the same with Ms. MacDonald - I never see ANY political bandstanding, any religious bandstanding, JUST the facts, JUST the data, and I don't even see any bias in other areas I typically would expect, hope she ends up teaching journalists to be - will certainly make the world a better place, for journalists ALSO influence the public - as we all know, journalists can mis-use the access to mass-media gateways for ALL kinds of purposes, from financial to political, NOT here though, and that's why I enjoy the chance to even reflect in this forum. Class A journalism from MacDonald, RARE in this world, not unfindable, but rare.

June 20, 2008 at 3:08 pm

CandyJane

from: Comment by Rob Jun 20th, 2008 at 11:09 am It seems like corruption is becoming the norm in this country. Integrity is out the window. Rob, this morning upon waking, short of trying to figure out why I was having that dream where I HAD to get back to high school - while being age 30's + and get to those classes, only to realize in the dream 'wait a second, I'm 30+ years old, I don't need to go to high school again' ? (oh, that recurring dream over the years, it ALWAYS ends up with this major stress of being late, or missing a day or two in high school to the point where I have this break through realization that - wait a second, I'm 32 years old (or 30+ or something), I don't GO to high school, this isn't a real demand or stress) SHORT of that ? I had something on my mind upon waking, as often thoughts are clear and digested as if I was problem solving while sleeping. Seeing your post reminded me of these thoughts. Your mention of 'corruption' awoke me to what I was thinking after awekening. There are many causal factors of cancer, we do not know them all, many though are turning up to be viral - alas remedies for cervical cancer using a vaccine etc. Now, bottom line a cancer is when a formally whole system becomes out of balance where the cancer lives on without regard for the host up to and including the point where it kills the host. Let's say that's true of a virus in many ways to, or a bacteria. Now, that's pretext for my point. My point is this: People are driven by compulsion in their lives, some more than others. Some are compulsive drinkers, smokers, sex, eatint, I mean, YOU name it. Religion can often show up on the scene to many who are compulsives - 'as if' they are being freed, only to enter into yet one more compulsion. I observe this with fundamentalists of any flavor of religion, oddly enough, the make up of the base is typically x-drug users, x-alcoholics (ok, alcohol is a drug, let's just peg it with drug users, I mean, really, let's be honest about this !), or bottom line - the fundamentalist community often comprises of people who hold to fundamental tenendancies in thought, which is sister to compulsion. NOW, aside from that jab on compulsives, and compulsive behaviour - that sex, drugs, religion can act as venue for explication of these thinking systems into actual physical reality, let us ask - about the one compulsion I left out. Money Now, HERE is my point - in content. We regulate alcohol. we regulate tobacco. We regulate sex. This comment is to all the anti-regulation people out there. We need to regulate money MORE ! people simply find them selves in compulsive pronounciations of behaviour regarding money. the Chicago Mercentile Exchange unregulated will be the end of us all ! Sure banking is regulated. That's great - Community Re-investment (even though Bank of America and CountryWide BOTH violate these policies, and my god - Citi - Citi goes so far as to skae CRA I think the regulators must get free ski passes to Dubai's indoor ski slopes in the desert or something considering what Citi gets away with), HMDA, even a new one I proposed to Dodd's last year regarding making loan products LESS transparent at the banking level, stripping out social security, but leaving in Zip 4 centroid so at LEAST the fed could have an IDEA of what KIND of products are behind a reported balance from a bank out of the myriad of 300+ products each and every bank offers. I mean really, SHOULDN'T the fed have a CLUE what KIND of products are behind summary data ? I argue they have to these days. You can't just say Service Group Loan - you need to say - was it a HELOC in relation to a mortgage, was it a 15 yr fixed rate mortgage itself, was it... onward... without that, numbers could be mis-used, or mis-interpreted as they are to reveal a bottom line pre-write down (or hey, let's presume there are periods to come with no write downs !). As to the proposal for a new level of regulation on bank product, Dodd's never DID respond to me emails (and yet ? I defend him on the CountryWide attacks -in part because he has pushed the SEC to be tougher, but hmm - that's tricky, pushed for tougher SEC, all I can say is I hope he takes the suggestions on tougher UPDA as I called it - Underlying Product Data Act as more necessary than not) - I know for a FACT that people in the analytics sector who do analysis on banks gain access to real - low level data comprising every aspect of what a bank has, is doing, has done, and in purpose of the software, what they should do based on that data, yet the Fed has NO access to this. And yet the Fed flies blind. Knowing not what is actually under the hood. My god, I can't even imagine investment banks and what THEIR low level account data looks like - my god, THAT would be a blast to see. If MarketWatch runs an article on a 10 trillion shadow banking system that has no regulation, no compliance, no rules virtually, sheesh, and THAT scares people- wait till they hit the honeycomb hideout (just came to me mid-sentence here, seems right) where global deravitives are exchanged. I'm off to work - it never ends. But then again, I love what I do. Formally known as DrDetroit - I see these actors - Leonardo Di Caprio - many others - who have a BLAST with a new name - it's tempting in reality - but on the forums ? I think I'll derive some fun here with a new nick everytime if possible. no mal-intent to suggest I'm other than who I am (and that that is dynamic, yikes, imagine if we DID change our name more often augh!), just for fun.

