Iris Mack's Blog - Ponzi Scheme

Bloomberg: Is Global Finance a Ponzi Scheme?

Mon, 11 Jun 2012 15:30:00 --0100

What's the difference between today's global finance system and a Ponzi scheme? This is the question that a 56-year-old veteran Russian financial scammer has been asking his victims. Chillingly, he almost has a point.

Building the Great Pyramid: Global Financial Crisis Explained

Mon, 15 Aug 2011 20:59:00 --0100

When the financial crisis erupted at the end of September 2008, there was an unusual sense of incredible panic among banking executives and government officials. These two establishment groups are known for their conservative, understated approach and, above all, their stiff upper lip. Yet at the time they appeared to the public running about like headless chickens. It was chaos. A state of complete chaos. Within a few weeks, however, decisions were made and everything seemed to returned to normal and back under control. The British Prime Minister Gordon Brown even famously remarked that the government "saved the world." But what really caused such an incredible panic in the establishment well known for its resilience? Maybe there are root causes that were not examined publicly and the government actions are nothing more than a temporary reprieve and a cover-up? Throwing good money after bad money, maybe? Please read more here.

"Catching Madoff": Harry Markopolos Documentary Reveals Ponzi Schemer Investigation (video)

Wed, 29 Jun 2011 13:39:00 --0100

After ignoring the Madoff whistleblower for over a decade, everyone seems to finally listen to what he has to say!

New York Post: "Ponzi Scheme" at Citi (video)

Mon, 09 May 2011 05:26:00 --0100

I remember reading this New York Post article a couple of years ago. Yesterday one of my colleagues inquired as to the status of this lawsuit.

Jailhouse Interview: Madoff says Banks Knew About Ponzi Scheme?

Sat, 09 Apr 2011 18:29:00 --0100

The London Telegraph reports that in a recent jailhouse interview, Madoff suggested the banks had enough evidence to detect his wrongdoings

Citigroup Saw Madoff Fraud Warnings: Trustee Lawsuit

Thu, 24 Feb 2011 01:26:00 --0100

First, JP Morgan Chase. Now Citigroup!

WikiLeaks: Libya's Gadhafi Turned Down Madoff

Thu, 24 Feb 2011 00:38:00 --0100

This is too funny. A connection between Wikileaks, Gadhafi and Madoff! Small world!

SEC's Top Lawyer Sued in Madoff Case

Wed, 23 Feb 2011 23:56:00 --0100

The SEC moved to quash speculation that its top lawyer David Becker decided to step down because he is being sued as part of a "clawback" lawsuit by the trustee seeking to recover assets on behalf of victims of Bernard Madoff's fraud. A lawsuit seeks to recover assets from the estate of Mr. Becker's mother, which allegedly received $1.54 million in fictitious profits from Mr. Madoff's firm. Please read more here.

Madoff Trustee Takes Aim at J.P. Morgan Chase (video)

Tue, 08 Feb 2011 19:27:00 --0100

Wonder J P Morgan Chase CEO Jamie DImon has to say about his bank's ties to Madoff?

HuffPost: Madoff's Relationship With JPMorgan Chase Should Shock No One

Mon, 07 Feb 2011 02:50:00 --0100

So now we learn that senior executives with decision-making authority inside JPMorgan Chase -- the Wall Street behemoth that is supposedly run by the most mature of adults -- apparently suspected that Bernie Madoff was running an enormous Ponzi scheme even as they kept doing business with his firm. They supposedly kept funneling money his way and let him run cash through Chase accounts even as they were sending emails to one another reporting the creepy sense that the whole enterprise didn't look real. This, according to internal documents that came out in a lawsuit on Thursday. Please read more here.

Madoff Trustee vs. New York Mets (video)

Sat, 05 Feb 2011 01:43:00 --0100

The owners of baseball's New York Mets and their business partners failed to investigate direct warnings and obvious evidence of Bernard Madoff's fraud even as they thoroughly intertwined their financial fortunes with his investment firm over nearly a quarter-century, a lawsuit unsealed Friday contends.

Quantitative Ponzinomics for Dummies (photo)

Thu, 30 Dec 2010 06:36:00 --0100

Enjoy!

