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JPMorgan, Madoff, And Why No One Dared Ask "The Cult" Any "Serious Questions As Long As The Performance Is Good"

Tyler Durden's picture




 

As was well-known in advance, today JPMorgan entered into a deferred prosecution agreement with the DOJ, whereby Jamie Dimon's enterprise, where legal fees and litigation charges are no longer "non-recurring" items but a cost of doing business, paid $1.7 billion (non tax-deductible) to settle all criminal charges that it was aware well in advance that Madoff was a ponzi scheme and did nothing to alert authorities or the general public. What was less known is just how acutely JPM was aware of the developments at Madoff's pyramid scheme, and that while apparently JPM was not convinced enough of Madoff's criminality to alert regulators using "Suspicious Activity Reports", it had seen enough to quietly reduce its exposure with the Ponzi from $369 million at the beginning of October 2008, or just after the Lehman collapse, to just $81 million at the time of Madoff's arrest.

There is much more on the sequence of events in JPM's realization that Madoff was a fraud (see filing below), but the punchline is the following extract from lengthy internal email in October 2008 by a JPM trading analyst that raised concerns about Madoff's investment returns, and which explains why frauds are never caught until it is too late: "The October 16 Memo ended with the observation that: "[t]here are various elements in the story that could make us nervous," including the fund managers "apparent fear of Madoff, where no one dares to ask any serious questions as long as the performance is good.... personnel at one feeder fund seem[ed] very defensive and almost scared of Madoff. They seem unwilling to ask him any difficult questions and seem to be considering his 'interests' before those of the investors. It's almost a cult he seems to have fostered."

And there you have the biggest failing of modern capital markets in a nutshell: nobody dares to ask any serious questions as long as the performance is good, and where there a cult-like following of the ringleader (see Central Banks). By the time the performance turns bad, and all the overdue questions are finally asked, it is always too late, and the cult blows up.

What is strangely missing in today's action by the DOJ, which slams JPM (rightfully), is any mention of the SEC, you know - the regulators - those people whose job it was to catch Madoff in the act. Because while pocketing $1.7 billion from JPM may be an enjoyable exercise in populist propaganda for an administration that suddenly realizes it has created an unprecedented social class hatred schism and needs to punish bankers on a recurring, monthly basis, where is there any mention of the SEC's fault for being completely oblivious to what JPM uncovered on its own? And yes, JPM did not alert the authorities, but at the end of the day its fiduciary obligations are first and foremost to its shareholders, which it executed, and not to a gullible public which opted for yet another "get rich quick" scheme, hoping foolishly that the SEC has some idea what it is doing.

Finally, we can't help but wonder: when the current bubble to end all bubbles implodes, who will be punished for failing to point out that the emperor is naked, and that it is the cult of the Federal Reserve and its central bank peers around the globe, that have created the biggest Ponzi scheme the world has ever seen?

For those curious about the details of how JPM succeeded in realizing what the SEC failed to grasp, despite numerous vocal warnings from Harry Markopolos, read on.

From U.S. v. JPMorgan Chase - Deferred Prosecution Agreement Packet, Exhibit C

October 2008: JPMC Concludes In A Report To U.K. Regulators That Madoff s Returns Are Probably Too Good To Be True

In mid-September 2008, following the collapse of Lehman Brothers and growing concerns about counter-party risk, JPMCs Head of Global Equities directed investment bank personnel to substantially reduce JPMC's exposure to hedge funds, which had increased following JPMCs March 2008 acquisition of Bear Stearns. This directive was reiterated by the Investment Bank Risk Committee on October 3, 2008. Acting at the direction of the Head of Global Equities, the Equity Exotics Desk began analyzing which hedge funds to reduce exposure to, including by directing the Desk's due diligence analyst (the "Equity Exotics Analyst") to scrutinize investments in various hedge funds, including the Madoff feeder funds. The Equity Exotics Analyst conducted this due diligence by, among other things, analyzing the reported strategy and returns of Madoff Securities, speaking to personnel at Madoff feeder funds and financial institutions administering Madoff feeder funds, and unsuccessfully seeking from the feeder funds and administrators documentary proof of the assets of Madoff Securities.

On October 16, 2008, the Equity Exotics Analyst wrote a lengthy e-mail to the head of the Equity Exotics Desk and others summarizing his conclusions (the "October 16 Memo"), The October 16 Memo described the inability of JPMC or the feeder funds to validate Madoff s trading activity or custody of assets. The October 16 Memo noted that the feeder funds were audited by major accounting firms, which had issued unqualified opinions for 2007, but questioned Madoff s "odd choice" of a small, unknown accounting firm. The October 16, 2008 Memo reported that personnel from one of the feeder funds "said they were reassured by the claim that FINRA and the SEC performed occasional audits of Madoff," but that they "appear not to have seen any evidence of the reviews or findings," The October 16 Memo also questioned the reliability of information provided by the feeder funds and the willingness of the feeder funds to obtain verifying information from Madoff. For example, the memo reported that personnel at one feeder fund "seem[ed] very defensive and almost scared of Madoff. They seem unwilling to ask him any difficult questions and seem to be considering his 'interests' before those of the investors. It's almost a cult he seems to have fostered." The Equity Exotics Analyst further wrote that there was both a "lack of transparency" into Madoff Securities and "a resistance on the part of Madoff to provide meaningful disclosure."

The October 16 Memo ended with the observation that: "[t]here are various elements in the story that could make us nervous," including the fund managers "apparent fear of Madoff, where no one dares to ask any serious questions as long as the performance is good." The October 16 Memo concluded: "I could go on but we seem to be relying on Madoff s integrity (or the [feeder funds'] belief in Madoff s integrity) and the quality of the due diligence work (initial and ongoing) done by the custodians . . . to ensure that the assets actually exist and are properly custodied, If some[thing] were to happen with the funds, our recourse would be to the custodians and whether they had been negligent or grossly negligent."

The Head of Due Diligence responded by complimenting the Equity Exotics Analyst on the October 16 Memo, making reference to other long-running fraud schemes, and suggesting in a joking manner that they should visit the Madoff Securities accountant's office in New City, New York to make sure it was not a "car wash."

* * *

JPMC's Redemptions From Madoff Feeder Funds

On October 16, 2008 — the day of the October 16 Memo — an Equity Exotics employee requested by e-mail a "list of all external trades and the exact counterparty trade" for each of the Madoff-related feeder funds, noting that "[t]le list needs to be exhaustive as we may be terminating all of these trades and we cannot afford missing any." The Equity Exotics Desk, which had already placed redemption orders for approximately $78 million from the Madoff feeder funds between October 1 and October 15, thereafter sought to redeem almost all of its remaining money in the Madoff feeder funds.

