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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Thursday, December 29, 2011

Contributions Provided by our Readers

As another year draws to an end, it is interesting to note that our many readers offer comments not of opinion but mostly of links to what they consider relevant in this battle against injustice.  As an aggregating site, we can only read and post so much so it is with much pleasure that I read - and urge the rest of you to read - the daily comments.  

From time to time some of them warrant exposure as a blog post.  These today do so. 

Thank you Christina M. for this first link, your comment posts and your many emails.  Thank you also for your continued readership and grass roots participation in attempting to rectify what all is wrong here in our country.  Also, as the year draws to an end, I would like to shout out to SeanZ who also consistently provides us with links and content through his daily emails.  For the rest of our readers and those who take the time to comment, please accept my personal thank you.  Your continued participation is what keeps us going.

Larry Rubinoff, Publisher 

A Christmas Carol 2011 
click title to link to Mr. Kunstler's original post)

     Slouched in woe beside the Christmas tree, a lot of Americans missed the point of 2011: Santa Claus had already emptied his goodie sack before the night of wonders and miracles arrived and was back at the North Pole checking the balance sheet to see if he could raise a little cash selling some remaining assets off to the Blackstone Group or maybe work a leveraged buyout deal with Kohlberg Kravis Roberts. A few elves would have to join the unemployment line, but they could probably get by on half-rations of food stamps. Or maybe Henry Kravis could feed them reindeer steaks... at a discount, as long as they last.

     It's remarkable how the year's great mega-holiday blowout suspends time and circumstance. I didn't see how the European banks were going to make it to December 25, but then, heading into the shopping frenzy home-stretch, swap lines opened up between the US Federal Reserve  and the European Central Bank and around $600-odd billion in ZIRP loans flowed to over 200 Euro banks. Maybe that will cover the next two weeks of aggregate debt rollovers, and then what? They can't even look forward to President's Day over there - unless we rented out the George Washington and Abe Lincoln brands to them.
     Who is still not impressed with the ability of these central banks, and their owner-operators, to keep re-circulating immense loads of notional money? Alas, every wash-rinse repeat cycle leaves the certificates a little paler and thinner, and it won't be long before they just appear to be blank paper. But rackets as grand and insolent as these would not be possible, except in a culture so estranged from truth that anything goes over without notice. I wonder about that scene around the American Christmas tree, though - the empty space between the floor and the lowest boughs where the gaily-wrapped presents used to appear.

     I reckon it will take a few weeks, perhaps through the whole winter, for a sense of swindle to set in among the rooked. You may notice a pervasive undertone of grumbling in the background - and winter is the right time for that - like the eerie, ominous chords of ice groaning in the darkness on a still night around the frozen lake. But eventually come the tumults and torrents of spring. I suppose what baffles many of us in the ethers of bloggery is the apparent failure of that demographic slice acquainted with thinking to register any objection to the travesties and organized brigandages of these times. At any other time in the life of this republic, such folk with active frontal lobes would have identified arrant criminal activity for what it is. Apparently, the nostrums of Paul Krugman are as powerfully narcotic as the raptures of Nascar.

     I'm afraid events are a little too far gone now. There was some hope that Mr. Obama would restore the rule of law, but he has gone even farther in the opposite direction by disabling even the levers of truth - and in so genial a style that nobody noticed that, either. That thinking demographic slice of the public I averred to must have mortgaged their souls the past three years just to keep on keeping on. Hence, when the truly rooked wake from their zombie sleepwalk, there will be hell to pay for sure. Sometimes an intellectual governor on events no longer even avails, as was the case in the French Revolution. When the lawyers, political theorists, and philosophers got into the act, the blood really flowed.

    Will that happen here, in the months and years ahead? I do think so. We've grown ourselves a toxic aristocracy of privilege and mega-wealth as cheeky (or worse) than the fops and strumpets of Versailles. I confess, I feel a bit lusty for some Grand Guignol action myself. There are stock figures in The New York Observer's weekly  "Shindigger" column who I would enjoy seeing treated after the manner of Vlad III, Prince of Wallachia, the celebrated "impaler." And what better place for it than Zuccotti Park, a much more intimate venue than the agoraphobia-inducing Place de la Concord. You see what happens: in the absence of the rule of law even prudent men turn to the reptile agencies of mind.

