What is bankruptcy?

[Marika]

Given the topic I know it's difficult at times, but I thought we were going to stay away from politics.  Let's understand that ONE administration is NOT totally responsible for the current climate.

I believe that this GLOBAL economy is a major part of the problem, how did that begin?  How are jobs exported to India, Dominican Republic, etc?  What was the impact of allowing China into the WTO?  What impact did NAFTA have?  Why did Nixon and Clinton cozy up with China?  How are we going to stop China from purchasing companies like Conoco?  Why did our education system become so diluited and watered down?

In WW2, we won because 1) out manufacturing engine was powerful, and 2) we destroyed Germany's manufacturing capability.  What the hell happened to OUR manufacturing capability?

When are we going to start thinking about the US?

Are you finished editing your comments???

Not yet, you got me on a roll...

What I have discovered is that there are no more real differences between Republicans and Democrats. They all have a keen smell for money and take to it easily.

[JasonA]

They should BOTH be jailed.

While I have pretty strong political opinions, I've discovered that nobody really knows what goes on behind the scenes. Usually, any politician we've ever had could be accused of theft, fraud, unsavory deal-making, etc, so it's never really productive to engage in "mine's better than yours". I know that's not what you guys were doing, but to comment on what Marika said, I suspect that most any politician or really rich person in this country could be jailed.

[JasonA]

What I have discovered is that there are no more real differences between Republicans and Democrats. They all have a keen smell for money and take to it easily.

Marika: yes! You said better what I was trying to say above.

[JasonA]

I believe that this GLOBAL economy is a major part of the problem, how did that begin?

To start with, because of marvelous machines we drive to work in everyday. And the marvelous machines we use at work everyday. Transportation and intelligence (computers) now know no boundaries. Back in the day of the horse and buggy, you HAD to make all your irons and textiles in your own town, because the cost of shipping was prohibitive. You couldn't just send an email to your family across the country either, so familes and groups of people tended to stay close.

Nowadays, it's nothing to ship a carton of CD players from China to the US and sell them for a hefty profit. Not to mention, our corporate execs have located their factories in the poorest parts of this world. Would YOU work at a CD player factory making a dime an hour? A lot of people across the world do.

What's the solution? The easy solution seems to be to quit purchasing products that were manufactured outside this country. It would cost you (individually) a lot more for a CD player because the guy making it is paid $6/hr vs. 60 cents an hour. But maybe the payback, in terms of this country's financial and manufacturing security, would be worth the cost?

I don't know the answer to that question. I'm not near smart enough, and don't have near the data available to begin to try to answer that question. I guess that's why we pay the smart people the big bucks.

[Scotty]

The problem is the uneven playing fields that are allowed. However its a double edged sword, while we want cheaper goods, if we put a tariff on imported goods to allow OUR companies (that don't exist anymore) to compete it would defeat the purpose of the Global Economy in a way. But at what cost are we getting cheaper goods? What are our youth going to do? What is our future?

Has anyone looked at your typical high school student lately in terms of their education levels? I am quite shocked at how uneducated and illiterate most high school students are these days. Hell if you don't attend a Division One college the education is nearly useless. The modern culture shown to our youth through VH1 an MTV and movies makes it appear that you can have Escalades, gold, money, women, bling bling and mansions with no problem, while being a low life, disrespecting law, women and standard convention. Hard work is unheard of anymore....!!!!

My own son refused to bring his non-functioning computer tower home from college this weekend because it was too heavy so I could work on it, WTF? Too heavy, he is a 6'2" athelete that goes to the gym everyday to workout, too heavy? Its more like TOO LAZY! Like I said, hard work and determination are GONE...so daddy has to pick it up Sunday and drive it back up to school 350 miles away at some point... Our youth are soft

Bill Gates recently said that he needed to go OUTSIDE the US because he could not find qualified computer science grads.. who is failing us? We have lowered standards while the rest of the world has caught up.