In addition to redeeming its positions in the Madoff feeder funds, JPMC sought, with the assistance of legal counsel, to cancel or otherwise unwind certain of the structured products issued related to the performance of the Madoff feeder funds. In an attempt to unwind these transactions, JPMC told the distributors of the Madoff notes that it was invoking a provision of the derivatives contract that enabled it to de-link the notes from the performance of the Madoff feeder funds if JPMC could not obtain satisfactory information about its investment. For example, in a letter dated October 27, 2008, JPMC warned that it would declare a "Lock-In Event" under the terms of the contract unless the recipient — a distributor that the Equity Exotics Analyst had spoken to as part of his due diligence underlying the October 16 Memo — could provide the identity of all of Madoff Securities' options counterparties by 5:00 PM the following day.

In the Fall of 2008, the amount of JPMC's position in Madoff feeder funds fell from approximately $369 million at the beginning of October 2008 (which was down slightly from its high-water mark of $379 million, in July 2008) to approximately $81 million at the time of Madoff s arrest, on December 11, 2008 — a reduction of approximately $288 million, or approximately 80% of JPMC's proprietary capital invested as a hedge in Madoff feeder funds. During the same period, JPMC spent approximately $19 million buying back Madoff-linked notes and approximately $55 million to unwind a swap transaction with a Madoff feeder fund that eliminated JPMC's contractual obligation with respect to those structured products. When Madoff was arrested, JIPMC booked a loss of approximately $40 million, substantially less than the approximately $250 million it would have lost but for these transactions.

At the same time, the Equity Exotics Desk also held through the time of Madoff s arrest a gap note providing JPMC with $5 million in protection if the value of a Madoff feeder fund collapsed completely. In a November 28, 2008 e-mail, an Equity Exotics banker declined a third party's request to buy this protective gap note from JPMC, and described the gap note as being "as of today. . . very valuable" to JPMC.

 

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Tue, 01/07/2014 - 19:06 | 4309588 samsara
samsara's picture

Why were they afraid?

Word on the street is that all the big money was being funneled to a small country in the ME......

Thus re-enforcing a "Don't ask questions if you want to stay healthy."

Tue, 01/07/2014 - 19:21 | 4309627 wintermute
wintermute's picture

The SEC completely missed all the warning emails about Madoff because they were covered by windows permanently open on porn sites.

I mean, they had to make an executive decision about the best use of screen space after the biggest financial crisis for 100 years...

Tue, 01/07/2014 - 19:27 | 4309651 samsara
samsara's picture

If you think it was entirely incompetence, You're missing it.

They watched porn, because, well what else you gonna do all day if you ask your boss If you can go after them and he says..... " if you make one move like that, you will never work again, Stay healthy, Go back to your desk until it's time to go home"

Porn it is I guess......

Tue, 01/07/2014 - 19:40 | 4309679 Divided States ...
Divided States of America's picture

Madoff got balls...he fucked his own tribe.

Tue, 01/07/2014 - 20:09 | 4309762 negative rates
negative rates's picture

Yea, he didn't need to be badgered by any stinkin regulators, most of them were just as guilty as Madoff anyhoos.