June 21, 2008 at 5:59 pm

Phil Conners

responding to: Comment by Rob Jun 20th, 2008 at 11:09 am It seems like corruption is becoming the norm in this country. Integrity is out the window. Rob - contemplating this further ? Corruption - without getting into etymology on the word, I don't think 'corruption' is local to humanity at a hierarchical node of nationalism, it's further upstream. Corruption is an interesting concept here. One can ask - can animals be corrupt ? can plants be corrupt ? it's not applicable is it. Seems corruption requires something that's local to the human condition. What are your thoughts on what makes humanity so advanced - or - outside the domain of animals - to bring forward corruption as a possible, potential and REAL state of human affiars ? What is it that says - humans can be corrupt, but animals can't (I have an answer or two, just curious as to your insights)

June 21, 2008 at 7:03 pm

CandyJane

from article above: "The defendants and others led investors to believe that the High Grade fund was only slightly riskier than a money market fund." This makes me think it says the reverse of the Bush admin's proclamation to all the children in America that their futures were in danger (not by lack of education - cough cough, or petro pumped into their lungs so the Larry Craigs of the world can grease MORE ANWR projects for profit with no regard for peoples pulmonary health, unless, perhaps Larry is willing to bend down and wrap his lips around an exhaust pipe to show us it's safe to breath in) - that the investors into going to war with Iraq ? This one's for you O'reilly - were slightly riskier than the intelligence data supported. I am very good at seeing people, through people, into people, away from people. All in all O'reilly is an adolescent. He uses violence and force of voice to get his points across, you can youtube away to find more examples than you care where he's simply compromised all civil aspect of behavior in dialog. Sure, I have too, but I can deal with it, I admit it, and I'm human, you can BET humility and human BOTH cross on meaning if you go back. I get concerned when I see lacking humility. Humility to me means moving on, growing, advancing. When people have to be 'right' ALL the time ? you can expect an entire closet full of shoes.

June 21, 2008 at 7:21 pm

SarahLawrence

from posts above: # Comment by jjv Jun 19th, 2008 at 4:50 pm Dr Detroit sez- Where certain folks inside the beltway are promoting the 300 Billion Housing remedy be put on hold until ‘allegations’ against those few who received potentially favorable - but legal - sweetheart mortgage deals ? The mortgage deals received by the liberals in Congress were NOT LEGAL. The maximum value of any “gift” received by elected officials is $50.00. Giving Conrad a mortgage shy 1 closing point from the norm was worth about $10,000 and Dodd’s “gift” was worth over $2500 per year for the term of his mortgage. Odd, you don't choose to actually spell out the words to make your point, what ELSE is missing I ask but further, the law doesn't bring dichotomy on liberal vs conservative. You're focus on liberal vs conservative there only passed on a hint that you're using what you can to further your agenda, and skipping the rest. Why not keep it to the law - if someone broke the law ? they broke the law.... Why must it be a 'liberal' or 'conservative' adjective applied ? I have a feeling you're not sleeping well at night are you. I am. Short of those returning to high school dreams ! hope you get better there whatever your nick was.

June 21, 2008 at 7:40 pm

SarahLawrence

Let's talk about Bush and Cheney's CASH tax break to Ken Laye right before he went down and then died. You know ? If Obama hangs around with the likes of Reverend Wright ? and that is grounds for evaluating character ? Why was Ken Laye the #2 user of the bush campaign jet in 2000 ONLY to find out he robbed his employees - gee what does THAT say about character last I checked ? he WAS convicted. THAT is not alleged.

June 21, 2008 at 7:48 pm

SarahLawrence

Heya Liz why not scare the second floor come in wearing tennis shoes ! tell em to take the Stepford Wives image and shove it.

June 21, 2008 at 9:43 pm

doug marcus

it is truly amazing that folks give their $$ to these guys. i'm sure that there are legit hedge fund manasgers but who in their right mind would be in a system where you give up your capital that they can charge outrageouys fees, lock your funds in, and more or less hold all the cards re: information. a mutual fund casn go up or down but thanks to morningstar and the like, we know how they are doing, they are liquid, and fees are nowhere near as expensive.

June 22, 2008 at 1:34 am

Greedom

Hey folks get this Watched a program last night - one I enjoy 'Breaking Vegas'. Turns out the MIT professor Ed Thorp ? after authoring his how to beat the blackjack dealer ? went on to study probability and analytics in the NY Stock Exchange - and get this. He birthed the Hedge Fund. His system of hedging over priced stocks against undervalued (what I call the Buffett approach) was technically the birth of Hedge Funds. I found that interesting, it's nothign ground breaking, but my first thought was ? Gee, Hedge Funds - e.g. Bear Stearns of the world - came out of a mind set that was attempting to 'skate' or 'beat' the stock market. Me ? I'm a fool, I used to invest in what I believed in, and that doesn't mean it will be a success, but at least I felt I was helping projects move on that I supported, such as BE Operating System. I think after losing everything, it was worth 13 cents a share. I'm a fan of buy long, or at least don't just bring money to the table of a company then pull it away 4 hours later in a trade, I don't know, I suppose that is okay for many but I think it's a good idea to invest INTO a company. I see this one nearby in Pittsburgh, I don't invest currently as I am a compulsive spender and spend everything I make, regardless if it's 4 or 5 figures a month. However, I like to type in random three letter names to the ticker lookup and see what I get, then I for the fun of it go learn a bit about it. last one I did was RTI - they aren't far away, knowing Pittsburgh, it was a steel town/city. I do say, says they are the only titanium solid piece manufacturer in the world. Looks like their stock is 1/2 at $45 or so from $90 - all apparantly because Boeing put on HOLD for one year, their 7x7 - one of the those BIG jet's - Air Jet I think. Go figure, all was well, until it got put on hold, you ask me ? Then again this is from someone who traditionally LOSES everything in the stock market, I can't see how this company should be devalued just because a contract is on hold. PLUS - you figure in the space sector coming ? I don't know, seems if the 1.6 trillion in bridge repairs actually come around in the US, you'd think there would be a demand for titanium steel. Anyway, that's my useless - not stock TIP for the day, but something to think about. Looks to be a good long term solution. I wish I DID have money to invest right now... If you're thinking long ? I gather there are a LOT of real nice long term investment opportunities out there. Hmm... Maybe the US gov. should start investing long term in it's businesses. Perhaps the US could say - look, WE -the federal government will buy stock in you - IF you do not leave the US. That idea just came to me as I was typing it, often goes that way, alas why I like typing things ! I discover more mid-sentence than not, which is scary I suppose. BUT If the Fed gov. did that ? it wouldn't be corporate welfare, it would be the US fed gov. saying "We believe in the corporations that stay within the confines, ok ok - bounds of the nation state." All in all sounds like a good idea to me. Sure beats 30 billion handouts from Bernanke to save the likes of Bear Stearns. Hmm - ok, it can't be 30 billion, I must have something mixed up there, because JPM got it for 1 billion and it was evaluated at 20 billion in Jan. Lest in Jan it was already severely down, I thought I read 30 billion bailout for BS though. Would have been peculiar if that guy who wrote suicide is painless would have been on one of the bridges in the US that civil engineers say are on the verge of collapsing. I saw some guy on c-span - some labor union of america or something chairman, he said civil engineers estimate the US roads and bridges need 1.6 trillion in repairs and that at least, (was at least 3,000, might have been 30,000) bridges are in critical shape and risk collapsing. Great, I won't fly as it is, and now ? I can think gee, forget the price of gas, will this bridge hold up. Seems the US is ignoring a LOT of basic repair work - all the while promoting 'Protect America from terrorists'. I find it contradictory. Seems you can't say abandon and ignore issues at home, all the while spending all the funds to cater to those repairs on protecting the nation from some external threat - that all in all ? is comprised of nameless, faceless threats/terrorists. I still say - if you go into a psychiatrists office and say some nameless - faceless person is out to get you, you're be 'treated' and yet ? this is the message from Bush admin all the way through Fox News. Seems Fox is heavy on the side of petro support. I see regular Fox employees on the shows insinuating that any alternative energy persuits - would have to render someone CRAZY to explore. It's bizarre- we all know offshore drilling wouldn't even show up for a few years - at BEST, and 10 years on par, yet ? the argument on alternative energy is - oh, that won't help us now. I'm puzzled hwo deeply the oil lobby has control on the corporate media. It really makes me ill. I suppose the effects of long term petro will make them ill too though that's the hard part - watching someone unnecessarily suffer. Kind of like watching someone smoke or drink themselves to death due to an addiction. In THIS case, it's not oil the fox regulars are addicted to, it's the oil money. Money that comes from drugs, well, we all know how badly that hurts the economy. Same with counterfeiters. Now, the middle east ? that takes in US money from US workers to pay for oil through gas ? and that money goes to indoor ski resorts in the desert ? ok ok - so Abu Dhabi DOES have 2.x trillion ripe for investing into the US, but that just means up to 1/4 of US real estate in my mind up for sale - at some point ? the US will just be bought up and rented out to the citizens it seems. Back to work for me. These articles AND the author are terrific, but I wish there was more activity on these forums.

