There are some, shall we say, "interesting" new twists and turns to the alleged Madoff swindle.
First is the sheer enormity of it. Anyone who believes that one man managed to doctor $50 billion worth of money away from clients over the space of a decade or more, and nobody else was in the know or complicit in the fraud needs a mental examination.
Let's think about this folks. There were account statements sent to customers, there were forms filed with the SEC and other regulators, there were tax returns, there were internal books of account kept. All of this had to balance and show that everything was on the "up and up" during the entire time.
Does anyone actually believe that these thousands of documents were correlated, produced and distributed by exactly one individual and nobody else anywhere up or down the line knew about it, was complicit in it, or assisted?
Neither do I.
Who might be on the list of people that "might have known"? Well, we can start with the SEC, can't we, since Barron's wrote an article on May 7th of 2001 entitled "Don't Ask, Don't Tell." There's little doubt that once something hits the mainstream press its "secret", right?
Now let's focus on a few other things. Chief among them is an apparent family tie between the Madoff's and a former Assistant Director of the SEC from 1996 to 2006.
True? I don't know. But it sure as hell is suspicious, isn't it?
$50 billion is not a small amount of money by anyone's measure. But before one cries too big of a river for those who lost it all in what appears to be the biggest Ponzi Scheme of all time, one should note that a number of people interviewed said they figured Madoff was "cheating" since he was a market maker and had returns they couldn't explain - they just didn't think he was cheating them! A knowing scam? You decide.
The true scam here isn't Madoff though. Its that this sort of attitude - bed, bribe, lie, browbeat and cajole - has become all of what Wall Street is about over the last ten years.
See, we had "investment banks" who "paid to play" with their bond ratings - ratings that were modeled by a computer that was told to assume "house prices will never go down."
Never?
We had other models that "assumed" various ratios (such as debt to income) for no-doc loans, where people didn't even bother stating an income - and others who simply took the "stated" income and believed it - even though HUD itself did a study that showed that a plurality of so-called "stated" income loans overstated actual income by as much as 50%! Fraudulent on its face? You decide.
We had our current Treasury Secretary who appeared before the SEC and Congress in 2000 to lobby for the removal of leverage limits, was told (quite literally) to go to hell - that what was he was asking for was unsafe - but he had the audacity to come back four years later with the same request and ramrodded it through. The result? Bear Stearns, Lehman Brothers, AIG, Fannie and Freddie - all "boomed" with leverage more than double the previous legally-mandated limit. Is Paulson responsible? You decide.
We have sitting Congresspeople who got "preferred rates" on loans from Countrywide Financial with cumulative benefits in the tens of thousands of dollars while they were voting to create (or not) additional regulations on the lending industry. Crooked? You decide.
We have a Federal Reserve who's previous chairman created a speculative bubble in the Internet space and when it popped, he knew this should and must lead to the default of the bad debt taken on. But instead of allowing that, he (along with Congress) intentionally blew an even bigger bubble in housing and the American Consumer. Our current Fed Chairman was a member of the Federal Reserve at the time and saw this happen, but made no comment about it. Congress was repeatedly warned that what was happening was unsustainable and did nothing. Idiotic at best, criminally negligent at worst? You decide.
Is all this an accident? Or is it racketeering?
Simply put, is there a predicate felony in here somewhere, and two or more people conspiring to swindle others? If so, RICO may apply.
Or will it?
Mr. Obama is now officially President-elect, the electors having sat and voted, and will be inaugurated on January 20th (Yes, I know, Congress must "accept" the results, but the fact is that the actual vote - of the electors - has now happened.)
To Mr. Obama - are you going to sit still for this swindle?
In your home state, where I lived for 13 years, corruption was a way of public life. The jokes about dead people voting in Chicago weren't just the stuff people chuckled about over a drink in the bar - there really were people who had passed away that consistently cast ballots in elections, never mind the old saw about Chicago machine politics: vote early and often.
America is tired of the crap President Obama. We're sick of being lied to, swindled and robbed. We understand (even if we would like to deny it) that the so-called "economic growth" of the last ten years has been a fraud - our wages have barely budged, our cost of living has gone up, and we've been drowning in an ever-increasing amount of debt.
Oh sure, we still believe in Santa Claus when it comes wrapped in a flag with a 10 gallon hat and "Uncle Sam" emblazoned across his chest; we think we can have free medical care, free social security and free energy.
At least when we're dreaming.
What America needs right now President Obama is the truth.
The God's Honest Truth.
We can't have things for free.
We can't spend more than we make.
Houses can't sell for more than 3x incomes and be sustainable. Prices must come down.
We can't keep charging up the nation's (or our personal) credit cards.
We can't have both good-paying jobs in the US and $30 DVD players. Pick one but don't bitch when the other disappears.
We can't tax or spend our way out of this mess. The bad debt must be defaulted, and this will mean bankruptcies among both people and companies (including banks) - lots of them. This is inevitable.
We can't kick the can down the road any longer. The mathematics do not lie and can no longer be ignored. The longer we continue to deny and kick the can the worse the destruction will be in our economy, employment and capital markets.
The swindlers must go to jail. It is the only deterrent that works.
You, President Obama, have a choice. You can either play the same game that President Bush did, listening to the same hopelessly-corrupt and compromised "advisers" and doing what they put forward, which incidentally got us in this mess in the first place or you can think on your own, do the math on your own, and then do the right thing.
You get only one shot at this; your first term is four years and frankly, sir, you don't have it. You've got about six months to demonstrate that this nation is going to stop all of the stupidity that led us to this special place in Hell before your halo effect from the election wears off, and if you have not done so by then the damage will be irreversible.
Me?
I'm planning for the worst, because while you may be from the Land of Lincoln, I don't believe you have what it takes.
Prove me wrong sir, and make me proud of our nation and its President.
If you dare.
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