The U.S. Marshals Service auctioned off 188 items seized from Madoff's many houses after he was arrested for duping his investors out of approximately $65 billion and perpetrating the largest financial fraud in U.S. history. Proceeds from the Madoff auction will benefit a fund for his victims.

Diane works for an organization of bankruptcy attorneys. She said "some of" the members of her group might be Madoff victims "but they would never tell me." Diane was surprised that the "vast majority of the stuff" at the auction "seemed drug dealer-ish." A nearby Marshall cracked: "that's because most of it is." Before and after Madoff's stuff went on sale, 409 items seized from other criminals were auctioned including several pieces of bling such as a necklace emblazoned with the Mercedes logo.

The auction was held in a second floor ballroom at the Sheraton Hotel and Towers in Midtown where buyers sat in a large room under a recessed crystal chandelier. Many of the bidders were jewelry dealers and other auction veterans. Outside the ballroom, I overheard them discussing the theory that the Madoff items would fetch a premium because of their association with the disgraced financier. In addition to these seasoned auction veterans, the Madoff sale attracted first-timers who wanted to witness history in the making.

On stage in the front of the room, a crew from Gaston & Sheehan Auctioneers ran the show. Gaston & Sheehan is based in Pflugerville, Texas and their staffers lent an authentic Old South sheen to the proceedings. The emcee spoke in a rapid-fire auction patter and bid-spotters punctuated the air with shouts of "Yah!" when buyers placed new bids.

Deborah Pointer, the executive producer of Russell Simmon's "Def Poetry Jam" was there to purchase "some African masks" that belonged to the Madoffs for her collection. Mona Berkowitz attended the auction wearing a coat with a fur collar and a pearl necklace. She pointed out that many of the bidders who bought earlier items were "buying thinking it's Madoff and it's not, Madoff was Jewish I don't think he had crucifixes."

Mario Ramirez, who works for the New York Aquarium Service brought an envelope filled with $3,500 cash, intent on purchasing Bernie's personalized New York Mets jacket. Ramizrez said he wanted the jacket because "I'm sure it's going to be worth something in the future, it's the biggest Ponzi scheme in the world and I was there for it." Ramirez said he plans to sell the jacket on eBay after next "season is over 'cause I want to wear it at the stadium." Ramirez said he's not worried about facing backlash while wearing a jacket labeled "Madoff" at Citi Field because "I'm taking my co-workers and they're pretty big guys." Following a bidding war, the jacket eventually went to an online buyer for $14,500. Most of the items at the auction sold for prices well above their estimated value.

Don Kruzer came to the auction with three friends from Washington, D.C. hoping to purchase "stuff for my Lake George summer home" from Bernie Madoff's house in Montauk. Originally, Kruzer came to New York to see James Gandolfini in God of Carnage on Broadway, but he included the Madoff auction in his trip after reading about it in the newspaper.

Kruzer, who works in the healthcare industry, was especially interested in bidding on Madoff's golf clubs and the duck decoys that he used to decorate his house in Long Island. The duck decoys ended up being fiercely bid for at the auction, going for $3,250-$4,750.

Lester Miller ended up purchasing the first Madoff item on sale at the auction, a fourteen carat gold "ocean motif" bracelet adorned with charms depicting a whale lighthouse, anchor, boat, sailfish, and lobster. Miller, a 77 year-old executive who works with a company that makes batteries for cell phone towers was wearing snakeskin loafers with a gold clasp. Miller has seven grandchildren, "six girls and one boy," who he's taking on a cruise from Mexico to Los Angeles next week.

Miller wasn't sure how many items he purchased at the auction or how much he spent, but he says he plans on giving the jewelry he bought at the auction to his grandchildren. Miller says he's "going to tell them" the story of Bernie Madoff "so they can see what happened to him."

With reporting from Sam Petulla

[Photo via Sarah Wali]

Fourteen more people have been charged with insider trading. Didn't they just charge some people with insider trading like, a couple weeks ago? We're far exceeding the SEC's yearly quota of prosecutions here.

Just callllmmmm it down, fellas.

Bonus season's coming! And bonuses this year are already expected to be as big as they were at the height of the bubble! Bigger and bigger buyouts, academic "irrefutable evidence" be damned! Bigger is better, in terms of stacks of dollars.

