Stanfraud?

Tuesday, February 17, 2009

Sir Allen Stanford, the man who brought excitement and a lot of money to the game of Cricket, West Indies Cricket especially, has been charged with fraud. According to The Gleaner, on Tuesday February 17, 2009 the US Securities and Exchange Commission formally charged Stanford and three of his companies with "massive" fraud centred around high interest rate CDs. The Securities and Exchange Commission's complaint, filed in federal court in Dallas, alleges that Stanford International Bank sold about US$8 billion of so-called certificates of deposit to investors by promising "improbable and unsubstantiated high interest rates." Reuters has reported that the US authorities have since frozen Stanford's assets have been frozen and a federal judge has appointed a receiver "to take possession and control of defendants' assets for the protection of defendants' victims."

Standford, to the still existing cricket fans, is a well known name as he is the founder of the Standford 20/20 Cricket tournament. this competition seems to overshadow even the Cricket World Cup due to its heavy prizes running up into several million dollars. There is no doubt that the West Indies Cricket Board WCIB and West Indies Cricket have benefited from the monetary inputs of Stanford. Standford's 20/20 Tournament brought something new to West Indies cricket and was seen by many as a last ditch hope to revive the dwindling love of Cricket in the region and to pump some well needed money into the coffers of the WCIB. However, with this new development, it seems that all this heavy funding will come to a screeching halt and the rich Stanford 20/20 Cricket will fail to exist. Already the England and Wales Cricket Board and the West Indies Cricket Board have immediately suspended all their ongoing negotiations with Sir Allen Stanford and his corporate group. Which simply means no more Stanford money for West Indies Cricket. Does this mean even more bad times for Cricket in the region? However, Cricket is not the only sport that will suffer from the loss of Standford's fat money, as his sports financing transcends to football (soccer) and golf.

Putting Sport aside though, this charge has serious implications for many of his investors around the world and even closer to home, here in the Caribbean. It is also frightening, as this is yet another major multi-billion dollar fraud charge coming just on the heels of the Madoff scandal. This leads us to wonder who is next? Which financial entity will be next? How many other companies and their heads have been playing around with our hard earned saving? I see a very frightening trend, and now I'm wondering if my money is just safer under my mattress.

Source: http://go-jamaica.com/news/read_article.php?id=6523 | http://uk.reuters.com/article/ousiv/idUKN1737429520090218

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Closed!

Saturday, January 17, 2009

It's now even more official than it was before when I saw the news on TV, Circuit City and circuitcity.com is closing down. I actually believed when I saw the news, but the reality really hit me today when I went searching the idea of the price for a new printer. I went on their website at circuitcity.com only to find the page in the picture above with the opening statement below.

Circuit City would like to thank all of the customers who have shopped with us over the past 60 years. Unfortunately, we announced on January 16, 2009, that we are going out of business.

Please check back later for updates about the status of our website. In the meantime, we hope the information below will help answer most of your questions.

It was so, surreal, one of the biggest electronics retail store in the USA is really shutting down. One more piece of evidence to show how bad things are in the US and the world economy as businesses not only cut staff, but are also shutting down. I can just imagine all the people who will be out of a job as Circuit City is a very large chain, 567 stores in fact, with many employees. I remember they even opened a store in the Bronx while I was vacationing in New york just last summer, and now this! It's a really frightening how this economic downturn is progressing with no end in sight.

On the flip side though, if you are looking to buy some electronics and on a serious budget, as we all are, then now is the right time to buy from Circuit City. They are having liquidation sales at all of their 567 stores. hopefully I can source a deal for my camera and a new printer at one of these sales is the stores in the are of new york I normally visit haven't closed down by now.

Despite the short term apparent benefit for me with the liquidation sales, its a frightening prospect seeing such a large, seemingly strong store closing its doors and leaving so many people without their daily bread.

