SEC Allows Deci-Billion Dollar Ponzi Scheme to Run For Years
Bob O'Brien's Sanity Check
Posted by: bobo
12/16/2008 3:34 PM
So, you have these cops, see? They patrol the neighborhood where all the cocaine gets sold, and yet for all their hard work, the coke problem spirals out of control. Many, when they choose to leave the force, get massive pay increases by going to work for some of the private security firms long linked to the coke dealers. They will occasionally bust small time dealers, or new entrants into the market, however the very visible kingpins in the neighborhood, who drive Bentleys and have their own planes, never get looked at. In fact, should anyone suggest that a Colombian with a 4th grade education not be a legitimate multi-million dollar business owner, they will get investigated. The town's awash with coke and coke profits, but according to the cops, nobody knows where it all comes from, who is trafficking in it, or anyone that's dirty. Everyone is mystified by the coke deluge.
Sound farfetched? That's the SEC for the last decade. Scandal after scandal reveals a corrupt agency that is incapable of doing the most rudimentary diligence when it comes to investigating prominent crooks, and whose alumni routinely go to work for the same Wall Street predators they’re chartered with policing.
Now, we have one Bernie Madoff, who apparently was able to steal billions and billions, even as the SEC routinely audited and investigated. Huh. Interesting. And of course, there is the odd coincidence that a major SEC official married Bernie's brother's daughter. You know, love conquers all, etc. tinyurl.com
So what IS the SEC capable of doing right, if they can't spot a $50 billion dollar ponzi scheme in full roar? I mean, that's kind of a big rhino in the room to ignore and be blind to, correct? If they can't spot the BIGGEST FINANCIAL FRAUD IN HISTORY, what are they equipped to do? Why aren't they all being thrown out on their behinds, and their job handed to the DOJ?
The answer is simple. They were never designed to do much of anything but act as a PR agency for Wall Street - post-Pecora hearings, the SEC was created to give the impression that there was a lawman on the beat, watching the swindlers on Wall Street with an eagle eye and a determination of steel. Nothing could be further from the truth, but hey, as we are seeing literally every day now, the truth has nothing to do with anything any more.
Here's an uncomfortable truth that my readers are familiar with. The markets are a gigantic confidence game, wherein the rubes (everyone who isn't on the inside of the Wall Street elite) are systematically bilked out of their money, whilst being assured that you can get rich, rich I say, by playing the market game. It's a con. The brokers are counterfeiting massive quantities of stock on a daily basis, they are counterfeiting mortgage paper, they are counterfeiting commodities derivatives, they are counterfeiting anything they can get under their control. They have systematically reduced virtually every market worth anything into a captive casino wherein only they can apply pressure to the roulette wheel and stop it where they want.
The SEC is part of the con - the crooked cops who do F-all to protect anyone but the crooks. They make a lot of noise and bluster as they pass ineffective rules riddled with loopholes - rules designed to fail from day one. They make a big to do about busting some low level street runner, or slapping the wrist of some fringe player, but they don't dare do anything to target the players who are raping the country out of its legacy.
Oh, I know, that's all crazy talk. There's no proof any of it is true. It's all wild eyed ranting.
Except that we are seeing, in real time, how financial frauds of unprecedented scope are going on with no SEC action other than tacit support and cheerleading.
Anyone who believes that Wall Street is anything but a money laundering and redistribution machine is a dolt. Anyone who believes that the cops aren't dirty is ignoring a mountain of evidence showing they are. The nation is being systematically carved up and confiscated by the likes of Madoff, whose peers are busy conniving ways of ripping off the country tomorrow even as he takes a fall, and the SEC is playing hear no evil, see no evil.
And of course the press is there to spin, spin, spin. Look at the language. Even now, instead of the largest financial fraud in the history of the world, the NY papers are already trying to do damage control - it's now only one of the largest. No, sweetie, it isn't. It is the biggest. Not one of the biggest, or a really big one, it is THE BIGGEST OF ALL TIME. EVEN AS THE SEC WAS INVESTIGATING.
But none of this surprises me. If you believe that oil could go to $150 and then to $50, when demand and supply largely remained the same, without manipulation, you no doubt believe that it's possible to honestly miss the equivalent of someone stealing an aircraft carrier, painting it red, and parking it in the middle of Manhattan harbor. It's not. If you believe that gold can be trading at $860, when physical supply is nil and demand is through the roof (the US mint can't actually produce coins now to keep up with demand - and of course, no press members ask why they can't just buy physical gold at market and make more. The answer is of course that there are no real sellers at that price, only paper manipulators trading futures contracts, just as they manipulated oil, and that the physical asset is so removed from the "official price" that it's impossible to get physical gold at anywhere near the posted price...) then you are probably a good candidate to put your fortune into the market, and watch it vaporize over the coming months.
The message is simple - all the markets are rigged and gamed, and the connection in the scam is that delivery is a sham. The crooks and thieves figured out that you can game anything if you can eliminate checks and balances that require delivery of the actual item purchased, and can substitute accepting counterfeits and IOUs. You can manipulate prices, disconnect price from supply of the asset, destroy companies for profit, move the value of underlying assets using derivatives, BK the global financial system...you name it.
This is the market system as it exists in the US.
The cops are bent. The thieves run the game. You are the food, the raw material that goes into one end of the sausage grinder and is turned into their next meal.
And that's the tame version. The sad part is that the press is now nothing more than an arm of the swindling machine. They parrot whatever the thieves want you to hear. And other than a few websites which have been remarkably prescient, there is no dissenting opinion to the pabulum foisted off on the nation's mouth-breathing hordes. On CNBC, all is well. At the SEC, everything's fine. At the WSJ, couldn't be better. NY Times, Floyd's a gentleman and a scholar.
Of course, that doesn't even take into account the "journalists" who have built their careers publishing hatchet jobs for hedge funds. Remember, the SEC promptly put the cabosh on any subpoenas to identify that fraud. Can't have the paid-for messengers being held accountable for their crookery, after all. Tut tut, they are also above the law. Virtually everyone is, except you and me and the guy next door. The decision to squash the subpoenas is now going to come back and be the final nail in the SEC's coffin, given the emails indicating participation by Bethany in a scheme involving Copper River attempting to destroy Fairfax's share price. Note you haven't seen anything about that in the mainstream press. It's as though it never happened. Total silence instead of front page expose...
It's astounding, and sickening, and the unvarnished truth, unfortunately.
Happy Holidays.
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