Home » Posts tagged 'fraud'

Tag Archives: fraud

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Orwellian CFTC, which ignored years of silver price manipulation, now going after Reddit Apes

Orwellian CFTC, which ignored years of silver price manipulation, now going after Reddit Apes

On Monday 1 March, an article in Bloomberg Law by CFTC connected lawyers from law firm Clifford Chance revealed that the Commodity Futures Trading Commission (CFTC) is reportedly investigating retail silver trader activity in the silver price and that the US Department of Justice looks set to investigate as well.

Before looking at this shocker of an Orwellian development, it’s helpful to provide some context on the CFTC’s track behavior in this area and to show how hypocritical such a development would be.

Rewinding exactly one month previously to Monday 1 February, as the spot price of silver rallied to an 8-year high of just under US$ 30 per troy ounce amid heightened retail interest and the emergence of the #SilverSqueeze, it was predictable that the establishment on Wall Street and in Washington DC, an establishment with a collective vested interest in a low and suppressed silver price, would feel the heat and attempt to counteract the rally.

On the regulator front, this was demonstrated by none other than the US Government’s Commodity Futures Trading Commission (CFTC), whose acting Chairman Rostin “Russ” Behnam, released an unprecedented statement, actually on 01 February, saying that:

“The CFTC is closely monitoring recent activity in the silver marketsThe Commission is communicating with fellow regulators, the exchanges, and stakeholders to address any potential threats to the integrity of the derivatives markets for silver, and remains vigilant in surveilling these markets for fraud and manipulation.”

Although a short statement from the CFTC, it signaled panic, panic on Wall Street and in Washington, that a #SilverSqueeze triggered demand surge in physical silver could pressure the supply side and thus trigger the collapse of the gigantic ongoing paper silver trading charade.

…click on the above link to read the rest of the article…

The Stock Market, Fatally Wounded by the Truth, Will Stumble and Crash

The Stock Market, Fatally Wounded by the Truth, Will Stumble and Crash

It didn’t have to be this way, but this is the reality we must now face: truth is fatal to fraud, and our entire financial-political system is a fraud.

The stock market has just been punctured by the thin blades of truth. It is fatally wounded but nobody dares notice. The wounds are barely visible, but the internal damage is mortal. The stock market is already stumbling and will soon crash.

The banquet’s participants ignore the faltering market because the rules are we never reveal the truth, or acknowledge it, or discuss it, no matter how obvious, because truth is fatal to fraud. So the stock market’s vital signs are in freefall but the conversation remains upbeat and light: stimulus, rapid growth in the second half, etc., all the patter of a carefully constructed illusion that fraud is forever as long as the truth never comes out.

Alas, the truth has emerged from the shadows, despite the silence of the insiders and the financial media. Here are the truths that have emerged like karmic genies:

1. The stock market is nothing but one giant fraud. The entire market is corrupt and rigged from the ground up. The fraud is systemic, designed into every tendril of the market. It was a useful deception to blame it all on “bad players,” but now the truth has been revealed: the market is nothing but a rigged game enriching insiders.

2. The Fed is a fraud. All the Federal Reserve has accomplished in 13 years of goosing the stock market is unprecedented wealth and income inequality as the fraud of the Fed has boosted the fraud of the market, which has fatally undermined America’s social and economic orders. Please read this short paragraph and let it sink in. Monopoly Versus Democracy (Foreign Affairs):

…click on the above link to read the rest of the article…

Our Wile E. Coyote Economy: Nothing But Financial Engineering

Our Wile E. Coyote Economy: Nothing But Financial Engineering

Ours is a Wile E. Coyote economy, and now we’re hanging in mid-air, realizing there is nothing solid beneath our feet.

The story we’re told about how our “capitalist” economy works is outdated. The story goes like this: companies produce goods and services for a competitive marketplace and earn a profit from this production. These profits are income streams for investors, who buy companies’ stocks based on these profits. As profits rise, so do stock valuations.

It’s all win-win: consumers get competitively priced goods and services, workers have jobs producing goods and services and investors earn a return on their capital.

Sadly, this is a fairy tale that no longer aligns with the reality that the U.S. economy is now a decaying billboard of “producing goods and services” behind which the real money is made in financial engineering, a.k.a. legalized fraud. Take everyone’s favorite stock, Apple. The fairy tale is that Apple is in the business of making mobile phones and providing services to this customer base.