Tue, 01/07/2014 - 20:54 | 4309884 AlaricBalth
AlaricBalth's picture

List of Madoff investors:
Access International Advisers, New York-based investment firm may have lost $1.4 billion in assets, according to Bloomberg.
Aozora Bank Ltd. The Japanese bank had 12.4 billion yen ($137 million) invested with Madoff, according to Bloomberg.
Banco Santander – Spanish bank reported yesterday that clients of one of its Swiss subsidiaries have lost $3 billion.
Banque Bénédict Hentsch – $47.5 million worth of client assets at risk.
Basically everyone at the Palm Beach Country Club – Madoff has belonged since 1996. "I’m taking care of my sick mother-in-law," one member, Richard Spring, 73, told the Times. "My wife has cancer. I just can’t deal with it. I’m cooked."
Bank Medici - The Austrian bank has two funds with a combined $2.1 billion invested with Madoff.
BBVA - second largest bank in Spain; potential $404 million in losses, according to Bloomberg
Benbassat & Cie Swiss bank has 1.1 billion francs, or $935 million, at .stake, according to la France via Reuters.
BNP Paribas – Did not invest directly in the Madoff funds but has 350 million euros, or about $500 million, at risk through trades and loans to hedge funds.
Bramdean Alternatives – British asset manager lost $19 million, or 9 percent of the company, according to a statement. The female CEO is being pilloried in the press: "I am an ordinary person who manages pension funds for pensioners. If I was a male fund manager this would not happen. Someone has to take a stand. If women are persecuted in this way you won't have any female fund managers. This could destroy me," she told the Evening Standard.
Carl & Ruth Shapiro Family Foundation – 99-year-old Boston philanthropist Carl Shapiro's foundation lost $145 million, almost half its money, according to the Boston Globe
Clal Insurance Israeli insurance company, $778,000, according to Bloomberg
Chais Family Foundation – Gives out some $12.5 million each year to Jewish causes in Israel, the former Soviet Union, and Eastern Europe; announced yesterday that it had closed after losing all of its money through investments with Madoff.
CNP Assurances The French insurance company could lose up to $4.1 million, according to Bloomberg
Elie Wiesel Foundation for Humanity – Invested money with Madoff — its losses are thus far unknown.
EIM Group – European investment manager has $230 million exposed.
Dexia SA The Belgian financial had $106.9 million wrapped up with Madoff, according to Bloomberg
Fairfield, Conn. – $42 million, or 15 percent of the town's retiree pension fund.
Fix Asset Management $400 million.
Fortis Bank Netherlands $1.4 billion at risk, despite lacking direct exposure to Madoff’s firm, according to the AP.
Madoff employees – "Generations of employees had worked for Madoff and invested their savings there."
Fred Wilpon – New York Mets owner, unknown.
GroupamaFrance-based international insurance group, $13.6 million, according to Bloomberg.
Harel Insurance – Israeli investment service, $14.2 million.
HSBC – $1 billion at risk.
Avram and Carol. Goldberg – The Boston-based founder of the Stop & Shop supermarket chain and his wife lost $29 million, according to reports.
J. Ezra Merkin – The GMAC LLC chairman's Ascot Partners lost most of its $1.8 billion, according to the Journal.
Jewish Community Foundation of Los Angeles – $18 million of the Foundation's Common Investment Pool (currently valued at 11 percent of its assets) was invested with Madoff.
The JEHTFoundation As commenter Sleater noted below, the JEHT Foundation, a nonprofit in downtown New York that promoted reform of the criminal and juvenile justice systems, has been felled by Madoff and will close, according to its web site, at the end of January 2009. According to the Web site: "The funds of the donors to the Foundation, Jeanne Levy-Church and Kenneth Levy-Church, were managed by Bernard L. Madoff, a prominent financial advisor who was arrested last week for defrauding investors out of billions of dollars."
Julian J. Levitt Foundation – Texas-based Jewish charity, lost about $6 million.
Kingate Management Ltd. – $3.5 billion at risk, according to Bloomberg.
Korea Life Insurance Co – $50 million.
Korea Teachers pension – Has $9.1 million indirectly invested.
Leonard Litwin The 93 year old real estate mogul has lost an as yet undetermined amount of money. This is not his only loss this year –Litwin narrowly missed making the Forbes 400 Richest Americans list and instead ended up on the “82 American billionaires too poor to make the list” list.
The Madoff Family Foundation – Madoff's own charity gave to the Memorial Sloan Kettering Hospital, Leukemia and Lymphoma Society, Lincoln Center, Robin Hood Foundation, and others. Its $19 million is gone, obviously.
Man Group PLC – The world's largest publicly traded hedge-fund manager, $360 million.
Maxam Capital Management – Darien-based hedge fund helmed by Sandra "Jerry Maguire of hedge funds" Manzke lost $280 million. "I'm wiped out," Manzke told the Journal.
M&B Capital Advisors – Spanish hedge funds had $578 million invested.
Mediobanca Italian investment bank, $671,00, according to Bloomberg.
Mirabaud & Cie. Lost “a few million Swiss Francs” according to Reuters via Le Temps.
Mort Zuckerman’s charitable trust Losses stand at $30 million, or 10% of the trust. “That was still a big chunk of money that was intended to go to worthier causes than shall we say Mr. Madoff,” said Zuckerman in an interview with CNBC.
Mitsubishi UFJ Financial Group Inc. $11 million.
Natixis The French corporate and investment bank could lose up to $614 million, according to Bloomberg.
New Jersey Senator Frank Lautenberg – "One of the wealthiest members of the Senate, entrusted his family's charitable foundation to Madoff. Lautenberg's attorney, Michael Griffinger, said they weren't yet sure the extent of the foundation's losses, but that the bulk of its investments had been handled by Madoff."
Nomura Holdings Inc. – Tokyo investment firm; said today it had $302 million in exposure.
Norman Braman – Former Philadelphia Eagles owner, unknown.
The North Shore-Long Island Jewish Health System – $5 million.
Notz, Stucki & Cie International portfolio management group; undetermined amount, according to Bloomberg.
Neue Privat Bank – Acknowledged being at risk.
Oak Ridge Country Club members A few members of this predominantly Jewish country club in Hopkins, Minnesota have lost perhaps almost $100 million, according to the St. Paul-Minneapolis Star Tribune.
Pioneer Alternative Investments – Irish hedge fund invested all of its $280 million in assets with Madoff — gone.
Phoenix Holdings According to Reuters, the insurance unit of this Israeli bank had $15 million invested in funds managed by Thema that followed Madoff’s investment strategy.
Robert I. Lappin Charitable Foundation – The Boston-based charity, which financed trips for Jewish youth to Israel, announced last week: "The money needed to fund the programs of the Lappin Foundation is gone. The foundation staff has been terminated today."
Royal Bank of Scotland – $600 million exposed.
Royal Bank of Canada Less than $40 million ($50 million Canadian).
Societe Generale – The French bank lost less than $13.46 million dollars, which it called a "negligible" amount.
Sumitomo Life Insurance Co. The Japanese company had $22 million (2 billion yen) involved, but put their losses at only “several hundred million yen” according to AFP.
Technion The Israel Institute of Technology in Haifa could lose $6.5 million.
Tremont Capital Management This advisor to hedge-fund portfolios has about 7% of its $2.7 billion in assets exposed to Madoff.
Walter M. Noel Jr. and the Fairfield Greenwich Group – The Fairfield Greenwich Group invested billions of dollars with Madoff over twenty years, and has lost approximately $7.5 billion. “[Noel] was a person of superb ethics, and this has to cut him to the quick,” George L. Ball, a colleague of the founder, told the Times.
The Wunderkinder Foundation – Steven Spielberg's charity. "In 2006, the Madoff firm accounted for roughly 70% of the foundation's interest and dividend income, according to regulatory filings."
224 funds and investment vehicles in Spain The Spanish stock market regulator CNMV has not yet revealed their names, but as of October 31, they had a combined 106.9 million euros directly exposed to Madoff.
Reichmuth's Reichmuth Matterhorn fund – 385 million Swiss francs, or $327 million, in potential losses.
UniCredit SpA The Italy based cross-European banking company has a potential $102.5 million involved, though the company told Corriere della Sera, the Italian newspaper, that “exposure…was 'equal to zero' in Italy and 'very limited' overall.”
Union Bancaire Privee Swiss asset management bank, $1.08 billion.
Yeshiva University – "Sources close to Yeshiva University, where Madoff served as treasurer of the board of trustees and chairman of the board of Y.U.’s Sy Syms School of Business until he resigned last week, said that the school has lost tens of millions of dollars, if not more," according to Jewish and Israel News.

Tue, 01/07/2014 - 20:27 | 4309822 J S Bach
J S Bach's picture

Madoff got balls...he fucked his own tribe.

 

And that's the ONLY reason he was prosecuted.

Tue, 01/07/2014 - 20:32 | 4309837 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

The Jew has always been a people with definite racial characteristics and never a religion. -Adolf Hitler (Mein Kampf)

Wed, 01/08/2014 - 01:19 | 4310630 dunce
dunce's picture

Yes, most of his victims were other Jews, but these extortions effectively make non Jew bank shareholders that had nothing to do with the scam  make the victims whole. Wealth redistribution.

Wed, 01/08/2014 - 14:12 | 4312140 Rafferty
Rafferty's picture

I don't have the link but I read at the time what seemed to be conclusive evidence that this was all a smokescreen. Purpose was to portray that this wasn't yet another case of the tribe shafting gullible goys, rather they were victims as well.  If they were shafted it'd be a first.

Tue, 01/07/2014 - 21:27 | 4309980 MeelionDollerBogus
MeelionDollerBogus's picture

no, no, it's "Regulatory enforcements manuals for 'mature audiences only' "

LOL

Tue, 01/07/2014 - 20:23 | 4309808 logicalman
logicalman's picture

If my guess is correct, regarding the ME country you are referring to, they have some pretty heavy duty enforcers.

Tue, 01/07/2014 - 21:32 | 4309995 willwork4food
willwork4food's picture

And many of their enforcers are members of the US .gov.

Tue, 01/07/2014 - 23:01 | 4310243 logicalman
logicalman's picture

some are dual citizens

Tue, 01/07/2014 - 21:19 | 4309961 optimator
optimator's picture

Wired from Switzerland.

Tue, 01/07/2014 - 19:07 | 4309590 666
666's picture

For every $1B one steals, if caught, one pays a fine of $1M.

Gee, I wonder why there are so many crooks?