But don't think Wall Street hasn't learned from this whole "Global economic meltdown" fiasco. It's learned that populist anger is a force to be reckoned with. So you can be sure that, going forward, Wall Street will do everything in its power to guarantee that each and every American, no matter how poor, is entitled to a lifeless patch of desert in the Arizona badlands from which to attempt to scrape out a meager survival. And after each poor American subsequently drinks himself damn near to death, he will be entitled to show up at his own funeral, which will provide a little levity.

It is the very least Wall Street can do.
[Pic: Guano]

Summary of what's going on in newspaper industry stocks in the last couple of years: They're finally tanking, and rationally so. Warren Buffett—partial owner of the Washington Post!—declared this year that he wouldn't buy a newspaper at any price. The last bits of hopefulness have left investors, even the contrarians. The newspaper industry is the buggy industry during Henry Ford's time, and other cliches.

But! Here in the muddy, mythical end of the recession, it's become fashionable (primarily amongst newspaper company executives) to say that a comeback is in the offing! The worst is over! The New York Times' recent $35 million quarterly loss, for example, is a sign of the great progress the company's making. Get in while the getting is cheap!

Well, as the WSJ ably points out today: What's really happened is that newspapers saw momentarily more encouraging numbers thanks to vicious cost-cutting across the board, and a somewhat less horrific economy at large. But there's not a whole lot of cost-cutting left to do before you cut your paper down to nothing. And the newspaper advertising business isn't looking up.

The reality is that newspapers are suffering severe declines in ad revenue this year on top of the double-digit percentage declines they suffered last year.
Compared with the first half of 2009, their recent performance doesn't appear to be getting much worse, but it has yet to show any real recovery.

The print ad business is in an irrecoverable dive, there's no comparable replacement revenue source, quality will likely continue to decline (unto death) at many old-school newspaper companies, and the internet still exists. Sorry.

We frankly don't understand Roubini's latest apocalyptic pronouncement, published yesterday in the FT, but it has something to do with how "quantitative easing" and "hot money" have created another massive asset bubble that is going to burst and kill us all. Everybody's borrowing in dollars—which we guess the Fed actually will pay you to do, like you get a free dollar for every five you borrow, or something—and investing in the Third World, and it's the "mother of all carry trades" and will ruin the world when the dollar rebounds, which we thought was supposed to be a good thing, but you can't win for losing and Nouriel Roubini will crush your dreams one way or another. It's what doom merchants do. Like the beleaguered Mayan eschatologists busy selling Sony's upcoming 2012, he's simply satisfying a market demand for a framework that renders our generalized anxieties sensible and justified.

And he's got to pay for all those parties at his vulva-studded TriBeCa loft somehow. Last night—on the very day his latest black pronouncement was published—Roubini had Wall Street II director Oliver Stone and some ladies over for post-Halloween merriment. Or, as Roubini put it his Facebook update: "We hanged out."

This is Dimon's 1974 yearbook senior page from the Browning School, the upper-east-side private academy he attended. We first learned about the yearbook in Duff McDonald's biography Last Man Standing, and knew that we needed to see the whole thing for ourselves. We put out some calls to find the rest of it and got a friendly source to scan in Dimon's whole page from the Grytte.

Sadly, Dimon didn't share Neel Kashkari's high-school obsession with sports cars. But he did clearly fit in with the waning hippie look of the mid-1970s.

Dimon's still got a reputation as something of a poor dresser. Here's how Last Man Standing biography describes his sartorial acumen:

He also eschewed the traditional uniform of the B-school student-khakis and button-down shirts-and wore jeans and often a blue leather jacket. His classmates actually remember that of the 75 students in their year, Dimon was the absolute worst dresser.

[snip]

His casual weekend wear was black jeans and a black t-shirt. "Jamie was dressed like Johnny Cash," laughs one executive. "I guess he thought he looked cool. But he didn't."

And here's what Andrew Ross Sorkin's new bailout book has to say about his jeans preferences:

A fed staffer announced to all the CEOs that Paulson, Geithner, and Cox would soon be coming downstairs. When Jamie Dimon, dressed in tight blue jeans, black loafers, and a shirt showing off his muscles, wandered into the room, Colm Kellcher whispered to John Mack, "He's in pretty good shape for his age."