According to the fairy tale, Apple’s rise in value from $400 billion to $1.4 trillion is based on higher operating earnings, i.e. profits. But if we look at Apple’s operating earnings (see chart below), we see that they’ve been flat for years. So why is Apple worth $1 trillion more than it was a few years ago if profits haven’t risen, much less tripled?

The answer is financial engineering: Apple sells bonds that pay a paltry rate of return and then uses the proceeds from this debt (and most of its actual profits) to buy back its own shares–an astounding $338 billion over the past 7 years.

But look at the return on this legalized fraud: $338 billion added $1 trillion in “value” which can be sold by insiders to greater fools who believe the fairy tale.

…click on the above link to read the rest of the article…

No One Gets Out Of Here Alive

NO ONE GETS OUT OF HERE ALIVE

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

As we wander through the fog of history in the making, unsure who is lying and who is telling the truth, seemingly blind to what comes next, I look to previous Fourth Turnings for a map of what might materialize during the 2nd half of this current Fourth Turning. After a tumultuous, harrowing inception to this Crisis in 2008/2009, we have been told all is well and are in the midst of an eleven-year economic expansion, with the stock market hitting all-time highs.

History seemed to stop and we’ve been treading water for over a decade. Outwardly, the establishment has convinced the masses, through propaganda and money printing, the world has returned to normal and the future is bright. I haven’t bought into this provable falsehood. Looking back to the Great Depression, we can get some perspective on our current position historically.

The Dow is up 450% since its 2009 low, which is the metric used by the establishment to prove their money printing solutions have succeeded in lifting the country from the depths of despair and depression.

…click on the above link to read the rest of the article…

Al Gore’s Global Warming Deliberate Fraud to Increase Governmental Power

Al Gore’s Global Warming Deliberate Fraud to Increase Governmental Power 

There is a serious question that no one wants to address. How did Al Gore create the global warming scare and earn hundreds of millions of dollars in the process? Before Al Gore, science was worried deeply about what we are experiencing today — global cooling. On April 28, 1975, Newsweek magazine published an article in which they sounded the alarm bell and proposed solutions to deliberately melt the ice caps:

“Climatologists are pessimistic that political leaders will take any positive action to compensate for the climatic change, or even to allay its effects. They concede that some of the more spectacular solutions proposed, such as melting thearcticc ice cap by covering it with black soot or diverting arctic rivers, might create problems far greater than those they solve. But the scientists see few signs that government leaders anywhere are even prepared to take the simple measures of stockpiling food or of introducing variables of climate uncertainty into economic projections of future food supplies.”

This sounds very similar to today’s proposed solution of putting particles in the atmosphere to deflect the sunlight to reduce global warming.  Indeed, TIME magazine’s January 31, 1977, cover featured the cover story, “The Big Freeze.” They reported that scientists were predicting that Earth’s average temperature could drop by 20 degrees fahrenheit. Their cited cause was, of course, that humans created global cooling. Then suddenly the climate cycles shifted and it began to warm up.

There was this core group of people who seemed to enjoy all the attention they were gathering by predicting the end of civilization caused by humans. As the temperatures began to warm, suddenly they had to switch the dire forecasts from global cooling caused by humans to global warming caused by humans.

 …click on the above link to read the rest of the article…

CNN’s “Journalist Of The Year” Committed Journalistic Fraud “On A Grand Scale” At Der Spiegel

German news magazine Der Spiegel has admitted that one of its top reporters has faked stories for several years.

Award-winning journalist Claas Relotius had “made up stories and invented protagonists” in approximately 14 out of 60 articles which appeared both in print and online editions. He had worked for Der Spiegel for seven years, winning numerous awards for his investigative journalism – including CNN’s Journalist of the Year award in 2014, according to the Guardian.

Relotius, 33, tendered his resignation after admitting to the fraud.

Earlier this month Relotius won Germany’s Reporter of the Year (Reporterpreis) honor for his story about a young Syrian boy. Since the report was written, it has emerged that all of the sources were hazy at best, and most of what he wrote was completely fabricated.


Claas Relotius: Er hat sein Talent missbraucht http://to.welt.de/aU8k3UM


The falsification came to light after a colleague who worked with him on a story along the US-Mexican border raised suspicions about some of the details in Relotius’s reporting, having harboured doubts about him for some time.

The colleague, Juan Moreno, eventually tracked down two alleged sources quoted extensively by Relotius in the article, which was published in November. Both said they had never met Relotius. Relotius had also lied about seeing a hand-painted sign that read “Mexicans keep out”, a subsequent investigation found.

