I had to preempt my screed against the French today to bring you guys this news because it's pretty bizarre.

On Monday morning, Peregrine Financial Group founder Russ Wasendorf Sr. tried to kill himself. While the media didn't report how, insiders at the company said that a secretary was looking out the window and noticed his car was parked away from everyone else and not in his designated spot, so she told his son (Russ Wasendorf Jr.). It appears his son discovered a suicide note pointing to accounting irregularities just prior to this (or maybe right after - unclear at this point), so he ran downstairs to find his dad in the car with a hose pumping exhaust into it. That's never a good sign if you're a firm employee.

Yesterday the other shoe dropped when regulators accused the firm of misappropriating $220 million in customer funds. The firm collapsed pretty much on the spot, and employees packed up their desks and left. The firm's trading partners froze all the firm's accounts and put everything into a "liquidation only" status.

It was, according to Bernie Madoff:

In his first interview for publication since his arrest in December 2008, Madoff looked different. Gone was the aloof stoicism and more than a few pounds from his belly.

Also gone was the notion that this too shall pass .

Being that I'm having a Madoff flashback this past week...

Being that the NASDAQ hack has roughly 1/5th of all U.S. stock trade info on some geek's jump drive...

Being that Wall Street operates out of D.C. and that the whole world is pretty intent on passing its own failures off on someone else...

I think it's a great time to ask the question...

What is the Biggest Scam You've Ever Seen

I am prompted to offer this little nugget of madness as further evidence of why I can't be mad at the Jesus freaks for screaming about Sodom and Gomorrah...

For over a thousand years, the key player in the world of finance has been sitting in the same place. Sure, he's moved his desk a few times...Rennaisance here, Inquisition there, a World War or Two to spice up the ho-hum. But long before it was called The Institute for Religious Works The Vatican's Bank was the ultimate exit opportunity for history's monkeys.

Imagine a young Shylock on the streets of Venice...steady moving those gold coins, scribbling on parchment and launching those carrier pigeons off to Rome...

Your ancestor...the Cro-Magnon Monkey networking for his first informational meeting.

What Does This Have to Do with Me?

As an amateur academic, I have spent a lot of time pondering the root causes of the credit crisis which precipitated America's long expected (though easily preventable) fall from economic grace.

There were certainly many culprits and a few hand picked scapegoats. Sadly, the majority of the former are not only still walking but occupying the same or even higher posts than before.

The few sacrificial Madoffs have been nowhere enough to satisfy justice or set an example for future thieves with credentials and dollar signs in their eyes.

In pondering some potential investment plays recently, I have stumbled on to the one road block I feel has gotten nowhere near enough press:

Credit ratings

Back to business today boys. After all...it's Saturday! I want to address two (IMHO) key issues for the finance world going forward. These issues will specifically effect those of you entering Wall Street soon and those who have hit the ground running recently. Both issues were addressed in the online WSJ over the last 24 hours. Here they are:

1) The Clawback

These are the words which
shaped my youth . Growing up poor in Brooklyn, these guys were the stuff of legend and when you're dirt poor and the peaks of Manhattan look like a literal Wall Street Oasis...you develop a different set of sensibilities.

Even though I knew more than one living inspiration for a Goodfellas character, not a single made man I even met or heard of had anything on this lady .

Ms. Amy Butte (rface), folks...perhaps the most Original Gangster I never met.

I always thought Bernie Madoff went down too easy. The whole confessing to his kid and turning himself in never sat right with me. Let's face it, he ran his scam for almost 20 years and jacked $50 billion. You don't just walk away from that one day.

So I wasn't surprised when a former cell mate came forward with tantalizing details about how Bernie may have squirreled away $9 billion with three personal friends of his before he came clean. And now Madoff is afraid his former partner Frank DiPascali is naming names to the Feds in exchange for leniency. What a tangled web we do weave. Anyone else think Ruth knows more than she's saying?

In perhaps the most unsurprising news since Tiger's decision to return for the Masters, Lenny Dykstra losing all of his money to late night infomercials, or Cramer getting investigated by the SEC, The Wall Street Journal is reporting that Bern-alicious got his nose broke and face re-arranged by another inmate in the slammer.

Apparently Bernie refused to acknowledge the inmate's invitations to his Gun Show, and thus, was promptly made a bitch. "Ese got out of pocket, so we decided to give him a little tune-up," Mo The Mallet told reporters, "took him out to the yard, did the Watusi on his grill. Dude is lucky he didn't get the shank."

According to reports, Madoff -- a.k.a. Prisoner #61727-054 -- has been trying to gather a prison posse "to repay his assailants" for weeks. Bern-man apparently promised his cohorts some of Steven Spielberg's money and a couple of backrubs if they would take up his cause. So far, no luck.

As you can see from the attached image, Harry Markopolos is pissed. Markopolos is the fraud investigator who brought down Mixmaster Madoff, and he's releasing a book next week that gives the inside dirt on this epic Ponzi scheme, missed opportunities, and award-winning foot dragging.

Among the highlights:

The book is called "No One Would Listen" and details his early interactions with the SEC, who he claims just about categorically ignored his findings on Madoff's douchebaggery and "usually didn't understand what he was talking about."

"As I explained this massive fraud to [the New England Director of Enforcement]," Marcopolos says, "it very quickly became clear he didn't understand a single word I said after hello... if blank looks were dollar bills, I would have walked out of that room a rich man ... I never knew if that represented a lack of interest, a lack of comprehension, or simply a desire to go to lunch." Brilliant.

Instead of becoming a prison bitch, Bernie Madoff apparently has fellow inmates lined up to kiss his ring according to this Wall Street Journal article. He's been cozying up to mob bosses, Israeli traitors, and jailhouse artists in a bid to boost his street cred and remain heterosexual. I guess those white collar incarceration classes worked out for him.

For those of you working at hedge funds who might soon require the services of a prison coach, here's the link.