The first candidate to run on protecting the United States and mean it will be successful if you ask me. BUT... is the horse out of the barn, is it too late? Does China have us by the privates while they pay their workers a fraction of what we need to pay? Who is going to stop the bleeding? GM and Ford are next, who is going to stand up and say enough?

[stsjoe]

In fact, every one of us comes into this world naked and helpless, and most leave it in the same condition -- and we are dependent on one another every single day in between. The "stand on your own feet and take care of yourself" attitude the right wing keeps pushing is not only cruel, but stupid, too.

This is why I ignore Molly

[JasonA]

In fact, every one of us comes into this world naked and helpless, and most leave it in the same condition -- and we are dependent on one another every single day in between. The "stand on your own feet and take care of yourself" attitude the right wing keeps pushing is not only cruel, but stupid, too.

By the same token, it's foolish to go through life intending to live off the government and mooch off anyone who's generous enough to flip a quarter your way. There's a happy medium somewhere between trying to be totally independent and being comfortable relying on others for your existance.

I suspect that wherever you stand on that issue correlates to on which side of the aisle you stand.

[Scotty]

Well said Jason

[Marika]

In fact, every one of us comes into this world naked and helpless, and most leave it in the same condition -- and we are dependent on one another every single day in between. The "stand on your own feet and take care of yourself" attitude the right wing keeps pushing is not only cruel, but stupid, too.

By the same token, it's foolish to go through life intending to live off the government and mooch off anyone who's generous enough to flip a quarter your way. There's a happy medium somewhere between trying to be totally independent and being comfortable relying on others for your existance.

I suspect that wherever you stand on that issue correlates to on which side of the aisle you stand.

First off, that was not my quote. The person who wrote the article wrote that comment as the last paragraph of the article but the way this list sometimes quotes things can cause an occasional mistake or two.

What I believe in is a fair system where those who really need the help, the elderly, the truly poor and the disabled, get it, and those that can work, work.

What's happening in our system is that those who can work, can't find work, because all the jobs are going overseas.

The unemployment numbers in America were skewed years ago when Clinton signed a law allowing those who are unemployed to be more easily placed on disability. It lowered the unemployment numbers, but raised the disability numbers. Cute tricks these buggered politicians play.

[JimD]

Future generations of historians will no doubt agree on the timing of "the begining of the end for American civilization".

It was the week after Ed Sullivan had the Beatles on his 'shew'.

[JasonA]

The unemployment numbers in America were skewed years ago when Clinton signed a law allowing those who are unemployed to be more easily placed on disability. It lowered the unemployment numbers, but raised the disability numbers. Cute tricks these buggered politicians play.

That's kind of where I was going with that comment, but in a more broad sense. So many people who don't care to work don't have to. They can easily get "on disability" and live off us. In my opinion, there are way too many "programs" to help those who don't want to work continue doing so. I used to work at Advance Auto Parts in college, and during one summer when I worked during the week, during the day, there was almost a "disability club" in the mornings. A bunch of the same guys would always be up there, with the obligatory cane or crutch, complaining that their disability or unemployment check is late, or whatever their current situation is. They'd of course be up there to buy parts for some car they have, and of course these aren't trivial parts to install (things like timing belts, CV shafts, etc). It angered me that the same guys would repeatedly be up there, proving that they're not really disabled by how easily they get around and install parts on old cars. Normally I'd say something like, "well, it's their money..." But I really didn't feel that way in that case. I felt like it was MY money (taxes), going down the drink because it was so easy for these guys to hide under some government welfare program somewhere.

As you say: "What I believe in is a fair system where those who really need the help, the elderly, the truly poor and the disabled, get it..."

Man, would I love that. Trouble is, there are so many dishonest people out there that you can never really tell who the "truly" poor and disabled are, unfortunately.

[Scotty]

Future generations of historians will no doubt agree on the timing of "the begining of the end for American civilization".

