Wednesday morning headlines

Retailer's last gasp: Make them an offer today - almost any offer might do. The only question is how much of a disaster we're looking at this season. (Reuters)

Some good news! Consumer spending, when adjusted for inflation, rose 0.6 percent in November, its largest gain in two years. That's due in large part to the huge drops in fuel costs that have provided a sizable economic stimulus. (NYT)

Trading light: The markets close at 10 this morning in a holiday-shortened session - and perhaps just as well. Volume, as usual on Christmas Eve, is very light. (AP)

Deal for IndyMac?: Regulators are ready to announce a sale, according to the American Banker, perhaps as early as today. The FDIC has run the servicing operations at the Pasadena-based lender since the place was seized in mid-July. Still unclear is whether the bank will be sold in one piece or in parts. There's been speculation both ways. (HousingWire)

Mortgage applications soar: Looks like the big drop in rates is starting to do some good. For the week ended December 19, the Mortgage Bankers Association's index of mortgage applications rose 48 percent. Refis represent a lot of the action. From Reuters:

Spencer Rascoff, chief operating officer at Zillow.com, a real estate website based in Seattle, said historically low mortgage rates are a boon for the mortgage industry and to many borrowers, but it remains to be seen if they will have a substantial effect on the housing market. "The good news is that these refis could help some homeowners avoid expensive resets on adjustable rate mortgages, and in turn prevent some foreclosures," he said on Monday.

Silverton got snookered: That would be baker and restaurateur Nancy Silverton, who put all her eggs in Bernie Madoff's basket. Actually, she invested with Beverly Hills money manager Stanley Chais, who served as a funnel to Madoff. Silverton's losses include a profit of more than $5 million from the sale of La Brea Bakery in 2001. From the LAT:

Silverton said she learned the bad news from her father when she called him at his office as she was driving up to Napa Valley about two weeks ago. "He said, 'I want to tell you something. Everything's gone. We lost everything.' " She was devastated. Silverton said she lost her entire nest egg, including her retirement fund and money she had set aside for her children and their educations. "I need to reinvent my life," said Silverton, who co-founded the landmark Campanile restaurant and La Brea Bakery with her ex-husband, Mark Peel, and another partner.

Jewish Journal coverage: The upcoming issue has a bunch of Madoff-related stories, including the little-discussed question of how much money was actually lost in the swindle. Business journalist Dean Rotbart says that the $50 billion figure being bandied about is probably inflated by quite a bit.

The actual amount lost, while still record setting, is most probably significantly less, in part because both Madoff and his victims seem to be counting phantom profits. This point is argued persuasively by John Steele Gordon, a financial and economic historian, who has closely tracked American pyramid and Ponzi schemes predating Charles Ponzi's 1919 fraud, which impacted 20,000 investors. Put simply, if an investor who placed $100 with Madoff was led in time to believe the investment had grown to $150, the "profit" was never real, so neither is the loss, Gordon explained. "The money was only building up in a phantom sense."