Raw Dawg Buffalo: Bernard Madoff

Monday, January 12, 2009

Ye old revolving doors

I was some what amazed at the Bernard Madoff scandal, maybe not amazed, but rather amused. Not because a few folks killed themselves, or a lot of rich folks lost all they loot, but rather because this crook, was also once the former chairman of NASDEQ. Now if that aint funny nothing is, not to mention that his investment arm was not even registered with the SEC until September 2006. Add to that, who would not be leery of a man with the name made-off? But that is how Washington and Wall Street insiders act, they used to going through them revolving doors from Washington to Wall Street, and to the SEC in this example. Madoff had a good reputation with folk on Wall Street and for a typical insider that is good enough for them. That’s the problem.

The SEC will never work as an effective watch dog over folk like Madoff. Namely because they are folk. Madoff as others on Wall Street interchange jobs like a connecting flight through Hartsfield/Jackson international Airport. The Madoff scandal is a black eye to the reputation of the Securities and Exchange Commission, who is supposed to police shit like this. However, folks like outgoing SEC Chairman Christopher Cox seem to have no clue or worse, turn a blind eye to their own kind. Cox after all said that Bear Stearns was in good shape three days before this investment house belly-flopped. Not to mention he mad at folks in the SEC (when they had been informed for decades) for not being able to notice the foul stuff being implemented by Bernard L. Madoff Investment Securities LLC.

Folks around the world took looses because institutions like the SEC and our Federal government care more about the folks who they know and support them than the implementation of objective critical thought. In the United Kingdom, Kingate Global Fund Ltd, reportedly lost $2.5 billion. Ascot Partners $1.8 billion, Access International Advisors $1.4 billion, Maxam Capital Management LLC $280 million and the banks HSBC and RBS have lost $1 billion and $600 million. The Spanish bank Banco Santander and Banco Bilbao Vizcaya Argentaria (BBV), have reported losses of $3.1 billion and $405 million accordingly.

I do not see these types of acts changing in the near future, and suspect a many more complex hustles in the futures and securities markets to be still in play, even with Obama naming the current head of the Wall Street Financial Industry Regulatory Authority, Mary Schapiro, as the new head of the SEC. Why do I say this? Well truth is known is that the folks who work for the big banks and financial institution of Wall Street are the same ones who work in the SEC. They go back and forth like the rubber ball in a game of dodge ball. Take Cox for example, which from 1978 to 1986, who was a venture capital and corporate finance lawyer with the international law firm of Latham & Watkins. He was supposedly over the Corporate Department in Orange County (they went bankrupt a few years back). He also received a MBA and JD from Harvard as well as taught federal income tax courses at the Harvard Business School.

Schapiro is no different. She was appointed by President Clinton in 1994 to be chairperson of the federal Commodity Futures Trading Commission – we see where that got us today, although she was supposed to be responsible for regulating the US futures markets. Before that, she served for six years as a Commissioner of the Securities and Exchange Commission being appointed in 1988 by President Reagan and reappointed by President Bush in 1989.

The SEC, regardless of who runs it, will never look out for the common man (folks who don’t work on Wall Street or hold political office). In October of last year, they gave "preferential treatment" to Wall Street executive John Mack during an insider trading investigation because he was about to become CEO of the Morgan Stanley investment banking firm. Now I am only saying that it is impossible for folks to police themselves. I don’t think you would let Crips police Crips in a federal correctional facility, so what is difference here? None, nada, zero is the answer. I don’t know why folks are so protective of the next president of these United States of America; likewise, I do not know why they are hypersensitive of folks who review and evaluate his proposed policies and his cabinet choices. It only makes logical sense to me. I remember doing the same regarding the current Bush – especially with respect to his incessant mentioning of “compassionate Conservatism.” His words, policies and appointments demonstrated neither compassion nor conservatism to me, especially with appointments of folk the likes of Dick Cheney, Don Rumsfeld and Paul Wolfowitz. No one, in particular black folks didn’t say a word against my evaluative pragmatism then.

Obama is the president and as president it is our job to be critical and free thinking about his office, policy and problem solving capacity – especially with respect to his words and what he said he will do. The only difference outside of his color for me is that his mantra is not “compassionate conservatism” but rather “change.” Show me some change, or better yet, where is the beef. For we will continue to have these problems until we clean house. These same old Washington folks done messed things up enough, don’t you agree? I feel that we can find just as competent folk, if not more competent folks outside the beltway. I’m just glad medicine isn’t like that, or else one would only be able to have an expert physician or Surgeon in Washington, DC.