You'd think someone who made $30 million in 2007 would be able to afford to pay someone to dress him better. Here are some close-ups of the good pictures.

The educational mission at Browning's is to turn out "Browning gentlemen," and Dimon sure looks like a gentleman, doesn't he? Right down to the ruffled jeans-and-tie bit and the long-haired Himalayan searcher pose.

Dimon chose to adorn this photo the Hamlet motto, "This above all: To thine own self be true," rounding out the nonconformist-outsider theme of the page. We wonder if he once shared former Bear Stearns chief Jimmy Cayne's penchant for pot—which would be funny, seeing as how Dimon earned his reputation as Wall Street's last man standing after he bought Bear Stearns at a measly $2-per-share, averting a financial catastrophe.

He's thankfully trimmed his hair down to a more manageable—and less androgynous—length.

The most basic definition of insider trading is: information that isn't available to the public shareholders of a company is given to sketchy assholes who already have more money than you, first. That way, said assholes can buy or sell stock based on whether or not a company's about to blow up or be royally screwed. Once the information becomes publicly available, the stock price is either too high for you to buy or your stock's already been screwed because they sold their gigantic loads of the company off before you could. And you would've bought and/or sold your stock because you know that when a company produces a bunch of planes that explode nine seconds after takeoff, you should probably sell your stock.

So: insider trading is bad, right? Bad for morals, bad for the economy, bad for people who get manipulated by other people by shady backdoor deals, right? Wrong, motherfuckers! Bwah. Ha. Ha. says the Wall Street Journal's suspiciously named Donald J. Boudreaux. How is this possible? Let's learn. Dr. Evil Donald J. Boudreaux suggests that because it's hard to tell what's a sketchy secret and what isn't, it (A) wastes the time of federal authorities, (B) it keeps asset prices "honest" by telling the truth about what their real value is and (C) it helps the market adjust rather quickly. Watch how he phrases this:

Time to stop telling horror stories. Federal agents are wasting their time slapping handcuffs on hedge fund traders like Raj Rajaratnam, the financier charged last week with trading on nonpublic information involving IBM, Google and other big companies. The reassuring truth: Insider trading is impossible to police and helpful to markets and investors. Parsing the difference between legal and illegal insider trading is futile-and a disservice to all investors. Far from being so injurious to the economy that its practice must be criminalized, insiders buying and selling stocks based on their knowledge play a critical role in keeping asset prices honest-in keeping prices from lying to the public about corporate realities.

Well, considering the small fact that federal authorities completely fucked the dog on Bernie Madoff, I'd say that anything that even remotely resembles something that might cost people who don't have the money of megalomaniacal bajillionaires a few bucks is probably worth the time of federal authorities. Also, a stock's "real value" is based on information attained through sketchy means? No, I'd say that's an asset's "shadow value." Its real value is based on the people whose fortunes are turned by it that can't afford (or, inversely, shouldn't be allowed) to have it do so. Information that insider trading works off of should be made public, not hunted out and used for profit; the big point Frederick von Dumbass is missing is that letting illegal information be freed up for legal use once obtained by white collar criminals makes said propriety information even more proprietary.

But I don't have a column at the Wall Street Fucking Journal, so, you know, I wouldn't know my ass from my face when it comes to money, which is to speak nothing of Mark Penn's Microtrends (For You To Buy Into, That My Clients Would Like You To Buy Into) column.

Boudreaux's column goes on to cite examples from the gas "crisis" of 20 years ago that allowed Big Unleaded to screw our parents in the tank, and the potential of Big Pharm to inflict damage on the public's health and wallets. Which is fair, but also, why we have regulatory agencies that exist to vette out this kind of thing. The second we let people with access to insider trading use it—people on Wall Street, guys who sit in front of their computer every day for hours at a time scanning forums for the slightest piece of corporate gossip—is the second we put the markets even further out of control of the majority of people who are layman's stockholders. This would be like letting the biggest Star Wars fanboys write the plot of the next three movies (and look what happened when we bought into George Lucas writing the screenplays for the last three).

Even more curious is how the Wall Street Journal allowed themselves to run this kind of complete nonsense without anything remotely resembling a counterpoint; they're big press. People who don't know Wall Street read the Wall Street Journal. This is dangerously stupid rhetoric. It's funny when Clusterstock does it, because they're mostly read by psychopathic, gossipy market obsessives, and because they often to have the counterpoint up five or ten minutes later. This is a little different. This is just patently ridiculous.

As you will see, The System is working around the clock to make you a productive member of society once again. Need to go out looking for a job? We're slashing subway fares to make it easier for you to do so, at 3 o'clock in the morning. Need some help tracking down the right position? We're making a Match.com for employment, to put the unparalleled success of online dating at landing you your dream date to work landing you your dream job! And if you do find that dream job—defined as "A $13 per hour gig at an Indiana trucking company"—you can be sure that 500 others will be right there with you to apply for the same position, to ensure you get to test yourself against the very best.

We will also enable you to stay in your below-market-rate apartment a bit longer.

Verily, The System is lining everything up in your favor. It's time to do your part. It could be much, much worse for you. You could be on Wall Street. We're capping those guys at $500k, not including stock options. Can you fucking imagine? Appreciate what you have.
[Pic via]

A funny thing about corporate earning is that even if your company objectively lost a boatload of money, it's okay as long as you lost less money than analysts thought you were going to lose. So even though the NYT Co. bled money, they beat estimates—and improved over Q3 of last year, when they lost more than $100 million—so things are looking A-OK, from Wall Street's perspective. Mostly due to the fact that the company is aggressively cutting costs (100 more layoffs TK), as it should be.

The real story here: The ad market is so abysmal that, for the first time ever, advertising is not even the NYT's primary revenue source:

The largest segment of the company reached a watershed moment, collecting more from readers than from advertisers, in an industry where advertising traditionally outweighed circulation in revenue by at least three to one. At the company's New York Times Media Group, which includes The Times and The International Herald Tribune, circulation revenue reached $175.2 million in the third quarter, while ad revenue dropped to $164.5 million.

Too bad they're in an ad-based revenue model. Get ready to break out those wallets, online readers.

Investors have been leaving Galleon Group in droves since Rajaratnam's arrest last week on charges that he used a network of informants to acquire inside information that netted him $20 million in profits. Galleon Group's trading partners have filed redemption requests to withdraw $1.3 billion of the $3.7 billion managed by the company. Clients are concerned that Galleon Group's assets could be frozen in the coming investigation. The investor exodus has forced Galleon Group to sell tech stocks and other assets to raise cash.

Rajaratnam visited the Galleon Group's Madison Avenue headquarters on Monday for a rousing ten-minute speech. Some of the employees in attendance for Rajaratnam's visit were crying as he told them "I'm counting on you to take care of our investors" and vowed to fight the charges being made against him by federal prosecutors. Rajaratnam also sent out a letter to Galleon Group employees and investors in which he proclaimed his innocence and promised that he'd "continue to be here working for Galleon" and that "the firm will continue to serve its clients with effectiveness and integrity."

There is one bright spot for employees who don't share Rajaratnam's rosy outlook for the Galleon Group. Executive recruiters have alreay been approaching staffers at the dying hedge fund about jumping ship. Raj Rajaratnam may think his company still has some life left in it, but the vultures have definitely started circling overhead.

Raj Rajaratnam is the co-founder of the hedge fund Galleon Group. Last Friday, he was arrested and charged with the biggest insider trading scheme that Wall Street has seen in recent history. Let's briefly recap this spectacular criminal web!

• The SEC says that Rajaratnam used a vast web of inside informants at various companies to trade on them illegally using inside information. He and five others have been charged in this case, including two from another hedge fund and one IBM executive. Rajaratnam allegedly paid cash and favors to insiders in return for information, and made more than $20 million in profit on the ensuing trades.
• Rajaratnam himself (who claims he's innocent) is a Sri Lankan native who's been a fundraiser for causes there (including, allegedly, the Tamil Tigers, who are designated as terrorists by the US government). He's also the largest individual investor in Sri Lanka, and stocks there fell on the news of the charges.
• This is the largest insider trading case ever connected to a hedge fund. That makes the publicity-and-regulation-averse hedge fund world nervous. However, at least three former Rajaratnam colleagues are helping the government build its case against him.
• Incriminating telephone transcripts? This case has 'em! The best are tapes of Danielle Chiesi of New Castle Funds (pictured), also charged with insider trading in the case. She sounded less than innocent:
  
  
  
  
• Robert Moffat, a top IBM exec, was also arrested in the case, for leaking inside info. His arrest reportedly caused "cheering in the halls" by unionized workers.
• Anyhow, Rajaratnam's out on $100 million bail and he's supposed to be addressing Galleon employees in the office today, so be sure to email us and let us know what he says!