Tue, 01/07/2014 - 19:49 | 4309708 dick cheneys ghost
dick cheneys ghost's picture

dont do the crime if you cant pay the FINE

~~~

Tue, 01/07/2014 - 22:01 | 4310083 hidingfromhelis
hidingfromhelis's picture

Since there's never any admission of wrong-doing, it's not really a fine but simply the cost of doing business.  Oh, and you only pay it when someone wants to give the appearance that financial crime is taken seriously.  Even when coupled with lobbying expenses, the ROI is still astronomical.  Paying the occasional vig in the form of a deferred (bullshit-no!) prosecution settlement amounts to peanuts.

Tue, 01/07/2014 - 19:52 | 4309713 max2205
max2205's picture

Proof that the SEC cares NOTHING about investors....nothing

Tue, 01/07/2014 - 20:51 | 4309882 SilverIsKing
SilverIsKing's picture

If Jenna Jameson was an investor, then your statement is false.

Tue, 01/07/2014 - 20:13 | 4309775 negative rates
negative rates's picture

And to think the democrates were going to try to raise a billion dollars for campain purposes in the last election.

I told them you can't raise a billion dollars, you can spend a billion dollars,  but you can't raise a billion dollars, you can raise a million dollars, if you know what ur doin.  

Tue, 01/07/2014 - 19:07 | 4309591 ebworthen
ebworthen's picture

And how different is the FED or Wall Street from Madoff?

Only difference is they are not in jail.

Tue, 01/07/2014 - 19:23 | 4309636 john39
john39's picture

Madoff's scheme was trivial compared to the size of the central bank fraud.

Tue, 01/07/2014 - 21:17 | 4309953 disabledvet
disabledvet's picture

Suck my cock and swallow bitch. This article is a complete bald face lie to appease "the TD paymaster." Here's the truth: http://en.wikipedia.org/wiki/Harry_Markopolos 9 years he was warning the SEC about these dopes. And of course "he was one that got threatened." (how can a guy who never worked for Bernie be a whistleblower again?) Now Detroit has gone belly up. Still don't think that's an important book to read? I mean "you do know what a book is" yes? And of course "it's all JP Morgans fault." Well...here's Bernie himself: http://online.wsj.com/news/articles/SB1000142405270230372210457924270372... he says "only one other guy knew." and "he apologized to a former and now current head of the SEC." hmmmmm. "thanks." now its time to blame the bankers? you really can't make this stuff up. "his caddy told him he was making a fortune flipping houses...that's when he told his wife." I thought you only told your business associate...Mr. Ponzi? stay long treasuries folks...there's a couple thousand of these clowns stilling running their book...still paying out to the man....and wondering why the price of gold and silver falls. "that's because the leverage is in fact a fraud." the irony of course is that those who lent into this have made a true fortune...goes to show there is a lot of truth in there too. Just not with this pathetic piece.

Tue, 01/07/2014 - 19:52 | 4309714 Musashi Miyamoto
Musashi Miyamoto's picture

Madoff made the mistake of stealing from the rich.

https://pathofmusashi.wordpress.com/2014/01/07/winter-shoes/

Tue, 01/07/2014 - 20:16 | 4309782 negative rates
negative rates's picture

The big problem is that there are simply not enough jails, yet........

Tue, 01/07/2014 - 19:07 | 4309592 One And Only
One And Only's picture

FREE CORZINE

Tue, 01/07/2014 - 19:14 | 4309604 jubber
jubber's picture

Why doesn't that useless prick Rand Paul, or ryan stand up in Congress and insist that someone goes to jail for this shit, rather than wanking off day after day

Tue, 01/07/2014 - 19:28 | 4309645 Harbanger
Harbanger's picture

Some people have political enemies, some people just talk shit from their mothers basement.  What have you done to make a difference?

Tue, 01/07/2014 - 19:58 | 4309726 caShOnlY
caShOnlY's picture

Why doesn't that useless prick Rand Paul, or ryan stand up in Congress and insist that someone goes to jail for this shit

because being found dead after the car accident with the gay lover's balls you never knew in your throat is a great deterrent. 

Tue, 01/07/2014 - 20:16 | 4309783 negative rates
negative rates's picture

See my above post.

Wed, 01/08/2014 - 14:16 | 4312160 Rafferty
Rafferty's picture

RP has sold out.  Or been given an offer he can't refuse.

Tue, 01/07/2014 - 19:15 | 4309608 Seasmoke
Seasmoke's picture

But surely Ruth is living the good life in Israel. 

 

Harry Markopolous for President of the World !!!!

Tue, 01/07/2014 - 20:18 | 4309786 negative rates
negative rates's picture

Oh yea, when all else fails call on ur buddies to do the dirty work.

Tue, 01/07/2014 - 19:15 | 4309611 Goldilocks
Goldilocks's picture

Protective custody
http://en.wikipedia.org/wiki/Protective_custody

Foster the People -Pumped up kicks
http://www.youtube.com/watch?v=b3DM_KV0x-w (4:13)

Tue, 01/07/2014 - 19:16 | 4309613 22winmag
22winmag's picture

Chris Christie was essentially Bernie Madoff's lobbyist when he worked at the Securities Industry Association. 

 

Some people say that's why Romney passed him over as candidate for VP.

 

But hey, that's all water under the bridge now.

Tue, 01/07/2014 - 19:19 | 4309624 Fix-ItSilly
Fix-ItSilly's picture

If the US Govt bailed out Madoff, as it did JPM, Madoff could have written a "get out of jail" check too!

Tue, 01/07/2014 - 19:21 | 4309628 buzzsaw99
buzzsaw99's picture

if you're in the tribe you make a profit even when you get totally ripped off.

Tue, 01/07/2014 - 19:52 | 4309703 TruthInSunshine
TruthInSunshine's picture

As a member "of the tribe" via maternal ancestry (and not by dogma, religious or otherwise, nor any support of Zionism - some call me "self-hating"), I've been witness to Jew-on-Jew financial brutality & criminality many, many times.

When one's god is a Golden Calf, as they say...

Tue, 01/07/2014 - 19:21 | 4309629 starman
starman's picture

Bernanke , Madoff , Paulson , Jamie Diamon

they're all the same!

Tue, 01/07/2014 - 19:57 | 4309728 ebworthen
ebworthen's picture

Bernanke and Paulson thumbed you down; they still see themselves as noble public servants, just like the Honorable Jon Corzine.

Tue, 01/07/2014 - 20:19 | 4309792 negative rates
negative rates's picture

Would that be the honorable Booker T version, or the do not disturb one?

Tue, 01/07/2014 - 19:22 | 4309632 Fix-ItSilly
Fix-ItSilly's picture

Maybe certain Congressman should be queried as to why they are permiting new, substantial taxes.  After all, all these bank fines are only passed on to the public.  The banks serve as the black hat collection agency without any Govt attempt to punish behaviour.

Tue, 01/07/2014 - 19:52 | 4309710 One And Only
One And Only's picture

All taxes are passed on to the public. That's why I've never understood why people want corporations to pay more in taxes. Essentially the corporation i. raises the price of the product, or ii. lays off workers or outsources to other countries.

Second point is that most of the politicians are complicit in this fraud or associated with some other fraud. Taxpayers/citizens operate under this convoluted misconception that the government is there to help you or keep you safe. Aside from protecting against a foreign invasion government is pretty harmful and the bigger it gets the more harmful it becomes. The US federal government is HUGE and the bigger it has become they have: destroyed our education system, usurped all forms of privacy, obliterated the middle class, stolen from everyone through inflation, and destroyed the healthcare system. Americans are fatter, dumber, and poorer than any other time in American history and it's not coincidental that the federal government is larger than it has ever been in history.

Tue, 01/07/2014 - 19:24 | 4309639 itstippy
itstippy's picture

