Tim Geithner To Hold Financial Crisis Seminars

http://www.zerohedge.com/news/2013-02-27/tim-geithner-hold-financial-crisis-seminars

Madoff: 'Whole government is a Ponzi scheme'

http://www.msnbc.msn.com/id/41825072/ns/business-us_business/t/madoff-whole-government-ponzi-scheme/#.TpNY9bJI7d4

Madoff Whistleblower Tells KWN Banks Stealing From Pensions

This is what happens when you put the dumbest guys in the same room (e.g. pension fund managers) as the biggest sharks in the room (e.g. investment bankers).  The sharks have used the opacity of markets to surreptitiously steal from the retirement funds.  The concept of "free" markets on Wall Street is fictitious. 

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/6_Madoff_Whistleblower_Tells_KWN_Banks_Stealing_From_Pensions.html

Silver, Gorillas, Madoff and Financial Regulators –Will they ever learn?

Not only are markets rigged, but the regulators who are mandated to monitor and enforce laws are not only looking the other way, they are enabling illegal price manipulation.  The markets are completely distorted due to the corruption, and everybody will pay when the COMEX defaults, whether it's the farmer who wishes to hedge his crops, the airline which wants to lock in fuel prices, or the consumer who puts food on the table and drives to work.  And market experts will declare "no one saw it coming."  Bull$hit.

http://www.scribd.com/doc/67350783/Silver-Gorillas-CFTC-Etc-1

Bernie Madoff: JPMorgan Doesn't Have A Chance In Hell And HSBC And UBS Are Going To "Have Problems"

This should be interesting:  Bernie Madoff, convicted of running a multi-billion dollar Ponzi scheme, is ratting out JPMorgan, UBS, and HSBC, accusing them of moving hundreds of billions of dollars, presumably dirty money. 

http://www.businessinsider.com/bernie-madoff-jpmorgan-ubs-hsbc-2011-4#ixzz1IsAC

Mark Madoff, Bernard's Son, Hangs Himself

http://www.zerohedge.com/article/mark-madoff-bernard-son-hangs-himself

SEC officials watching porn on taxpayer's dime

http://abcnews.go.com/GMA/sec-pornography-employees-spent-hours-surfing-porn-sites/story?id=10452544

The investigation, which was conducted by the SEC's internal watchdog at the request of Sen. Chuck Grassley, R-Iowa, found 31 serious offenders during the past two and a half years. That's less than 1 percent of the agency's 3,500 employees but 17 of the alleged offenders were senior SEC officers whose salaries ranged from $100,000 to $222,000 per year.

One senior attorney at SEC headquarters in Washington spent up to eight hours a day accessing Internet porn, according to the report, which has yet to be released. When he filled all the space on his government computer with pornographic images, he downloaded more to CDs and DVDs that accumulated in boxes in his offices.

An SEC accountant attempted to access porn websites 1,800 times in a two-week period and had 600 pornographic images on her computer hard drive.

Meanwhile, crooks like Bernie Madoff and "Sir" Allen Stanford were ripping off billions from unsuspecting suckers...er "investors". The SEC also managed to look the other way, while big banks were committing hari kari on the nation's retirement and pension funds.

Government dollars: hard at work. No pun intended.

By the way, even if there are truths in the allegations, this is no doubt a smear campaign against the SEC, probably instigated by the very firms who are being charged with fraud, which will go unnamed. Connect the dots, dear readers. This is a false choice between the bad guys and the bad guys.

Biggest boondoggle of them all

The Biggest Financial Deception of the Decade

Jeff Clark, Editor, Casey’s Gold & Resource Report

Enron? Bear Stearns? Bernie Madoff? They’re all big stories about big losses and have hurt a lot of employees and investors. But none come close to getting my vote for the decade’s most dastardly deception...

First came Enron, with $65.5 billion in assets, going belly-up and becoming the largest bankruptcy in U.S. history at that time. Chairman Kenneth Lay said that Enron's decision to file bankruptcy would “stabilize the company,” but over the next five years the company was completely liquidated. The stock went from a high of $84.63 in December 2000 to a whopping 26¢ one year later.

And what had we been told by the media? Fortune magazine dubbed Enron “America's Most Innovative Company” for six consecutive years. A well-intentioned friend wanted to give me a gift subscription to the magazine for Christmas; I choked on my cocktail and luckily he assumed my drink was too strong. In the end, you can thank Enron for bringing us the Sarbanes-Oxley Act of 2002, a ghastly financial reporting regulation for which compliance is grossly expensive, and – stop the presses! – hasn’t prevented similar repeats.