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Recap and Eye Candy on the Side

Thursday, January 10, 2008

Another weekend is here again! Is it just me or do the weekends seem to come quicker these days? I have been so busy this week between working regular 8-5 and working out at the gym for hours in the gym. By the time I reach home I can only manage to shower and grab a bite and it's straight to bed. Well it has been quite a week here in Jamaica. Here is the recap:

The Jamaican Urban Transit Company (JUTC) withdrew it's services on Monday morning as the staged a protest to vent their frustration of their management! According to the report, the company has been deducting payments from the workers salary but has not been paying over the deductions to the financial institutions including the National Housing Trust (NHT). This has added fuel to the the fire as the workers are already upset about their salaries and now they have financial institutions breathing down their necks for money that was supposed to have already been paid over. [Read Article] I know that I would not be pleased myself... that's to mild, I would be cross nuh 10 Bounty Killer!

The government announced that it will taking steps to regularize the many alternative investment schemes currently operating all across the island including the well known Cash Plus. It has been reported that the Financial Services Commission (FSC) has been receiving a flood of calls from several schemes asking about getting their organization registered. [Read Article] So all the Cash Plus investors are keeping their fingers crossed on this one!

The Jamaica Public Service (JPS) delivered its new years present in fine style yesterday evening with an island wide blackout starting at approximately six fifteen. [Read Article]I escaped the total mayhem on the roads as I still managed to get my workout as the gym has a backup generator. I was totally surprised to find power at my house after my workout, even though the road home was only lit by the headlamps of the cars. But is was a good thing cause I man did hungry like dawg and in need of a good warm shower!

Those were the main stories for the week, pretty eventful start to the year. But today the weekend begins, a time to relax, hangout with friends, party, shake your groove thing and of course work! Oh yeah, I have work the entire weekend, but I won't complain as I had all of last weekend off, so it's not that bad. And here is a little present to start of the weekend on a nice note... well for the male readers, as they would appreciate this!

Hmmm, if only I was a train on that track! Choo! Choo!

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Money Wars - Cash Plus vs Commercial Banks

Sunday, November 25, 2007

It seems the hottest topic in the news here in Jamaica is the financial civil war that has erupted in the past few weeks! It is such a hot topic that it has even almost overshadowed the Local Government Elections that will be held shortly.

Of late many more ordinary Jamaicans have opted to invest their hard earned money in high yield alternative investments schemes in a bid to earned tangible interest on their principals. One of such investment companies, is the locally popular Cash Plus Limited. This investment company is one of several high yield investment companies that have been termed as risky and unregistered investments entities by the local commercial banks. But why have the ordinary Jamaican, despite the many warnings, leave the apparent safety of the commercial banks to gamble their hard earned money in such risky investments?

Well, my answer is just a layman's answer, not the reliable comments of a financial analyst. Times are hard, many Jamaicans are grossly underpaid, inflation is growing at an alarming rate, the dollar is devaluing every day and the same commerical institutions are offering little or no help to the ordinary Jamaican. But why would I say the commercial institutions are not helping? Well if we compare the the interest charged on loans with the interest paid on savings, there is no wonder why the top management of such banks can get seven digit salaries while your money seems to be growing only from your own input. I may be corrected on this, but the average interest paid on savings rarely goes above six percent per annum, while the interest charged on an ordinary almost never fall below seventeen percent per annum. There is no wonder why an interest rate of ten percent per month would seem attractive enough to take a risk!

As a result, many Jamaicans have taken the leap of faith and have been withdrawing their savings and deducting from their monthly commercial bank savings to take a leap of faith and invest in Cash Plus. This has definitely not gone down well with the leading commercial banks which have launched an all out assault on these alternative investment options, including the famed Cash Plus! It seems the commercial banks attacks started with harsh warnings to the public, which escalated into pressuring the government to act, however, these actions have seemed to do little to quench the publics fire for Cash Plus. This would not deter the banks as the have resorted to dishonoring checks to and from institutions such as Cash Plus and OLINT, considering closing the accounts all accounts relating to these "unregistered institutions" and reports are that they have even gone as far as threatening their own staff if they are found to be investing in entities such as Cash Plus. However, Cash Plus has been vigorously attempting to assure its investors that this latest move by the banks will no bring the company and its subsidiaries down, through the printed media and mass meetings and have begun to explore other means of paying their investors their returns. [read story]

Who will win this war? Will the banks succeed in bringing down these investment companies, or will companies like Cash Plus and OLINT grow ever stronger? Will the banks actions reestablish themselves as the investment option of choice or will their actions bring an unwanted backlash? As the missiles fly across the battle field, only time will tell. What are your thoughts on this financial war?

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