     The truly interesting thing about America's romance with our Wild West was that there was always an Unwild East to return to - if you survived adventuring in one piece. Well, first the frontier closed about 100 years ago, and now we wake on Christmas morning to discover that the whole land, from sea to shining sea, has gone feral with rot. Enjoy this nebulous week of suspended animation while it lasts. I'll be back next Monday with the 2012 forecast.

 Here now, an interesting article on what the SEC seemingly is doing to right the wrongs of the past.  It appears that as a result of the Madoff scandal they are targeting hedge funds.  And yes, there will be casualties, arrests, prosecutions and most probably jail time for some.

But is this just another effort of our government and regulatory agencies to publicly attempt to fool us into thinking they are doing everything they can and are supposed to be doing to protect the public's interest?  I believe it is as the fraud on Wall Street has been rampant for years.  These many frauds - many led by those top level executives who received excessive bonuses - have been exposed often with proof positive.  Yet, no action, investigation or prosecutions have resulted.

I can remember back in 2008 - when I was a Guest Writer for an anti fraud site called - I wrote about an investigation announced by the FBI of 17 banking institutions for the possibility of fraudulent activity.  This at the beginning of our economic meltdown was, as I described it then and continue to believe today, was just "feel good" actions attempting to lure the public into believing that our justice system was hard at work protecting us.

The FBI then and until today have failed to identify those they were supposedly investigating.   And as of now, no other reference has ever been made by the FBI as to this investigation.  Their report of an ongoing investigation was and remains a sham.

So to is this action by the SEC.  While much more real in its' activity then was that FBI report, the fact of the matter is that the sham exists as they have not and evidently will not take any type of decisive action against those who truly have committed fraud and brough the entire world to its economic knees.

SEC Ups Its Game to Identify Rogue Firms
The Wall Street Journal

It is the Securities and Exchange Commission's new "most-wanted" list: a chart covered with handwritten notes, yellow highlighter and the names of about 100 hedge funds.
The hedge funds have one thing in common: Their performance seems too good to be true, with some trouncing the overall market and others churning out modest results without ever suffering a down month. Some funds on the list stumble but still always outperform rival hedge funds.

"There is serious fraud in this space, and we have been attacking it," said Bruce Karpati, co-chief of the SEC's asset-management enforcement unit. The hedge-fund chart dominates a corner of his lower Manhattan office.
The list is the low-tech product of a high-tech effort by the SEC to crack down on fraud at hedge funds and other investment firms. After the agency failed to detect the $17.3 billion Ponzi scheme by Bernard L. Madoff, who wowed investors with steady returns over several decades, SEC officials decided they needed a way to trawl through

Read here 

See Bill Black's comments on the SEC story as published by Yves Smith in

Bill Black: What if the SEC investigated Banks the way it is investigating Mutual Funds?

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

 The SEC has, inevitably, discovered that accounting fraud is common among hedge funds. It is unlikely that the SEC system is really “high-tech” in information science terms. Low-tech information systems have been capable of identifying “aberrational performance” for at least thirty years. We did not have to create any pioneering software in 1984 in order to identify aberrational performance. The cost and time to create our “red flags” was trivial (a few hours of programming time by an agency staffer). (We were collecting the data and computing the necessary ratios anyway. One simply decides the level of a few key variables worthy of being flagged. There’s nothing magic about a “flag.” All it means is that suspicious levels are highlighted on the computer screen and on physical copies of the periodic reports so that they capture the reader’s attention.)

The SEC took two years to create its “aberrational performance” system and is embarrassed enough about the cost that it wants to keep it secret. The two year development process allowed the SEC to make a major advance relative to our system – they invented a title consisting of two words and eight syllables. Devising a title that recondite doubtless accounts for six months of the time it took the SEC to develop its flags.
Read It here


It needs to stop said...

JPMorgan Swaps Occupying Cassino Prove Curse Like World War II Destruction

World War II’s Battle for Cassino leveled the Italian town and its hilltop abbey. Now, the 33,000 residents are digging out from the rubble left by Wall Street.

Six decades after U.S.-led forces ousted the Nazis from Cassino, a new generation is grappling with the fallout from the debts of postwar rebuilding -- borrowings that grew because of a derivative that backfired. Soaring costs forced Cassino, 80 miles southeast of Rome, to settle an interest-rate swap with JPMorgan Chase & Co. (JPM) in 2009, leaving the town unable to pay for daycare for 60 infants and services for the poor.

In Milan, Dimon’s bankers say they played by the book, adhering to rules that allow swaps dealers to withhold details, including how much they’re charging their customers. Hidden charges on derivatives contracts are what Milan prosecutor Alfredo Robledo says made them fraudulent.

