Mob extorts subprime lender, not sure who the crook is

From the Post:

Mortgage firm is Mafia Inc: feds

It was a hostile corporate takeover — Mafia-style.

The son of jailed former Lucchese boss Nicodemo “Little Nicky’’ Scarfo used the trusted mob technique of extortion to gain control of a cash-rich mortgage company — and then loot it for millions, according to federal prosecutors in New Jersey.

“The [mob’s] criminal activities have evolved from the back alleys to the boardrooms,” said Michael Ward, FBI agent-in-charge in Newark, said of the stunning scheme.

Nicodemo “Junior’’ Scarfo, 46, and 12 others, including an accountant and five lawyers — one, David Adler, from tony Chappaqua, NY — were nailed in the scheme involving Irving, Texas-based FirstPlus Financial Group, authorities said.

Instead of targeting a more typical Mafia staple such as a restaurant or illegal-gambling racket, the mobster offspring and his cronies zeroed in on FPFG, which had been raking in millions from its subprime-mortgage business at the height of the real-estate boom, the feds said.

“They saw the potential, they saw this small company that was cash-rich, looking to do a restructuring,” one law-enforcement source told The Post. “They saw an opportunity to exploit. It was wrong place, wrong time” for the firm.

The group began threatening the board of directors — and their families — to get them to vote their way, or else.

In another instance, when Pelullo was trying to get enough directors to vote his way, he allegedly screamed at an associate: “I don’t care if [any voting members] are in a funeral parlor, I don’t care if they’re in a f–kin’ hospital respirator, we’ll send somebody there.

“I want their vote, I want their signature, and I want it done by the close of the day today.”

The scheme netted $ 12 million by bleeding FPFG dry. The money was laundered by manipulating mergers of sham shell companies they owned and engaging in phony consulting contracts, prosecutors alleged.

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92 Responses to Mob extorts subprime lender, not sure who the crook is

  1. Mike says:

    Good Morning New Jersey

  2. grim says:

    From CNBC:

    Challenge Your Foreclosure Now

    It’s late, and it’s limited, but for borrowers who feel their homes were wrongly or inappropriately foreclosed upon in 2009 and 2010, there is now recourse.

    As part of a larger enforcement action (so-called “consent orders”) taken last April against fourteen of the nation’s largest mortgage banks/servicers following the so-called “robo-signing” scandal, the Office of the Comptroller of the Currency is beginning a “multi-faceted independent review of foreclosure actions.”

    The major banks, including Bank of America, Chase, Citibank, Wells Fargo, GMAC, and EMC, will have to fund these independent reviews to evaluate, “whether borrowers suffered financial injury through errors, misrepresentations, or other deficiencies in foreclosure practices.” If they did, those borrowers get some kind of “remediation.”

    “The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system,” said John Walsh, Comptroller of the Currency in a statement.

  3. Shore Guy says:

    Or the appearance of recourse just before the election.

  4. Fabius Maximus says:


    I always found the biggest whiners came from LI. 5:01 and they are busting the gates to get to Penn. Then there is points failue in Jamacia or a fire in a tunnel or the wrong type of snow in the sound. Overall I think the bus is more reliable and anyone from NJ, going into the city on the weekend is probably driving to Hoboken and taking the path.
    On travel, I have standards and if they aren’t met, I politely decline. I have traveled too much in my earlier years to spot when I’m getting shafted. If they insist I go, I’ll insist on booking the flights and hotel. I highly recomend
    On going out after work, its a choice. If my boss wants to take me for a steak at Mark Jospeh, I’ll go. If its Bowlmor lanes with a corporate 2 drink max, I’ll pass.
    I am very flexiable with my team and try and run a 9-5 shop. I want them home with their families as I need the spouse on board when I need them working at 3AM. There is a lot of unpaid weekend work, but I have ways of paying them and making up the time. I have a very loyal team and very low turnover. But I know if I call at 11PM on New years eve, the call is getting picked up.

  5. Have a shot of Ouzo, sit back, and inhale the stench of death.

  6. Anchor Baby says:

    I’ll just put the tip in.

  7. Comrade Nom Deplume says:

    (90) (prior thread) baby

    JJ’s words carry weight that would break a lesser man’s jaw.

