Seeking Alpha – In 1997, some observers feared an impending global recession as a result of the headwinds stemming from the Asian financial crisis. However, within two years, those fears had dissipated and were replaced with new concerns of irrational exuberance.

In contrast, the U.S. economic downturn beginning in 2008 initially appeared to be relatively benign. Most observers believed that a moderation in U.S. economic growth was essential to prevent an over-heating of the global economy. It was further believed that the problems confronting the U.S. economy were of its own making and would have little effect on global economic growth.

To be sure, some economists did forecast a U.S. recession in 2008 as a result of mounting home foreclosures. Such forecasts were however widely dismissed as being unduly alarmist during the first quarter of 2008.

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Tags: asian-financial-crisis, economic-downturn, economists, fears, first quarter, global recession, global-economic-growth, global-economy, headwinds, home foreclosures, irrational exuberance, moderation, observers, seeking alpha

New York (HedgeCo.Net) – A prestigious New York City lawyer has been arrested and charged with masterminding a $100 million real-estate scheme that targeted large institutional investors and hedge funds.

Marc Dreier, of Dreier LLP on Park Avenue, was arrested on Sunday at LaGuardia Airport and is now facing both federal charges of securities and wire fraud, along with civil fraud charges filed by the U.S. Securities and Exchange Commission. In addition, Dreier was already dealing with criminal impersonation charges brought on by Canadian authorities.

"Our complaint alleges a stunning, brazen fraud that targeted some very sophisticated institutional investors," said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.

Among the allegations, Dreier allegedly marketed bogus promissory notes that included ones tied to a real estate development company based in New York. Prosecutors said Dreier then covered it up by producing phony documentation and false financial statements to keep the investors from discovering the scheme.

According to the prosecution, Dreier convinced hedge funds to purchase these notes by highlighting the discount they would receive due to the original investors facing a cash crunch brought on by the current economic turmoil. Though the hedge funds weren’t specified, prosecutors say that one New York fund wired $100 million to one of Dreier’s accounts, while another fund in Connecticut wired about $13.5 million.

"This is a very complicated matter, and the facts are beyond reach of a sound bite," Dreier’s lawyer, Gerald Shargel told reporters at the scene.

Marc Dreier is a 58-year-old graduate of Harvard Law School. His bail hearing is scheduled for this Thursday.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
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Tags: chief-executive, children-with-special-needs, due-diligence-service, emergency-action, founding-partners, fraud-suit, global-economic-growth, new-marketplace, real-estate-investments, retail-transactions, strategies-master

New York (HedgeCo.Net) – At least David Findel can never be called a band-wagon fan. The owner of mortgage-lender Financial Resources just agreed to pay a record $400,000 to the rights to two of the best seats at the new Meadowlands stadium. That’s just for the rights. The tickets themselves will cost him another $7000 annually.

The New Jersey native told the New York Post that he probably won’t even use the coveted seats.

“I purchased them for my son, Brandon, 11, and my daughter, Brooke, 7. I will probably continue to sit in my current seats.”

Both Jets and Giants fans were informed this season that they would have to pay money to obtain licenses in order to secure seats in the new stadium, which they will be sharing. Though some fans were outraged, the Jets were hoping to raise $170 million by selling licenses that ranged between $4000 and $25,000 per seat. The Giants, coming off a SuperBowl win and leading the solid NFC East Division, planned to charge between $1000 and $20,000 per seat license. The money from both teams will help to pay for the $1.3 billion in construction costs for the new stadium.

Jets owner Woody Johnson doesn’t see anything wrong with charging such outlandish fees in times of economic turmoil.

"People who buy PSLs and suites are looking over the long term," he said. "I know they realize, because I’ve been talking to a lot of them, that this is kind of a once-in-a-lifetime opportunity to buy something that hasn’t been available ever."

Meadowlands Stadium will hold 82,500 seats, making it the second largest stadium in the NFL next to FedEx Field, home of the Redskins.

Findel won the rights at an October 16 auction, outbidding other millionaires like Nobu owner Drew Nieporent. Instead of slightly raising the $140,000 bid for each of the two seats, he shocked the crowd and shot right up to $200,000 per seat. Not exactly the kind of frivolous purchase you see mortgage lenders making lately.

“Although part of the mortgage business is in turmoil, this is an opportunity to invest in my business and to further demonstrate our loyalty to the New York Jets,” Findel told the Post.

Ummm…a Favre jersey would’ve worked too.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: adjunct, business-model, chief-executive, domestic-institutions, global-economic-growth, reshuffle, term-money, value-investors

Times Online – The esteem of John Waples for the hedge funds (“Get used to volatility: the hedgies are in control”, last week) was not very sound financial journalism.

Who else but these grossly leveraged entities would have the capital or the appetite for the short-selling that we have seen during the course of this economic turmoil?

Waples should turn his investigative attention to our so-called regulators who, with every conceivable avenue of inspection available to them, have failed to track down the City insider traders who have made millions from this financial system.

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Tags: benchmarks, foundations, frame-walls, global-economic-growth, invoices, staffers