Olduvaiblog: Musings on the coming collapse

Home » Posts tagged 'Bernard Madoff'

Tag Archives: Bernard Madoff

Ponzi World (Over 3 Billion NOT Served): The Promise of the Joker and the Fool

Ponzi World (Over 3 Billion NOT Served): The Promise of the Joker and the Fool.

Blogs like this one are a total fucking waste of time. We are a handful of hardcore realists reading each others’ blogs and reinforcing what we already know. All while the stoned masses sit at home fat and happy watching the Kardashians, hypnotized by Dow Casino ticking higher with every passing day. After 2008, the comfort-seekers at large curled up into the fetal position and have remained that way ever since. Regardless, how can we possibly warn the oblivious masses about today’s economic risks when it’s all doomed to collapse under the weight of its own moral depravity? Basic logic dictates that the majority can’t all get out of a house of cards intact. The Idiocracy at large is totally bought in and sold out to the promise of the jokers and fools who run this globalized catastrophe, you know, the same ones who collapsed it the last time…

There is nothing any bearish blogger can do to bring about the collapse of this fabrication that global thought dealers are not already doing. They collapsed world markets in 2008 and they are fully capable of doing it again all on their own. These people went to the top schools in the U.S., the UK, Canada – across the world. They know what they are doing. They generated the 2008 clusterfuck, profited from it, and now are guiding us straight ahead to the next catastrophe. Who was at the helm of the Federal Reserve in 2006, 2007 and 2008?  Bernankenstein of course. And who until this very month has steadfastly been Wall Street’s largest leveraged banker? Bernankenstein. He saved us from a catastrophe that he himself subsidized. Soon he will hand over the reins to Janet Yellen, who has degrees from Yale and Brown, two more Ivy Leagues. Surely she can finish the job and pile drive this fucker straight into the ground. Yellen admits that she didn’t see the 2008 financial crisis coming – apparently giving subprime loans to illegal immigrants and watching Goldman invent the self-imploding CDO didn’t raise any alarm bells with her. So she is definitely the right person to finish the job. Speaking of which, the self-imploding CDO that took out AIG and Lehman was invented at Goldman Sachs under current chairman Loyd Blankfein (see: Ayn Rand Gone Wild), who was Harvard roommate to the Bennie Bernank. Fortunately Goldman was bailed out by that other Harvard/Goldman alum Hank Paulson as Treasury Secretary (and Bernanke). The Credit Default Swap (CDS) was invented by JP Morgan/Cambridge superstar Blythe Masters who was just let go from JPM for her alleged role in an energy market manipulation scheme a la Enron. The CDS may well be the ultimate financial weapon of mass destruction (WMD) – still out there working its magic. Meanwhile, Central Bankster Mark Carney, another Harvard/Goldman Sachs alum, just finished inflating Canada’s massive real estate bubble and has now moved to the UK to help top off their real estate bubble. And if only Larry Summers, Dean of Harvard, had been picked as Fed chairman, surely this clusterfuck would already have collapsed by now. It was Summers who suggested just last year that the secret to improving a nation’s credit rating was to borrow more not less. Genius ! Summers also of course was a key proponent of repealing Glass-Steagall, the Depression-era law meant to preclude another financial crisis. The other key proponent behind Glass-Steagall repeal was Robert Rubin (Goldman/Citigroup/Yale/Harvard). Obama/Bush, two more Harvard frat boys gleefully sowing the seeds of anarchy. This is all well in hand. Clearly, we need to sit back and wait. There is nothing we can do to end this shit show that the dumbfucks from Harvard and other Ivy League schools are not doing on their own. No offense, but I highly doubt if anyone reading this blog could collapse the world financial system – I doubt if I could. So the longer we doom forecasters warn of risks and otherwise prescribe caution, the longer this circus will continue. Think about it. Harvard dunces will end this globalized catastrophe once and for all. We just need to be a bit more patient and give them time to work.

Bernanke fixed Wall Street by giving them $3 trillion to play with…

Fed balance sheet (blue line) with Dow Casino. Fast, slow, fast. Sounds familiar…


Apparently we’re still waiting for the melt-up to occur. Sure, whatever…


Nasdaq 100 – 70% retracement
Speaking of melt-ups…


And Priceline (Nasdaq in background)
Top performing S&P stock – Up 2200% in five years
Are we in a bubble? I can’t tell. Although the last time this stock went parabolic I lost a shit ton of money shortly thereafter that’s all I know. It’s a good thing I’m not bitter, especially towards Central Banksters and their continued market manipulations…


IPO Casino
Twitter (below) priced at $26 and recently traded at $75 for a 200% gain in 6 weeks. Its price to sales ratio is a ludicrous 75. Apple’s price/sales ratio is 3. Twitter’s profit margin is -25% so it sells dollar bills for 75 cents and yet its market cap is greater than that of 80% of S&P companies. It’s the most overvalued piece of shit on the entire planet. 