Every single one of Madoff's wealthy clients knew the game was rigged.  They all thought Madoff had a super web of contacts and was trading insider tips.  Wealthy clients were lined up to join Madoff's scam, confident that they could get in at the top of the food chain and make money by fleecing all the other less connected investors.  They had NO ethical problem with this - it was their right as members of the 1% to fuck over the "Mom & Pop" connectionless sheep and make money.

When it turned out the wealthy investors themselves were the patsies they cried foul very loudly.  BAAA!  BAAA BAAA BAAA! they cried.  

Damn, I enjoyed watching the Madoff fiasco unfold.  

 

Tue, 01/07/2014 - 19:50 | 4309709 SAT 800
SAT 800's picture

You're completely wrong. Read the book; as usual; if you actually want to know something instead of just making up stories.

Tue, 01/07/2014 - 20:22 | 4309801 itstippy
itstippy's picture

I've read numerous articles about the Madoff ponzie.  I watched the whole thing unfold.

Madoff had multiple "feeders" who would prowl upscale country clubs to find wealthy "upper crust" clients.  The come-on was that you couldn't get in on Bernie's investments unless you had a very sizable sum to invest and were legitimately wealthy and upper-class.  Walter Noel and his family were the best of the feeders.  They steered huge sums of money into Madoff's scam by lining up greedy wealthy snobs.

Tue, 01/07/2014 - 21:58 | 4310075 Caviar Emptor
Caviar Emptor's picture

You are close to the truth. The wealthy snobs believed that Madoff simply had a skim: he had been head of NASDAQ from it's inception and championed electronic trading, taking the game away from NYSE specialists. They thought he was at the top of the electronic food chain like HFT algos are now, knowing what all the bids and asks are and arbitraging every trade. They didn't know about his connections to the Italian mafia from his old neighborhood.

Wed, 01/08/2014 - 02:01 | 4310684 Shylockracy
Shylockracy's picture

Yes, the italians...

Tue, 01/07/2014 - 19:27 | 4309650 MsCreant
MsCreant's picture

The whole thing is a daisy chain Ponzi scam which includes government, TBTF banks, NSA and computing businesses, and the Fed. Made-off was sacrificed to save the rest of the chain. Insiders withdrew their tentacles to avoid a big hit.

Are you confused?

Any questions?

I am stating the obvious, apologies. This is our Orwellian world.

Tue, 01/07/2014 - 19:34 | 4309669 samsara
samsara's picture

You got it Babe...

As usual MsCreant....

(Never told you, But I love your avatar)

Tue, 01/07/2014 - 22:36 | 4310181 MsCreant
MsCreant's picture

MsCreant came to this website a few years ago pissed off, with questions. She has a gun pointed at you, she is doing the asking, and she won't take crap. I like her too!

Here is the original:

http://jamesreasoner.blogspot.com/2013_09_01_archive.html

I like your screen name, very much!

Tue, 01/07/2014 - 23:39 | 4310371 samsara
samsara's picture

I knew it was a book cover from the '40s

And Thank you,  Most people think it's about Sam and Sara....

(Maybe you did?)

But really  it's a Buddhist term

Cycle of Life... "The Wandering...'

http://en.wikipedia.org/wiki/Sa%E1%B9%83s%C4%81ra

Keep Cool as you are...

(Watch out for the trolls, it's getting worse)

Wed, 01/08/2014 - 05:14 | 4310804 StychoKiller
StychoKiller's picture

I hope you come back and read this pic...

Tue, 01/07/2014 - 22:04 | 4310088 Papasmurf
Papasmurf's picture

Madoff left them no choice but to proscute him when he declared he was operating a ponzi to the media in the middle of Manhattan.  If he had dodged, diverted and denied, he would have gotten away with it just like Corzine.

Tue, 01/07/2014 - 19:31 | 4309657 JuliaS
JuliaS's picture

Madoff's firm got audited by the SEC 7 times in 14 years and no faults were found despite no actual trades ever taking place. That's no trades at all! Not inflated, misrepresented or salted trades. No investment trades, period! I guess someone didn't get his semi-anual bribe in time.

Tue, 01/07/2014 - 19:37 | 4309659 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Speaking of no one asking concerning the FED and SEC in relation to them covering up illegal securites (specifically the Black Rock Trust Fund) right after 9/11.

http://www.wanttoknow.info/911/black_eagle_trust_fund

There is more to the article but this is key sections are quoted here. Not saying the FED and the SEC were behind 9/11 but they sure as hell were involved in covering up illegal covert securities that were to expire on 9/12/2001

...

The 9/11 Cover-up and the Black Eagle Trust

With an understanding of the economic war being waged on the Soviet Union, the focus needs to turn to reports that on September 11, 1991, President George Bush was responsible for issuing $240 billion dollars in secretive bonds as a part of this attack on the Russian ruble. There are six lines of evidence from eight sources that suggest this was indeed the case. Many of these instances are corroborated with documents available on the Internet, presented by those making the claims.

The bonds sat for ten years, like a ticking time bomb. They had to be settled – or cashed in by September 12, 2001. The two firms in the U.S. most likely to be handling them would be Cantor Fitzgerald and Eurobrokers – the two largest government securities firms in the U.S. The federal agency mostly involved in investigating those transactions was the Office of Naval Intelligence. On 9/11, those same three organizations: the two largest government securities brokers and the Office of Naval Intelligence in the US took direct hits.

...

What would be even more revealing would be the actions of the Federal Reserve Bank and the Securities and Exchange Commission on that day, and in the immediate aftermath. As one of many coincidences on 9/11, the Federal Reserve Bank was operating its information system from its remote back-up site rather than it’s downtown headquarters. The SEC and Federal Reserve system remained unfazed by the attack. All of their systems continued to operate. The two major security trading firms had their trade data backed up on remote systems. Nevertheless, the Commission for the first time invoked its emergency powers under Securities Exchange Act Section 12(k) and issued several orders to ease certain regulatory restrictions temporarily.

The Federal Reserve Suspends the Rules

On the first day of the crisis, the SEC lifted “Rule 15c3-3: Customer Protection – Reserves and Custody of Securities.” Thus GSCC [Government Securities Clearing Corporation] was thus allowed to substitute other securities for the physical securities destroyed during the attack. “…collateral substitutions can and should be made with regard to immediately maturing collateral.” [191] At this point in time, the Federal Reserve and its GSCC had created a settlement environment totally void of controls and reporting – where it could substitute valid, new government securities for the mature, illegal securities, and not have to record where the original bad securities had come from, or where the new securities went – all because the paper for the primary brokers for US securities had been eliminated.

...

While the Fed was reporting outstanding account balances of over $100 billion per day (while not identifying the banks involved), the Wall Street Journal reported that at one point during the week after 9/11, BoNY was publicly reported to be overdue on $100 billion in payments. [198] The Deutschebank, which sat inside the WTC and was totally decimated, reported no such account balance increase, and JP Morgan, the other of only two clearing banks which uses the same traders and communications hub, reported no such increase in its account balance. No one has publicly asked: why is it that these other two banks were not seriously disrupted, while the Bank of New York – which had no structural damage – seemed unable to operate?

