Winners and Losers

Even though its Passover and Easter, the high holidays are taking a back seat to the financial shake-up as far as headline news is concerned.

Here are what I’ve observed as this week’s financial winners and losers. Let’s start with the losers.

So far, the only one to go to jail from the Madoff fallout, is Bernard Madoff himself. If you haven’t seen the list of those who invested in his wealth management company, you’ll be astonished.

Banks from Spain, Insurance companies from Japan, prestigious places of higher learning like Yeshiva, NYU, and Bard College and celebrities like Zsa Zsa Gabor, Larry King, Sandy Koufax, and Jeffrey Katzenberg make up the victim list published by the WSJ.

This includes Hadassah, the largest volunteer organization in the US, which lost an astonishing $90,000,000. Heartbreaking!

So loser number one is Madoff. But AP reported yesterday that the government is also going after his collaborators who made big bucks from his heist. Hedge fund manager, J. Ezra Merkin’s clients had more than $2 billion invested in Madoff’s company.

Merkin earned massive returns from his partnership and lived the lifestyle to prove it. He had an 18-room duplex in what is considered the “world’s richest apartment building” in Park Avenue, Manhattan. As an aside, I love the words apartment, duplex, and co-op in reference to a property of this size and value. Most of us probably don’t use these terms when referring to one of the world’s most expensive homes.

Merkin also had $91 million in Mark Rothko paintings. The artwork alone would cover Hadassah’s loss.

So now the government is going after his sons, his brother, and anyone else who knew of the swindle and made money off it. It’ll probably take years to sift through this disaster, but let’s hope that this week’s losers will provide some returns to Madoff’s victims.

And now the winner. Wells Fargo & Co reported huge earnings, $3 billion to be more specific. It’s the financial sector that has been hit the hardest, and for WF to report profits was quite remarkable. This most likely caused the Dow Jones to rise nearly 250 points the day WF announced the news.

According to the AP report, WF attributed its acquisition of Wachovia and a rise in mortgage applications as reasons behind the good news.

Another company that’s reporting profits is Target, whose 6.1% increase was higher than they expected.

Allow me to add one piece of late news, a final winner is Walgreens. Last week they introduced the “Take Care Recovery Plan,” which provides free healthcare visits to those who have lost their jobs and are uninsured. As long as the fine print doesn’t make this more of a marketing ploy than genuine public service, it shows corporate America is reaching out to those of us who are facing difficult times.

Here’s to a restful holiday for you and your family.

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