I love that line. I first heard it on the trading desk at Bear Stearns in the early ’90s. For the last twenty years, I have used the line often to counter those who would bemoan an outcome with the standard, “If only . . .” My response typically generates a healthy chuckle and we then move on.
At this point, I feel comfortable amending the line from above to “If my aunt had balls, she’d be Mary Schapiro.” Too harsh, you say? I think not. How so?
Financial executives aren’t the only folks lawmakers are pursuing. They also want to see more heads roll at the Securities and Exchange Commission.
Nearly 18 months after Bernie Madoff’s multibillion-dollar Ponzi scheme was exposed and almost a year after the SEC’s inspector general issued a blistering report, lawmakers are still questioning how the SEC staffers who reviewed the Madoff firm and investigated fraud allegations were being punished.
SEC Chairman Mary Schapiro told Congress during an oversight hearing that 15 of 20 enforcement attorneys and 19 of 36 examination staffers that dealt with the Madoff matter had left the agency. The SEC was still conducting a disciplinary process, she said, but it should be concluded soon.
Republican Rep. Bill Posey of Florida –- home to many Madoff victims -– said he wants to know if those SEC employees ended up at other regulatory agencies, working for companies they were supposed to regulate, or retired with government pensions.
“There’s a necessity to know where they went,” said Posey. “It’s like letting a pedophile slink out the door or change neighborhoods. We’re dealing with the same type of problem here.”
Wow!! Representative Posey is being aggressive here, but I commend him because the nation still deserves answers to so many Madoff questions that have been swept under the SEC’s and FINRA’s rugs. The WSJ continues:
Schapiro strongly disagreed. “These aren’t bad people. In some cases they were people who were very junior and not adequately trained or supervised.” In other cases, she said, they were pulled from one project to another.
Junior people, my ass!! The people calling the shots on the Madoff investigation were…
Partisan GOP hacks say the financial crisis was caused by too much regulation, and government interference in the markets.
But Glass-Steagall was repealed, derivatives were left unregulated, and the regulators were watching porn instead of preventing fraud. Giant banks, hedge funds and other fat cat private players knowingly gamed the market and committed fraud in more ways than can be listed in a single post.
On the other hand, partisan Democratic party hacks say that bad corporations caused the crisis, and that if more power is given to Summers, Bernanke, Geithner and the other governmental honchos, they’ll fix everything.
But Summers, Bernanke, Geithner and the other meatheads largely caused the crisis through their actions. And as Simon Johnson points out, the government created the mega-giants, and they are not the product of free market competition.
As I pointed out in February 2009, government fraud is pervasive:
In case you believe that there are only "a couple of bad apples" in the United States, here is an off-the-top-of-my-head list of corruption by leading pillars of American society:
Senior military officials stole approximately $125 billion dollars out of Iraq reconstruction funds, dwarfing Madoff’s $50 billion Ponzi scheme (in turn, the looting which is now occurring under the bailout/stimulus programs will far surpass $150 billion)
This is crazy, unless we’re refunding everyone who lost money, jobs, houses, retirement funds, etc, by clawing money back from those who recklessly or negligently contributed to the financial meltdown. Unfortunately, it’s not much crazier than some other government programs over the last year. Any Senator supporting this repulsive plan (Senators Richard Shelby and Bob Corker) should be voted out asap. My yellow highlights. – Ilene
These are, by and large, relatively well-to-do people who were considered ‘qualified investors,’ or ought to have been. They were able to place large sums of money in obviously risky investments seeking abnormally high rates of return, which they did receive for many years.
The notion that the government should retroactively cover their losses, even indirectly, by taxing the public is obviously repugnant.
What about the many who have lost, on a percentage basis, equally if not more devastating amounts of their retirement savings in the tech, housing and credit bubbles? Their only fault is that they lack the political connections and high powered lawyers to make the case for them to the Congress, and the influence to get their way from pliable Congressmen.
I feel mightily sorry for anyone who has lost money in these fraudulent markets. I spend quite a bit of my personal time trying to warn people about the snares and pitfalls that are allowed to continue in the US financial markets even today. And there are many of them. Consumer Protection is not a priority in Washington.
A better case might be made to sue the Wall Street exchanges, the private self-regulators, and the auditors and ratings agencies for gross negligence in allowing these frauds to continue for so many years. Prosecutions for fraud and corruption across a much wider circle of enablers is generally what is done. It was done in the 1930′s and it was done after the Savings and Loan Scandal.