June 22, 2008 at 7:09 pm

Greedom

I'll say this for $6000 I can get a 2.x foot by 5.x foot solar panel that generates 1400 watts. My plan is to get an electric car and slap that baby on the roof. I'll make SURE it sticks - heh - now, for me ? let's see - I work at home, for 5 yrs + I don't have to go out except for groceries, mountain biking, walks, or wait, I forgot, I don't know anyone, so let's call them grocery store friendships that last about 2 minutes. Either way, I can leave my car out in the sun, I feel confident it will charge on the sunny days enough that it will get me around town. You know ? I got on this Hyundai newsletter as a child - don't ask how - but that company has been into electric cars for a LONG time. Hyundai has their own battery division I used to read in their newsletter, also the worlds largest shipbuilder, but my point here is that Sonata Sedan has been electric - that you can plug into a WALL outlet for 10 years now. And yet ? in the US ? really, how friggin- hard would it be for a gas station - what few will be left - for anyone that noticed Exxon is pulling THEIR stations, and if you ask me ? if THEY can't make money at it ? how is any small mom and pop shop going to make money at it ? So, the few gas stations left, how friggin hard would it be to put out some sockets - and power meters. Gee ? What's more available - gas or electricity ? I'd say almost EVERYONE has a wall socket - FEW people have oil and gas refineries - or trucks that come to their houses. I say that because again, Exxon is pulling their stations, ask yourself, gee, how can anyone ELSE afford to do it ? Where I live ? The gas stations have already fallen - plenty of them - they just go out of business. Asking one owner ? The volatility was too much, asking another owner I saw at the supermarket ? The price of a tanker was + $30,000 a pop for them, too risky - and too much money needed up front. No one, not one single news resource has hit on this dilemma for gas stations closing, and the point I make on Exxon, which is - if Exxon is closing THEIR stations, sheesh, what does THAAAAYAT say about profitability for the NON-largest corporation in the world folks and THEIR chances to make it. Realistically ? the things we can count on are this: High gas prices health risks from petro exhaust health risks from coal burning potential for environmental disaster from fission nuclear. As to high temperatures ? Sure, even the bush admin admits global warming is real, so, we COULD say we can count on higher temps, more violent storms, but let's keep that 0.02 % happy that says it's all hogwash - and if they're wrong ? we'll break the taboo on cannabalism and bring down food prices. Point being, we CAN choose to go electric, pulling from the power grid isn't at present - MUCH cleaner, if it's coming from coal or nuclear. BUT - I see in Australia, you can pull up to a bar or restaurant, and there exists a huge windmill - generating power - to charge your vehicle. Hmm - what an idea- I do say... Let's see - who ordered the fries, that's $3.95 and let's see - your total bill comes to $29.93 for the food, and $3.93 for the electricity ! Not bad. Yet ? If I turn on Fox News, there is Krauthammer - lobbying for big oil, next to that other person, she's clearly on the take - insinuating anyone that if anti-oil is insane - and yet ? if I turn off Fox News and look around the world ? she's the nutcase - and it's clear they're just a big oil mouthpiece bought and sold. Who ARE these people ! and what are they doing on my TV screen ! lol I swear, if the plane crashed, these people would be sorting through "Are you a liberal, oh ? sorry, we're only rescuring conservatives first - then capping it with 'loser environmentalist tree-hugger