Is the WHOLE economy a Ponzi scheme?????
January 09, 2009
– Comments (11)
Alstrynomics has given you the heads up for a few years.
Bill Gross gave it to you yesterday.
Madoff, Petters and a slew of others are providing pieces to the mosiac.
Now this......
Jan. 9 (Bloomberg) -- Lennar Corp. fell as much as 28 percent in New York trading after Barry Minkow’s Fraud Discovery Institute alleged that the company operates joint ventures “like a Ponzi scheme.” Lennar denied the allegations.
Minkow posted his accusations today on a Web site called lenn-ron.com. The company has failed to disclose material transactions, Minkow said on the site.
“These are false allegations,” Lennar Chief Financial Officer Bruce Gross said in an interview. He declined to be more specific and said the company will issue a statement later today.
Minkow served more than seven years in prison, from 1988 to 1995, after being convicted of fraud while running a company called ZZZZ Best Co. Minkow’s group investigates what it suspects to be corporate fraud, according to the Web site.
In a video on his Web site, Minkow said Lennar is “a financial crime in progress and they have a pattern of behavior that is an environment that is hurting the little guy.”
Minkow accused Lennar of concealing debt off its books and misappropriating funds between joint ventures. Lennar’s approach is “sue me if you want to get paid,” Minkow said.
Minkow said in an interview today his report was “based on the public record of multiple claims against Lennar in like situations for breach and fraud.”
Lennar Chief Executive Officer Stuart Miller told CNBC that the Minkow is an “angry litigant.”
Lennar fell $2.39, or 21 percent, to $9.03 at 11:47 a.m. in New York Stock Exchange composite trading. Earlier, the shares touched $11.28.
The cost of protecting against a Lennar default jumped the most in seven weeks. Credit-default swaps linked to Lennar bonds climbed 55 basis points to 630 basis points, according to broker Phoenix Partners Group. That means it would cost $630,000 a year for five years to protect $10 million of Lennar bonds.
If my detailed forensic analysis is close to being right, there is a boatload of allegations like this coming. Just go back and read my posting on Yahoo about SPF over a two year period of time. You would have seen this coming a long long time ago.
GET READYand grab your surfboard....this is one big wave.
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