Hugh Hendry, hedge fund manager with Eclectica Asset Management, disagrees with Angela Knight of the British Bankers’ Association about the state of the banking crisis on Jeff Randall live.

“I think we can probably conduct our business better than the government can conduct it for us,” Blank said in an interview with Sky News.

The government threw its troubled banks a second multi-billion pound lifeline in three months on Monday, the day that Lloyds TSB completed its takeover of mortgage lender HBOS to create Lloyds Banking Group.

Shares in the new company closed a third lower as the scheme failed to reassure investors.

The government has a 43 percent stake in the new group after underwriting capital raisings by Lloyds TSB and HBOS as part of an earlier 37 billion pound bailout of the banking sector.

“The reason why we are at 43 percent and we don’t want to go any higher is that we believe that that is better for our customers … better for our staff … and we believe that in time it will be better for our shareholders,” he said.

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The Cruz Roja said Thursday night that more than 300 persons have been injured and that eight persons have died. Individuals remain trapped in workplaces, vehicles, buses and hotels, and some will have to be airlifted to safety Friday morning.

The death toll from quake that shook Costa Rica Thursday has risen to 13 after 10 more victims were found at a popular tourist destination near the epicenter of the quake, a Red Cross official said on Friday.

The U.S. Geological Survey said the 6.1-magnitude temblor was centred 35 kilometres northwest of the capital of San Jose in the early afternoon, near the Poas Volcano national park.

Wall Street trader Bernard Madoff allegedly defrauds the rich and famous out of tens of billions of dollars. Minnesota businessman Tom Petters allegedly fleeces hedge funds out of $3.5 billion. And socialite New York lawyer Marc Dreier may have duped some hedge funds into giving him hundreds of millions of dollars for an apparently bogus real estate scheme.

All of these scams are a big and all appear to be some kind of Ponzi scheme, designed to take in money from new investors to pay-off earlier investors. A Ponzi scheme is one of the oldest financial frauds around. And many are referring to the Madoff caper as the biggest Wall Street fraud ever.

But derivatives consultant Janet Tavakoli may be onto something. In a note to her clients, she says the biggest Ponzi scheme of all may be the one that brought the world financial markets to its knees. And that’s the scheme that united Wall Street bankers with mortgage lenders in a bid to funnel more and more money into the market for supbrime homes loans. She says the packaging of iffy home loans into securitized bonds that could be sold to insitutional investors—many of them relying on borrowed money—was a system born to fail.

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Dec. 12 (Bloomberg) — Bernard Madoff confessed to two sons this week that his investment advisory business was “a giant Ponzi scheme” that cost clients $50 billion before two FBI agents showed up yesterday morning at his Manhattan apartment.

“We’re here to find out if there’s an innocent explanation,” Agent Theodore Cacioppi told Madoff, who founded Bernard L. Madoff Investment Securities LLC and was once chairman of the Nasdaq Stock Market.

“There is no innocent explanation,” Madoff, 70, told the agents, saying he traded and lost money for institutional clients. He said he “paid investors with money that wasn’t there” and expected to go to jail. With that, agents arrested Madoff, according to an FBI complaint that provided a timeline.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=a3uKf5P1lFmg&refer=home

By Tom Leonard in New York
Last Updated: 12:27AM GMT 10 Dec 2008

Marc Dreier, 58, whose clients have included the rock star Jon Bon Jovi, took advantage of the financial crisis by selling fake debt to hedge fund managers looking for investment opportunities, say prosecutors.

In what the Securities and Exchange Commission called a “stunning, brazen fraud that targeted some very sophisticated institutional investors”, he is charged with stealing $113 million since October, including $100 million from two hedge funds.

He allegedly hoodwinked hedge fund executives by meeting them in the offices of various businesses, including a property company and a pension fund, where he had no right to be.

Mr Dreier also provided the hedge funds with fake financial statements, audits and letters on the stationery of the New York property company that was supposedly issuing the debt.

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