Meanwhile, per IBD on Friday, “Investor’s Intelligence (sentiment) bulls v.s. bears ratio is in the silly zone” That’s because there are no bears left except for a handful of bloggers engaged in a mutual admiration circle jerk…


Ode to Ponzi Capitalism and Securitization
In a big FU to customers, BusinessWeek informs us last week that companies with the poorest customer service have outperformed in the stock market. There is actually negative correlation between customer satisfaction and stock performance. Time Warner Cable is the reference company (appearing on the list multiple times); however, Facebook is at the very bottom of the ratings. 

Fadebook: Shitty service and abuse of customer data privacy
The strategy is working – Booyah Skidaddy !

 

Ponzi World (Over 3 Billion NOT Served): Choosing the Mass Delusion

Ponzi World (Over 3 Billion NOT Served): Choosing the Mass Delusion.

One of these countries monetizes its debt in order to levitate asset markets, the other does not. One reflects reality – the other one, not so much…

According to OECD data, Canada’s economy is as strong or stronger than the U.S. across all three dimensions of GDP growth, unemployment and fiscal deficits:
 
Therefore, since the Dow is at new highs, the Canadian stock market must be really rocking…
 
However, here below is what economic reality looks like without quantitative easing applied in conjunction with mass outsourcing to generate record short-term profits i.e. this is the Canadian Dow, lower than in 2011 and 2007:
Here of course, is Dow Casino where economic fundamentals need not apply:
Applying Krugmanite/Bernanke Idiocratic logic, it’s abundantly clear that Canadians don’t borrow enough, print enough or outsource enough of their economy and that’s just bad management.
S&P with VIX: Choosing the Mass Delusion 
Guzzling the Kool-Aid from a fire hose. No risks are priced in right now. Not one.

 

 

Further Proof the Justice Department is Protecting JP Morgan from Criminal Prosecution | A Lightning War for Liberty

Further Proof the Justice Department is Protecting JP Morgan from Criminal Prosecution | A Lightning War for Liberty.

In what may be the least surprising article of 2013, we find out from Newsweek that the Department of Justice is going out of its way to protect the poor little babies at JP Morgan from criminal prosecution in the Bernie Madoff case. While we know all too well about the institutionalized practice of “Too Big to Jail” that dominates the current fraud system of so called “justice” in America, it is still of the utmost importance that we spread these stories far and wide. Amazingly, in this instance the DOJ is actively blocking the Treasury Inspector General from doing his job in order to protect the mega-bank.

From Newsweek:

Bernard Madoff’s principal bank, JPMorgan Chase, has for years obstructed federal bank examiners trying to ascertain what it knew about his gigantic Ponzi scheme, an official document obtained by Newsweek shows.

The Justice Department refused in September to back up Treasury inspector general staff who wanted a  court order to enforce a subpoena, in effect shielding JPMorgan from law enforcement, the October 8 document shows.

The Justice Department told the Treasury Inspector General “that they were denying the request for enforcement of the subpoena,” which means officials “could not undertake further actions regarding this matter,” wrote Jason J. Metrick, the inspector general special-agent-in-charge.

The memo revealing that Justice protected JPMorgan from an obstruction complaint raises anew questions about how much the Obama administration has done to protect the big banks, whose lies about mortgage securities and other investments they sold sank the economy in 2008.

Only minor players have been prosecuted, in contrast with the more than 3,000 felony convictions the FBI says it obtained in the much smaller savings and loan scandals two decades ago.

The JPMorgan memos Justice declined to pursue are almost certain to show that years earlier the bank had grounds to suspect Madoff was running a fraud. A separate inquiry by the U.S. Attorney in Manhattan is looking into JPMorgan, which may  include what the 90 bank employees knew and when they knew it. 

Banana Republic Justice.

Full article here.

In Liberty,
Mike

The Rumored Chase-Madoff Settlement Is Another Bad Joke | Matt Taibbi | Rolling Stone

The Rumored Chase-Madoff Settlement Is Another Bad Joke | Matt Taibbi | Rolling Stone.

Just under two months ago, when the $13 billion settlement for JP Morgan Chasewas coming down the chute, word leaked out that that the deal was no sure thing. Among other things, it was said that prosecutors investigating Chase’s role in the Bernie Madoff caper – Chase was Madoff’s banker – were insisting on a guilty plea to actual criminal charges, but that this was a deal-breaker for Chase.

Something had to give, and now, apparently, it has. Last week, it was reported that the state and Chase were preparing a separate $2 billion deal over the Madoff issues, a series of settlements that would also involve a deferred prosecution agreement.

The deferred-prosecution deal is a hair short of a guilty plea. The bank has to acknowledge the facts of the government’s case and pay penalties, but as has become common in the Too-Big-To-Fail arena, we once again have a situation in which all sides will agree that a serious crime has taken place, but no individual has to pay for that crime.