But that will not happen. The financial sector is contributing far too much to the politicians in Washington, and too many powerful politicians are beholden to them, despite what smooth words that might pass their lips in public.
To take the losses of wealthier investors from hedge funds and other high risk investments having no productive benefit or…
$2.5 Trillion – That’s the size of of the global oil scam.
It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs). That’s right – $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.
Where is the outrage? Where are the investigations?
Goldman Sachs, Morgan Stanley, BP, TOT, Shell, DB and Societe General founded the Intercontinental Exchange in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate "dark pool" trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se. They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel.
A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades. Round-trip” trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.
"Traders of the the ICE core membership (GS, MS, BP, DB, RDS.A, GLE & TOT) wouldn’t really have to put much money at risk by their standards in order to move or support the global market price via the BFOE market. Indeed the evolution of the Brent market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and “squeezing” those who had sold oil they did not have. The fewer cargoes produced, the easier the underlying market is to manipulate." – Chris Cook, Former Director of the International Petroleum Exchange, which was bought by ICE.
How widespread are “round-trip’‘ trades? The Congressional Research Service looked at trading…
A successful career on Wall Street is as much about the failures as it is about the wins. Anyone who tells you differently is either hiding their past mistakes or is about to experience their own epic collapse, made even worse by the fact that it will be wholly unexpected to them.
This is good to remember the next time you hear any of the following terms assigned to a Wall Street professional…
Guru – As in “Options Guru” or “Trading Guru”. These days, robes and a beard are optional as investors are more than willing to lavish the appellation Guru on virtually anyone who can get themselves on television. This term typically precedes the name of someone who would like to sell you a set of instructional videos. example: Lenny Dykstra (TheStreet.com’s ex-options expert)
Rock Star – Anytime someone involved in finance is called a Rock Star, you can turn on the bull$#*t meter and pretty much just leave it running. “Rock Star” is what they called Erin Callan, Lehman’s CFO just before the end, whose main role at the company was the application of lipstick to herself when the cameras were rolling and to their pig of a balance sheet when the Korean sovereign wealth funds were in town. example: Erin Callan (former Chief Obfuscation Officer, Lehman Brothers)
Wiz – Similar to Guru, although with the added implication of supernatural talent or skills. Those on The Street who are referred to as “a Wiz” will likely end up in handcuffs before long. example: Bernie Madoff (the most consistent generator of returns in the history of investing…until someone needed money back)
Wunderkind – Typically reserved for someone who runs a hedge fund and puts up incredible numbers within the first year or two out of nowhere. Much like your average American Idol winner, the “Wunderkind” rides this initial wave of success until his many new investors find out how rarely any one strategy works consistently in back-to-back years. example: Thomas Hudson Jr. (Pirate Capital)
Prodigy – Similar to wunderkind, those in finance who are called “prodigy”…
As the New York Times only prints news fit to print, I feel obligated to keep inquiring financial minds informed on all dimensions of the financial crisis.
It’s been documented that subordinates laugh more at their bosses jokes than vice versa. Such is the nature of interaction in a hierarchical society with a strong pretense for egalitarianism. Rich people have more friends, bigger birthday parties, etc. But once you lose everything, you suddenly aren’t as funny, as friendworthy, as desirable.
Bernie Madoff’s ex-mistress, clearly not above seeking financial gains where others don’t, wrote a quickie book Madoff’s Other Secret, in which she informs us about Bernie’s various inadequacies, including one I never really thought about (from Bloomberg):
Bernie had a very small penis. Not only was it on the short side, it was small in circumference. That he was now pointing it out to me was telling. It clearly caused him great angst. I wanted to be careful how I responded. Men and their penises have a strange and unique relationship…[However] I liked this man and didn’t want to emasculate him. His tiny penis hadn’t prevented me from climaxing…On the bright side, oral sex would be a breeze.
In his position this isn’t very damaging to his status. I can’t think it helps her socially, but I imagine without that passage, there would absolutely nothing noteworthy in there.
Mr. Madoff listed family members, boat captains, housekeepers and others as employees of Bernard L. Madoff Investment Securities, even though they never actually worked for the firm, newly released documents show. Mr. Madoff also used his firm’s money to pay for real estate, yachts, private planes and country club memberships, according to court filings by the trustee charged with liquidating the Madoff firm and recovering money for victims of Mr. Madoff’s multibillion-dollar Ponzi scheme.
The documents back up a previous assertion by lawyers for the trustee, Irving H. Picard, that Mr. Madoff used his business as a personal “piggy bank.”
