New York charges Madoff 'feeder' Ezra Merkin with fraud - I say send 'em all to jail!

As the investigation into the Madoff scheme deepens, other prominent names are coming to the forefront. I say that it's time for all these fat cats to pay for what they've done.

I celebrate each and every indictment that comed from this case, and hopefully this will make people think twice about pulling these types of shenanigans on people...

But it probably won't; the lure of all that money is too much for most to resist:

"New York Atty. Gen. Andrew Cuomo today charged money manager J. Ezra Merkin with civil fraud in the Bernie Madoff Ponzi scheme, alleging that Merkin funneled more than $2.4 billion in clients’ funds to Madoff while ignoring 'glaring red flags.'

Merkin, a well-known New York philanthropist and the former chairman of General Motors Corp.’s financing arm, GMAC Financial Services, 'profited enormously from Madoff’s scheme, reaping huge commissions while investors lost all their money,' Cuomo said in a statement.

Merkin earned $470 million in management and incentive fees over time by steering money to Madoff, Cuomo said." Source: LA Times

Accounting rulemakers to change mark-to-market changes--Isn't this what tanked Enron?

I came across this benign looking tidbit of news about changes to mark-to-market accounting rules. Now when a layperson hears mark-to-market, they might think of the accounting practice that helped Enron to appear fiscally healthy although it wasn't.

Admittedly, I need to do more research on this, and will provide an update once I make heads or tails of this. Specifically, I want to know if this is going to help companies falsely inflate their fiscal healthiness better understand how these changes could potentially impact us given the current economic situation.

In the meantime, please let me know what you think.

From the article:

"WASHINGTON (Reuters) – U.S. accounting rulemakers on Thursday agreed to make adjustments to a proposal to change mark-to-market accounting rules concerning when transactions would be considered distressed. [...]

The board, at a meeting in Norwalk, Connecticut, said it would remove a presumption in its original proposal that would have allowed all transactions in an inactive market to be considered distressed unless proven otherwise. It said that particular language could have had unintended consequences.

FASB also said the objective of mark-to-market, or fair value accounting, in inactive markets would be to determine what an asset could fetch in an 'orderly' transaction between market participants. It said an 'orderly' transaction would not include distressed transactions or fire-sales.

The board is continuing discussions on the rule and another rule on other-than-temporary impairment issues that affect when writedowns have to be taken on financial assets that have suffered a decline in value." Source: Yahoo! News

For those of you who are unfamiliar with mark-to-market-accounting and Enron, here is a excerpt from the Journal of Accountancy:

The role of mark to market accounting in the rise and fall of Enron
Enron incorporated “mark-to-market accounting” for the energy trading business in the mid-1990s and used it on an unprecedented scale for its trading transactions. Under mark-to-market rules, whenever companies have outstanding energy-related or other derivative contracts (either assets or liabilities) on their balance sheets at the end of a particular quarter, they must adjust them to fair market value, booking unrealized gains or losses to the income statement of the period. A difficulty with application of these rules in accounting for long-term futures contracts in commodities such as gas is that there are often no quoted prices upon which to base valuations. Companies having these types of derivative instruments are free to develop and use discretionary valuation models based on their own assumptions and methods.
The Financial Accounting Standards Board’s (FASB) emerging issues task force has debated the subject of how to value and disclose energy-related contracts for several years. It has been able to conclude only that a one-size-fits-all approach will not work and that to require companies to disclose all of the assumptions and estimates underlying earnings would produce disclosures that were so voluminous they would be of little value. For a company such as Enron, under continuous pressure to beat earnings estimates, it is possible that valuation estimates might have considerably overstated earnings. Furthermore, unrealized trading gains accounted for slightly more than half of the company’s $1.41 billion reported pretax profit for 2000 and about one-third of its reported pretax profit for 1999. Source: Journal of Accountancy

Jobless and Uninsured? Walgreens Offering Free Healthcare

It's great what Walgreens is doing to help those who are jobless in this economy. I didn't even know that Walgreens had clinics in their durgstores until I had a minor, yet urgent illness a few months ago. The clinic accepts walk-ins,and with my experience I was in and out. They even billed my insurance for the visit!

As we all know, there are so many people who are uninsured in this country, whether due to joblessness or unaffordability of ever-rising premiums. I imagine a trip to the local Walgreens will be much faster that going to a state-run free clinic, and healthier than forgoing treatment all together:

NEW YORK — Drugstore operator Walgreen will offer free clinic visits to the unemployed and uninsured for the rest of the year, providing tests and routine treatment for minor ailments through its walk-in clinics, though patients will still pay for prescriptions.

Walgreen said patients who lose their job and health insurance after March 31 will be able to get free treatment at its in-store Take Care clinics for respiratory problems, allergies, infections and skin conditions, among other ailments. Typically those treatments cost $59 or more for patients with no insurance[...]

Patients must present proof they are unemployed, including a federal or state unemployment determination letter and an unemployment check stub. They will have to sign a form at the clinic saying they have lost their jobs and health benefits. If they find a new job or get new health insurance, they will no longer be eligible for free care.

Spouses and children are also eligible for free services if they don't have insurance of their own. Source: Huffington Post

For more information on these clinics at Walgreens, please visit their website:

Take Care Clinics

Have you been to a Walgreens clinic, and/or would you consider trying one?

Tell us about it!

Sleeping on the job lands an airline worker in another state!

This takes sleeping on the job to a completely new level. Apparently a JetBlue worker decided to sleep on the job take a nap during his break, and chose the cargo hold as his resting place.

The poor guy didn't wake up until the flight was already in the air:

BOSTON — A JetBlue employee says he took a free flight from New York to Boston — after falling asleep in a plane's cargo bin.

The man was discovered by baggage handlers at Logan International Airport after the plane landed there Saturday. He told police he'd been accidentally locked inside the pressurized luggage compartment while taking a nap.

The 21-year-old man says he called JetBlue Airways officials when he realized he was no longer on the ground.

A state police spokesman says the man wasn't charged with any crime and was returned to New York when it was determined he wasn't dangerous.

JetBlue Airways Corp. says it's investigating." Source: Associated Press via Newsvine - Airline worker flies NY to Boston in baggage hold

Hopefully this guy has learned his lesson, because he could have been killed during this act of negligence. And of course you know if this had happened, the first thing his family would want to do is sue.

I believe that JetBlue should fire this employee for both sleeping on the job, and for his negligence in where he chose to sleep. Of course I'm sure he's not the only one doing this, but if for no other reason than employee safety and potential liability, they need to get rid of this guy.

What do you think? Should this employee be fired?