Harry Markopolos

Wednesday, February 4, 2009

This guy (the Madoff whistleblower) has joined my pantheon of heroes along with Captain Sullenberger.

He is honest, competent, and selfless. He is tearing the SEC apart.

Watch on CNBC.


Punishing Wall Street

Tuesday, February 3, 2009

You may have noticed a slightly angry tone on this blog in recent days.

I can’t help it. I’m furious.

It’s not just that Wall Street greed (in the most negative, irresponsible sense) has catapulted the world into a depression (if it’s not here yet, it’s coming), it’s that there has been, to date, no repercussions. A few CEOs have stepped down. A few executives have missed bonuses.

But these actions should be expected when companies post losses of billions of dollars. Anyone (in my mind, this is not debatable) can manage in the boom times, but if your company collapses in the bad times, you are a bad manager and should be fired (and certainly receive no bonus or golden parachute).

No. What bothers me is that Congress somehow thinks they can get away with holding a few hearings. Obama thinks he can get away with a scolding. Cuomo thinks he can get away with a few threats and withheld bonuses.

But that is not enough. There must be serious, lesson-teaching punitive measures meted out to Wall Street. Many must go to jail. Lavish pay must be curbed. Bankers must lose their homes and wives. Their children must be forced to attend public school.

And it must happen on, in relative terms, a Maoist scale. Thousands must pay the price.

The reason for this is simple: They must pay because they are the architects of global suffering on a level that hasn’t been seen in a century (or longer).

Two more arguments:

a) gains are illusory – what I had two years ago, I no longer have – but bonuses are real.
b) bankers were paid obscenely when times were good and should suffer in inverse proportion when times are bad.

The bottom line is that it is truly an age of privatized profit and socialized losses, with “top talent” making out like bandits.

The reason why a man like Captain Sullenberger is such a champion to the people is because he is a man of ethics; a man of honor and responsibility who understood that his duty extended beyond the self.

Is there any banker in the world about whom we can say that?

In another age, these men (and a few women) would be strung up in the public square and burned.

Then the point, in many cases, was to allay a restive public; to give the people a show of blood and vengeance. We live in a more civilized age, but the need for catharsis lives on and grows stronger now.

The people want blood.

I want blood.

Who (and how many) will pay the harsh, public price for their malfeasance?

Bank of America Defers 2008 Bonuses

Wednesday, January 28, 2009


It’s an effort by their CEO, Ken Lewis, to save his job, but it’s still a great move. The bankers there are, apparently, furious, especially in light of the Merrill Lynch bonuses paid out under the cover of night before BoA overpaid for Merrill.

From the Financial Times:

“This is going to cause an uproar,” says one BofA executive familiar with the matter. “There will be cash-flow issues for families.”


Oh, the bankers are furious. The money gained by destroying the economy and their business is all tied up in yachts and summer homes. Oh, the bankers. Quick, run and hide. The bankers are angry.

I have an idea. Why don’t the bankers quit? BoA is obviously not paying to retain top talent. So, top talent, go elsewhere.

Finally, someone, somewhere is being punished. I expect a lot more of this in the future. Prison, financial ruin, regular take-home pay. I hope these bankers have to send their kids to – horror – public school.

Dow Has Worst Start to a Year Ever

Wednesday, January 14, 2009

From CNBC:

The Dow and the S&P are actually having their worst opening to a new year ever: The Dow is down 6.6 percent since the ball dropped; the S&P is off 6.7 percent.

Did anyone expect otherwise?

Why Isn’t Bernie Madoff in Jail?

Tuesday, January 13, 2009

From Andrew Ross Sorkin:

Welcome to the two-tiered system of justice: one for the super-rich, the other for the rest of us.

Judge Ellis’s explanation is not very satisfying. He says that to be remanded to jail, a defendant must pose a flight risk or be at risk of obstructing justice.

The guys shipped millions in jewels and watches to his kids and his wife is paying for his security and monitoring with ripped off money. You’re telling me this guy isn’t a risk of obstructing justice?


Unemployment Hits 7.2%

Friday, January 9, 2009

Half a million jobs lost in December according to the Department of Labor. Both November and October job losses were revised upward:

November’s job losses were revised to show a cut of 584,000, previously reported as a 533,000 loss, while October’s losses were revised to 423,000 from a decline of 320,000.

With those revisions, the total reduction in U.S. nonfarm payrolls in the four months through December was 1.9 million.

And that’s all there is to say about that.

700,000 Jobs Lost in December

Wednesday, January 7, 2009

From CNBC:

Private employers shed 693,000 jobs in December, up sharply from the revised 476,000 jobs lost in November and far more than economists estimated, separate reports showed Wednesday.

Ugh. I know I have written about how bad I believe things are going to get (double digit unemployment is a certainty), but I somehow keep hoping I’m wrong.

Then you wake up and find 700K jobs gone and Obama talking about trillion dollar deficits for years to come.

I am really afraid for America.

We won’t do the right thing until we are forced to and, in this case, that may come too late.