Madoff Trustee Seeks $19.6 Billion From Austrian Banker

Fri, 10 Dec 2010 21:47:00 --0100

The trustee seeking money for victims of the Madoff Ponzi scheme has sued Sonja Kohn, an Austrian banker, seeking $19.6 billion in damages and accusing her of masterminding a 23-year conspiracy that played a central role in financing the Ponzi scheme. Please read more here..

Madoff Trustee Sues J. P. Morgan for $6.4 Billion

Fri, 03 Dec 2010 12:31:00 --0100

The trustee who is tracking down assets for the victims of the Madoff Ponzi scheme sued J. P. Morgan Chase for $6.4 billion, contending that the bank bears some responsibility for the losses of victims because it continued to serve as Madoff?s primary banker despite growing evidence that he was running an enormous fraud. ?Madoff would not have been able to commit this massive Ponzi scheme without this bank,? David J. Sheehan, a lawyer for the trustee, Irving H. Picard, said in a statement after the case was filed in U. S. District Court in Manhattan. Please read more here.

The Nation: Federal Reserve "Phantom Fund" Buys U.S. Treasury Securities

Sun, 10 Oct 2010 19:51:00 --0100

Lately I have been researching and writing a book about the financial markets. My research has involved my trying to better understand the purpose of the U.S. Federal Reserve. While conducting this research I came across this editorial from The Nation - After All, It's Just Another Ponzi Scheme. The US appears to be printing money hand over fist and cooking the books to make everything seem rosy. The US financial and monetary authorities are running a Ponzi scheme as they scramble to delay economic catastrophe. That's the finding of Eric Sprott and David Franklin in their Sprott Asset Management LP's Markets at a Glance report, "Is it all just a Ponzi scheme?" (December 2009). The authors have detected a phantom account in the US Federal Reserve Flow of Funds Report, which camouflaged its money printing on a gigantic scale from public eyes. In fiscal year 2009, the US added another US$1.88 trillion to its public debt. There were three main groups of buyers of US treasuries issued to finance this huge amount of deficit spending. The first group was identified as foreign and international buyers, who purchased $697.5 billion. The second group was the Federal Reserve, which bought $286 billion. By buying the US treasuries, the Fed was pursuing a quantitative easing monetary policy, or money printing, to keep both the public finances and the financial system alive. It plans to end its money-printing programme by March 2010. The third group of buyers was identified as the Household Sector, which bought Treasury securities of $528 billion in the first three-quarters of fiscal year 2009. For the whole fiscal year, this Household Sector would have bought a total of $704 billion in Treasury securities. Sprott and Franklin were wondering who actually made up the Household Sector because, given the current economic conditions, it did not seem that the real household sector would have money at its disposal to purchase Treasury securities. As it turned out, the Federal Reserve defined the Household Sector as a "catch-all category", representing buyers left over who can't be slotted into the other group headings such as money market funds, mutual funds, life insurance companies, retirement funds, and closed-end funds, etc. "To answer the question - who is the Household sector? They are a phantom. They don't exist. They merely serve to balance the ledger in the Federal Reserve's Flow of Funds Report," said the authors. "Our concern now is that this is all starting to resemble one giant Ponzi scheme. We all know that the Fed has been active in the market for T-bills. It serves to remember that the whole point of selling new US Treasury bonds is to attract outside capital to finance deficits or to pay off existing debts that are maturing. We are now in a situation, however, where the Fed is printing dollars to buy Treasuries as a means of faking the Treasury's ability to attract outside capital. If our research proves anything, it's that the regular buyers of the US debt are no longer buying, and it amazes us that the US can successfully issue a record number of Treasuries in this environment without the slightest hiccup in the market." Yes, indeed there are increasingly fewer buyers of US Treasuries. As the export-led economies and oil rich countries have less dollar revenue, they will have fewer dollars to buy US Treasuries and thus to finance the US deficit. Fears about the dollar's stability have also led sovereign wealth funds and investors to shy away from US dollar assets. As the US government continues to rack up more debt to finance the bail-out costs and other programmes, it will accrue more debt that eventually will soak up the whole economy. Next year the US will run a deficit spending of another $2.2 trillion, compared with $1.1 trillion in 2008 and $1.88 trillion in 2009. The point is, since the US already faces difficulties in finding buyers for its Treasury securities, who will step forward as financier of the $2.2 trillion deficit next year? If there aren't enough buyers, will the Federal Reserve continue to create phantom accounts to purchase Treasury securities? For how long will the financial markets allow the US to fake its actual financial health? We are fast approaching an end game.