  8. gary says:

    Now the guy’s got Paulie as a partner. Any problems, he goes to Paulie. Trouble with a bill, he can go to Paulie. Trouble with the cops, deliveries, Tommy, he can call Paulie. But now the guy’s got to come up with Paulie’s money every week. No matter what. Business bad? F–k you, pay me. Oh, you had a fire? F–k you, pay me. The place got hit by lightning, huh? F–k you, pay me. Also, Paulie could do anything. Especially run up bills on the joint’s credit. And why not? Nobody’s gonna pay for it anyway. And as soon as the deliveries are made in the front door, you move the stuff out the back and sell it at a discount. You take a two hundred dollar case of booze and you sell it for a hundred. It doesn’t matter. It’s all profit. And then finally, when there’s nothing left, when you can’t borrow another buck from the bank or buy another case of booze, you bust the joint out. You light a match.

  9. funnelcloud says:

    Gary, #8
    Great movie !!!!
    Your a funny guy, not like a clown, Your, Your funny, you know,,, like the way you tell the story.

  10. gary says:

    How the f*ck am I funny? lol!

  11. chicagofinance says:

    This MF Global stuff is unbelievable. Commingling accounts? In this climate with OWS et al. and the whiff from 2008, Corzine and senior mgmt are warmed over chum in the shark tank…….THIS IS ENTERTAINMENT…..

  12. Painhrtz - I ain't dead yet says:

    Spider get me a pre-approval letter you stupid f*ck

  13. Comrade Nom Deplume says:

    [11] chifi

    I’m staying out of the water. MF reminds me too much of LTCM.

  14. Comrade Nom Deplume says:

    Apparently, even the physicists want in on the zeitgeist of wealth and inequality.

    Strikes me as having too much time on one’s hands when you are trying to mathematically model the obvious. But then again, I am the one that argues that Newton’s Third Law has a place in economics, so I should just STFU, I suppose.

  15. Juice Box says:

    MF Global – nothing to see here move along.

  16. Comrade Nom Deplume says:

    This may have been good advertising, but it is gonna bite him in the ass.

    Can anyone spot the violation? (no Fab, being a wingnut isn’t a violation per se. Yet).

    FWIW, if he had just left off the muslims, he would have been fine. It would have pissed off enough lefties (who would not be patronizing him anyway), and gotten some fine visibility for his business. Sure, the feds could have pressured him, but they’d be on thin ice and would have given him even more free press.

  17. Juice Box says:

    After Secretary of the Treasury Geithner retires, I nominate Jon Corzine for the job.

  18. grim says:

    Isn’t it Chase’s turn at the helm? Or is it BOA’s?

  19. grim says:

    Corzine would have got a turn, but Paulson got it instead.

  20. The Original NJ Expat says:

    #4 Fab – I’ve done the bus from Nutley, NJ and the train from Huntington, LI. I found the reliability of each about the same.

  21. The Original NJ Expat says:

    #5 Clot Have a shot of Ouzo, sit back, and inhale the stench of death.
    Ouzo is a step up from grain. Green shoots?

  22. Fabius Maximus says:

    #16 Nom

    I love wingnuts, they are the funniest thing around. Time to order a new bumper sticker.

    Wingnuts, enhancing democrat electibilty since 2008!

  23. Juice Box says:

    re: # 19 – Grim – Corzine is a Democrat, no way Bush would have given him the nod.
    He is or now was on the list to replace Geither. He is a big time bundler for Chairman O. Corzine ran the first fundraiser this year for Chairman O in NYC at his wife’s Sharon Elghanayan place @ 35k a ticket(I gather they would not come to Hoboken). Many Wall St glitterati were there. Corzine was also Chairman O’s referee between Wall St and DC when bankers feeling were hurt because they were being singled out by the administration. Corzine organized a sit-down at the Four Seasons between Chief of Staff Bill Daley and the fat cats to smooth things over going into next year.

    I guess Chairman O will have to find a new bundler on wall st, there will be no shortage of candidate for the job that is for sure.

  24. Fabius Maximus says:

    I live in North BC which I like to refer to, as Republican he11. One thing I have noticed is that even up here in a GOP stronghold the candidates are running lawn signs and mailings with no party afffiliation. I drive past a campaign office every day and there is not an elephant in sight. It seems the GOP are treating their own brand as toxic. Not a good sign for them.

  25. nathalie says:

    This site is really beautiful, I have done everything, to find out. Congratulations to the “Creator” of this site. Very pleasant.

