Tag Archives: Brawl Street

“This is Big Business. This is the American Way!”

I got a list of people...If Im going down, Im taking a whole lot of people with me!

"...I got a list of people! If I'm going down, I'm taking a whole lot of people with me!"

Ken Lewis just can’t seem to get his act together. At least Vikram Pandit, head of Citigroup (NYSE: C) – which is arguably in similar to worse position as Bank of America (NYSE: BAC) – has had the sense to stay out of the newspapers for a while, keep his head down, and at least keep up the appearance that he’s trying to grind it out and do things right this time. Lewis on the other hand, from his standoffish demeanor during the most recent hearings in front of the Finance Committee, to his initial claims of pure ignorance regarding the Merrill Lynch bonuses and balance sheet situations, to the current controversy, where his new defense about Merrill is “the Government made me do it and made me keep it ‘hush hush.'” (Get the Full Story here as reported by The Wall Street Journal Online.)

To quote Jack McCoy in cross-examination in one episode (or one hundred episodes) of Law & Order, “Were you lying then, or are you lying now?!?”

I think it’s safe to say that many are “skeptical” about the absolute truth of Lewis’ statements, but it’s not hard to believe that Paulson and Bernanke at the Treasury and the Fed may have had a hand in how things played out, and certainly are responsible for the way some of this information has come out, which is sloppily, and non-desirable-press inducing. At the very least, Lewis has deflected some of the spotlight for the moment, and has thrown two of the most prominent figures in this entire “recovery” process directly under the wheels of the Political “Straight-Talk Express.”

Regardless of whether you think it was a good or a bad move on his part, this scenario is very similar to what those from “the inner city” or “the hood” might call “snitching.” That being the case, I would think that many from “the hood” would consider what Ken Lewis has just done as being a “bitch-ass-move.” I tend to agree with that, but feel it’s also noteworthy to point out that corporate rules are obviously different from “hood” rules. No matter what, usually when there’s a crime to be sorted out with multiple suspects, the one that talks first usually gets the best deal. From that perspective, Lewis’ move is a smart one, and Paulson and Bernanke would be idiots for not revealing this information themselves, before Lewis, especially since they’re government officials which would potentially have shielded them from the prospect of “wrongdoing” on their parts being that they would have been the ones doing their jobs by reporting it. Add to that, the fact that Paulson (before) and Bernanke (now) can be considered the “cops” of the TARP/TALF/PPIP framing and administration, and it can be argued that although Lewis was snitching, he was snitching  on cops, so for that, he would get a pass from the orginal bitch-ass nature of his snitching actions.

At the end of the day, I’m not too moved by the story itself. Bernanke’s already been on record as having been against the Merrill-Bank of America deal, but not feeling as though there was much of an alternative if Lehman is any indication of what could have happened. Paulson was always a shady looking character in my eyes from the beginning, and he’s part of the Wall Street wrecking crew anyway, so I wouldn’t be surprised if Paulson,  after setting up the deal and seeing that there would be these types of problems, told Lewis to blame it all on him. Think about it. John McCain had already made his “economy is fundamentally sound” comment in the face of the Lehman collapse, so Paulson had a pretty damn good indication right there that he probably wasn’t going to be Treasury Secretary for much longer. If that’s the case, he could be pretty safe telling Lewis “hey, blame this bonus and balance sheet stuff on me if things get really tough. It won’t be me that has to give that speech. I won’t even have to say anything about it at all. That’ll be on the new guy.”

Now I’m not suggesting that Bernanke is completely innocent in all this. He’s at least partly responsible for the ugly, sloppy way this information and the details of these deals have come to light, and that may be being generous as well. Ultimately though, Bernanke has come across as being more up front and forthcoming, therefore more credible than either of the other two characters involved in this headline grabber. Net net, this is a losing situation for Lewis. He reveals more of his own character flaws (another euphemism) in this scenario than anything. More and more, as the story unfolded yesterday afternoon, the whole thing reminded me of a scene in a fairly old movie – many from “the hood” would consider it a hood-classic – New Jack City.

