Blog on the Run: Reloaded

Monday, March 1, 2010 8:44 pm

Meet Harry “Cassandra” Markopoulos

OK, Cassandra wasn’t Greek, she was Trojan. But she was the chick to whom the god Apollo gave the gift of prophecy … and, because she then wouldn’t be  his girlfriend, the curse of never being believed.

Harry Markopoulos can relate. He was a money manager who was ordered by his bosses to find ways to equal Bernie Madoff’s return on investments. He calculated that it was statistically impossible, then spent years trying unsuccessfully to bring the wrath of the Securities & Exchange Commission down on Madoff. It turns out that Markopoulos was right, that the reason Madoff’s “returns” were so high was because he was running a $65 billion pyramid scheme that cost a lot of people (including, I am reliably informed, some folks right here in River City) a ton of money, and that the SEC was “comatose” (if not on the take, I hypothesize).

Not surprisingly, Markopoulos doesn’t think very highly of the SEC, and the feeling apparently is mutual:

Why do you think the S.E.C. failed to wake up to Madoff’s $65 billion Ponzi scheme until he turned himself in?
They weren’t even asleep at the switch; they were comatose. They didn’t respond to heat and light, much less evidence of wrongdoing. They were not engaged in the fight.

This was when William Donaldson was head of the S.E.C.?
Donaldson was too tough on Wall Street, so he got the ax. Then you had Christopher Cox, because he wasn’t going to do his job. That’s why he got the job.

You met last year with Mary Schapiro, the current head of the S.E.C. How did that go?
I would say she was coldly polite. Her general counsel, David Becker, did most of the talking. He and I did not get along at all. He was getting ready to come across the coffee table and strangle me.

(h/t: Ed)

Tuesday, November 17, 2009 8:42 pm

Odds and ends, Nov. 17

  • Our eyes are on Afghanistan, but the prize is energy-rich Uzbekistan. So they boil political opponents alive. Big freakin’ deal.
  • The Special Inspector General of the fed bank bailout program says we need to audit the Fed already. Fine minds agree. So let’s audit the Fed already.
  • Tim Geithner’s pissing away of taxpayer money earlier this month, to the benefit of — surprise!! — Goldman Sachs and AIG —  would’ve been grounds for dismissal, if not execution, in any country that wasn’t already a banana republic. Unfortunately, we’re all now singing the Chiquita song:

This, Mr. Geithner, is what moral hazard is all about. Thanks to your actions you have doomed the U.S.’s formerly free and efficient equity markets to the biggest capital market bubble in history, which, like any ponzi, has only two outcomes: it either keeps growing in perpetuity as greater fools crawl out of the woodwork to keep it growing, albeit at ever slower marginal rates (note, this did not work out too well for Madoff), or it eventually pops. And the longer it takes to pop, the greater the ultimate loss of value: one day Madoff’s business was worth $50 billion, the next day it was $0. And that is precisely the same fate that American capital markets will have at some point in the upcoming months or years. When future historians look back at what specific action caused the biggest crash in U.S. capital markets history, Mr. Geithner’s cataclysmally botched negotiation of the AIG counterparty bailout will undoubtedly be at the very top of the list. In the meantime, just like in the Madoff case where the trustee is trying hard to trace where any stolen money may have been transferred to, to see the fund flows in our ongoing “ponzi in progress”, look no further than the bank accounts of Goldman bankers as they receive their biggest ever bonus this year …

 

  • Relatedly, I’m a lot less bothered about Obama bowing to an Asian leader than I am about his bowing to Goldman Sachs.
  • Question of the day, from Michael Lind: Shouldn’t the government pledge allegiance to the people, rather than the other way around?
  • Nice punking of an anti-immigration crowd. Not-so-nice behavior of the cops on hand, who were shoving around nonviolent counterprotesters rather than the anti-immigration folks who started the fisticuffs.
  • Time to revoke David Broder’s membership in the Wise Old Mainstream Media Pundits’ Club: When you say it’s more important to do something, anything, now than to do the right thing, you’re reckless. When you say that about a decision over whether to start, or expand, a war of choice, you’re just batsh*t insane definitely not supporting the troops.
  • Faith may well complement competent psychiatric care, but it is no substitute, a fact that appears to have escaped the Department of Veterans Affairs. And this is just one facet, albeit a particularly annoying one, of the VA’s utter failure to cope competently with the mental-health problems of veterans of the fighting in Iraq and Afghanistan. My senior senator, Richard Burr, ranking Republican on the Senate Veterans Affairs Committee and a guy with a DSCC bulls-eye on his back this election year, could do himself a lot of political good, in addition to doing a lot of real-world good for a lot of deserving people, if he just rode this issue like a beast across the plains of Mongolia.
  • And speaking of Richard Burr, call the WAAAAmbulance. Apparently, Senate Republicans are concerned that TV commercials about them supporting government contractors who let their employees get gang-raped may engender bad feelings against … um, well, the 30 Senate Republicans who supported government contractors who let their employees get gang-raped. (Here’s the one on Burr:)

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