  26. emotadats says:

    Our online Ed Drugs Pharmacy is dedicated to providing you, with outstanding service and value and provides a full selection of discount prescriptions. get cilias ohio naturally?.. facts about club drugs medical device companies mn!

  27. freedy says:

    corzine gets a pass . whats the odds?

  28. Anchor Baby says:

    – crickets –

  29. Nicholas says:

    Corzine gets a free pass and all my senators and congressmen get the boot. Someone is going to jail over this one.

  30. Juice Box says:

    freedy – I have the uppermost confidence that our judicial system will protect the banks at all costs. There will be no prosecutions of Jon Corzine, he will not spend a day in jail, he won’t even pay a fine. I would not be surprised to see him as ambassador to China or some other post in the near future.

  31. freedy says:

    thats what i’m thinking as well. so sad that these guys always walk.

  32. funnelcloud says:

    He who makes the laws or enforces the laws is above the laws

  33. Anon E. Moose says:

    Nom [16];

    Just dumb. How about “Must be elegible to qualify for security clearance”? Similar effect, no?

  34. make money says:

    We all know there will be war in teh next 5 years or so…this is a good start I guess…

  35. JJ says:

    corzine was hired to take over a troubled firm as their figurehead, most of these problems were there before him. I think arrogance and gross incompetance was his downfall, from not wearing a seatbelt, to being gov of NJ to this. It is not a crime to be an idiot.

  36. chicagofinance says:

    I once ran next to him on the treadmill in the Hudson Tea gym for 45 minutes. I have never heard someone make so much noise. Huffing, pfftting his lips, moaning….at the end he said …. “it’s a miracle”……….

    JJ says:
    November 2, 2011 at 12:28 pm
    corzine was hired to take over a troubled firm as their figurehead, most of these problems were there before him. I think arrogance and gross incompetance was his downfall, from not wearing a seatbelt, to being gov of NJ to this. It is not a crime to be an idiot.

  37. Comrade Nom Deplume says:

    Well, the town came and my tree is gone. They have been very efficient here, and they cleared everything, including the limbs from my other trees and my leaf pile.

    But we will miss that tree.

  38. Comrade Nom Deplume says:

    (33) moose,

    Not a good proxy. Lots of Muslims and liberals could pass

  39. Comrade Nom Deplume says:

    (24) fab,

    You see an elephant and think swas-tika. I see a donkey and think hammer and sickle.

    And don’t tell me there isn’t rhetoric to support it. I don’t have time to do a data dump on your azz.

  40. Comrade Nom Deplume says:

    (34) make,

    Not very preemptive if you announce it.

  41. joyce says:

    If I see either, I think they’re interchangeable

  42. Dan in debt..... says:

    I think these stories come out every couple of months in order to keep the defense analysts who insist Israel will start the next war back on front of TV screens with a living. How else these guys gonna sell books. Also good for the Christians to remind the Jews that they can make stories and rumors up too to make people look bad…….

  43. chicagofinance says:

    NOVEMBER 2, 2011

    Blueprint for a New American Home

    Expanding the Spaces a Family Really Uses; More Practical Doesn’t Have to Mean Smaller .


    The new American home is taking shape.

    Tough recent years are leaving their mark on home design, just as the housing-boom years sent square footage soaring and stamped a distinctive “McMansion” style on neighborhoods across the country. Big home builders, smaller architecture firms and even bathroom-fixture makers are adjusting to the shift toward more practical features and away from the aspirational.

    The new styles are showing up in the relatively few new homes under construction as well as in the remodeling of older homes. More people are renovating as they stay put longer.

    Disappearing are formal living and dining rooms, two-story foyers and second staircases. There are fewer places to stick grandfather clocks, wedding china and bowls of glass balls. Plenty of space is opening up for shoes and sports equipment, schoolwork and textbooks, wrapping paper and scrapbooking supplies. And maybe even an elevator shaft, just in case Grandma moves in or Mom and Dad stay for ages.

    That doesn’t necessarily mean smaller homes, though median square footage of 2,169 last year remained below the peak of 2,277 hit in 2007, according to 2010 census data.

    “The spaces where everybody hangs out and that they use every day are the spaces that families actually want a little bit larger,” says Tony Weremeichik, a principal at architectural-design firm Canin Associates in Orlando, Fla. “Buyers are asking, ‘Why spend dollars on space I am not going to use?’ There’s no need for drama anymore.”