Next came WorldCom filing for bankruptcy in 2002, their assets of $103.9 billion dwarfing Enron’s. “We will use this time under reorganization to regain our financial health and focus, while operating with the highest integrity,” assured CEO John Sidgmore. Was his eggnog spiked? Today, WorldCom stock certificates have been spotted as doilies under pancake house coffee mugs signifying it’s decaf.

Tyco, Adelphia, Peregrine Systems… it’s a crowded field around this time. But their stories of fraud and greed and mismanagement get boring after awhile. Just watch the closing credits from the movie Fun with Dick and Jane and you’ll see what I mean.

Bear Stearns set us all up for the Big Meltdown of 2008. It was B.S. (no, I mean Bear Stearns) that pioneered the asset-backed securities markets, and we all know how that turned out. Later we learned that as losses mounted in 2006 and 2007, the company was actually adding to its exposure of mortgage-backed assets, gearing itself up to 35:1. With net equity of $11.1 billion supporting $395 billion in assets, B.S. carried more leverage than a streetwalker’s push-up bra.

And during it all, Bear Stearns was recognized as the “Most Admired” securities firm in a survey by Fortune magazine (there’s that Lower Manhattan tabloid darling again). Frequent sightings of company executives on country club fairways assured the public that all was well. And CEO Alan Schwartz told us there was “no liquidity crisis for the firm” and insisted he “had the numbers to back it up.” His company was sold four days later to JPMorgan Chase at $10 per share, a 92% loss from its $133.20 high. Perhaps his numbers were prepared by ex-Arthur Andersen employees.

Lehman Brothers, the 158-year-old investment bank, was next and still today holds the title as the largest bankruptcy in U.S. history. L.B. succumbed to 2007’s Word of the Year, “subprime,” and its $600 billion in assets all went poof! In just the first half of 2008, before the meltdown, Lehman’s stock slid 73%.

And what did CEO Dick Fuld tell us in April of that year? “I will hurt the shorts, and that is my goal.”He must have been referring to the attire of his tennis club buddies, because the ones who actually got hurt were numerous other banks, money market funds, institutions, hedge funds, REITs, brokers, private and public trusts, foundations, government agencies, foreign governments, employees, and investors.

Moving on to the largest U.S. government bailout recipient by far, AIG’s troubles spawned my favorite placard of the decade: seen outside their Manhattan offices stood a sign that simply read, “Jump!” Maybe its creator heard what I did from AIG’s financial products head Joseph Cassano: “It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these [credit default swap] transactions.”

He must have substituted his prescription eyewear with those giant New Year’s Eve glasses, because the government sunk $180 billion into the company and it still had to be split up and the assets sold to the highest bidder. I’m sure that his non-flippant comment had nothing to do with him making CNN’s “Ten Most Wanted Culprits” list in 2008.

GM, with $91 billion in assets, filed for bankruptcy in the summer of 2009 and is now largely owned by the U.S. and Canadian governments (i.e., taxpayers). The $19.4 billion in federal help wasn't enough to keep the nation's largest automaker out of bankruptcy. But don’t despair: the government is pouring another $30 billion into GM to fund “reorganization operations.”

GM shares? Bye-bye. For 83 years GM had been a member of the prestigious 30 Dow Industrial stocks. It managed to survive the Great Depression but not this decade’s Greater Depression. Yet chairman Ed Whitacre had insisted, “I remain more convinced than ever that our company is on the right path and that we will continue to be a leader in offering the worldwide buying public the highest quality, highest value cars and trucks.” I wonder what he thinks now that the stock is named “Motors Liquidation,” trades only on the pink sheets, and sells for about 50¢?

Topping off our list is the infamous Bernie Made-off (er, Madoff), who scammed $65 billion over 20 years from unsuspecting institutions and wealthy investors. But don’t be too upset, because the number is probably half that amount. Hey, the alleged size of the losses comes from his own ledger book, and should we really trust his balance sheet? Dubbed the largest Ponzi scheme ever, I beg to disagree, as you’re about to see...

By now you are probably wondering... what’s bigger than all these? He’s covered the major frauds and scams of the past decade – what could possibly be left?

To quote my favorite sleuth, Hercule Poirot, “When all the facts are laid before me, the solution becomes inevitable.”

Here are a few clues…

Federal Reserve Chairman Ben Bernanke said on July 16, 2008, that Fannie Mae and Freddie Mac are “adequately capitalized” and “in no danger of failing.” Then-Secretary Treasurer Henry Paulson declared on August 10, 2008, “We have no plans to insert money into either of those two institutions.”