Nino Brown (Wesley Snipes) runs the murderously bloody CMB, a drug-dealing organization, holding a Central Harlem Housing Project and its resident’s hostage as its base of operations. After being caught by rogue cops, and witnesses of the organizations dealings step forward, the following court scene occurs. (*Spoiler Alert*)The magic of this clip comes when Nino himself takes the stand, explains his reasoning, and then pulls a move that proceeds to turn the trial into a media circus. Sound familiar? I’ve  transcribed my own Ken Lewis translation below the clip. Once the judge calls for “order in the court,” that’s a good point to stop the video and read the translation. Then continue to watch the end…if of course you don’t mind spoiling it and somehow haven’t seen this instant classic already.

Ken Lewis:

“This thing is bigger than Ken Lewis. This is Big Business. This is the American Way!…I wanted to get out [of the deal with Merrill Lynch]. They threatened to [take my job.]”

NY A.G. Andrew Cuomo:

“Who are you talking about [Mr. Lewis]? What They?”

Ken Lewis:

They!Look at [them! Hank Paulson and Ben Bernanke!] That’s right, the educated brother[s] from the bank[s! They’re] the real heads of [BAC], the brains behind the whole thing! I told you, this thing is bigger than [Ken Lewis], and I got a list of people! If I’m going down, I’m taking a whole lot of people with me!”

 

If the end of the movie is any indication of what could happen to Ken Lewis, I’d say the days in his current position at the helm of Bank of America are numbered.

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Campos vs. Asensio: More on Short-Selling and The Uptick Rule

This past Tuesday afternoon, April 7, Bloomberg News featured two prominent figures in the world of finance to discuss and debate the SEC’s proposed reinstatement of the traditional uptick rule, or the imposition of a modified version. It sure was a showdown in the world of market regulation. Here’s the recap and analysis…

 

In the Blue Corner arguing in favor of the uptick rule, we have Roel “Jor-El” Campos -Former SEC Commissioner, and advocate of more regulation in the area of naked short-selling.

In the Red Corner arguing against the uptick rule (and, it turns out, any and all short-selling restrictions of any kind) we have Manuel “Lex Luthor” Asensio – Managing Director of New York based Hedge fund, Millrock, (and best Lex Luthor look alike I’ve ever seen!)

 

Slightly resembles Campos, No?

Slightly resembles Campos, No?

Campos does a great job of actually explaining what the uptick rule is and, later in the interview, the difference between legal short-selling and illegal “naked” short-selling. In case you missed it, the uptick rule or uptick “test” would mean “that a short sale [order] cannot be executed [in the market] unless there is some evidence…[by either] a price test or a bid test…as to whether the stock is rising.” Essentially, this means that stocks can only be shorted when they are actually going up at the moment you place the short sale order. He also explains that the uptick rule is a bit of “Chicken soup,” meaning it’ll make the activists and congressional members that have pressured the SEC about it feel a little bit better about the prospect of abusive short-selling being less prevalent in the markets. However, with the markets as computerized as they are today, and with more advancements on the way, it’s still very easy for savvy, sophisticated, investors to “manipulate the tape” – create the appearance that a stock is experiencing buying or selling pressure by placing strategic large orders on the order book – and still get away with the type of dubious activity that the uptick rule is essentially looking to at least hinder. So, Campos actually even concedes to what he also believes as fact, that even restoring the uptick rule or something like it really won’t do much in the way of stopping illegal short-selling activity.