pro-terrorism supporter'. Bizarre how ignorance pervades into corporate media - painful to watch but I like trying to understand who's saying what, and often - why. Fox News is strange- always promoting how the ratings are #1 - and I look at the advertisers - real class acts ! Head On - CountryWide - IRS Tax Lawyers - Cancer institute of America. That one takes the cake. "Hi, we're Fox News, we're 100 % PRO Petro - why ? don't you worry about cancer, don't worry, if you get it ? Cancer Treatment Centers of America will cure it, just stop in for a few weeks, we'll alter your diet, do some copycat Genentech work with a crackpot staff and you'll be celebrating that life after cancer is better than ever" I actually WROTE Peggy - that woman Cancer Treatment Centers of America has been using as a poster child for what ? that SAME ad on Fox has been out for 5 years. "And ya know Peggy ? there is nothing written on the bottom of YOUR foot that says you're going to die from cancer" Right. I see - Pro Petro- and hey American Fox Watchers, it's OKAY if you get cancer, because life after cancer is just THE BEST ! ? ? ? My god I MUST be in a nightmare - please someone awake me help ! This is WORSE than a bad 1970's sci-fi movie. Who ARE these people ? How did a SMALL group of people get CNN's software to make a TV news front over night - it's ALL smoke and mirrors, eye candy via software - and then ? if a Fox Employee steps out of line ? Enter a new one - there's ALWAYS a new face over there - and the ones that leave ? I recommend you watch OutFoxed people - and take a listen to x-fox News employees. My FAVORITE scene last was this one: Jesse Ventura was on Vanity and Holmes (I'm not big fan of any of em) Jesse says though "Oh come on Sean, you're told what to report on and you know it" Sean goes "No, I choose what I report on" Jesse goes "So, what Sean, you're tellin' me you WANTED to report on Anna Nicole Smith for 2 months straight ? " it doesn't get any better winning thinking systems win losing thinking systems lose

June 22, 2008 at 7:46 pm

Greedom

If I could live my entire life in 1 year or 1 day you can BET I'd QUICKLY put focus on making sure children or those that come after me are not hindered by my decisions in that one minute, hour or day or week. That's all that matters and yet ? sociopaths get in as hedge fund managers and walk off with community assets that don't belong to them. The hedge fund manager that didn't jump off the bridge ? he was no George Bailey from It's a Wonderful Life that DID jump off the bridge. Odd, the guy that cares, jumps, the guy that's pathological ? goes off believing the money he has is his. Hey Jonathon ! It's YOUR Money right ? I noticed you don't bob your head so much lately - looks like you got some sun too. You've got all the answers don't you. I've heard it said in latin - since I don't recall the latin ! I'll put the english recollection: Some people have all the right answers and none of the right questions.

June 22, 2008 at 8:33 pm

Greedom

I give adolescents room to grow - really, I do. This entire NATION is in an adolescent stage - which explains the adolescent alleged president we have. Bush - unlike Arthur - is probably never going to get past high school or grow up. Grownups start with humility - I've never seen bush admit he's wrong - and THAT is a greater weakness than being wrong. Normally I am leery of the christian fundamentalists who are 'never' wrong - they're usually the ones with the compulsion problems that NEED someone to save them, and I often ask - save them from what ? the answer is - save them from their compulsions. Unable to embrace humility - a critical human component - they become detached from society, only left to seek raw power to delineate persona.

