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

For Bonds, This Is Now The Second Worst Bear Market In 40 Years

Courtesy of ZeroHedge View original post here.

Last December, we predicted that the US was heading for a "titanic taper tantrum" in 2021, to an extent as a result of a sharp drop in bond demand as a result of reduced bond purchases by the Fed but also due to a spike in inflation which would lead to a sharp drop in demand for duration.

So fast forward to this week when the crash in US Treasurys, and especially the belly of the curve led by a plunge in 5Y prices...

...

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ValueWalk

There's A "Chip" Shortage: And TSM Holds All The Cards

By Mauldin Economics. Originally published at ValueWalk.

“You drove 1,000 miles just for this game?” Christmas 1988 was a stressful time for many American parents. Nintendo’s Super Mario Bros. 2 was the must-have toy that year. But copies of the hit videogame were as scarce as hen’s teeth.

Q4 2020 hedge fund letters, conferences and more

ABC News ran a 20/20 special on the shortage called “Nuts for Nintendo.” They chatted to one dad who drove 1,000 miles from Indiana to NYC in the hopes of grabbing a copy.

“I’ve tried 7 stores a day for 3 weeks and sti...



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Phil's Favorites

Wall Street Sends a Message to the Fed: We Have Run Out of Places to Stuff Your Treasuries

Courtesy of Pam Martens

By Pam Martens and Russ Martens: February 26, 2021 ~

The action in the U.S. Treasury market yesterday reminded us of the classic “I Love Lucy” episode at the chocolate factory. As the conveyor belt churns out chocolate balls faster than Lucy and Ethel can handle them, they resort to stuffing them in their mouths, their hats, and their shirts. Lucy remarks: “I think we’re fighting a losing game.” (See video clip below.)

That was the scene in the Treasury market yesterday – ...



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Politics

What is fascism?

 

What is fascism?

A Donald Trump supporter wears a gas mask and holds a bust of him after he and hundreds of others stormed the Capitol building on Jan. 6, 2021. Roberto Schmidt/AFP via Getty Images

Courtesy of John Broich, Case Western Reserve University

Since before Donald Trump took office, historians have debated whether he is a fascist.

As a teacher of World War II history...



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Biotech/COVID-19

How does the Johnson & Johnson vaccine compare to other coronavirus vaccines? 4 questions answered

 

How does the Johnson & Johnson vaccine compare to other coronavirus vaccines? 4 questions answered

The Johnson & Johnson vaccine only requires one dose. Phill Magoke/AFP via Getty Images

Courtesy of Maureen Ferran, Rochester Institute of Technology

Editor’s note: On Tuesday, Feb. 24, the U.S. Food and Drug Administration released the results of its trial of the Johnson & Johnson coronavirus vaccine. The FDA found the vaccine to be safe...



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Chart School

The Fastest Money

Courtesy of Read the Ticker

The fast money happens near the end of the long trend.

Securities which attract a popular following by both the public and professionals investors tend to repeat the same sentiment over their bull phase. The chart below is the map of said sentiment.







Video on the subject.







Charts in the video


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Digital Currencies

Bridgewater Explains When It Will Invest In Bitcoin

Courtesy of ZeroHedge

Two weeks ago, Bridgewater founder Ray Dalio called Bitcoin "one hell of an invention" adding that:

"I expect Bridgewater to soon offer an alt-cash fund and a storehold of wealth fund in order to better deal with the devaluation of money and credit that we consider to be a major risk and opportunity, and Bitcoin won’t escape our scrutiny.”

And now, after significant attention that his comments received, Senior Portfolio Strategist Jim Haskel sits dow...



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Kimble Charting Solutions

Is Rising Inflation About To Hit U.S. Economy In Big Way?

Courtesy of Chris Kimble

Inflation seems to be a thing of the past… but current trading in bond and commodity markets tell us that it could become a thing of the future!

Inflation hasn’t been an issue, or even on our radar, since the 1980s. Sure, the 2007 surge in oil prices offered some concern but the financial crisis killed any thoughts of inflation.

So what’s got us concerned about inflation in 2021?

Today we take a look at long-term charts of two potential inflation indicators: Crude Oil ...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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