When you wake up in the morning and see a story about how Wall Street is all set to pay its employees $140 billion this year, which is more than ever before, the first thing you do is run check the calendar to make sure that the year you think it is is the year it actually is, because that story could lead one to believe that it is, in fact, a different year than you had suspected. The second thing you do is mentally review whether you took any drugs last night, and if so, how many and what type, and what sorts of hallucinations they could produce, in terms of visualizations of newspaper headlines. The third thing you do is look around your $56.5 million apartment, slap yourself, and say "Goddamn it's good to work on Wall Street!" The fourth thing you do is let yourself out quietly, because you don't actually own that apartment, and your presence there probably has something to do with all the drugs, but you're not sure what.

None of which is meant to obscure the fact that we're finally getting our national priorities back in order. We're keeping regular working-class people in their jobs, but we're finally cutting their outsized pay down to size—more pay cuts than there have been since the Great Depression. And for those workers who pay we can't cut, by law? We're lowering the god damn minimum wage. Take that, fiscal profligacy.

Real Americans appreciate this Thrift Encouragement Initiative, from the private sector. Getting our vast system of class-based income stratification back in order won't be accomplished by lazy government bureaucrats with fancy Harvard degrees; it'll be accomplished by hardworking small businesspersons like Wall Street CEOs taking their fair share. Even you can play a part. Stab your fellow American to prevent them from buying football tickets before you. It'll make you feel better. It'll stimulate the health care and corrections industries. And it'll send a strong signal to Wall Street: We, the lower classes, are "Keeping our eyes on the ball," so to speak. Carry on!
[Pic via]

Two American economists who you've never heard of won the Nobel Prize for Economics for work that you will never read nor understand. All you need to know: They're motherfucking Americans. USA.

The Dow Jones hit its highest levels of the year today, thanks to corporate earnings improving after massive layoffs and budget cuts that have turned most of middle America into a vast economic wasteland of once-mighty engines of capitalism ground to horrific halt, from the empty airplane manufacturing factories of Wichita to the glass-sheathed carcass of Las Vegas' Fontainebleau, now nothing more than a $2 billion black hole for squatters and rats. Luckily state unemployment benefits for the long-term unemployed are about to run out for good, providing the same corporations that make up the S&P 500 an unprecedented pool of desperate workers ready to do any old job for any old salary.

Also the Village Halloween Parade is totally broke ass.

All of which bodes well for corporate America, and stocks. Go forth and celebrate, unemployed Americans. Wave your hobo flags. USA.
[Pic via]

Lay back and light your cigar with a one hundred dollar bill in a gleefully stereotypical manner as you take in this information from the respected Wall Street Journal: "A fresh round of corporate dealmaking on Monday helped lead to broad-based gains for stocks, which are closing in on the best quarterly climb in more than 10 years." They says "Stocks Leap," which is a powerful and evocative action word.

Leaping, upwards!

When you're right in the midst of a big huge once-in-a-decade rally directly on the heels of a hellish financial apocalypse followed by a totally jobless "recovery," there is only one thing to do: the most risky thing possible! Investors are fleeing from investing in Iraq just because of its total lack of safety or functioning government? Rush in headfirst, waving bags of money! Analysts are wary of the secular nature of the ongoing horrific collapse of all ad-based media? Go to Ad Week and party the fuck down! It's a party! An ad party.

Scared of the fact that statistically most corporate M&A's are failures? Fuck it! M&A's: Do them! Everyone else is. Do it for the economy of America. Do it for financial trade reporters, and corporate culture consultants, and, most of all, for the bankers.

They need this. Otherwise they're just floating around and getting spooked by the possible metaphorical significance of a 1,400-pound bull rampaging down the streets of Paterson, NJ, before being forcefully subdued by police. Which is not good.