June 22, 2008 at 8:38 pm

WhosNextOnTheChoppingBlock

I do wonder who the FBI will visit next early AM ? you think Joe is next ? Joseph Gregory or Erin ? Erin Callan ? Or maybe one of Joe's hires from some said boat trip where the refrigeration unit failed ? Maybe they had Swordfish stored hoping to set the market price with their catch Too bad the Perfect Storm has already been put before us as fiction. I think this time, there will be a just a BIT more data to support a final 'wave' disaster scene. heh Maybe Fox BN could run a top 10 next candidates likely to go down with the ship article. Odd no one ever goes after Huntington Bank. You might have to waterboard to get it out of em though ! lol If I were a lawyer I'd explore means and ways to do just that -considering who they are in bed with. Oh well -

June 22, 2008 at 9:50 pm

WhosNextOnTheChoppingBlock

Liz, you oughta summon up Mr. Succo (John Succo) and ask him who he thinks is next on the chopping block. Could you imagine the beans he'd spill in a federal grand jury indictment with a gag order ? These things eventually get out you know. I think sometimes the greater crime in question outweighs someone who breaks a gag order. Call him up - ask him out to lunch - make it on a boat too - just to encourage more lip smackin' loose lips. Crack open a bottle of Chateau Ausone 2003 - that'll get him yackin' away - heck, bring a whole case - let Fox pick up the tab, hey, just trade the Fox N Friends show salaries for the day on a case. If that doesn't get it out of him, gee, hmm.. You're an EXCELLENT journalist ms. Macdonald - however there are other ways to get access to data that no one else has ! Be creative. To me, you're the kind of person that will release a story based on its content - and a responsibility to the public to get a message out - RATHER than first saying 'will the company I work for have an issue with this ? ' That is to say - you have a spine, and a conscience.

June 22, 2008 at 10:22 pm

WhosNextOnTheChoppingBlock

P.S. Mzzzzz MacDonald, thanks for being pro FBI as well - the CIA is NOT my favorite foreign movie Strange people end up at the CIA - the FBI has REAL - people - BIT more integrity than your average state trooper if you ask me. I can say FBI has better picnics too ! Least the people are real if you ask me. I would prefer I didn't hear about that basement cleanup story in Pittsburgh though - my god - some horror movies aren't FAR from the mark regarding how messed up people can be. Again, we NEED the FBI - if nationalism is to fly out the window as we move towards globalism - what will replace the FBI ? I don't know INTERPOL isn't a good sign heh - all respect - but wow - it's going to be a bizarre up coming transformation from nationalism to globalism - economically - AND well - ask yourself - law is geographically peg'd - I'm one to say morality isn't a matter of a good geocoder. I'm one to say morality isn't either derived based on the principle that you are being watched, although omniscience POV from god is attractive is this is what some need. I'm a fan morality is derived by maximizing potential to be all you can be. No 'in the army' there predication though. Groundhog day ended when Phil Conners discovered life for those around him wasn't so far from his own life - compassion. Oh well- this is going nowhere - I'm going back to work - I should get out more - I suggest all readers examine the author I saw on C-span book tv- 'africa in chains' where this fellow from Ghana points out - post colonialism in africa ( picture the US here too ) - it's corrupt - and giving ANYTHING ends up in billions to swiss bank accounts. Add in something I learned recently that from space - Africa is dark at night, they have no electricity for the most part - but my point is US citizen's analagously to the Africa statement - why 'give' anything to a corrupt government ? that is no answer. Isn't it enough we pay 1/6 of our income to the middle east because petro has been presented - thanks to Fox regulars like KrautHammer (yeah, RIGHT, I'd leave the kids with him, right !) - and his side kick waiting to have a saturday night live sketch done on her - EYES alone - what is that ? that bovine paralysis stuff ? you can't DO eyes that wide open, even IF you hire David Byrne to score it - (nice piece though from the Catherine Wheel Tharp/Byrne) ? Oh - I think I forgot my point hey - least I'm not scaring you with terrorism then selling you countrywide ads !

June 22, 2008 at 11:03 pm

about this blog

  • Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.

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