More than $16 billion of investors’ money evaporated in Ponzi schemes in 2009, according to the Associated Press. Although the names Bernie Madoff and Allen Stanford were in the headlines in 2009, many other Ponzi schemes were uncovered as the economy declined, making continued payouts to investors impossible.
GMAC Financial Services, the former financial arm of General Motors, is set to receive yet more federal bailout funds as the year draws to a close. According to a Reuters report, GMAC will get roughly $3.5 billion in additional federal government money to help cover losses on the mortgage market. Mortgage-related assets, considered the key to GMAC’s return to profitability, comprise roughly a third of GMAC’s total $178 billion balance sheet.
Little noticed (so far) by the American public, a Christmas Eve announcement by the Obama administration to expand the amount of bailout monies available to ailing mortgage giants Fannie Mae and Freddie Mac is already stirring controversy among Capitol Hill lawmakers sick of fueling the bailout gravy train at the expense of an increasingly restive voter base.
The prime architect of the Federal Reserve was German immigrant Paul Warburg. Arriving in America in 1902 with brother Max, he married into the family controlling Kuhn, Loeb and Company, America’s prime international banking firm. By 1907, he was earning $500,000 annually, an enormously generous salary at a time when there was no income tax and inflation had not begun eroding the value of the dollar.