It was the week after Ed Sullivan had the Beatles on his 'shew'.

That is so funny!

We watched that show on TV and my Dad said, look at these no talent a-holes! Look at them!

[rek]

The preservation of privilege requires the exercise of power. The power to inform, or dis-inform. Decisions, disguised as Democracy-"The Will of the People", DON'T empower the "People", but rather continue the "Privilage" of a few.

To obtain control over public opinion, it is first necessary to confuse it by the expression from various sides of so many conflicting opinions. Increasing and intensifying the shortcomings of the people in their habits, passions and mode of living, so that no one will be able to collect himself in the chaos, and, consequently, people will lose all their mutual understanding. Enter, The education system, whose main function seems to be DUMBING DOWN, Identity Defining Consumption, mass breeding of SHEEPOLE. A society that sacrifices fairness and integrity for profit and power betrays its insensitivity to human needs. The proliferation of material things becomes the measure of progress in living, and man is pitted against woman, worker against employer, individual against community. When wealth occupies a higher position than wisdom, when notoriety is admired more than dignity, when success is more important than self-respect, the culture itself overvalues 'image' and is regarded as narcissistic. That is NOT what we are here for. Republicans, Democrats, or Republicrats, is doesn't matter. Confucius said: "Don't do to others, what you don't want done to you." In the West, this has been reframed into a directive, more commonly known as the Golden Rule: "Do unto others as you would have them do unto you. The inability to feel emotion is linked with narcissism, because narcissists are only concerned with how they appear and not how they feel. They wear a mask, striving to appear in a certain way, even though their underlying feelings are in conflict. As a result, narcissists can be very manipulative, striving for power and control in order to maintain their image. They are focused on their own interests, but lack dignity and integrity. Because narcissists only value themselves, they become the ultimate competitive beings.

[Marika]

And this is all legal now.....

The New York Times

October 18, 2005

Refco Sells Futures Unit and Seeks Bankruptcy Protection

By JENNY ANDERSON

Refco Inc., the giant commodities and futures brokerage firm that has been quickly unraveling, said last night that it had filed for bankruptcy protection, a week after it put its chief executive on leave amid accounting problems.

At the same time, an investor group led by J. Christopher Flowers, a former Goldman Sachs partner who runs a private equity fund, signed an initial agreement to buy the firm's futures brokerage business - including Refco L.L.C., Refco Overseas and Refco Singapore - for $768 million.

The deal gives Refco the option to retain up to 20 percent of the equity value of the entities being sold, Refco said in a statement.

The investment group includes the Enstar Group, Silver Point Capital, MatlinPatterson Global Advisers and the Texas Pacific Group.

Mark Winkelman will serve as chairman of Refco L.L.C., and Jacob Goldfield will be vice chairman. Both have ties to Goldman, Sachs. Mr. Winkelman was co-head of the firm's fixed-income unit and Mr. Goldfield was at the firm for almost 16 years.

On Oct. 10, Refco announced that its chief executive, Phillip R. Bennett, was put on indefinite leave. It said Mr. Bennett had hidden a $430 million debt owed to Refco by a company that he controlled. That debt, which was shifted to a hedge fund called Liberty Corner Capital, was not disclosed or associated with Mr. Bennett in the company's initial public offering in August. Refco also said its financial statements as far back as 2002 could not be relied upon.

Shares of Refco plunged more than 70 percent after the announcement and in the days following. On Thursday, the New York Stock Exchange halted trading in the stock, while the company's bonds continued to plummet. By the end of the week, Refco had shut its unregulated capital markets business and its regulated broker-dealer operation..

Competitors have scurried to capitalize on Refco's rapid collapse. One firm, Interactive Brokers, based in Greenwich, Conn., announced an advertising campaign to try to capture Refco clients.