In January, Mr. Madoff, his wife, Ruth, and other family members spent more than $100,000 on his firm’s American Express Corporate Card. Among the charges were $1,564 at Bistro Chez Jean-Pierre in Palm Beach, Fla.; $2,000 at Georgio Armani in Paris; and $2,813 at the Apple computer store in New York.
Mr. Madoff, the mastermind of the world’s biggest Ponzi scheme, doled out more than $7 million to various companies owned by his wife, Ruth, his two sons and his niece Shana. Peter Madoff’s wife, Marion, was paid a salary of $163,500 by the Madoff firm last year, even though investigators found no evidence that she actually worked there.
Mr. Madoff also paid out $471,000 to a marina in Long Island and nearly $1 million to a number of exclusive country clubs including the Breakers, the Atlantic Country Club on Long Island, the Palm Beach Country Club and the Trump International Golf Club.
If the IRS never audited this guy, who were they auditing? Just asking.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
Singaporeans were the second-most eager to flee home, with 23% planning to relocate in five years, followed by 20% for the U.K. and 16% for Hong Kong. Indian and American rich are the least likely to move, with only 5% and 6% of respondents saying they would reloc...
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What is the biggest risk for investors in China's e-commerce giant Alibaba? In one word: politics.
Jack Ma Yun, English teacher-turned entrepreneur, is already a legend in China for the incredibly fast growth and remarkable success of the e-commerce firm he founded in 1999. I have no doubt about Ma's business experience and leadership skills, but there is one thing Ma - and many of his rivals - may be worried about. Politics.
The Alibaba success story is not just about Alibaba itself. It is about ...
It was a second day of heavier volume selling in four for the S&P, and the fifth day of distribution since the last accumulation day. The breakout of 1,987 was undercut by Friday's close in addition to a finish below the 20-day MA. Bulls still have room for maneuver with the 50-day MA next in line for a test; even a modest rally Monday would be enough to return the S&P above its breakout. The higher volume selling is a concern, but not a deal breaker for bulls...yet.
The Nasdaq had a better Friday. While it also suffered a loss, it didn't undercut its mini-trading range or close below its 20-day MA. It hasn't suffered the same level of distribu...
The CBOE Vix Index is in positive territory on Friday morning as shares in the S&P 500 Index move slightly lower. Currently the VIX is up roughly 2.75% on the session at 13.16 as of 11:35 am ET. Earlier in the session big prints in October expiry call options caught our attention as one large options market participants appears to have purchased roughly 106,000 of the Oct 22.0 strike calls for a premium of around $0.45 each. The VIX has not topped 22.0 since the end of 2012, but it would not take such a dramatic move in the spot index in order to lift premium on the contracts. The far out-of-the-money calls would likely increase in value in the event that S&P500 Index stocks slip in the near term. The VIX traded up to a 52-week high of 21.48 back in February. Next week’s release of the FOMC meeting minutes f...
Despite the various opinions on Bitcoin, there is no question as to its ultimate value: its ability to bypass government restrictions, including economic embargoes and capital controls, to transmit quasi-anonymous money to anyone anywhere.
Opinions differ as to what constitutes "money."
The English word "money" derives from the Latin word "moneta," which means to "mint." Historically, "money" was minted in the form of precious metals, most notably gold and silver. Minted metal was considered "money" because it possessed luster, was scarce, and had perceive...
In a report published Friday, Jefferies analyst Jason Kupferberg reiterated a Hold rating on Science Applications International Corp (NYSE: SAIC), and raised the price target from $41.00 to $44.00.
In the report, Jefferies noted, “In the government IT services space, Hold-rated LDOS and SAIC reported their F2Q results this week, and we are updating our F15/F16 revs/EPS ests for both the companies. We are also lowering our Price Target for LDOS from $38 to$36, but raising our Price Target for SAIC from $41 to $44. We maintain our Hold-rating for both the companies.”
Science Applications International Corp closed on Thursday at $47.71.
Latest Ratings for SAIC DateFirmActionFromTo Jul 2014Stifel NicolausInitiates Coverage onHold Jun 2014JP MorganMaintainsO...
First Trust, the sixth-largest U.S. issuer of exchange traded funds, will introduce the First Trust Long/Short Equity ETF (NYSEArca: FTLS). The new actively managed ETF can take long and short positions in U.S. and international equities, using earnings quality as a primary determinant of stock selection. Read ETF Trends article.
Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).
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Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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