In response, however, Asensio starts off throwing wild accusations at Campos. He references a letter Campos wrote supporting the regulation of short-selling by imposing the uptick rule or some modified version, which was supported by many “main street companies.” Asensio says these companies that Campos represents are “very questionable companies…that should be the targets of the investigations themselves.” He then calls for more deregulation of the markets in regard to short-selling, stating “there is no economic reason why America should cause and force short-sellers to borrow stock.” He tries to make all short-sellers look like they are all some kind of investment superheroes that short stocks purely for the purposes of stopping price manipulation on the upside and to discover true price parity, or the true value of a stock. He even advocates for the legislation of whistleblower protection for members of public companies that are sued by those companies for blowing the whistle, and tries the old guilt-by-association tactic of trying to say Campos “represents” these types of companies. This guy is some piece of work, but if you keep an eye out for the signs and read between the lines, it’s very easy to see the wolf in sheep’s clothing.

Asensios a dead ringer!

Asensio's a dead ringer!

First of all, I’ve been searching for this supposed letter by Campos, which is supported by these “questionable companies,” and I haven’t been able to come up with much. The two that are fairly recent and deal most directly with the issue at hand that I did locate, can be found by clicking the links in this sentence. But neither really mentions nor is endorsed by any public companies…unless Asensio was talking about the companies through which the letters were published? That doesn’t make much sense either though. So, what underhanded, “questionable” organizations is he talking about? To be honest, I don’t even think he knows what companies he’s trying to implicate by saying that. His entire performance is nothing more than the typical cloak and dagger tactics you would expect from a perfidious, villainous, Lex Luthor-ian salesman, especially now, and especially in the finance industry. Is it really a wonder why we are in the mess we are in right now with guys like this running hedge funds?

Secondly, the calmly arrogant demeanor that Asensio maintains throughout the interview is simply an extension of this surreptitiously evil mind trying to maintain this bogus façade of nobility and humility, trying to lure the viewer into seeing it his way, or at least see that he is perhaps much more credible than he obviously is in reality. Saying that short-sellers shouldn’t have to borrow any stock at all and should be able to sell shares at will with absolutely no regard for the downside and the possibility of that trade going against them, is just like saying buyers shouldn’t be forced to actually pay for the stock they buy, and should be able to buy at will. If this were truly allowed to happen, the current economic recession would feel like utopia compared to the economic situation we would be in as a nation if Joe the Plumber and his band of brothers could actually participate in the market without having to actually pay for any trades that went against them. The market would have dropped to 0 if these were the rules for investing, because once the market started to drop from 14,000+ in October 2007, no one would have paid for their trades! Anyone that pretty much bought stock from then through November 20th 2008 – some until March 9th of this year – has been losing money on that trade every day since they bought it! Why the fuck would you pay a trade they were down in by 2, 5, or 10% by settlement, especially if they didn’t have to? NOBODY!

Finally, it’s obvious that borrowing is what got not just us but the entire globe into this trouble in the first place. The fact that on many stocks, mostly very volatile ones, the extent to which you have to “borrow” (to cover for settlement) is as high as 75-80%, is a means of keeping that same type of out of control leverage that was prevalent in other markets and helped get us into this, away from these markets. All trades are based on ifs, and if that trade goes against you, you’ll be glad that the higher requirements saved you from getting crushed on the entire position, because you “were forced to protect” 75-80% of that highly speculative position. Now you’re only getting crushed on 20-25% of it, but at least you’re still in business. It’s tragic when going the wrong way on one trade in Volkswagen could cause a short-seller to take his life, so I’d say this type of protection is critical on all investments, but especially on ones that are tremendously high in speculation.

The uptick rule is like warning labels on cigarette boxes. Shorting, like smoking, is the other side of a 2 sided coin. Buyer’s, like non-smoker’s, and proponents of selling (smoking) restrictions. Non-smoker’s recognize the health risks that smoking poses to the overall community, as buyers recognize that deflating prices, by shorting stocks, brings the overall economy down thereby threatening the economic health of the overall community,  along with the markets. Regardless, shorter’s are gonna short, and smokers and gonna smoke. The uptick rule, like a warning label, simply makes it a little less attractive to do it, and has been proven to have the overall effect of discouraging an action (naked short-selling and smoking) that has proven to at least inject more potential for unhealthy activity.