Beware of Corporate Psychopaths – They are still occupying positions of power

“They are,” he says, “simply the 1 per cent of people who have no conscience or empathy.” And he argues: “Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the [banking] crisis’.

And Mr Boddy is not alone. In Jon Ronson’s widely acclaimed book The Psychopath Test, Professor Robert Hare told the author: “I should have spent some time inside the Stock Exchange as well. Serial killer psychopaths ruin families. Corporate and political and religious psychopaths ruin economies. They ruin societies.”

Want change? said...

Jesse Ventura Endorses Ron Paul as the Only Anti-war Candidate

Repression said...

Chris Powell: Financial Repression

"Is the message here that governments have determined that the only way to stay in power is:

    "To fund their excess through the banking system, at the expense of the private sector;

    "And to go along with the gold price suppression scheme so that the only alternative to that system is not attractive either?

    "If the Chinese, Indians, Japanese, and others buy into this power-preservation scheme, then it appears -- as you have long said -- there really is no true market left, and we're all screwed, no? This is not particularly what I want to believe, but if that's where we are, then I guess I need to deal with it."

Your secretary/treasurer replied:   "Yes, that's how I construe the comments about 'financial repression' made by Rickards, Kirby, Tett, and others. It's a matter of government's making it impossible for investors to make money except in undertakings specifically approved and designed by the government itself, undertakings that get narrower and narrower as government intervention in markets grows more pervasive.
"Economic circumstances and markets will keep trying to find ways to assert themselves, and the different interests of some countries may cause them to act against the 'financial repression' other countries try to impose, what Rickards describes in his new book, Currency Wars so there's no assurance about how things will end up, just assurance of less democracy and more totalitarianism. That's what GATA has been fighting all along."

Get involved, vote real change said...

Lawrence Lessig
Author Lawrence Lessig examines the way in which money links every issue that Americans -- both liberal and conservative -- care about.

Shenanigans said...

Paul cites 'shenanigans' with loaned gold

ATLANTIC, Iowa -- Ron Paul said Thursday that he's eager to find out how much gold the United States really owns.

A supporter at a town hall meeting asked about Fort Knox: "Would you reveal as president whether there's actually gold there?"

Here is Paul's full response:

"Yes, and if I couldn't accomplish that then there's big trouble in this country. I may need to get some help for you. I tried for years to do this. ... I never went to Fort Knox. I made a request when the gold commission came up in the early 1980s. We had a study of the role of gold in the monetary system. There were 17 members, and I couldn't get one other person to endorse the principle that we ought to go to Fort Knox and find out if there's gold.

Doesn't everyone want to know? maybe not?

The 'Financial Repression' Trap

In Capitals Worldwide, Policy Makers Deliberately Obscure Market Prices and Prevent Informed Judgments

By Kevin M. Warsh
The Wall Street Journal
Tuesday, December 6, 2011
Mr. Warsh, a former Federal Reserve governor, is a distinguished visiting fellow at Stanford University's Hoover Institution and a lecturer at its Graduate School of Business.

Conflicts said...

 Interview with Rick Santelli 12-29-2011

Nothing said...

bonuses for some, nothing for others

Money Saved at Misdiagnosed Vets' Expense

NEW HAVEN (CN) - The Vietnam Veterans of America says the Pentagon has "systematically and wrongfully discharged" more than 22,000 veterans since 2001 "on the basis of so-called 'personality disorder'" - rather than post-traumatic stress disorder - to deny them medical care and save the Pentagon $12.5 billion in medical and disability payments.
     "The military classifies PD [personality disorder] as a condition pre-existing military service," the four plaintiff chapters of the Vietnam Veterans of America say in their federal complaint against the Department of Defense and the Department of Homeland Security.
     "Veterans discharged from the military on the basis of a PD diagnosis are not entitled to receive service-connected disability benefits or VA health care.

"By discharging over 22,000 service members on the basis of PD, DoD saved the military approximately $4.5 billion in medical care and $8 billion in disability compensation that these service members would have received had they been discharged on the basis of Post-traumatic Stress Disorder ('PTSD') or another service-connected disability."

usedtobesupermom said...

Here is a very good report: The Economic Elite by David DeGraw. 

usedtobesupermom said...

If Americans could just understand how much wealth is being withheld from us, we would have a massive uprising and the Economic Elite would be swept away, into the history books alongside the evil despots of the past.

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