Posts Tagged ‘Madoff’

If My Aunt Had Balls She’d Be Mary Schapiro

If My Aunt Had Balls She’d Be Mary Schapiro

Courtesy of Larry Doyle at Sense on Cents

Securities and Exchange Commission Chairman Mary Schapiro testifies before a Senate Banking Committee hearing on the causes of the May 6 market plunge, on Capitol Hill in Washington on May 20, 2010. UPI/Kevin Dietsch Photo via Newscom

“If my aunt had balls, she’d be my uncle!!”

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?

Let’s review a recent Wall Street Journal article, Madoff’s Ghost Still Haunts SEC:

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…
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Cut the Partisan Crap … BOTH the Private Sector AND the Government are to Blame for the Financial Crisis

Cut the Partisan Crap … BOTH the Private Sector AND the Government are to Blame for the Financial Crisis

Courtesy of Washington’s Blog

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.

And remember, even the "father of economics" – Adam Smith – didn’t believe in completely unfettered free markets.

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)
  • The government-endorsed ratings agencies which were supposed to accurately rate the credit-worthiness of companies and nations committed massive fraud

There are hundreds of similar stories of corruption which have come out recently.

But surely government employees would have done something to stop such corruption if had known about it, right?

Well, actually:


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Investors Who Lost In Madoff and Stanford Schemes Want Government to “Make Them Whole”

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

Investors Who Lost In Madoff and Stanford Schemes Want Government to "Make Them Whole"

Courtesy of JESSE’S CAFÉ AMÉRICAIN

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
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Goldman’s Global Oil Scam Passes the 50 Madoff Mark!

$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,


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7 Terms That Should Never Be Used To Describe A Finance Pro

7 Terms That Should Never Be Used To Describe A Finance Pro

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.

Premiere of Paramount's "The Love Guru" - Arrivals

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)

Michael Jackson Concert - Day 2

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”…
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Madoff Losing Status

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Just for fun after a long day of posting about serious matters.  Sorry, no pictures. – Ilene

Madoff Losing Status

Courtesy of Eric Falkenstein’s Falkenblog

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.
 

 


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This just in: Bernie Madoff was a crook!

Courtesy of Christopher at For What It’s Worth

This just in: Bernie Madoff was a crook!

He passed out investors’ money to all his family and spent most of it on himself. No sign yet of the Madoff boys’ houses on Tomac or Cherry Valley being put up for sale, but my guess is that they’ll be just behind Walt’s Round Hill cottage. Maybe a “Madoff real estate tour” should be organized for this fall?

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.”

[snip]

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.


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Zero Hedge

DoD Admits US Global Hegemony Threatened By China, Russia In "Persistently Disordered World"

Courtesy of ZeroHedge. View original post here.

By 2035, the US could find itself in an environment where Russia or China may match or even exceed the West's military and economic might in some areas, taking advantage of a “disordered and contested world,” the Pentagon’s research unit said...

Conflict and war in 2035 cannot be understood by the simple identification of a set of individual trends and conditions. Instead, the intersection and interaction of many discrete ...



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Phil's Favorites

Chicago Pension Situation Improving Says Mayor: Careful Analysis Uncovers Lies

Courtesy of Mish.

Chicago Mayor Rahm Emanuel brags about balancing the Chicago budget and fixing the city’s pension plans. Reuters writer Dave McKinney took the lies hook line and sinker.

Mark Glennon at Wirepoints Illinois separates fact from fiction in his article Chicago’s Friday Bunk Dump.

This is a guest post by Glennon.

Chicago’s Friday Bunk Dump by Mark Glennon

Fridays in the summer are a great day to dump news you don’t want scrutinized, as reporters will tell you. Today, we got a new financial report from the city, the actuarial reports for its police and firefighter pensions and news of a private offering...



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Chart School

World Markets Weekend Update: The Global Rally Moderates Further

Courtesy of Doug Short's Advisor Perspectives.

The global rally in equities moderated further last week. Only three of the eight posted gains, down from six the previous week. T average gain of the eight indexes on our world watch shrank to 0.27%. The two Eurozone indexes were the top performers, the DAXK up 1.87% and the CAC up 1.34%. India's SENSEX was the third winner, up 0.89%. China's Shanghai was the biggest loser, down 1.11%.

A Closer Look at the Last Four Weeks

The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. We've also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatilit...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Credit Suisse Is Building a New U.S. Bank Just for Billionaires (Fortune)

Credit Suisse, which exited its U.S. private wealth business last year, is building out a new investment banking group in the region to serve billionaires.

China Doubles Down On Building Bigger, Badder, Better Economy (Forbes)

Between state-owned banks with a record $14 billion in new bond offerings in the second quarter, to Beijing promising more infrastructure spending, one thing is certain — they are hell bent on building rocket ship trains and bridges. The market hopes ...



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ValueWalk

NetSuite Inc Stock Soars On Oracle Corporation Bid

By Jacob Wolinsky. Originally published at ValueWalk.

NetSuite Inc (NYSE:N) is soaring this morning as Oracle Corporation (NASDAQ:ORCL) has made a bid to buy the company for $9.3 billion. This deal has been rumored for some time but obviously few expected such a large premium or did not think the bid was certaintly coming as the stock is up about 18 percent at the time of this writing which is a lot for a tech giant. Here is what the sell side is saying.

NetSuite – analysts react

Nomura

Should the transaction take place, Oracle would pay about 9x NTM EV / revenue (based on consensus estimates for NetSuite), above the average multiple paid in our precedent SaaS Software acquisitions analysis of 6.8x . Additionally, Oracl...



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Mapping The Market

Illusion of Choice

From Jean-Luc:

Looks like we are down to about 10 companies for our consumer goods:

http://www.visualcapitalist.com/illusion-of-choice-consumer-brands/

Just like banks, airlines and cable companies! 

The Illusion of Choice in Consumer Brands

Explore the full-size version of the above graphic in all its glory.

If today’s infographic looks familiar, that’s because it originates from a well-circulated report that Oxfam International puts together to show consolidation i...



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Digital Currencies

Judge Rules Bitcoin Isn't Money Because It "Can't be Hidden Under A Mattress"

Courtesy of ZeroHedge. View original post here.

By Everett Numbers via TheAntiMedia.org

In a landmark decision, a Florida judge dismissed charges of money laundering against a Bitcoin seller on Monday following expert testimony showing state law did not apply to the cryptocurrency.

Michell Espinoza was charged with three felony charges related to money laundering i...



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Kimble Charting Solutions

Junk Bonds at important inflection point, should impact stocks!

Courtesy of Chris Kimble.

Junk bonds have been quality at sending Risk On and Risk Off message to the broad stock market. Below looks at Junk Bond ETF JNK over the past decade.

JNK finds itself at an important price point below and what it does in the upcoming couple of weeks could become a big influence on the Risk On/Risk Off trade.

CLICK ON CHART TO ENLARGE

...

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OpTrader

Swing trading portfolio - week of July 25th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Promotions

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

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News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

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Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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