At the end of the day, it is clear that this was a very poor attempt by Manuel Asensio at trying to maintain the shroud of secrecy around what short-selling actually is and the market manipulation that can and does occur due to abusive naked short-selling. He does great job looking like one of the most diabolically evil genius’ of all comic book history, but is too transparent with his chicanery to truly pull off the full impersonation. In my eyes, Gene Hackman will always be the best Lex Luthor!

The one and only...

The one and only...

Jon Stewart Conducts the Modern Day “Frost/Nixon” Interview!

Yesterday was truly an amazing day for American history!

First off, Bernie Madoff went to court and tried to play “Let’s Make a Deal” with his sob story of a guilty plea, but the judge wasn’t having it! More on that later.

Last night, Jon Stewart exposed not just Jim Cramer for the Krustonian Clown that he really is, but also CNBC as the Stanford Group/Madoff Securities of the “Financial News” media that they truly are, all in one interview!

Jim Cramer Wants to Make You Money? Yeah Right!

Jim Cramer Wants You for Cramerica!

The scene of Stewart “training all day” for the interview is personally reminiscent of my own time studying for the Series 7 some time ago, so I particularly enjoyed that. Then we see how Doughboy Cramer prepared for the interview – by baking with Martha Stewart and pounding dough with a rolling pin in true Neanderthal fashion, after Martha suggests he think of the dough as Jon Stewart. Stewart responds with the comment, “Mr. Cramer, don’t you destroy enough dough on your own show?”

 

Once Jim Cramer stepped out onto that stage though, it wasn’t exactly war immediately, as Stewart let Jim know that none of his previous comments about CNBC and its coverage of financial news had ever been aimed directly at Jim Cramer. He in fact later informs Cramer that he feels bad that Cramer has become sort of the face of what Jon Stewart has been vehemently and very precisely attacking. Cramer certainly accepted that he understood Stewart’s point and agreed that in the current environment, CNBC and he himself, was “fair game” for criticism. Once all those “courtesies” were taken care of, it was certainly “ON!” and all the fun and games stopped, as Jon Stewart conducted the interview like Jack McCoy trying to squeeze a dirty witness into a deal for more information on the “Big Fish.” And Stewart was out to reel in CNBC and its reputation as a credible financial news media outlet. The war was on!

Stewart hits him with the evidence: clips from a December 22, 2006 interview that was obviously never meant for TV, as Jim Cramer clearly states in the interview that he is making statements and revealing things about his own activity as a former Hedge Fund Manager that he cannot say on television!

 

The Statements: I can’t even say that Cramer all but admit to futures trading manipulation – which is just as simple and illegal as manipulating the trading of a low-volume stock (see the movie Boiler Room) – but that’s exactly what he admitted to doing. That’s why he can’t say it on TV! “Welcome to Mad Money. The show where I tell you what will make you do what we CEO’s need you to do in order for stocks to move in the direction we want it to move in, and yes sometimes that direction is down.” That just wouldn’t work as a marketing scheme, and Cramer, stumbling and stammering like a lion on ice skates, readily tried to use marketing as an excuse for why he acts the way he does and does the “crazy Bull(Bleep)  I see [him] do every night” as Jon Stewart so rightfully and eloquently put it.

 

 

The Meeting (And the Proverbial “Nail in the Coffin: Stewart had Cramer so off-guard from the beginning of the interview with those video clips, that it was a side of Jim Cramer that I’m sure too many Americans were not used to seeing, and were probably pretty worried to see –and we should all be worried! Jim was stuttering and stammering like Jimmy, from South Park, trying to defend himself and his Network, CNBC,  just like the guys on Law & Order that try to hold out on McCoy – like we don’t know they’re gonna get broken down to where they end up revealing every element of the crime. Feeling the heat from Stewart’s poignant, targeted, incriminating questions, Cramer readily admit that he as well as others could have all done a “better job” – spotting the oncoming crisis, calling out the mistakes that were made, and doing their own due diligence on the information they received from corporations (and they frequently receive “insider information”– “Absolutely, I truly wish we had done more.”