    “Value and need are driving the home purchase decisions, not the potential investment value,” says Stephen Melman, an economist for the National Association of Home Builders.

    So the soaring cathedral ceiling is out. And it’s got company. Here are some fading features and the new designs that are replacing them:

    THEN: Grand foyers
    NOW: ‘Drop zones’

    Once a must-have in the McMansion floor plan, double-story entrance foyers are now seen as a waste of space and energy-inefficient, homeowners and builders say. Few suburban families actually enter their homes through the front door, so the grand entryway is a vestige of a house meant to impress others.

    Replacing the foyer is the so-called drop zone. As large as 10 feet by 10 feet, these rooms are bigger versions of the mud rooms once common to homes, with places to unload clutter before it’s deposited throughout the house. They feature baskets for mail, hooks for backpacks and coats, and storage for shoes and winter wear. Some even have lockers.

    “Families tell us there are two times of day that are their hot buttons: getting ready for school and the evening with all their kids’ homework and cooking dinner,” says Scott Thomas, national director for architecture at builder PulteGroup Inc. Since laundry rooms are too small and most people use the back entry to their homes, “we’ve created the drop zone,” says Mr. Thomas.

    The drop zone is being brought into older homes, too. Washington, D.C., real-estate agent Laura McCaffrey says she finds herself increasingly building them into mud rooms, hall closets or basement walls. “A place to actually put stuff is a much more sought-after area,” she says. “A closet with a pole and hanger won’t do.”

    THEN: Formal living rooms
    NOW: Open family rooms

    With four of their six children out of the nest, Colleen and Doug Otto downsized last year from a 5,600-square-foot, six-bedroom home in the Fortville suburb of Indianapolis to a four-bedroom with a little more than half the space. They have no separate, formal living room. “We used to put the Christmas tree in there and that was about it,” says Ms. Otto, who works as a dental assistant. “We like this [new] house because we don’t feel there is any wasted space.

    Builders say families want an integrated and open area encompassing the kitchen, family room and dining area. And a separate great room—a cavernous bonus room for the piano or wicker furniture—is out. Now buyers “are OK with having a great room with three functions,” says Steve Ruffner, president of KB Home’s Southern California division. “They separate spaces more with furniture than their walls.”

    THEN: Second staircase
    NOW: Room for elevator

    A spiral staircase out front, with a secondary set off the family room or kitchen, is another bygone feature. More buyers who plan to grow old in their homes foresee the day when those stairs become an obstacle. This has prompted more builders to add a bedroom and full bathroom onto the ground floor—and leave enough space for an elevator.

    “Lately, we work to deliver the elevator shaft as a possibility for conversion down the road with removable floor plates…and stacked closets on the first and second floors,” says Pulte’s Mr. Thomas. The builder also sets the house low to minimize the steps up to it. Many downsizers and seniors, KB’s Mr. Ruffner says, don’t want stairs at all. “Everybody wants the bedrooms downstairs.”

    THEN: Dad’s office
    NOW: ‘Lifestyle center’

    Mobile devices and laptops allow work to be done all over the house now, meaning Dad isn’t chained to a large mahogany desk in a home office.

    Some Pulte properties feature a special area for these tasks dubbed the “lifestyle center”: a multifunctional room off the kitchen where parents can work from home, print school assignments, do crafts and wrap presents.

    “We’re most excited by this room,” says Ms. Otto. “Our two kids, a freshman and a junior, they do their homework and I pay the bills. I can be cooking, but I can keep an eye to make sure they’re not playing on the Internet.”

    THEN: Soaker tubs
    NOW: Steam showers

    Jacuzzis and big soaker tubsare boom-era legacies that families say were rarely used. Replacing them are bigger shower stalls which allow men and women to shave comfortably and steam their pores.

    “The shower category has grown faster” than tubs,says Mirjam Lippuner, a spokeswoman for Kohler Co., a manufacturer of kitchen and bathroom fixtures. The company recently launched a digital shower system that allows users to press buttons for steam, lights and music.

    Some families hold onto their tubs to help preserve resale value. Others install more modern ones with gentler hydrotherapy bubblers instead of strong water jets.

    Ms. Lippuner says a tub featuring a wall that can be lowered—allowing elderly bathers to easily enter and exit—is growing in popularity. It’s a nod, she says, to more families moving into a home and “aging in place.”