The five directors haven't been named, but Cuomo wants to know whether they misled shareholders in the weeks leading up to its merger with Merrill Lynch, especially about the $36 million in extra losses that were posted after the deal was complete. But Cuomo's not stopping there:

Cuomo plans to subpoena most, if not all, of the directors over the next several weeks, said the source, who spoke on the condition of anonymity because the investigation is ongoing. Bank of America chief executive Kenneth D. Lewis has already testified.

These subpoenas, sources say, could be part of a game plan to bring charges against some Bank officials. And, even if that's not true, this will make great campaign fodder should Cuomo run for governor next year.

And who's getting hit the hardest? The top 1%. The heroes. The supermen. We can't help but read a dismayed tone into the WSJ headline, "Income Gap Shrinks, At Cost to Rich."

This is not normal. The poor know how to be poor already. What do the rich know about losing income? It's troubling, to say the least. When the top 1% of earners earn slightly less, innovation in America is destroyed, and Russia comes out on top. Try to imagine the world that this single WSJ photo caption implies: "Anthony Carmenate, in his home near Boston, has struggled since losing his $500,000-a-year job in asset management."

Scary, isn't it? Yes. Scarier still because one of the traditional economic leavening agents that kept the poor in their proper place—gambling—is not being embraced as enthusiastically as it should, by the desperate underclass. If you people don't support your state lotteries with your meager bit of disposable income, who is going to pay for your kids to go to school? The rich? A preposterous thought! They can build their own schools, or send their kids to public schools supported by their property taxes on the rich side of town. You, the poors, send your kids to crappy schools supported by the laughable taxes you pay on your hobo property. Lottery money makes up the difference! Gamble or die uneducated!

Whew. We must admit today's dark projections have us positively exercised. We offer a tip in the amount of $3 in scratch-off tickets to the first member of the underclass to fetch us an ice cold glass of lemonade and a bamboo fan. Additionally, we offer you a free investment tip: buy in Florida. Condos down there are going like hotcakes. Get in on the ground floor. Fifty Feet in Paradise, kids. It beats the hell out of broke ass Stuy Town.
[Pic via]

Madoff was recorded advising a guy from the Fairfield Greenwich Group how to evade the SEC. It's enough to make you think that Madoff had something to hide.

"You know, you don't have to be too brilliant with these guys, because you don't have to be," Madoff said, referring to SEC investigators.

Because they are none too bright, you see. If the questions got tough, Madoff advised, just start joking around with the SEC guys—hey, whoa, you guys writing a book here or something? Haha. Works every time!

At one point, Madoff interrupted the conversation to take another phone call. He returned and said, "I'm sorry. If I get any more solicitations for charity, I'm going to kill myself."

At least he's solved that problem now.
[Pic: Getty]

So this reporter went on up and found Dick at his Ketchum mansion, just cold hiking over mountains and chilling out. His first words to the reporter:

"You don't have a gun; that's good."

Ha, okay then! So then he went on about how much he has suffered and how ridiculous it is that the government didn't bail out Lehman and how oh well, he knows nobody wants to hear all this from him, he's such a big villain, yea right, whatever, this too shall pass. I mean he has to sit with his back to the wall at restaurants just so some joker doesn't come in and hit him in the face, with a pie! That is absolutely in the story, yes! And he's down to his last four mansions! But he's keeping on a happy face:

"I'm not a defeatist," he said. "I do believe at the end of the day that the good guys do win. I do believe that."

You better hope not, Dick.
[Pic: AP]

What has been going on in "the market" today, you may ask? Sell! Sell! Sell! The stock market was on a big tear the last week or so and now everybody is selling everything off as fast as possible because, as we all know, the US financial system is built on a foundation of rotten balsa wood, and the termites have been hungry lately.

People are especially selling off their financial stocks because, ha, you invested in that??

Not to fear, foolish investors! Your friendly neighborhood loan shark is ready and willing to give you a much-needed loan, as well as maybe a shark bite (from a gun). Shop around! Interest rates range from 60% to 2347%, so don't just jump at the first usurious deal you hear!

Hey, it's better than selling your parents, right? Eh? Well what kind of price are we talking, here?