Then he goes into this spiel about how he tries to be “truthful” on his show, and expose “these guys” as much as possible, still oblivious to the fact that he admitted to being one of “these guys” during those clips at the beginning of the interview.

 

But then he surprised me and everyone else with enough financial knowledge to know that there’s a reason why you don’t say certain things on TV or anywhere that you can be recorded saying it for that matter. It’s the same reason why you take the 5th on the stand. But Cramer – I guess because he, like Madoff and most other people who have been running scam-like enterprises, got drunk off the illusionary power that enterprise (his show) created, that he felt as if he was a made of Teflon – didn’t plead the 5th! He continued trying to play this investor advocate role, talking about how he readily bad-mouths CEO’s and companies that make mistakes and don’t do well for their investors, as he proceeds to implicate himself in a grand scheme of manipulation of insider information using his show as a vehicle!

 

Thinking he’s in line for the Academy Award for this performance, he opens up and goes into a story about a meeting he had with one such CEO, whom he had previously admonished on his show. Without going into the details of the meeting, Cramer – in true Blagojevich fashion – tells a lot more than he probably should have and seems to be realizing it as he’s telling Jon Stewart how this meeting basically compelled him to refrain from talking down that CEO on subsequent shows. Now you don’t need to be a lawyer, a DA, or a Law & Order fanatic like myself to know that Jim Cramer must have gotten something to have readily gone against his own previous rebuke of a stock or CEO. Obviously, Cramer wouldn’t want you to think he received money in exchange for his silence and cooperation, and he’s probably smart enough not to accept any “money” so as not to leave himself open to easy interrogation. So, Cramer’s implication, what he wants you to believe, is that the CEO of that company gave him some “information” about the company that put him “at ease” about whatever it is that caused him to rant negatively in the first place. And therein lies the rub, because chances are, it wasn’t information, it was “money,” or “gifts,” or “favors,” whatever you want to call it.

 

Let’s say it was information though. Most likely, that “information” was inside information, which is info that only company officers, directors, and other high level employees or partners would be privy to, as it is non-public information. If that is the case, then my belief is that a strong case can be made against Cramer, and possibly CNBC, for stock manipulation and a form of insider trading, at least manipulation of insider information. Jim Cramer already provided all of the evidence!

 

If I was meeting with CEO’s and buying stock in their companies, and a good majority of investors out there watched my show, hell yeah I’d use it to manipulate perceptions as much as I could to my benefit, the same way I’d take a bag of money out of an open unguarded safe.  What Jim Cramer does however, is equivalent to putting on a guard’s uniform and telling people that the open safe is secure because he’s guarding it for you, more people come and put their money in the safe, and when it’s packed nice and tight, he slams the door shut and makes off with the money, in search of another area or arena where he will be able to pull off the same scheme over and over and over again. It’s criminal how he’s able to get away with it, and he and all that help these “shadow government” wheels go ‘round should be held responsible for their actions.

 

Now I know most likely, that this will not happen, and that’s because the Wall Street “Back Room” that Jon Stewart alludes to is real and is in power, running this whole game. The American Financial markets (and the Healthcare and Social Security Systems for that matter) is nothing but a nationwide Ponzi scheme authorized and run from the highest levels. We invest our hard earned money in these companies, whether we want to or not. Just working at a company that trades publicly means that your 401K is invested in the market through them, on your behalf. Individual and Online Investors, can only purchase a handful of all financial products. The rest, especially the “sophisticated” ones, you have to buy or sell through a financial institution aka a brokerage firm. Then, with our 401K, IRA, and pension accounts financing the whole show, these institutions trade with each other as much as possible, constantly turning over (churning and burning) our accounts – which now combine to be lump sums of billions, even trillions of dollars – for them to take bets as risky as possible, and then manipulate and control the markets so that those ridiculously risky (no risk, no reward!), overleveraged bets actually do end up working out through their own magical “invisible hands,” – thier hands in our accounts/pockets! Then you have CNBC and guys like Cramer, Kudlow, and the whole CNBC crew, who all think of themselves as modern day Ruggedo‘s, feeding us the information that fuels the very rumors these company CEO’s and Directors want to use to perpetuate this “Oz-ian Fantasy Land,” where we can all make “Fast Money,” to manipulate any and everyone involved if it will lead to more profits.