►Both Fannie and Freddie were nationalized 28 days later, on September 8, 2008.

Ben Bernanke claimed on February 28, 2008, “Among the largest banks, the capital ratios remain good and I don’t expect any serious problems of that sort among the large, internationally active banks...” Henry Paulson added on July 20, 2008, that “It’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”

►Since the recession started in December, 2008, 144 banks have failed.

Paulson informed us on April 20, 2007, that “All the signs I look at show the housing market is at or near the bottom.”

►The number of foreclosures skyrocketed shortly thereafter and will now any day surpass those during the Great Depression.

Ben Bernanke announced on June 20, 2007, that “[The subprime fallout] will not affect the economy overall.”

►Less than one year later, the stock market crashed, losing 53% of its value, and is still down 25% despite one of the biggest bounces in history.

Those in charge of our country’s finances not only failed to see the crises developing and then bungled the handling of the recovery, they’ve deliberately misled us about what they’re doing to our currency. In spite of emphatic promises, flowery speeches, pat-on-the-back assurances, and continual reassurances, here’s what they’ve actually done to the dollar:

* Since September 1, 2008, the monetary base has ballooned from $908 billion to $2.0 trillion. The current monetary base is now equal to bailing out General Motors 23 times.

* Bailout funds in 2008 and 2009 total $8.1 trillion. That’s almost 78 WorldComs. It’s over 123 Enrons.

* U.S. debt has risen sharply, from $6.2 trillion in 2002 to $12.1 trillion today. That’s over $39,000 per citizen.

* David Walker, the comptroller general of the Government Accountability Office from 1998-2008, warned that the U.S. is on the hook for $60 trillion in unfunded liabilities. Independent analysts peg the figure at near twice that. Whatever the number, it is incomprehensibly large. The only way we will meet these liabilities is to print the money and inflate them away.

We’re bailing out corporations that should fail, making financial promises we can’t keep, and adding layers of debt we can’t possibly repay. And the real killer is, if we don’t have the cash, we just print it. It is, by any reasonable account, the “blunder that will plunder” the next several generations. It is changing America permanently, and the problems will persist long after you and I are laid to rest.

Bottom line: after all the bailout programs, housing initiatives, rescue efforts, stimulus schemes, bank takeovers, wars, unemployment benefit extensions, and numerous other promises, the biggest financial deception of the decade is what the U.S. government is doing to the dollar. Nothing else even comes close.

This reckless activity has spooked our foreign creditors, weakened our global standing, diluted our currency, is punishing savers and retirees, and ultimately sets us up for a level of inflation this country has never seen before.

Yet, what is the guardian of our economy and money telling us now?

“Will the Federal Reserve's actions to combat the crisis lead to higher inflation down the road? The answer is no; the Federal Reserve is committed to keeping inflation low and will be able to do so. In the near term, elevated unemployment and stable inflation expectations should keep inflation subdued, and indeed, inflation could move lower from here.” (Ben Bernanke, December 7, 2009).

This is pure rubbish. If inflation could be controlled by just thinking stable inflation thoughts, then Ben should be able to grow a full head of hair by just thinking scalp follicle thoughts. This is so ridiculous, it’s insulting.

Government actions make a mockery of their words; what they say and what they do are diametrically opposed. It’s clear that inflation is not a question of if, but when.

Any level-headed individual has to conclude that there will be a steady – and likely accelerating – decline in the dollar’s purchasing power. It’s inevitable.

The great masses don’t quite understand it yet, but they will. There will be no escape from the cold, hard slap in the face the citizens will receive when higher levels of inflation arrive. And when it does, it will make a mockery of any opposing viewpoint.

So the question before you is simple: Will you be a prepared survivor for what lies ahead, despite what our government leaders tell us, or will you be a complacent victim of the biggest financial deception of the decade?

For me, there’s only one solution. Don’t kid yourself into thinking a man-made asset will protect your purchasing power. This is the time to be overweight gold and silver. I advise letting them serve their purpose for you.

Redemption suspension

The words "suspend redemptions" evoked panic and fear in hedge fund investors in 2008 after Lehman Brothers collapsed. Insolvent hedge funds had to delay investor demands for redemptions because they lacked access to liquidity during the financial crisis. A credit freeze ensued, and no one trusted their counterparties who were equally insolvent.

Fine, hedge fund investors are allegedly savvy and required to understand the outsized risks and rewards of investment in hedge funds. An accredited investor needs to have a minimum income of $200,000 and a minimum net worth of $1 million, but most have income and net worth levels much higher than the minimum thresholds. They understand "high risk/high reward"--at least they're supposed to.