Certain key unknown figures in the Federal Reserve may have ‘conspired’ with key unknown figures at the Bank of New York to create a situation where $240 billion in off balance sheet securities created in 1991 as part of an official covert operation to overthrow the Soviet Union, could be cleared without publicly acknowledging their existence. These securities, originally managed by Cantor Fitzgerald, were cleared and settled in the aftermath of September 11th through the BoNY. The $100 billion account balance bubble reported by the Wall Street Journal as being experienced in the BoNY was tip of a three day operation, when these securities were moved from off-balance-sheet to the balance sheet.

[As reported on page 12 of a Federal Reserve document] “In the absence of complete information on deliveries into and out of its account at BoNY on September 11, and as a result of its assumption of settlement fails on the starting legs of blind-brokered RPs, GSCC recorded (after the close of business on September 11) $266 billion in transactions that apparently failed to settle.… Continuing connectivity problems prevented GSCC from giving BoNY delivery instructions after the close of business on September 11 and prevented it from acquiring information on activity in its account at BoNY during the day on September 12. Consequently, GSCC recorded $440 billion in settlement fails as of the close of business on September 12.” [201]

What appears to be the case is that the Federal Reserve imbalances reported on three consecutive days in the aftermath were largely concentrated at the Bank of New York, which is reported to represent over 90% of the imbalance, suggesting the Bank had been the recipient of massive fund transfers, and unable to send out transfers. Overall transactions for the day of 9/11 were seemingly down even more significantly than volume, but the transactions that came in after closing were extremely large, averaging in size in packages of $35 million or more. This would be consistent with a hypothesis that $240 billion of securities were being pushed surreptitiously into the money supply.

The Federal Reserve, without providing the detail required to substantiate it’s claims, would have the public believe that there were widespread liquidity issues, when in fact the issues were very concentrated primarily, if not singularly, in the BoNY, which has been the subject of an ongoing major money-laundering investigation for many years. These account balance issues resulted in the defacto expansion of the monetary supply, details of which are no longer reported by the Federal Reserve.

The reported cause of this market malfunction is seemingly suspect. By comparison, the Deutschebank which sat inside the World Trade Center reported no such account balance increase, and JP Morgan, the other of two clearing banks which uses the same traders and communications hub, reported no such increase in account balance. Additionally, while problems were being documented between the BoNY and GCSS, no other institution had those problems.

...

 

This right here is more than enough reason to audit the FED to see how they cooked the books to clear these securities. I bet Maddoff was involved in this too somehow or else he'd be out of jail right now like Corzine.

Tue, 01/07/2014 - 19:49 | 4309683 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Some conclusions from the article

There is a contention that at the core of the September 11th attack, someone was planning to cover the 1991 issuance of $240 billion in covert securities used to finance the collapse the Soviet Union. The facts surrounding the financial aftermath of September 11 suggest this is not only possible, but that reports describing the aftermath have deliberately been misleading.

  • The US dollar money supply was significantly increased in the aftermath of 9/11;
  • The bank at the core of the illegal money laundering by ex-Soviet criminals was the source of the increased money supply (BoNY);
  • The generally disseminated rationale for BoNY’s operational problems seems to have affected no other bank in a similar manner or magnitude and is inconsistent with reports on the BoNY operations in the aftermath;
  • A key witness who might provide insight to these issues is a statistically aberrant death;
  • The source of the BoNY’s $330 billion increase in assets is cloaked under the privilege of “private banking;”
  • The only alleged “severe” disruption to the financial systems was the Federal Reserves account balance and the securities trading fails – both systems required to hide the laundering of $240 billion in covert securities.

This is not a ‘proof’ that $240 billion was laundered, but it provides probable cause for paying serious attention.

 

As the bullshit that was fed to us after 9/11 with the rah rah patriotism head fake when a lot of us were still guilible. Never forget and that includes things like this.

Tue, 01/07/2014 - 19:53 | 4309716 samsara
samsara's picture

Now then, about those Airline Puts and the Riggs bank, (or was it BCCI?)

Tue, 01/07/2014 - 19:59 | 4309733 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

And this from the memory hole.

http://www.foxnews.com/story/2001/12/17/german-firm-probes-final-world-t...

German computer experts are working round the clock to unlock the truth behind an unexplained surge in financial transactions made just before two hijacked planes crashed into New York's World Trade Center Sept. 11. 

Were criminals responsible for the sharp rise in credit card transactions that moved through some computer systems at the WTC shortly before the planes hit the twin towers? 

Or was it coincidence that unusually large sums of money, perhaps more than $100 million, were rushed through the computers as the disaster unfolded?

...

"The suspicion is that inside information about the attack was used to send financial transaction commands and authorizations in the belief that amid all the chaos the criminals would have, at the very least, a good head start,'' said Convar director Peter Henschel. 

"Of course it is also possible that there were perfectly legitimate reasons for the unusual rise in business volume,'' he told Reuters in an interview. 

PROFITING FROM DISASTER? 

"It could turn out that Americans went on an absolute shopping binge on that Tuesday morning. But at this point there are many transactions that cannot be accounted for,'' Henschel said. 

"Not only the volume but the size of the transactions was far higher than usual for a day like that. There is a suspicion that these were possibly planned to take advantage of the chaos.''

Tue, 01/07/2014 - 21:17 | 4309950 tip e. canoe
tip e. canoe's picture

don't forget about PRISM, er, PROMIS:

This seems all the more urgent if you add to the PROMIS capabilities “that it was a given that PROMIS was used for a wide variety of purposes by intelligence agencies, including the real-time monitoring of stock transactions on all the world´s major financial markets”. 

then there's this gem:

the SEC took the unprecedented step to deputize hundreds, if not even thousands of key stakeholders in the private sector for their investigation. In a statement that was sent to almost all listed companies in the US, the SEC asked the addressed companies to assign senior staff for the investigation, who would be aware of “the sensitive nature” of the case and could be relied on to “exercise appropriate discretion”.

What happens when you deputize someone in a national security or criminal investigation is that you make it illegal for them to disclose publicly what they know. Smart move. In effect, they become government agents and are controlled by government regulations rather than their own conscience. In fact, they can be thrown into jail without a hearing if they talk publicly. I have seen this implied threat time after time with federal investigators, intelligence agents, and even members of United States Congress who are bound so tightly by secrecy oaths and agreements that they are not even able to disclose criminal activities inside the government for fear of incarceration. 