    THEN: Breakfast nook
    NOW: Outdoor living space

    As the kitchen has opened up into the dining room, there’s less need for a separate, small table for breakfast. Builders say they are increasingly installing sliding glass doors into the back of houses that blur the lines between indoors and outdoors.

    In May, Jorge Rocha moved into a three-bedroom in Chula Vista, Calif., built by KB Home, and his first task was to build a patio out back.

    “We installed a small seating area with a fire ring to make it a real outdoor living space,” says Mr. Rocha, who works as a manager for an electronics retailer. “It makes the house seem bigger.”

  44. Anchor Baby says:

    36. Are you sure he wasn’t crapping in the stall next to you at the Cornhole club?

  45. chicagofinance says:

    Anchor Baby says:
    November 2, 2011 at 1:36 pm
    36. Are you sure he wasn’t crapping in the stall next to you at the Cornhole club?

    are you Essex?

  46. Libtard in Union says:

    Nom (37):

    Your limbs are gone and I don’t even have electricity or FIOS. My jury rigged boiler is humming along just fine so at least we have heat, until the neighbors new Chinese knockoff generator dies. The neighbor (the guy who loves to take advantage of every government hand out) bought a Powermate with a Subaru engine. 6,000 watts, which is enough for just about everything. It sucked filling it with gas at 6:30am in the dark. Neighbor’s gas cans have a valve that we can’t figure out how to open. I guess a beggar shouldn’t be a chooser. And I hope he doesn’t complain about the liter or so of fuel that ended up in his driveway. BTW, he got $5,000 from FEMA from the hurricane, even though he didn’t sustain any damage besides the fact that his facade of a basement floor cracked in a few places.

  47. JJ says:

    October’s $34.9 billion in municipal bond new-issue volume was the highest single-month total in 2011, beating out June’s $31.5 billion, and October’s total included $31.0 billion in new tax-free muni bonds, the highest monthly total in over two years, according to Janney Montgomery Scott, as much of 2010′s record volume was driven by taxable Build America Bonds.

    Janney says this elevated new issue activity contributed to October’s muni-to-Treasury yield ratio hitting its highest level since January 2009. That ratio compares yields on muni bonds to those on comparable Treasurys. Depending on maturity, muni yields typically run between roughly 80% and 95% of Treasury bond yields because muni yields are tax-free. But lately Treasury yields are so low that muni yields have climbed higher, making them an excellent relative value investment, provided you trust muni bonds to live up to their low-risk reputation. 10-year muni bond yields currently measure 115.2% of 10-year Treasury yields, according to Thomson Reuters Municipal Market Data.

  48. JJ says:

    I thought you had to pay back FEMA money, just a low cost loan. Did you neighbor get to keep the 5K?

  49. Libtard in Union says:

    As far as I know he did! I’ll ask him. Although I distinctly recall him saying that back when he collected when Floyd came through, if you failed to pay FEMA back, they stopped bothering you after about one year.

  50. The Original NJ Expat says:

    125% LTV mortgages? Our mortgage is small now and through JPM Chase (originally through WAMU) . Chase sent us a letter yesterday offering to refinance us at 4.01% for up to 125% of the value of our house. WTF? We have great credit and have always overpaid our monthly mtg payment with extra principal. Are they tired of seeing us devalue their loan asset each month so much that they want to lure us into a mortgage 4x the size hoping we can’t overpay that one?

  51. chicagofinance says:

    The End Is Nigh (NJ REReport Aquatic Edition):
    Tracking Unicorns of the Sea

  52. Juice Box says:

    JJ – MF Global – Apparently the European sovereign debt was all Jon Boys idea, and since they had been racking up losses for over 4 years where was PwC? Should they have issued a going concern opinion? Opps I forgot they have to pay their bills too.

    Can’t trust (with my money) list

    Rating Agencies
    Investment Banks
    Bald guys wearing suits

    Feel Free to add to this list.

  53. chicagofinance says:

    JP Morgan has several corporate initiatives aimed at expanding loan portfolios. As an example, they gave me checks for my credit card that are 0% until 2013 and can be used for my full credit line of $30,000. The fee is 1%.