But the latest financial reform being pushed by the Obama financial team "to protect consumers" includes the following language: "suspend redemptions to allow for the orderly liquidation of fund assets." This clause is in direct conflict with Securities Exchange Commission (SEC) Rule 2a-7, which provides minimal risk, no volatility, and redeemability for money market funds. In other words, when the average Joe parks his money in a money market account, he expects miniscule interest earned, in return for the safety and liquidity of funds being instantaneously accessible via a computer keystroke or a visit to the bank teller.

What this "financial reform" clause does is allow financial institutions to NOT guarantee your request for cash withdrawal if financial markets are collapsing. In other words, how "safe" is your cash if you can't even access it in times of financial distress--or when there's a run on banks?

This is the same SEC which is chartered to protect investors from unscrupulous swindlers and regulate free, orderly markets. Given their dismal track record of protecting investors from the likes of Ponzi schemers Bernie Madoff and Allen Stanford, it should come as no surprise that savers and investors will become incredibly vulnerable should the next financial iceberg hit again.

The SEC

This is an excerpt from Chris Wood, of Casey Research:

I would say that rather than worry about it right now, we should first go ahead and abolish the SEC.

Of course this won’t happen until we witness a complete collapse of our current economic system as we know it. But let me briefly lay out part of the case for why Congress should do it. And please note that in the interest of time, I will be borrowing heavily from Graeme B. Littler’s essay titled, of course, “Abolish the SEC.”

* The SEC profits from its blunders. As Ludwig von Mises observed, “government regulation generates unforeseen problems, which excuses more regulation, which causes still more unforeseen problems.” The SEC has a history of growing and profiting from crises. Most recently, a guy by the name of Bernie Madoff comes to mind. Although the SEC missed uncovering Madoff’s $50 billion Ponzi scheme for a decade (despite constant warnings from outsiders), the commission now says it needs more money to prevent schemes like that in the future. In FY 2008, the SEC was authorized to spend $906 million, by the way.

* The SEC erects barriers to competition. Thanks to the SEC, it costs a lot more than it otherwise would to raise capital by issuing stock. The process requires a mountain of paperwork, CPAs, and lawyers. Many small companies, which don’t have the resources to negotiate this bureaucratic maze, can’t raise new money and grow. Large, established firms do just fine, however, and like the lessened competition.

* The SEC is anti-shareholder. By hampering corporate “raiders,” the SEC defends the interests of corporate management over the shareholders’. Raiders seek to make a profit by buying out a firm’s owners, firing inefficient managers, and replacing them with people who will make the company more profitable. The SEC requires “raiders” to file public reports after they acquire a small percentage of a company’s stock. These filings are designed to tip off management about possible tender offers, thus giving them plenty of time to plot a takeover defense to secure their jobs at shareholder expense.

It’s true that the securities industry is not problem-free. And it never will be. But it would function better without the SEC.

Gold and Silver Price Suppression

If a recent Bank Participation Report (BPR) doesn't provide proof that large commercial banks are artificially suppressing the price of gold and silver on the COMEX exchange, nothing will.

http://www.cftc.gov/dea/bank/deaaug09f.htm

This data is readily available on the Commodity Futures Trading Commission (CFTC) website, an independent agency that is chartered to regulate the commodity futures and options markets. They serve a similar role as the Securities and Exchange Commission (SEC), which regulates equities exchanges (the stock market). You know--so fraudsters like Bernie Madoff can't run Ponzi schemes like he did for decades with impunity. Zing.

I've posited before that the CFTC may be even worse than the SEC at regulation and enforcement, if that's possible.

According to their website:

Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.

The CFTC's mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.

Lately, after numerous complaints on market manipulation, they have begun an investigation on the energy futures market, including crude oil and natural gas. Potential solutions include tightening of margin requirements, limits on naked short sales, including overall monitoring and enforcement against market manipulation.

Fine. So why don't they initiate a similar investigation and enforcement in the precious metals market, namely gold and silver?

Look closely at the long and short positions of gold and silver on the COMEX (sometimes dubbed CRIMEX by cynics) in the BPR. Two U.S. banks are long 15 silver contracts--and short 29,813 contracts, representing 30% of all open contracts. That's a lopsided ratio of long/short contracts. According to the Commitment of Traders (COT) data, these two banks--JP Morgan and HSBC--should have 149,065,000 ounces of silver in their vaults (each contract represents 5000 ounces for delivery). I'm calling BS on that.

