QUACK!* by Alex Dalmady

February 14, 2009

It’s over. Regulatory bodies have caught on. WSJ just announced that the FBI is investigating. “Duck Tales” is in the hands of dozens of analysts who “get it”, including many with ties to the MSMs (that’s Mainstream Media for you, Toby LOL). The press is flowing more freely. The MSMs have sent guys to Antigua. It’s big. They “get” it. THE EMPEROR HAS NO CLOTHES. Stanford has no answer. “Sir Allen” has been silent since over three days ago, as that spokesman who was beginning to look a lot like Jim Carrey at the beginning of “Fun with Dick and Jane”.

Hope he gets even like Carrey did.

The Antiguan regulators are on it. They made a complete “about face” on Friday, going from “not probing Stanford” to “to quiz Stanford” and “its not a Friday afternoon cocktail anymore”. It’s obvious that someone told them to “wake up and smell the guavaberry”.

They are still in denial, however. A Mr. King says “I know Allen Stanford personally put close to half a billion dollars of his own money to beef up the capital structure of the bank.” Did you see the check, Mr. King?

NO ONE and I mean NO ONE has disputed the facts in my article. The central issue of Show me the money! has not been addressed by Stanford or anyone else. Some MSMs have asked me how I got to my figures and I’ve sent them my dinky little spreadsheet. No questions. Maybe I should pretty it up a bit.

Now comes the ugly part. The Antiguan regulators with perhaps some special “help” are going to go see about those assets. I hope for the best, but I’m afraid for the worst. There may not be much there. If there’s a broker statement showing $2-3 billion in T-bills somewhere, you can be sure it’s false. Better confirm that with the brokerage company, guys. My best guess is that those assets are going to be stuff like eLandia, which Stanford poured like $100 million into, only to lose it. HSSO, which was trying to become “something” by buying EMAG, Transwitch (TXCC), which some guy named “Peabody” on the BW blog turned up. Seems that Stanford, grasping for cash, sold $15 million of short-term notes back to the company for $9.5 million back in December. Talk about “liquidity crunch” (it works to about a very high yield, for those mathematically challenged). I guess then there are the movies, the restaurant in Memphis and other “market-beating” investments. I can imagine the ledger now…one coffee pot: $50,000.00, one helicopter: $500,000,000…one corrupt politician: priceless! The human part is going to hit home really quick. I already had a taste, and my blood is boiling. I’m MAD and I’m SAD. Yesterday, I get a call on my home phone from a lady in Venezuela. She was desperate. She tells me her 99-year-old aunt’s money, the income from which she uses for her medical needs, is in a Stanford CD. “Can you help me, Mr. Dalmady?” What do you say? “Should I redeem, Mr. Dalmady” Yes, “redeem” I said…broke my heart.

It’s becoming painfully obvious that this was in a death spiral anyway and the story was going to blow really soon. Matt Goldstein had plenty of research he was ready to go forward with, as was Allison Fitzgerald at Bloomberg. They were googling for Stanford regularly when my stuff came up. More stuff will come forward anyway. I’d say if not for “Duck Tales” this had maybe a week or two more to go, before it blew itself up (ran out of money) or the press blew it up.

That’s really bad if you think about it. Ponzi schemes live off liquidity. If these guys are strapped for cash, after pulling in $2 billion in fresh money in 2008 and “injecting fresh capital” in December…well. It’s obvious that this isn’t just a product of the 2008 market crash, stuff has been going on for a while. If I had to guess, I’d say this might have been legit until 2000 or at least a “viable model”, since the markets were doing well, but somewhere back it took a bad turn and a little hole grew into a crater. They were filling it in and perhaps trying to build up a business on the side (Stanford Group?). But its just speculation here and we won’t know unless an insider talks.

So…there it is. It’s my 15 minutes. Thanks for lending me your blogs (I really should get my own).

*A simultaneous blogcast exclusive of the Devil and Inca Kola News

11 Responses to “QUACK!* by Alex Dalmady”


  1. [...] who started all the fuss has kindly allowed IKN (along with The Devil’s Excrement and also here at the Devil’s Excrement WordPress version) to publish his thoughts on how the Stanford International Bank story has [...]

  2. Frank Says:

    Might want to look into Oct 2008 warrants served by Venezuela Ministry of Justice on Stanford bank in Caracas, over alleged spying activities by Stanford employees on behalf of Mr. Stanford. Stanford employees targeted included former US government employees, including security department head. Lots of evidence removed by Ministry of JUstice.

  3. moctavio Says:

    Nobody knows what they were looking for, some say oppo accounts, other Government officials accounts,some say both.

  4. Steve Says:

    This is getting really rich. “Its over” followed by comments from the blogosphere about how Hugo Chavez’s jackboots served warrants on the Caracas bank. Think they might be looking for a few assets to nationalize there?

  5. jim peters Says:

    I hear the brokerage assets at stanford financial are held in street name at pershing securities which should be ok and not impacted by activities at SIB. The SIB CD’s is just a “security” they sell that is held in these accounts at Pershing. The question is how much have they sold? Looks like the $8bb is the number according to their latest annual report. The other question is how many assets are left to support the CD’s? If they were solvent coming into 08, based on Alex’s allocation estimate they probably have 50 to 60 cents on the dollar. Interestingly, in the foot notes that talk in very vague terms about assets held for trading and assets available for sale, etc… My bet is that they are carrying assets at modeled value or cost based on how they have decided to classify them within the context of the Carribean banking laws that they helped craft.
    Finally, you have to think that anyone who can withdraw now will do so immediately. This will exacerbate the recovery rates for those depositors who can’t get out. Several of their products do not allow withdrawals. Jurisdiction will be interesting if fraudulent conveyence of funds comes into play and the courts demand money to be returned and split up in an equitable manner. I would love to see someone go to Caracas and convince those who have withdrawn money to return it! If they pay out the demands from liquid depositors, the illiquid folks could be left with nothing.

  6. Ann Says:

    Where did Alex’s blog go?

  7. moctavio Says:

    Apparently hacked…


  8. [...] Dalmady insists that had he not published his investigation, one of the major newspapers or industry magazines would have done so. [...]

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  10. SUNIL NAIR.S Says:

    I am a Safety Officer, No Job, No money, No Ability?


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