Lars Schall gets the goldstar for connecting the dots:

http://www.larsschall.com/2012/03/20/insider-trading-911-the-facts-laid-bare/
http://www.larsschall.com/2013/02/23/re-deutsche-bank-alex-brown-and-911-insider-trading/
http://www.larsschall.com/2013/09/11/911-insider-trading-revisited/

interestingly, Mr. Max Keiser plays a supporting role in Lars' telling of the story.   

Max Keiser: There are many aspects concerning these option purchases that have not been disclosed yet. I also worked at Alex Brown & Sons (ABS). Deutsche Bank bought Alex Brown & Sons in 1999. When the attacks occurred, ABS was owned by Deutsche Bank. An important person at ABS was Buzzy Krongard. I have met him several times at the offices in Baltimore. Krongard had transferred to become executive director at the CIA. The option purchases, in which ABS was involved, occurred in the offices of ABS in Baltimore. The noise which occurred between Baltimore, New York City and Langley was interesting, as you can imagine, to say the least.

funny enough, Max never responded to Lars' request in early 2013 to corroborate the tale.   maybe someone should call him out on that.

Tue, 01/07/2014 - 23:41 | 4310103 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Yes since we are digging backwards concerning PROMIS and how it ties into all this if anyone wants to read the full report which 59 pages at the site about the Black Rock Trust Fund. It starts with a company called INSLAW. The same cast of characters are all involved here in some form or another.

http://www.nytimes.com/1991/10/21/opinion/a-high-tech-watergate.html?pag...

Here is the readers digest version of the key points.

Former NSA analyst and CIA contractor Bill Hamilton started up a small database software firm called INSLAW in the 70s. The company was contracted out by the Department of Justice to develop a new hi-tech database collection-and-tracking software for law enforcement agencies. The program they developed was called PROMIS (a database program) which proved to be an equally effective intelligence tool.

It was so good, according to lawsuits and at least one federal judge, that the Reagan Administration essentially stole PROMIS from INSLAW, bankrupted the firm and hawked its own versions of PROMIS to intelligence and law enforcement agencies both in the US and abroad to allied countries.

http://www.nytimes.com/1987/06/14/us/justice-dept-is-held-in-contempt-in...

Within America, PROMIS was used by the NSA and CIA to track financial transactions to the Soviet bloc, terrorist organizations, and likely for other uses. Abroad, the hawked PROMIS software was reportedly outfitted with a backdoor to allow secret NSA and CIA access, and installed in many of our allies’ intelligence and law enforcement agencies’ systems, so that the NSA could spy on its allies by tapping into their databases.

The story is proceeds from the sales were used to fund off-book operations (*cough* Black Rock Trust Fund *cough*) and to enrich other cronies involved.

The other key point in this whole affair is this and an interesting aside on current events.

INSLAW started as non-profit funded by Justice Department government grants in the 70s and morphed into private contracting software firm under the Reagan administration in the 80s. It is a small representative slice of how the whole US military-intelligence complex has been privatizing for the past 20 plus years to the point that 70% of today’s intelligence budget flows to private contractors.

http://www.nytimes.com/2013/06/18/opinion/put-the-spies-back-under-one-r...

The implications are this, privatization and public-private contracting, did more than funnel taxpayer billions into private hands. It also blurred legal accountability. This is still a major problem now including the whole current NSA debacle and without also focusing on the private sector doing the actual work is just pissing in the wind and won't provide any meaningful long term reforms along with stopping the slide down the shiter into a totaltarian shithole.

 

My bigger point is the truth is still out there and so is the financial forensics trail to be found if we ever decide to start being Americans again and get ir done instead of hoping for corrupted institutions to investigate themselves. They hit the military and the military didn't put all these fuckers in handcuffs when they should have so it is up to us at this point there is no one else to turn to.

One conclusion we can draw the FED and SEC easing of goverment securities clearing rules was done with the express purpose to hide who was behind the Black Rock Trust Fund from the CIA and NSA through PROMIS monitoring software at the time and in turn the OSI through the Pentagon to continue the investigation so that still leads back to them being involved in covering it up afterwards. That financial forensics trail still exists within the FED and/or SEC and most likely the BoNY. The credit transactions the financial forensics most likely exist in the CIA/NSA logged information from PROMIS that day. If military was truely not compromised they'd finish the job the Office Naval Intelligence started as matter of fullfilling their oath to uphold the Constitution from enemies external and internal.

Tue, 01/07/2014 - 23:21 | 4310304 samsara
samsara's picture

I REMEMBER THAT!!!

Tue, 01/07/2014 - 23:07 | 4310260 logicalman
logicalman's picture

Sept 10, good old Mr. Rumsfeld said the Pentagon couldn't account for $2.3 Trillion

A lot of records regarding Pentagon finances were kept in building 7.

.                                  .

 

Tue, 01/07/2014 - 23:19 | 4310297 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

http://www.cbsnews.com/news/the-war-on-waste/

On Sept. 10, Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists, "the adversary's closer to home. It's the Pentagon bureaucracy," he said.

He said money wasted by the military poses a serious threat.

"In fact, it could be said it's a matter of life and death," he said.

Rumsfeld promised change but the next day – Sept. 11-- the world changed and in the rush to fund the war on terrorism, the war on waste seems to have been forgotten.

...

If you read between the lines sounds like a veiled threat directed at the Office of Naval Intelligence for investigating the Black Rock Trust Fund.

 

Tue, 01/07/2014 - 19:35 | 4309668 SillySalesmanQu...
SillySalesmanQuestion's picture

As is per the norm these days, a fine amounting to probally 2% of the total gross, a tap on the wrists from  the DOJ (Department of Jamie), "please don't get caught again Jamie", and nobody goes to jail again...What a bunch of bullshit!

Tue, 01/07/2014 - 19:46 | 4309698 P.T.Bull
P.T.Bull's picture

A ponzi is a great place to make money under two conditions: 1) you know when to get out, and 2) you don't lose your money due to a claw-back from the bankruptcy trustee. So, those who knew it was a ponzi had no incentive to call shenanigans.

Tue, 01/07/2014 - 19:53 | 4309717 Son of Captain Nemo
Son of Captain Nemo's picture

"The October 16 Memo ended with the observation that: "[t]here are various elements in the story that could make us nervous," including the fund managers "apparent fear of Madoff, where no one dares to ask any serious questions as long as the performance is good.... personnel at one feeder fund seem[ed] very defensive and almost scared of Madoff. They seem unwilling to ask him any difficult questions and seem to be considering his 'interests' before those of the investors. It's almost a cult he seems to have fostered."...

It's the ripe definition of every bureaucrat that works for the Federal Government, most important on the list the DoD and ICs.  Except with these two you add torture, murder and war crimes to the list for a monthly "paycheck" and an honorable discharge and pension.

What a perfect statement suitable for framing that describes so well this Nation's failure in everything it does including setting the example when crimes have been committed and customers "screwed"!