With COMEX gold, 2 U.S banks are long 346 gold contracts, and short 106,272 contracts--or 27.1% of the open interest--again a huge discrepancy in long vs. short contracts. That equates to 10,627,200 ounces of gold (100 ounces per contract). Ladies and gentlemen, this is by definition manipulation, when a market has such huge concentrated positions by so few market participants. Similarly, the Hunt brothers were convicted of trying to corner the silver market in the 1970's when they built concentrated long positions.

So why doesn't anyone investigate JP Morgan and HSBC? Could it be they are mandated by our government finance officials to sell short the precious metals, suppressing the price of the two "fear indicators"? After all, when the prices of gold and silver soar, it means financial markets and investors are panicking that Armageddon is upon us.

Normally, gold and silver mining companies will short sell the metals contracts in order to lock in a sales price as a hedge against falling prices, much like a farmer will lock in a futures sales price for their specific crops. When it's time for settlement of the contracts, the farmer or gold miner delivers said respective commodity.

But commercial banks don't possess enough of the gold or silver in their vaults necessary for delivery--hence the "naked" sale. Instead, delivery is settled via cash--with no exchange of the physical bullion from seller to buyer.

The abuse comes in when a commercial bank can just indiscriminately and theoretically sell an infinite amount of gold or silver contracts--with no intention of delivery. Creating a huge surplus of naked short sales contracts places undue selling pressure on the commodity, causing it to decline precipitiously. Suppose every homeowner in your neighborhood put their homes up for sale, whether some of them really had the intention of selling their homes or not. You can imagine what that would do to the value of your own home--if every single home on your block had For Sale signs on their front lawn. In a worst-case scenario, a scam artist can accept payment for selling empty shells as homes with no intention of ever building the homes--the ultimate naked sell.

Similarly, when a few banks can flood the COMEX exchange with thousands of naked short sales contracts--with no intention of delivering the physical bullion, they can artificially and temporarily suppress the prices of gold and silver. Long-term, this distorts the supply/demand dynamics of the market, as miners stop drilling for new supplies, because the price of the commodity is too low to cost-justify exploration and drilling. When miners stop mining, this will ultimately undermine the suppression efforts, as a severe shortage occurs, causing prices of the commodities to soar. Suppression defers the pain of higher prices, but it also exacerbates the resulting bubble.

As both gold and silver are monetary stores of value with no counter party risk, exorbitant increases of money supply by central bankers will eventually induce price inflation across all hard assets. Investors will mistrust their respective currencies, while gold and silver will retain their monetary value. As a result, gold and silver prices will soar. It occurred in the 1970's when we had runaway inflation and budget deficits, because the US government turned on the printing presses. With today's trillion-dollar deficits, there is no telling how high the price of gold and silver will rise. We'll know by the whites of the eyes of government officials.

Regulation--or lack thereof

Interesting excerpt from cnbc.

Madoff Whistleblower Markopolos at the Congressional Hearing on the 50 billion dollar ponzi scheme.

Congressman Alan Grayson: Are you familiar with the concept of capture when you are talking about regulation? What is that? Do you know that concept?

Harry Markopolos: Yes. It’s basically when the regulator is in bed with the industry they purport to regulate and do not regulate the industry. In fact, they consider the industry the client, not the public citizens.

Congressman Alan Grayson: And have you seen that in action.

Harry Markopolos: Yes. At the Food and Drug Administration and at the SEC.

Bernie Madoff client list exposed

It's the list no one wants to be on. The Wall Street Journal just published the client list of Ponzi schemer Bernie Madoff. Those on and off the list include a who's who of the wealthy and famous: Larry King, John Malkovich, Sandy Koufax, Steven Spielberg, Jeffrey Katzenberg, Kevin Bacon and Kyra Sedgwick to name a few. This isn't a surprise as celebrities aren't expected to be smart investors.

What's really telling is Madoff's client list also includes all the major money centers, including Bank of America, Barclay's, Citigroup, and Credit Suisse (notice I only covered A through C). It also is includes individuals who should have known better, such as private-equity investor Thomas H. Lee, real estate mogul Stephen L. Green of SL Green Realty, David Greenbaum of Vornado Realty, and Henry Kaufman, former Salomon Vice Chairman and economist with the Federal Reserve Bank of New York. Money managers like Sandy Gottesman, an early Berkshire Hathaway investor and long-time Warren Buffett acquaintance who manages $10 billion at his investment firm, First Manhattan, is also on the list.

The Madoff lesson? If you don't know how your money will be invested, don't do it. Don't be intimidated by so-called "experts" in cryptic jargon. There are no stupid questions. Your money is yours and you suffer the consequences if it disappears.