Refco's client accounts have dwindled by roughly 20 percent, said one person involved in the negotiations. It is unclear whether the prospect of a buyer will stem client losses. The futures business was the largest independent futures commission merchant in the United States with $4.1 billion in more than 200,000 customer accounts, regulatory filings indicate.

The unit, regulated by the Commodity Futures Trading Commission and the Chicago Mercantile Exchange, is required to segregate its customer's funds, meaning that those funds are secure as long as the firm complies with its regulatory capital requirements. Its regulators indicated last week that the firm was still in compliance.

But the potential buyers face several obstacles. Regulators and lawyers are swarming around trying to determine where Mr. Bennett's original debt came from and who else was involved in covering up the transfer of that debt to Liberty Corner every quarter. By shifting the trades - or renting a balance sheet - Mr. Bennett sought to avoid disclosing his control of the debt.

Kevin Marino, a lawyer for the hedge fund's principal, William Terrence Pigott, said his client believed the trades were legitimate. Lawyers from Mayer, Brown, Rowe & Maw drafted the documents outlining the terms of the loans, he said. "Mr. Pigott vehemently denies any knowledge of concealed loans," Mr. Marino said.

A spokeswoman for Mayer Brown said the firm was still gathering information.

[Marika]

And yet more good news....

The New York Times

October 20, 2005

Insiders Collected $1 Billion Before Refco Collapse

By GRETCHEN MORGENSON and JENNY ANDERSON

In the year before Refco sold shares to the public and then promptly made the fourth-largest bankruptcy filing in United States history, insiders at the firm received more than $1 billion in cash, according to the firm's financial statements.

And one insider, Robert Trosten, received $45 million when he left his post as chief financial officer a year ago, according to testimony at an arbitration hearing earlier this year.

A great deal of mystery still surrounds the collapse of Refco, a decades-old firm that conducted billions of dollars in trades in foreign currencies, United States Treasury securities and commodities for more than 200,000 clients last year. But investors and customers who are facing losses in Refco's bankruptcy will certainly want to understand how insiders could drain $1.124 billion from the firm's coffers in the year or so leading up to its demise.

To some degree, the money that insiders took out of the firm is not surprising, given that Refco's executives sold a big stake in the company to Thomas H. Lee Partners, a private equity firm in Boston, in August 2004. Indeed, most of the money insiders received - $1.057 billion - was paid upon the completion of that deal.

Two Refco insiders were on the receiving end of those payouts: Phillip R. Bennett, the former chief executive who has been charged with defrauding investors by concealing a $435 million loan he arranged with the firm, and Tone Grant, Refco's longtime chief executive before Mr. Bennett.

Mr. Bennett has denied the charges of securities fraud but has declined to comment further. Mr. Grant could not be reached.

Creditors of Refco will almost certainly try to recover what they can from payments made by the company to its top executives in the months leading up to its demise. While compensation - like salaries - is typically not recoverable, payments made in the sale of a company or dividends paid to its owners are fair game if the company is insolvent, said Denis Cronin, a bankruptcy lawyer at Cronin & Vris in New York.

"Dividends or payments with respect to their stock ownership, that is vulnerable to what is known in bankruptcy as a fraudulent conveyance or distribution," Mr. Cronin said. "Fraudulent conveyance is a payment or distribution made while the company was insolvent or rendered insolvent. When you make those payments in that time frame, then creditors have a right to recover them."

The $1.057 billion came in two chunks, according to the Refco prospectus. First, Mr. Bennett and Mr. Grant appear to have shared in a $550 million cash payment in the transaction with Thomas H. Lee Partners; then, Mr. Bennett appears to have received another $507 million in the deal as well.

Mr. Bennett did not cash out of Refco completely. At the time of the deal with the Lee firm, he agreed to roll over an equity stake in Refco worth $383 million, the prospectus said. At a meeting of Thomas H. Lee Partners last year, just after its $2.2 billion purchase of Refco, Mr. Lee introduced Mr. Bennett to discuss the firm. According to someone who was at the meeting, Mr. Lee boasted that Mr. Bennett's $383 million stake in Refco was among the largest investments he had ever seen in a company by its chief executive and was an indication of his confidence in the firm.