This type of manipulation of the American public is 100% legal. It’s the American Way!

 

*Watch the uncensored version of the interview here.

 

The only good thing that may have come about as a result of the Bush Administration is that he and his posse made the abuses perpetrated on the poor and middle class by the American Upper class so blatant, flagrant, and out in the open that he may just end up being the straw that breaks the camel’s back. As more and more information about what went on during his “Animal House” of an administration, hopefully we as Americans will continue to wake up from our greed/profit-induced slumber, and will continue to awaken to the presence of the modern-day financial “matrix” where the few control the behavior of the masses. Just like our current banking system, we are the living dead, afforded just enough to keep trucking along in this zombie-like state, as our pensions, 401K’s, and nest eggs are raped and pilaged, traded hundreds of times over for sport. Just like Morpheus says in The Matrix, it is hard to tell how people will react to finding out that the world that have become used to is nothing like what it seems. No one enjoys finding out that they are being manipulated, taken advantage of, and ultimately “you are a slave.” Jon Stewart should be commended for his targeted, well publicized assassination of Jim Cramer “the financial guru”, and for revealing Cramer as a bozo-the-clown like, wild and crazy financial version of Pee-Wee Herman that he is – going nuts in his “Cramerican Play House” during the day, while meeting with shady characters to conduct underhanded, devilish, back-alley deals behind the scenes. Cramer, your hands are just as dirty as those of Dick Fuld, Henry Paulson, and all these brokers and managers at these financial institutions that when they knew their assets weren’t worth anything, used the guise of international investments to spread this garbage around the globe. To pretend as if you are an advocate of the “ordinary American” is not just “disingenuous,” it is criminal, and one way or another, your chickens will hopefully come back to roost. Only time will tell.

Manipulation of Law Over Morals and Ethics

In his Senate hearing on his decade long quest for justice, Harry Markopolos seized the opportunity to reveal himself as a true patriot, populist, and Authentic American Hero in his sweeping indictment of the joke of a financial regulatory system that has exposed itself in the wake of this economic crisis. In a modern day “David vs. Goliath,” tale, Mr. Markopolos told Congress how he and a handful of industry executives and insiders were in affect committing career (and possibly literal) suicide in attempting to go after not just the monster now known today as Bernard Madoff, but the entire financial regulatory Gestapo that controls the wealth of our great nation

If nothing else is apparent from the findings of Harry Markopolos and his league of extraordinary gentleman, it should be that the “Wild West” nature by which the SEC, the NASD, and FINRA (“Regulators! Mount up!”) operates, in collusion with the very organizations they are charged with regulating, is by far the greatest factor in the systemic risk chained to the ankle of our economy as our society sinks deeper into these uncharted waters. Rep. Alan Grayson of the 8th District of Florida, has an excellent exchange with Mr. Markopolos during the Senate hearing, when he essentially poses to Harry to explain the concept of “capture.” “It’s basically when the regulator is in bed with the industry they proport to regulate and do not regulate the industry. In fact, they consider the industry the clients, not the public citizens,” Markopolos explains.