    The Original NJ Expat says:
    November 2, 2011 at 2:03 pm
    125% LTV mortgages? Our mortgage is small now and through JPM Chase (originally through WAMU) . Chase sent us a letter yesterday offering to refinance us at 4.01% for up to 125% of the value of our house. WTF? We have great credit and have always overpaid our monthly mtg payment with extra principal. Are they tired of seeing us devalue their loan asset each month so much that they want to lure us into a mortgage 4x the size hoping we can’t overpay that one?

  54. JJ says:

    Since we are talking trees. What is best way to kill a big pine tree?. The type that drops those big pine cones and needles year round. Thing is around at least 50 feet high and has a double trunk, big guy.

    The catch 22 is it is not mine. I can spend a ton to trim the junk coming over fence but it will grow back, but if dead town will take it down. It is spitting stuff on both neighbors houses who both told me after every storm they are mad it is still standing.

    Someone said Copper Algegcide for pool. Another said weed and grass killer concentrate, type you are supposed to mix with water but pour it straight on. However, I can touch tree so stuff like coopper nails or slicing into tree is a no no. What type of chemical would take this out. Or at very least slow its growth so less cones next year.

  55. The Original NJ Expat says:

    Chase and Citi both gave me old-fashioned credit cards in the last 6 months. Old-fashioned like 2005 old-fashioned. 0% and NO fees on balance transfers or purchases.

  56. Captain Foresight HEHEHE says:

    Back from Vietnam. Miss anything?

  57. R Patrick says:


  58. Captain Foresight HEHEHE says:

    “Bald guys wearing suits” – this is a baldist statement and should be removed.

  59. JJ says:

    purple headed bald guys in turtle necks sounds better

  60. JJ says:

    Kodak up till day and about to report “earnings” what up with that. Plus got a big 11/15 and 12/1 bond interest payment coming up. EK has only till 11/14 to declare BK or might as wait till spring of 2012 as they are there two largest interest payment dates.

  61. nj escapee says:

    TMI, TMI, TMI could this be the start of a new NJ reality TV show?
    Woman tries to stab boyfriend’s nephew, then defecates in police holding cell, cops say

  62. Nicholas says:

    To kill the pine tree in a way that would appear natural you should relocate some beavers to your back yard. Place a tape recorder with the sound of running water in the direction that you want the tree to fall and let mother nature do the rest.

    That or work with your neighbors to have the tree removed.

  63. Anchor Baby says:

    45. We are ALL Essex .

  64. JJ says:

    Other way I heard is everytime is snows and you have salt out thow a pile at base of tree and salt over time soaks into base of tree.

    I did try to record the neighbors beaver, but she was worried her husband might find the tape.
    Nicholas says:
    November 2, 2011 at 3:14 pm
    To kill the pine tree in a way that would appear natural you should relocate some beavers to your back yard. Place a tape recorder with the sound of running water in the direction that you want the tree to fall and let mother nature do the rest.

    That or work with your neighbors to have the tree removed

  65. Barbara says:

    As a young girl, my dad would take me to the restaurant where Scarfo Jr had been shot 8 times. It had an excellent reputation, erm, food wise. Jr survived.

  66. JJ says:

    Was your Dad in the Mafia? Closest Mob encounter I ever had was I was invited to John Gotti’s nieces wedding shower. Thing was in an gaudy Italian Catering hall with like 400 people. I asked why doesn’t she just get married today and I got a look to kill. Anyhow I am sitting with two soldiers at table and another niece had tale some guy knocked up and refused to pay for abortion and can’t go to daddy for money or ride. Well anyhow main course just served and vieniese hour like two hours away, guy goes does he live nearby, she goes like ten minutes away. They go great, we can pick him up shake him down for money, if he does not have it get him in an incinerator at the wrecking yard in flushing and either way get back here for desert. Girl declined and I heard dope paid up a few weeks later and did right thing. Little did he know how close he came. AHHH the two or three Mob parties I attended. Can’t date a few Italian girls and not meet that side of the family.

    Barbara says:
    November 2, 2011 at 3:49 pm
    As a young girl, my dad would take me to the restaurant where Scarfo Jr had been shot 8 times. It had an excellent reputation, erm, food wise. Jr survived.

  67. Anchor Baby says:

    My cuz processed all the evidence on gotti as a clerk for guiliani. You cannot imagine.

  68. nwnj says:

    Christie now feels sympathy for Corzine. I guess he knows the ordeal having a major swindler in his immediate family.

