Before the owners of the NY Mets invested big-time with Bernie Madoff and made handsome fictitious profits, they entrusted millions to, yes, our old friend Sam Israel and his Ponzi scheme.
[I]nvestors in small Chinese stocks today are very much like the foreigners who poured money into U.S. railroads in the nineteenth century. Then investors anxious to cash in on the railway boom proved to be easy targets for self-dealers and outright swindlers, and foreigners in particular struggled to get good information about what was happening to their investments. *** Yet, because the railways offered—and sometimes delivered—the prospect of enormous wealth, the money kept flowing. Today, the same is true. China’s boom is real enough, and so it’s possible for investors in small Chinese stocks to believe that they’re heeding Deng Xiaoping’s famous admonition “To get rich is glorious.” Unfortunately, many of them are just proving the truth of another famous adage: “There’s a sucker born every minute.”
After three unsuccessful attempts a money manager won a seat on a board that oversees trust funds for a town here on the New Hampshire seacoast. The board then decided to fire TD Bank as investment manager. (I'm only guessing, but the town trust funds probably didn't fare much better in the Great Recession than, say, Harvard's endowment.)How can you defend yourself when a bunch of clowns attack?Not to be outdone, The New York Times suggested a way to avoid coming up short when investing for retirement. As the article (much read on the Times web site) points out, the stock market's Lost Decade hit hardest at those near retirement age. The bigger your stock portfolio, the greater your dollar loss when its value doesn't keep growing as "average returns" led you to expect.
Go for the juggler!
What the wise person does is save a large amount of money when they are young.Simple, isn't it? Accumulate several million before age 40 (doable if you were one of Google's original employees) and you can get out of the market.
Citing a recent study, Rhode Islander Alan G. Hassenfeld, a director of Hasbro Inc., charges that Rhode Island's stiff estate tax is driving the wealthy away. Before 2009, Rhode Island taxed estates over $675,000. The current exemption ($850,000, indexed for inflation) isn't much kinder. Even so, in The Wealth Report Robert Frank writes that he finds the study unpersuasive.
rdian has published extracts from Treasure Islands: Tax Havens and the Men Who Stole the World by Nicholas Shaxson, In the first installment we learn that really private bankers don't sit around waiting for money to come in seeking shelter:My bank never once had a client walk through the door. The bankers and their clients go on big-game hunting trips, or to the ballet in Budapest. That is where it happens.
Wikileaks, not content with embarrassing U.S. diplomats and stirring up trouble in Tunesia, now threatens to release details of thousands of offshore accounts. The Swiss bank accounts belonged to more than 2,000 American, European and Asian individuals and multinational companies, according to former Swiss banker Rudolf Elmer. Among the seekers of shelter were politicians, business leaders, celebrities, organized crime leaders and "three major financial institutions."
The avoidance of taxes is the only intellectual pursuit that carries any reward.Marketing yacht loans and grantor retained annuity trusts doesn't exactly create an adrenalin rush. Sometimes I'm sorry the racy aspects of private banking are off limits.
Bob calls people-in-the-know at publicly traded companies. He says, "Hey, wanna do consulting?"
What kind of consulting? "Oh, you know. Just handing over corporate secrets. Easy money."
Bob then calls hedge funds: "Hey, wanna buy some stock tips?"
Hedge-fund managers have wealthy clients who pay them a premium to beat the market. And what better way to beat the market than to fix the market?
Insider trading? Nah. This is "expert networking."
* * *
It would be comforting to write off Bob as a cynical urban myth. But Bob is not only a real person, he likely represents an entire industry.
Last week, 32-year-old Bob Nguyen, of Stockton, Calif., pleaded guilty to fraud charges in a Manhattan federal court.
Many wealthy people got pitches from their estate planning lawyers last year encouraging them to make taxable gifts. It seemed like a good idea at the time.***If … you ignored what lawyers then dubbed a unique "opportunity," you avoided a quandary that’s consuming a lot of airtime this week at the Heckerling Institute on Estate Planning, the annual Super Bowl on the subject sponsored by University of Miami School of Law. The lawyers meeting here in Orlando are in the awkward position of trying to figure out what clients who followed their advice can now do to reverse those 2010 taxable gifts.
Northern Trust has formed a new practice to provide investment and fiduciary services to gays and lesbians. Good idea? Not according to star financial adviser Ric Edelman, whose radio show I happened upon Sunday morning. He deems Northern's initiative demeaning to gays.
In 1916, when the federal estate tax was new, Seth Milliken, a co-founder of Milliken & Co., sought to reduce his estate by giving shares of the company to his children. He died in 1920. The IRS insisted the shares were taxable, as gifts in contemplation of death. The legal battle lasted until 1931, when the Supreme Court ruled that the gifts were indeed subject to estate tax.Textile tycoon Roger Milliken ducked the taxman upon his death almost a century after his grandfather lost a landmark legal fight with the U.S. government over sheltering a fortune from the estate tax.
The 95-year-old Milliken, chairman of Milliken & Co., one of the world’s largest closely held textile, chemical, and floor-covering manufacturers, died in a Spartanburg, South Carolina, hospice on Dec. 30, less than 48 hours before a temporarily lapsed federal tax on multimillion-dollar estates was to be reinstated.
Milliken’s fortune now will pass to his heirs with no estate tax.
“The timing of his death surely benefited his heirs and the company,” said Jock Nash, Milliken’s Washington lobbyist on trade issues for 25 years. “His timing was impeccable.”
Lindsay had Scots ancestors but never visited Scotland. (Let's hope he didn't become a decedent without seeing a live production of Lerner and Lowe's glorious musical. The Hollywood version of "Brigadoon" was an abomination.)
While appealing his conviction for swindling his mother, Brooke Astor's son has run up millions of dollars in legal bills. Perhaps, the NY Post suggests, that's why the Astor estate is willing to sell her Park Avenue duplex for less than half the original asking price of $46 million.
… the big financial news is the May 6 stock market "Flash Crash." The Dow at one point is down nearly 1,000 points, including a drop of 600 points in five minutes, resulting in what financial analysts say is the largest mass purchase of emergency replacement underwear in Wall Street history. The Securities and Exchange Commission investigates the crash and later issues a 350-page report concluding: "You know that E-Trade baby? In the commercials? With the grown man's voice? That baby is REAL."
Photo via Wikimedia Commons
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