There it is ladies and gentleman. All the complicated mathmatical calculations, financial products, swaps, CDO’s, derivatives trading and analysis, risk models, connections between housing, banking, and insurance industries, and Main Street companies like Robin’s Book Store in Philadelphia, and The Republic Windows and Doors Company out in Chicago…forget about all of that, it’s just the details. Too many Americans, and too much of society is not educated enough to even wrap their heads around the bare bones of how these devastating events shape our current stance, let alone the details. However, the current season of 24 on Fox makes at least the concept of capture easy to understand and easy to explain. If you’ve been watching, you know Jack Bauer (Markopolos) and the old CTU team is working “Palin”/”rogue” right now, because they know that the current threat to America(fraud) goes all the way up to those with power(the regulators) in the President’s Cabinet(SEC,NASD,FINRA, etc.). Even the bad guys at the top don’t know the identities of the other bad guys on their level or above, so that the entire atmosphere is steeped in suspicion of everyone’s intents and a “cover-your-own-ass” mentality. Now, applying this to our Regulatory situation, Markopolos, like Bauer and Tony, had been “whisteblowing” and shedding light on the threat, the fruad, for years. But after being ignored time after time, it’s no surprise that he figured the very process set up for handling the threat, the regulatory system, was clogged and cluttered with individuals who were either too stupid, young, and naive to see a threat themselves, or so caught up in the status quo – that Markopolos himself attributes to a “code of silence” among industry insiders and regulators alike – that being charged with the responsibility of making sure this type of fraud doesn’t happen, although it might feel nice for the soul, does not amount to a good enough paycheck for them to take that responsibility seriously.

When asked what other organizations could be charged with participating in “capture,” Markopolos is quick to name the FDA along with the SEC. He suggests incentivizing the compensation structure of the regulatory bodies, and making it similar to that of the financial industry. With this type of structure, the philosophy is that anyone working for the regulators will not allow themselves to be stopped or hindered, and will run over people that present themselves as barriers in their investigations of fraud like a “bulldozer,” if they knew their paychecks might get a nice boost. Regulators like Meaghan Cheung, the New York Division SEC Branch Chief, might have paid attention to the chief executive of midsize, Boston based, Equity-Derivatives trading business when he walked through her door in 2000, with volumes of provocative information revealing what has become the largest and longest fraud scheme in American History…so far.

Markopolos also offered his insight in the arena of human intelligence gathering, which the workers at the regulators sorely lacked. “When they [the regulators] come in to inspect a firm, they are led to conference room, they meet the compliance staff, and they are fed controlled pieces of paper. That’s what they do, they inspect pieces of paper, because they’re too untrained to realize what to look for on the financial end. All they’re looking for is the pieces of paper.” He goes on to say that if they actually probed the company’s, and spoke with the various workers, traders, executives, and salesmen, and asked them, “Do you see anything fraudulent going on? Is there anything going on here I should know about?” then that would have, and still would go a long way towards accomplishing what the SEC was created to accomplish. As far as Markopolis is concerned, the SEC did not ask these questions nor make any real attempt at gathering any information on questionable companies, “because they were afraid the answer[s] would be ‘Yes.'” That would have meant more mountains of work for the regulators, which brings us back to their incentive and motivation…not enough. Combine that with the fact that Bernard Madoff, as a former chairman of the entire NASDAQ Stock exchange and the amount of respect and power gleamed in the “white swan” public view by holding that powerful a position within the industry, and there is almost no incentive for any one regulator to investigate anything other than how they themselves can capitalize somehow, and join the club. It’s that same view of power that “sophisticated investors” scammed by Madoff allowed to lull them into such a sense of safety in the very idea of having their money managed by a man with such financial clout, that they didn’t feel they had to pay attention to or investigate how they were making such high returns, so consistently, even though the investments they were making were labelled as “high risk” investments.  This obliviousness and drunken greed is an attitude that pervades American society, and it is the “systemic risk” that we as a society must fully recognize and deal with if we are going to have any chance of passing this planet on to future generations.