  69. Simply Ravishing HEHEHE says:

    Dude I live in Hoboken, I can’t walk a block without walking by somebody connected or a social club.

  70. Barbara says:

    I’m German and my grandad’s nickname was “Dutch”. I will say no more except that sometimes it takes a few generations to get to legit. I’m a girl scout.

  71. expat (21)-

    The stench of death has a decidedly Greek tinge to it these days. No better beverage/catastrophe pairing than Ouzo and default.

  72. JCer says:

    Barb are you implying, what I think you’re implying, by German do you mean German-Jewish! It usually doesn’t take long, a lot of people become VERY successful legitimately, through the infusion of a little dirty money. I know quite a few people running rather large, rather successful businesses that were founded many years ago through family financing if you know what I mean.

  73. Barbara says:

    JC I’m Penny Dutch with a little Irish but I married a Jew. He’s a boy scout too, there’s no hope for us.

  74. jj (35)-

    Didn’t Corzine make the big bet to go long Euro sovereign debt?

  75. chi (43)-

    Where’s the bomb shelter?

  76. JCer says:

    I thought you were imply your granddad was dutch schultz!

  77. Barbara says:

    Jc I was. Grandad was working his way through law school as a Camden County bailiff in the 40s….

  78. Captain Foresight HEHEHE says:

    Actually I’d be highly suprised if anything happens to Corzine or any of the other management at MF. They’ll find some lower level people to throw to the wolves. The guys in the club have nothing to worry about.

  79. NWNJHighlander says:

    small world,
    my G-grandfather was one of Dutch’s people,
    running German Harlem, mostly.
    The immediate aftermath of Dutch’s murder ruined my family during the Depression.

  80. Is that the current Depression to which you refer?

  81. Barbara says:

    82. Highlander,
    Grandad did time so as not to be a snitch. It doesn’t get talked about much, especially by grandmother who passed away in my 20s. My dad and uncle have a bizarre few years amnesia corresponding to that time.

  82. Shore Guy says:

    Re. Israel and Iran:

    As long as the US maintained a military presence in Iraq, Israel was constrained, especially after Turkey got ticked off at them, thus cutting off a Southern-Turkey route to Iran. As soon as our troops are out of Iraq, it is open season on Iran. Now, whether Israel decides to try and bag some reactors is another matter. Since a number of the Iranian special weapons facilities are not going to get taken out except with a special weapon, they may decide not to act; the last thing they want to do is to act and fail to achieve the objective as that will weaken their position and embolden Iran.

  83. Shore Guy says:

    Mr. Flegenheimer, your table is ready.

  84. Shore Guy says:

    Re. Corzine:


    Now here’s the trade: the rate at which it was borrowing money was lower than the coupon payments on the European sovereign bonds. And because this was a “repo-to-maturity”, MF Global was essentially locking in the difference as profit. It got to keep all the coupon payments, while it had to pay out something less than that in interest.

    There were two risks with this trade. The first risk was that the European sovereigns would default, and that MF Global then wouldn’t have the resources to pay back in full the money it had borrowed. That was a solvency risk, but MF Global had a hedge there — a $1.3 billion short position in French government bonds.

    And then there was the liquidity risk. As the MF Global slide notes, “MF Global retains obligation to post margin”. If the people lending money to MF Global started getting worried, they could require MF Global to put up more money.

    And that seems to be exactly what happened. When questions started being raised about MF Global’s ability to continue as a going concern, its counterparties probably started asking for more collateral if they were locked into repo trades to maturity in 2012.

    But MF Global, leveraged to the eyeballs, didn’t have that kind of extra money lying around. And so it needed to find a partner with deeper pockets who did. Corzine put the firm up for sale — and at one point it looked as though Interactive Brokers might be interested in buying the company at a fire-sale price. (Even after taking into account the fact that such a sale would generate an automatic $12 million check for Corzine.)

    That sale didn’t happen, for a very good reason: there seemed to be $700 million missing from the bank accounts of MF Global’s customers.

    MF Global, then, had two huge risk-management strikes against it. It had no way to manage the risk that its counterparties would ask for extra collateral, and it had a very weak grasp of where its customers’ money was.

    In both cases, the buck stops with Jon Corzine.