Before the transaction with Thomas H. Lee Partners, Refco had three owners: Mr. Bennett and Mr. Grant each owned 45 percent, and Bawag Overseas owned 10 percent. Bawag stands for Bank für Arbeit und Wirtschaft, an Austrian banking company that invested in Refco in May 1999. It is Refco's largest creditor, stating that it is owed $451 million.

The $45 million exit payment made to Mr. Trosten, the former chief financial officer, was not mentioned in the Refco prospectus. Instead it noted that when he left the firm in October 2004, he forfeited the shares in the company that he had received as part of its top management. His departure seemed abrupt because it left Refco without a chief financial officer for two months.

The payment to Mr. Trosten came out this year in an arbitration case that was brought against Refco by a consultant it had employed.

"Trosten testified that he received a $45 million separation payment when he left the company," said Sean O'Shea, a lawyer who represented the consultant, Edward McElwreath, who won $3.5 million from the company. The arbitration panel overseeing the case awarded the money to Mr. McElwreath, who contended that he had introduced Refco officials to Thomas H. Lee Partners and was owed a fee for the introduction. The separation payment to Mr. Trosten by Refco was first reported by The New York Post.

Robert G. Morvillo, a lawyer who is in the process of being retained by Mr. Trosten, said he had advised the former Refco executive not to discuss the matter publicly. A spokesman for the Lee firm declined to comment about Mr. Trosten's separation payment.

Four other Refco executives shared in cash payments made just before the deal with the Lee firm, according to Refco filings. These payments, which totaled $22 million, related to the executives' interests in a profit-sharing pact at the firm.

The recipients were Joseph J. Murphy, chief executive of Refco Global Futures; William M. Sexton, then Refco's chief operating officer and now its chief executive; Santo C. Maggio, the chief executive of Refco Securities; and Dennis A. Klejna, the firm's general counsel.

According to the prospectus, these four executives had invested a total of $1.95 million in Refco at the time of the Lee transaction.

[mike5514]

There is a lot of hate out there! I have seen it over the years grow untill it consumes those that imbrace it and drives them apart from those that are not in fected. It places them in the 2 political camps that are drawing farther apart as I type this. It used to be single moms on welfare now its people on disability Ihave a friend who is trying to run a small farm and receives a partial disability he can only work for a couple hours and the pain is so bad he has to lie down. My sister in law also just started receiving disability her spine is deteriating and she also can only work for a short time even with the pain medicine. Disability is part of social security it is fully funded and in the black, I paid into it for 40 years and did not need it but Im glad it was there for others in their need. A few years back I met a person who knew someone who was reciveing surviver ins. for her 3 kids because her husband drowned in a accident. She thougth that was bad this person would get money from the government, I explained that this money was funded by the husband when he paid into social security and it is only for the children untill the age of 18 this program is also in the black. Hate who do I hate? The rich and powerfull. I believe they are benefitting from this hate and useing it to there advantage. There was a wealthy republican running for office in this state who received a million bucks from the feds for not growing something, asked why he took it he said because it was there Bush was going to put him on his cabinet but he killed himself sitting on the patio of his ranch overlooking his 50000 acres. Hate the poor? or hate the rich and powerfull who run the country?. You want to hate take your pick but choose wisely. And when you cant defend the standing president blame a previous one, that always works. Sometimes its good to blame the school system Thats been a favorite for quite some time. We have the best of everything but somehow it is hard to enjoy it. Mike

[JasonA]

Mike, you obviously missed a big part of the discussion above. Nobody finds fault with helping out people who have a real need. I believe everybody finds fault with others trying to sneak in the system under the guise of having a real need. Nobody here hates anybody. I'd just like to see a system that places a higher priority on "need verification" if you will.