Friday, December 12, 2008

Where Were the Accountants?

The Madoff ponzi scheme could become a house of cards for the market today and as Eric Bolling would say "no money for you Detroit." Today will be a confluence of events that could really knock the starch out of the market as futures are just getting killed. The question becomes, is my hedge fund clean, or is it another ponzi scheme or three card monty scam?

I used to run a fund, a big one, and I couldn't and I couldn't breath without having my attorneys and accountants sign off on things. Last night I asked the question to some of buddies, where were the accountants? Well, it turns out this morning that the accounting firm was a little two man shop in Rockland County, NY. in an eight by ten office. A fund of that size should be with a big eight accounting firm not with Murray and Harry in a small operation. You cannot pull off a scam of this size without enablers. The funds and sophisticates that invested with Maddoff should know that. Where the hell was their due dilly?

That story is still developing, but there should be more hedge fund liquidations as a byproduct of this implosion. Most investors do a "fire, ready, aim" when this stuff happens. The autos were denied, so that will also add pressure to the market, so today could really be ugly.


GS751 said...

maybe retail sales will be god awful and we'll have the trifecta.

Leslie Coerver said...

Been asking that same question for the past year. In my other life I was a cpa with a big6 firm. The event that blew my bean counting brain was this summer when Merril released their Q and 2 weeks later took another huge writedown. What the fuck.

Many breakdowns and/or elimination of purported checks and balances. SEC, CFTC, auditors, boards - you name it - many have simply fucked up big time.

good luck with your blog - bullethead

GS751 said...

they are all in bed together.

Ragin' Cajun said...

Thought on the market after today?

Jonny said...

Yes, but it wasn't, was it?

Despite everything, all of it... it was just another sad sack hum drum day in the markets.

Call me old fashioned, but do you ever get the feeling that the crazy bastards in charge just might, they just might be propping this puppy up by buying stock themselves?

I'm sure it's do-able and easy enough (you probably know better than me) but it's starting to be one of those strange times in history when it walks like a duck, quacks like a duck and yet, remarkably, as if by magic - it ain't one.

BofA had guidance trashed last week but its shares went up. A shower of shit has been raining down on the market for two weeks and yet we're still 2000 points off where we all know WE SHOULD BE.

How long until we can call that an interruptive event? How long till someone calls meddling?

Meanwhile, UPSIDE, you are one of the few daily reads I have. And FWIW, I run a top ten media company... (old media, fair enough, but media all the same).

I went to bed last night convinced we'd be on the sparkly stuff tonight and ate my lunch barely able to sit down from the agony in my ass.



fifeman said...

Hey Upside,

Why didn't the market tank today? I am in cash so I know why I wasn't selling but other than traders trying to game the volatility I don't understand who can possibly be buying this market. The volume was relatively low today. Honestly, I don't get it. Why wasn't there a rush to the exits. Has all the smart money already sold and only the "I'm holding forever" crowd remains to get tossed around by the traders?

upsidetrader said...

arthur anderso looked the other way on Enron and the firm is no more, my guess is that these 2 clowns in their 2x4 office have been accepting envelopes full of cash going on forever and may even be related, investors deserve what they get, no due dilly

upsidetrader said...

tough one to call, still a bear mkt rally and i think the bulls will still be massacred, i'm letting them have some fun for now

upsidetrader said...

i am a slight believer in the PPT support the market theory

upsidetrader said...

there was a rush to the exits in the morning but then the market shrugged it off, a short term bullish signal

upsidetrader said...


true bro

About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.