    At MF Global, Mr. Cohan asked: “Who in the world was going to stand up to Jon Corzine? Nobody. They didn’t have the compliance or the culture.”…

    In the case of Mr. Corzine, at MF Global, he was the chairman and chief executive. Given that he was directing the investment strategy, he might as well have been the compliance officer too. The only people with any authority who could have meaningfully pushed back were the board.

    The first job of the chairman of an investment bank is risk management. But Corzine has always been an aggressive trader; even at Goldman Sachs, with its legendary risk management, there were major trading losses under his watch in 1994.

    For traders, risk managers are always the enemy; Corzine was a poacher who was never going to be comfortable in a role as gamekeeper. The Goldman culture kept him in check, to some degree, before it pushed him out; on his own, he was — literally — out of control. And as a result, thousands of his employees are now out of jobs. It’s a truly ignominious end to Corzine’s career.

    Here’s Corzine from an earnings conference call just last week. This should be his epitaph.

    “The spread between interest earned and the financing cost of the underlying repurchase agreement has often been attractive even as the structure of the transaction themselves essentially eliminates market and financing risk.”

  85. Tim Jonson says:

    Good job. I think it’s valuable article. Thanks for posting such nice topics. Thank you. free government cell phone

  86. Shore Guy says:

    Cain is beyond beyond when it comes to his lack of knowledge:


    the GOP frontrunner is also raising eyebrows with his foreign policy remarks.

    In an interview Monday, Cain said part of China’s threat to the United States stems from its attempts to develop nuclear weapons — even though China tested its first nuclear weaponin 1964.

    “Yes, they’re a military threat,” Cain said on the PBS NewsHour, in response to a question from Judy Woodruff. “They’ve indicated that they’re trying to develop nuclear capability and they want to develop more aircraft carriers like we have. So yes, we have to consider them a military threat.”

    Cain’s remarks have in the past raised questions about his foreign policy credentials. Earlier this month, when joking about “gotcha” questions, Cain said, “And when they ask me, ‘Who is the president of Ubeki-beki-beki-beki-stan-stan?’ I’m going to say you know, ‘I don’t know. Do you know?’


    from CBS

  87. chicagofinance says:

    NOVEMBER 3, 2011.Where Was the CFTC?
    Apparently it was too busy writing new rules to monitor MF Global

    How are the regulators going to explain this one? MF Global, the failed firm whose Chairman and CEO is Jon Corzine, has already destroyed the wealth of its investors and roiled the banking world. But now we are learning that it may have lost customer funds as well.

    A major Wall Street broker in derivatives markets with $41 billion in assets, MF Global filed for bankruptcy on Monday after Mr. Corzine made disastrous bets on bonds issued by European governments. It initially appeared he was (only) gambling with his firm’s own capital, but a federal official tells the Journal that MF Global has admitted diverting money out of customer accounts, which may be a violation of federal law.

    This follows a report from futures exchange operator CME that MF Global was not complying with federal rules on segregating client funds. In bankruptcy court yesterday an MF lawyer said “To the best knowledge of management, there is no shortfall” in customer accounts. But the Journal reported late yesterday that the FBI is investigating the matter.

    If reports of missing funds are true, it’s a significant embarrassment for the firm’s regulators at the Commodity Futures Trading Commission. CFTC Chairman Gary Gensler has been leading the Beltway chorus for years in reciting the (false) story that the absence of regulation allowed AIG and its credit-default swaps to wreak havoc in 2008.

    Never mind that the Treasury Department’s Office of Thrift Supervision did regulate AIG, and that an OTS official testified before Congress that the agency signed off on the swaps because it didn’t expect Armageddon in the housing market. Mr. Gensler nonetheless succeeded in gaining for himself and his agency broad new powers over the derivatives market as part of Dodd-Frank in 2010.

    The MF Global case involves business that was unambiguously regulated by the CFTC long before Mr. Gensler built his new regulatory empire. In fact, the alleged MF Global failure goes to the basic regulatory blocking and tackling that the CFTC is supposed to perform, which includes ensuring that companies aren’t raiding customer funds for their own trading.

    It is also no small irony that MF Global was among the cheerleaders for Mr. Gensler’s plans for new clearing arrangements under Dodd-Frank. Maybe if the regulators hadn’t been so busy writing new rules, they would have checked if MF Global was following the old ones.

    It was always fanciful to believe that the regulators who failed to prevent the last financial meltdown would somehow prevent the next one. The surprise is that this mirage of regulatory competence has been exposed so quickly.

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