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E-mail, Feeds, 'n' Stuff

Monday, December 15, 2008

We're only halfway through this

Here's some not-so-good news about the economy.

Comments (6)

Here's my question: We've been exploring the financial meltdown on this site for months with plenty of comments from people chastising others for not knowing what derivatives are, etc...Right?
I've read article after article in the mainstream press about the problem, and yet last night on "60 Minutes" was the first time I heard the phrases "Alt-A and Option ARM loans." And these are supposed to combine to be more trouble than Sub-primes!!! Why haven't these been mentioned before?
I can only conclude that the powers-that-be and their flunkies in the media are deliberately keeping the scope of our economic nightmare from us. Plus, I conclude that the snippy comments made here by people pretending to be experts were just so much cyber-air because they never got near this.
P.S. It also hurt watching "60 Minutes" when I realized the USC coach is a great guy. Ouch.

Housing Doom blog and Housing Panic blog (among many others) have been warning about the menagerie of exotic animals that mutated in the lending garden for quite some time.

"Why haven't these been mentioned before?"
To avoid public panic, of course.
Many of us have been aware of the risks associated with ARMs for years. If the whole truth were told at once, riots would ensue. But, spread the angst over several months and the public can accept the loss in a peaceful way.

Per George, there have been discussions and warning for years in the WSJ and various finance, real estate, and business magazines and websites. Just that the average public-school educated, clueless Joe is too busy watching ESPN or the local TV news for the days big automobile pile-up to actually think and ask questions.

Or here.

Alleged Madoff Fraud Has Worldwide Exposure, By THE ASSOCIATED PRESS, December 15, 2008.

Damage continued to ripple from the massive fraud allegedly engineered by storied Wall Street money manager Bernard Madoff on Monday, even as investigators worked to unravel the scheme's working and its reach.

While details remained sketchy, the sudden collapse of Madoff's firm began revealing an impact far beyond the world of the ultra-wealthy and well-connected who were the mainstay of his client base. And the firm's extensive dealings with charitable foundations and other groups suggest the fraud may take a toll in unexpected places.

The 70-year-old Madoff (MAY-doff), well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors.

But the list of people and organizations allegedly taken by Madoff reached into the ranks of the little guy, too.

When local officials in Fairfield, Conn., heard of Madoff's arrest ''it set off every bell,'' said Paul Hiller, the town's chief fiscal officer.

The town's employees board and police and fire board -- which cover 971 workers -- had $41.9 million invested with Madoff, said Paul Hiller, Fairfield's chief fiscal officer.

Town officials immediately notified their investment fund to liquidate. ''At that point, it was too late,'' he said.

''We obviously didn't ask enough questions,'' Hiller said.

Without the Madoff funds, the town's pension funds remain safe, officials said, but the loss means they've lost their cushion.

Others, though, have no such comfort zone.


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