As University of Michigan law professor David Uhlmann noted in a Times editorial at the end of last week, the use of these deferred prosecution agreements has explodedsince the infamous Arthur Andersen case. In that affair, the company collapsed and28,000 jobs were lost after Arthur Andersen was convicted on a criminal charge related to its role in the Enron scandal. As Uhlmann wrote:

From 2004 through 2012, the Justice Department entered into 242 deferred prosecution and nonprosecution agreements with corporations; there had been just 26 in the preceding 12 years.

Since the AA mess, the state has been beyond hesitant to bring criminal charges against major employers for any reason. (The history of all of this is detailed in The Dividea book I have coming out early next year.) The operating rationale here is concern for the “collateral consequences” of criminal prosecutions, i.e. the lost jobs that might result from bringing charges against a big company. This was apparently the thinking in the Madoff case as well. As the Times put it in its coverage of the rumored $2 billion settlement:

The government has been reluctant to bring criminal charges against large corporations, fearing that such an action could imperil a company and throw innocent employees out of work. Those fears trace to the indictment of Enron’s accounting firm, Arthur Andersen . . .

There’s only one thing to say about this “reluctance” to prosecute (and the “fear” and “concern” for lost jobs that allegedly drives it): It’s a joke.

Yes, you might very well lose some jobs if you go around indicting huge companies on criminal charges. You might even want to avoid doing so from time to time, if the company is worth saving.

But individuals? There’s absolutely no reason why the state can’t proceed against the actual people who are guilty of crimes.

If anything, the markets might react positively to that kind of news. It certainly did so in the Adelphia case, in which the government dragged cable company executives John, Timothy and Michael Rigas out of their beds and publicly frog-marched them in handcuffs on the streets of the Upper East Side at 6 a.m.

The NYSE had been on a four-day slump up until those arrests. After they hit the news, it surged to its second-biggest one-day gain in history. From the AP report on July 25, 2002:

Although stocks began the day by extending a four-day losing streak, the arrest of top Adelphia Communications Corporation executives for allegedly looting the cable TV company triggered a broad rally that intensified as the session wore on.

Of course, that was an isolated example, and the broad market rally that day didn’t save Adelphia, which had already gone bankrupt by the time of the Rigas arrests. But certainly it gave credence to the sensible argument that the markets generally would rather see the government punish criminals than not.

Anyway, it’s hard to not notice the fact that crude Ponzi schemers like Madoff (150 years)and Allen Stanford (110 years) drew enormous penalties – essentially life terms for both – while no one from any major firm has drawn any penalty at all for abetting those frauds.

That’s an enormous discrepancy, life versus nothing. But it makes an awful kind of sense. Madoff and Stanford were safe prosecutorial targets. There was no political fallout to worry about for sending up two guys who mostly bilked other rich people out of money. Also, there were no “collateral consequences” in the form of major job losses that had to be considered, just a couple of obnoxious families that would lose their jets and their ski vacations.

But most importantly, Madoff and Stanford were simple scam artists who could have come from any generation. There was nothing systemic about their crimes. It was possible to throw them in jail without exposing widespread corruption in our financial system.

That’s what’s so disturbing about this latest Justice Department cave. It underscores the increasingly obvious fact that the federal government is not interested in getting to the bottom of our financial corruption problem. They seem more to be treating bank malfeasance as a PR issue for the American financial markets that has to be managed away, instead of a corruption problem to be thoroughly investigated and fixed.

In a way, the administration seems to have the same motivation as Chase itself – as CEOJamie Dimon put it last week, “We have to get some of these things behind us so we can do our job.”

Madoff’s con was comically crude: He never executed a single trade for a client, and instead just dumped all of their money into a single checking account. To say, as Madoff himself did, that his bank “had to know” what he was up to seems a major understatement.

Remember, independent investigator Harry Markopolos figured the whole thing outyears before the Ponzi collapsed without the benefit of complete access to Madoff’s financial information. Markopolos really needed just one insight to penetrate the Madoff mystery.

“You can’t dominate all markets,” Markopolos said, years ago. “You have to have some losses.”

That this basic truth eluded both the SEC (which somehow failed to notice the world’s largest hedge fund never making a single trade) and Madoff’s own banker for years on end points to horrific systemic problems. A prosecutor who actually cared would floor it in court against everyone who made that fraud possible until he or she got to the bottom of how these things can happen.

Our response was different. We gave 150 years to the main guy, and now it seems we’re quietly taking a check to walk away from the rest of it. It’s not going to be a surprise when it happens again.

 

Ponzi-Scheme Expert To Oversee Detroit Bankruptcy | Zero Hedge

Ponzi-Scheme Expert To Oversee Detroit Bankruptcy | Zero Hedge.

 

You Are In The Ponzi Scheme Whether You Realize It Or Not | Monty Pelerin’s World

You Are In The Ponzi Scheme Whether You Realize It Or Not | Monty Pelerin’s World.

 

The Biggest Ponzi Scheme In The History Of The World

The Biggest Ponzi Scheme In The History Of The World.

 

%d bloggers like this: