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Discussion Starter #1
Saw it on TV and here's a link, I don't know how these guys get away with it for so long, seemingly the bigger the con the easier to do it.

Seems to be little financial controls by the 'watchdogs' in the financial world, can't trust anyone these days.

Repercussions for two major European banks, Santander also owns a couple of UK banks (and unfortunately one of them is mine !)


http://news.bbc.co.uk/2/hi/business/7782731.stm


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A desperate indictment of the US financial regulatory authorities, or their mandate; apparently the business was done in an unregulated entity with no oversight from any third party. Beggars belief really.

Beemie, there ain't no money! It was by all accounts a giant pyramid scheme, using cash from the most recent investors to pay the others, while creaming a fat percentage off the top. Everyone was happy until suddenly there were no new investors...
 

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A desperate indictment of the US financial regulatory authorities, or their mandate; apparently the business was done in an unregulated entity with no oversight from any third party. Beggars belief really.
It is also a desparate indictment of the oversight & accountability of the entire 'democratic' system & news media that are also supposed to provide oversight for the majority, general population.

These institutions, systematically degraded over decades by adminstrations of all flavours, are simply not fit for purpose. Madoff, Enron, Ted Stevens, Blagojevich etc etc - just the tip of the iceburg, those blatant enough to get caught, whose token demise will be used to further the myth of accountability.

Little will change after Jan 20th. Even as all this is happening, Obama has appointed advisers who were key cheerleaders for the repeal of the Glass-Steagall act (& other derugulation). G-S had previously separated high street & 'investment' banking. This completely opened the floodgates to bet the 'real' economy's cash in the pyramid casino of the massively leveraged (borrowed money) exploding derivatives market. This ensured that when the Ponzi scheme fell, as they all must do at some point, they would have to be bailed out by Governments using workers' & taxpayers' present & future earnings. 'Globalisation' also greatly weakened the ability of any States not to play along - failure to participate would have wrecked their own financial instutions ability to compete. The size of the US economy ( together with other nations fully complicit, UK ? Switzerland ? China?) ensured that all must follow the race to the bottom.

There are many insiders, CEOs, directors, bankers, credit rating cos., regulatory authority officials, politicians & their advisers who knew precisely where this was going. Not to mention a compliant corporate media still silent on any accountability for a system corrupt to the core.

In essence, this highly leveraged bubble (scam) has been encouraged by many at every turn, not least by Greenspan, disciple of Ayn Rand's neo-liberal garbage. It is little different to that which preceded the '29 crash. There's no possible excuse for this repetition - just pure fraud & greed at the highest levels of society.

Some will 'knee-jerk' reach for some '-ist' or '-ism' with which to dismiss such criticisms, as you have been trained to do like some Pavlovian dog. :rolleyes:

Just to be clear, I subscribe to no particular ideology. I favour a mixed economy, but one that works and properly balances the interests of rich and poor alike. I have no problem with entrepreneurs (in the real economy) aquiring millions even tens of millions. But they must stick to business & not be able to buy the institutions of Politics & (news, analysis) Media which are needed to protect the majority of ordinary working citizens and the environment upon which all, present & future, depend.

There are many solutions outside the myopic, tired narrative of 'left' vs 'right' - but these are the last things the corporate media want a brainwashed, dumbed-down public to hear.
 

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Discussion Starter #5
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There are many insiders, CEOs, directors, bankers, credit rating cos., regulatory authority officials, politicians & their advisers who knew precisely where this was going. Not to mention a compliant corporate media still silent on any accountability for a system corrupt to the core. ..............
It's one of the reasons I totally pulled out of trading NYSE shares just over a year ago after being in it as an amateur for nearly 20 years. I saw just too much manipulation, gross ramping, suspicious insider trading and family or owner companies creaming off huge profits and salaries then passing nil returns to public shareholders.

The whole system needs a severe regulatory overhaul, at the moment gangsters and crooks appear to be running most of it, the system is definitely rotten to the core.

Madoff set about this scam right from the start, he had no compunction in doing this and where it would lead to. He'll get 20 years for this, he'll probably die in jail as he deserves to, he's 70, and I hope all his cohorts go with him.


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Labels like Liberal or Conservative don't apply anymore. I think we are either "Perps" or "Victims". Ayn should have been labeled a super-libertarian back then.
 

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Discussion Starter #8
I vaguely remember her from Economics but had to look her up again:


Objectivism

Rand's philosophical system, Objectivism, encompasses positions on metaphysics, epistemology, ethics, politics, and aesthetics.
Objectivism embraces objective reality in metaphysics, reason in epistemology, and rational egoism in ethics. In politics she was a proponent of laissez-faire capitalism and individual rights, holding that the sole function of a proper government is protection of individual rights (including property rights) against their violation by the initiation of physical force.
She believed that individuals should choose their values and actions solely by reason. According to Rand, the individual "must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life. Because she held that faith is antithetical to reason, Rand opposed mysticism, supernaturalism, and any form of religion.
Rand considered the initiation of force or fraud to be immoral, and held that government action should consist only in protecting citizens from criminal aggression (via the police), foreign aggression (via the military), and in maintaining a system of courts to decide guilt or innocence in criminal cases and to resolve civil disputes under objective law.

Here's a list of the big bank losers:

Clients of Santander, Spain - $3.1bn
HSBC, UK - $1bn
Natixis, France - $605m
Royal Bank of Scotland, UK - $601m
BNP Paribas, France - $460m
BBVA, Spain - $400m
Man Group, UK - $360m
Reichmuth & Co, Switzerland - $325m
Nomura, Japan - $303m


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Libertarian, I can see. But given her extreme restrictions on the role of government, I can't see calling her a liberal.

I've read Atlas Shrugged and Anthem this year. Good books, and there's a lot I like about her philosophy, but she makes the same mistake as the communists she abhorred. Man cannot be perfected by the right circumstances or political system or education.

An economic system, like a political system or individual human behavior, requires checks and balances.
 

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I've read Atlas Shrugged and Anthem this year. Good books, and there's a lot I like about her philosophy, but she makes the same mistake as the communists she abhorred. Man cannot be perfected by the right circumstances or political system or education.
There was book about Rand a several years back that highlighted this point, I heard the author interviewed on the radio. He said that one of the reasons Rand was so popular was that she was writing in a unique Russian style, and was the only one doing so in English. Her books follow formulas that were especially popular in communist literature when she was in high school, but are relatively unknown here.

For instance, there were several pro-communist novels in which a group of highly moral people dropped out of corrupt capitalist society and formed some sort of communist utopia -- basically a pro-communist version of Atlas Shrugged. The guy had examples from her other books, but since I've only read Atlas Shrugged this is the only one I remember.

Personally I think Rand was more of a pulp fiction author than a real philosopher. She never submitted any of her work to peer review, and most academics thought she was loopy -- her background in philosophy was definitely limited. I don't believe she ever even stated her "philosophy" in any sort of rigorous way, and when academics tried to interpret her essays they found her arguments to be full of holes.
 

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There was a great rant on Best of Craigslist about Ayn Rand's status as a philosopher. I can't find it at the moment, of course. But Atlas Shrugged was very good at times (and tedious to the point of synaptic genocide at others - particularly Galt's radio rant, which could -should, actually - have been about 80% shorter than it was).


Edit; found the rant.
 

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Discussion Starter #12
Now the so called 'regulators' are getting examined, seemingly they were warned 10 years ago and regularly since and nothing was done about it !

http://news.bbc.co.uk/2/hi/business/7786923.stm


It will be interested to seen if anything is done about this gross lapse, which basically is the tip of the iceberg.

......expect more to go under.


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Libertarian, I can see. But given her extreme restrictions on the role of government, I can't see calling her a liberal.
Liberal doesn't mean pinko big government.

I know it means that in the US. But in the rest of the English speaking world a true liberal is

and I'll quote wiki here - I'm too lazy this morning:

Liberalism is a broad class of political philosophies that consider individual liberty to be the most important political goal.[1]
Liberalism emphasizes individual rights and equality of opportunity. Within liberalism there are various streams of thought which compete over the use of the term "liberal" and may propose very different policies, but they are generally united by their support for a number of principles, including freedom of thought and speech, limitations on the power of governments, the rule of law, an individual's right to private property,[2] free markets,[2] and a transparentsystem of government.[3] All liberals, as well as some adherents of other political ideologies, support some variant of the form of government known as liberal democracy, with open and fair elections, where all citizens have equal rights by law.[4]

The US was the first true liberal state founded on liberal philosopical principles.

What you call liberal in the US is someone left of centre who espouses CLASS rights rather than INDIVIDUAL rights.

A liberal is not a socialist.

A conservative is not a liberal, in that they seek to keep the class rights or privileges of the rich, the aristocracy, or big business.
 

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It's what makes me smile about HiD's postings. He is the ultimate "liberal", but the definition of "liberal" in the US has come to mean something entirely different. How can you argue political discourse with people who can't agree what the terms mean...:confused::D

That's the problem with them Yanks. If they could talk English proper they'd find the world a whole lot easier to understand...;)

On the Madoff subject, I dont expect that guy to see the New Year in. Call me morbid, but...
 

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Wonderful thoughts from all.

Here's a couple of ramblings, from someone who spent 30 years in the Investment industry:

1. The Ponzi schemes are invariably, almost by definition, discovered at the bottom of market cycles. The propensity for people to disbelieve the adage "If it looks too good to be true, it is" never ceases.

2. Market regulation and deregulation swings pendulum like, just as the markets do- over reaction is a given, human trait.

3. It surprises me how folks will spend countless hours vetting a mechanic or parts supplier for their ride, and hand over their retirement funds to an account manager on a casual tip from their barber.

:confused:

Excellent discussion!
 

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Discussion Starter #16
Those who managed to pull their own funds out Madoff's scam upto a couple of years ago must be shaking in their shoes. Under US bankruptcy code, investors that pulled money out of a fraudulent fund up to two years before it went under must give their money back, if they knew or should have known, the fund was bogus. Some State laws typically broadens that window to four to six years.

It is reported that Bayou hedge funds investors had to hand back funds that they had withdrawn years before Bayou went under. Seemingly it's about equalisation of harm.

Lots of red flags were ignored, Madoff executing trades for the fund through his own firm with many senior people in his firm were relatives and use of an insignificant little-known auditor.

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Wonderful thoughts from all.

3. It surprises me how folks will spend countless hours vetting a mechanic or parts supplier for their ride, and hand over their retirement funds to an account manager on a casual tip from their barber.
What astounds me about the Madoff case is how many professionals parked their money with him. I mean it's one thing to rip off a wealthy celebrity (there are entire industries built on that model), but this guy conned the Royal Bank of Scotland and many other banks that you'd think would know better.
 

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It's what makes me smile about HiD's postings. He is the ultimate "liberal", but the definition of "liberal" in the US has come to mean something entirely different.
By that definition of "liberal", I find your statement quite a compliment. I thank you, sir. I've heard this definition referred to in the conservative press, sometimes as the 'classical definition of liberalism.' That's a liberalism I can get behind 100%.

How can you argue political discourse with people who can't agree what the terms mean...:confused::D
By avoiding labels, and discussing the principles that are or should be at work in each particular issue. And anyone who espouses class rights instead of individual rights needs to learn something about self-reliance and individual responsibility.

Boy, do I love this forum.
 

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Exactly swampy-

The human prediliction to believe in a system seems unavoidable.
It is all basic human psychology, seemingly.
All the MBA degrees, experience in the markets, and red flags take a back seat to the hope of perfect, infallable, consistent success.
Las Vegas was built on this knowledge.
I am more than sympathetic to the victims, but not surprised.
One investor has been forthright in stating that he "knew" that it was too good to be true, but could not resist the returns.

Tulip bulbs, anyone?

:rolleyes:
 

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Discussion Starter #20
Madoff or Made-off as it is now pronounced, was investing most of the funds (apart from what he and his mates were skimming off) into the usual practices of funds management. Unless he was well into sub-prime mortgages some of these funds should be worth something and returning an element of interest. He can't just have parked the money. Anyone read any news on where these 'investments' might be ?

It's quite astounding that these reputable banks were sucked in and didn't have a clue what was going on, one would have thought they would have enquired where he was 'investing' after giving him billions !

This is the problem where computer trading is mainly automated and has shades of the movie WarGames, Norad's computer WOPR which nearly sets off WWIII in game mode ! Maybe Madoff had a similar computer and he was in game mode of WallStreet ! :D


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