Harry Markopolos, and others like him (Pat Tillman, Dalton Fury, Robert Baer –  real men that have put their lives on the line to defend the fabric of this nation’s security and safety, so that we can rise and sleep soundly “under the blanket of the very freedom that [they] provide,”) represents what is best in the Spirit of America. It is not only that they, and countless others who remain nameless, have put themselves in harms for us, but that they have excercised their own freedom in informing us what happened, and been through serious ordeals just in trying to do that. They are the real John McClain’s, Jack Bauer’s, and Solid Snake’s, that have worked within the system and gotten so fed up with the amount of “friendly fire” they’ve received in the form of inaction and outright stonewalling by the very agencies and governments for which they’ve worked, that they’ve realized they can’t trust anyone, and have to “go rogue” on their quests to safeguard us, the American public, from real terror.

And that very real terror that we are currently experiencing is coming from within. It is being perpetrated on us by the very leaders that are sworn to protect us. It is “capture” at the highest order, and it is the embrace of greed based politics and principles that is the only thing that has trickled down to the public like a cancerous disease. We have to wake up and let our government know, the way we did this November, that enough is enough. We have to maintain the interest, and continue to grow the amount of involvement we have, in simply knowing exactly what our elected officials are doing and how they are “representing” us. Remember, just because a guy gets elected, it doesn’t automatically make him a good leader. Let’s make sure we are electing proven leaders, and not admitted sex offenders, like some of our current officials, who shall remain nameless and should stay out of controversy if they don’t want people bringing up their previous sexual indiscretions.

 

Lastly, let’s wake up and realize the reality that taxes are extremely difficult for even tax professionals to get right all of the time. The media is spending too much time talking about the current Administration Appointees and their tax records from 2001. Who cares? Taxes are like parking tickets. There are those who deliberately take advantage of the fact that it’s a parking ticket, therefore a minor infraction, doesn’t have to be paid immediately, and so they don’t mind getting them and therefore keep getting them. Then it spirals out of control as they “forget” to pay the tickets, and before they know it, they’re getting their car towed and they owe the local government a lot of money. Now, the tax equivalent of a person or a public official that exhibits this behavior would probably be Senator Ted Stevens. He was indicted for using his position and accepting bribes among other things, but basically, had he reported these “gifts” he received from these “questionable” people or organizations on his taxes – either as personal spending or what have you – things could have been totally different for this now tarnished elder of the Senate. (Not saying that would have been the moral thing to do, but if you’re gonna accept bribes, wouldn’t you at least try to cover your tracks as best as possible, or slow down the process of your capture in any way?)

Then there are those who when they get parking tickets, it’s few and far between, so since it’s not as routine for them as for the previous example, it’s understandable that they might forget to make a payment for that ticket. To round it all out, there are of course those people that pay a parking ticket as soon as they get it, no matter how frequent an occurrence, but the group in the middle, the understandably forgetful group, is the group I would place most people in with parking tickets and taxes. We screw up on our own taxes from time to time, forget this rule and that, (or more likely don’t know it in the first place) and sometimes it’s in our favor, and sometimes not, but there’s no deliberate manipulation of any tax code involved in how we go about doing our taxes. It’s unfortunate that Tom Daschle had to withdraw from the position of Secretary of Health and Human Services, although I think it was the noble thing to do to take one for Team Obama. I place him in this group of understandably forgetful tax infraction holders. I myself owed New York City taxes after I thought I was done for 2008, but my accountant screwed up on the city taxes. Does that make me any more or less trustworthy that I chose to go to the same accountant I have for 3 years with no problems to get my taxes done? I think not. I have a friend that found out, also in last year’s tax season, that he was owed about $10,000 more in deductible income. Does that make him or his tax professional business or tax guru’s that have a leg up on the entire franchise? I think not. More likely, it means that single tax professional he went to on that very day was a more focused, harder worker than average. But it means nothing about the character or the integrity of my friend, the person that went to that professional for a service. Wake up people, please!