Tue, 01/07/2014 - 19:58 | 4309731 TrustbutVerify
TrustbutVerify's picture

Many who invested knew it was too good to be true but thought they were on the receiving end of the goody. 

Tue, 01/07/2014 - 20:04 | 4309748 Son of Captain Nemo
Son of Captain Nemo's picture

So true.

As every professor in financial management will tell you in college "the greater the risk the greater the return"... Just be careful what you wish for!

Tue, 01/07/2014 - 20:13 | 4309776 tip e. canoe
tip e. canoe's picture

goddess knows i have no love for the Morgue, but unless i'm missing something, i fail to see how any of this is (a) a crime, (b) even if it is a "crime", how it warrants a $2 BILLION fine, especially as it's public knowledge thanks to HarryMark that the SEC was in possession of similar information. 

sorry, but this sounds more like extortion by the Big O and his Gang to grab some brownie points with the sheeple.   oh by the way, whose account does this $2 BILLION go into, the US Treasury?    as if the last 7 SecTrez's haven't pulled the same exact shit?  

BWAA-HAA-HAA, what a fucking circle jerk.    flush them all down the toilet.   ALL OF EM.

Tue, 01/07/2014 - 20:44 | 4309793 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

It is free money anyways. The government wants it's skim off the top of QE like everyone else who is connected. This is all just bukake theater for the masses to obfiscate that fact.

Tue, 01/07/2014 - 20:50 | 4309880 tip e. canoe
tip e. canoe's picture

exactly, in one orifice, out the other.

rinse, repeat.

Tue, 01/07/2014 - 20:39 | 4309853 Son of Captain Nemo
Son of Captain Nemo's picture

... it's public knowledge thanks to HarryMark that the SEC was in possession of similar information. ...

Not to worry.

When this goes beyond the boiling point, as it did with Enron and 'WorldCum', the SEC on behalf of the DOJ and all of it's benefactors will see to it that the building that houses all of that electronic data and hard copy disappears into a giant pile of white dust and "fused materials", while the Bernie Ebbers, Ken Lay's and Bernie Maddoffs are frog marched to prison to take all the heat for the top of the org chart.

Same as it ever was!

Tue, 01/07/2014 - 20:21 | 4309794 virgilcaine
virgilcaine's picture

No Bankster bone-us' were harmed with this message.

Tue, 01/07/2014 - 20:22 | 4309804 NIHILIST CIPHER
NIHILIST CIPHER's picture

The Bernays effect was used with the Made-Off conviction. Basic Amerikan sheep only saw a "lone wolf" taking advantage of rich people, which is exactly what MSM was told to put out thus simple minded sheep would not connect the dots to Wall Street and the gubberment as being part of the criminal elements involved. For some reason, sheep enjoy seeing rich folks suffer a loss so no top level criminal arrests have ever been made. 

Tue, 01/07/2014 - 21:06 | 4309921 MeelionDollerBogus
MeelionDollerBogus's picture

baa-aaa-aaa-aaa!

Two teams good!
Lone wolf bad!

 

Two teams good!
Lone wolf bad!

 

 

Tue, 01/07/2014 - 20:35 | 4309843 rosiescenario
rosiescenario's picture

"They seem unwilling to ask him any difficult questions and seem to be considering his 'interests' before those of the investors. It's almost a cult he seems to have fostered."

 

...here, let me help with the right choice of words....that would be 'festered' not 'fostered'....

 

Far more frightening than these criminal financial dealings are the non-criminal, merely idiotic ones dished up from Nobel prize winning economists.

 

LTC is the classic case of brilliant minds overlooking the obvious....the same peer group that runs the Fed.

Tue, 01/07/2014 - 20:43 | 4309863 I Write Code
I Write Code's picture

All the good comments is already posted here, sniff.

Still, if the total ponzi was $50b, and JPM never had more than $380m, then they was small potatoes, so why don't I even believe the $380m number?

Tue, 01/07/2014 - 20:46 | 4309869 q99x2
q99x2's picture

Because this collapse will lead to major changes Jamie Dimon, Loyd Blankfein, Greenspan, Bernanke and Yellen will all end up in prisons.

They may even be cruel and stick them all in a cell and not allow Janet Yellen to shave.

Tue, 01/07/2014 - 21:13 | 4309938 thomasincincy
thomasincincy's picture

The only "major changes" these kinds of people understand is if you open their head like a can opener with a crow bar. Until then... yeah right

Tue, 01/07/2014 - 20:55 | 4309891 Seize Mars
Seize Mars's picture

Ok, first, note that the "deferred prosecution" check gets paid to the prosecutors. Hw can I get in on that deal? Pay the prosecutors to not prosecute me for a crime? Wow.

Secondly, if you believe that Bernie Madoff is currently sitting in a jail cell, then you haven't been paying attention.

Tue, 01/07/2014 - 21:42 | 4310012 Blano
Blano's picture

Ok, so where is he?  I'll be back in about an hour.

Tue, 01/07/2014 - 23:58 | 4310427 Seize Mars
Seize Mars's picture

Not in a jail cell. I think it's the equivalent question to "where is Jon Corzine hiding?"

Tue, 01/07/2014 - 21:52 | 4310051 BullyBearish
BullyBearish's picture

Garden variety Jews have always suffered the most from the actions of the "Chosen Jews":

--worldwide vilification

--holocaust victims after the "Chosen Jewish" bankers left the country

--fodder for each and every false flag engineered to get the next crisis ready for exploitation

Tue, 01/07/2014 - 22:34 | 4310174 SweetDoug
SweetDoug's picture

'

'

'

'

Has anyone asked the question, "Who's doing all of this fraud in JPM?"

 

"Is it just in one area, or is it all over?'

 

"Are there any overlapping people that always seem to be coming up in the investigation?"

 

I'm gonna bet there are, so when are we going to say "That's enough!" and send them to jail?

 

mmOJOmm

Tue, 01/07/2014 - 22:55 | 4310229 virgilcaine
virgilcaine's picture

The Dollar collapse will be the great equalizer. Until then expect more of the same.

Tue, 01/07/2014 - 23:03 | 4310248 Dineroguru
Dineroguru's picture

I worked at JPM when the ding-bat, social climber, that headed the Private Bank, Mary Callahan Erdoes went on the morning conference call and crowed to the world how great JPM was for knowing Bernie was a crook before it happened.  She said the bank KNEW Bernie was cooking the books and oh what a wonderful place JPM was for client assets,,, LAH TEE DAH!   She should have stayed on the high school cheerleader path-- What A DING BAT!  She was also famous for moaning into the conference call speaker "that every JP Morgan client should buy or sell something today".  What a deep thinking strategic mind!  She should be in compliance at JPM where she could really rise to the top!

Tue, 01/07/2014 - 23:03 | 4310249 Dineroguru
Dineroguru's picture

I worked at JPM when the ding-bat, social climber, that headed the Private Bank, Mary Callahan Erdoes went on the morning conference call and crowed to the world how great JPM was for knowing Bernie was a crook before it happened.  She said the bank KNEW Bernie was cooking the books and oh what a wonderful place JPM was for client assets,,, LAH TEE DAH!   She should have stayed on the high school cheerleader path-- What A DING BAT!  She was also famous for moaning into the conference call speaker "that every JP Morgan client should buy or sell something today".  What a deep thinking strategic mind!  She should be in compliance at JPM where she could really rise to the top!

Tue, 01/07/2014 - 23:23 | 4310312 esum
esum's picture

support opposition ..... you will be VIOLATED..... mulatto/muslim/commie rule #1 

Wed, 01/08/2014 - 07:59 | 4310899 overmedicatedun...
overmedicatedundersexed's picture

Miriam Carey (unarmed with her child in the car) was gunned down by multiple police and security agents on a public street in washington DC, for what crime? traffic violations...and these fuckers get time served?

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