Other fraudulent stories included one about a Yemeni prisoner in Guantanamo Bay, and one about the American football star Colin Kaepernick. –Guardian

The Spiegel – which has an online readership of over 6.5 million and sells around 725,000 print copies per month, admitted to the fraud in a lengthy article in which they said they were “shocked” by the discovery – apologizing for anyone deceived by Relotius’s “fraudulent quotes, made-up personal details or invented scenes at fictitious places.”

…click on the above link to read the rest of the article…

The Age of Fraud: the Link Between Capitalism and Profiteering by Deception

The Age of Fraud: the Link Between Capitalism and Profiteering by Deception

Photo Source Daniel Lobo | CC BY 2.0

Fraud is an issue that haunts many contemporary societies around the globe, including in East Africa. I have been researching the topic of economic trickery for over a decade in Uganda, and published a number of articles, books and opinion pieces about the matter.

As many of you might know, Uganda experiences intensive fraud levels in numerous economic sectors, from agricultural seeds and produce trade to land and the fuel business. Basically, all vital sectors of the economy are affected by fraud in one way or another.

As an analyst, I have for a while now regarded Uganda to be at the high end of the fraud problem in the region, at least in certain trades such as seeds. However, a few days ago I spent some time in Kenya and was taken somewhat by surprise by how dominant the theme of fraud – i.e. profiteering by deception – was in the Kenyan press. On the day I gave a talk at the Aga Khan University, the front and inside pages of one of the dailies was full of news about the latest scandals and the evening news started with and was dominated by the same theme: fraud and corruption.

It quickly became evident to me that this fraud-heavy news day was probably not a one-off, or an outlier. In a way I was prepared for this scenario and realisation: I have read over the past few years about some of the major fraud cases in Kenya (Goldenberg et al.), and was aware that the current government has declared to fight corruption vigorously.  But more broadly, I have watched fraud news become more or less a staple, not only in the country of my research focus, namely, Uganda, but also in my country of residence, the UK, and my home country, Germany.

…click on the above link to read the rest of the article…

Everything is AwesomeThe Donald in Wonderland: Down the Financial Rabbit Hole With Trump

The Donald in Wonderland: Down the Financial Rabbit Hole With Trump

Once upon a time, there was a little-known energy company called Enron. In its 16-year life, it went from being dubbed America’s most innovative company by Fortune Magazine to being the poster child of American corporate deceit. Using a classic recipe for book-cooking, Enron ended up in bankruptcy with jail time for those involved. Its shareholders lost $74 billion in the four years leading up to its bankruptcy in 2001.

A decade ago, the flameout of my former employer, Lehman Brothers, the global financial firm, proved far more devastating, contributing as it did to a series of events that ignited a global financial meltdown. Americans lost an estimated $12.8 trillion in the havoc.

Despite the differing scales of those disasters, there was a common thread: both companies used financial tricks to make themselves appear so much healthier than they actually were. They both faked the numbers, thanks to off-the-books or offshore mechanisms and eluded investigations… until they collapsed.

Now, here’s a question for you as we head for the November midterm elections, sure to be seen as a referendum on the president: Could Donald Trump be a one-man version of either Enron or Lehman Brothers, someone who cooked “the books” until, well, he imploded?

Since we’ve never seen his tax returns, right now we really don’t know. What we do know is that he’s been dodging bullets ever since the Justice Department accused him of violating the Fair Housing Act in his operation of 39 buildings in New York City in 1973. Unlike famed 1920s mob boss Al Capone, he may never get done in by something as simple as tax evasion, but time will tell.

…click on the above link to read the rest of the article…

Massive Deficit Spending Greenlights Waste, Fraud, Profiteering and Dysfunction

Massive Deficit Spending Greenlights Waste, Fraud, Profiteering and Dysfunction

America’s problem isn’t a lack of deficit spending/consumption. America’s problems are profoundly structural.

The nice thing about free to me money from any source is the recipients don’t have to change anything. Free money is the ultimate free-pass from consequence and adaptation: instead of having to make difficult trade-offs or suffer the consequences of profligacy, the recipients of free money are saved: they can continue on their merry way, ignoring the monumental dysfunction of their lifestyle.

This explains the appeal of Modern Monetary Theory (MMT), which holds that deficit spending is the “solution” to all our problems because governments can’t go broke–they can always emit whatever currency they need via printing or borrowing.

The problem with government deficit spending is it’s free money to the recipients: there are no feedback mechanisms to enforce any consequences for spending that’s wasteful, fraudulent or inefficient/ineffective.

Deficit spending simply enables the wasteful, corrupt, rewarding-insiders profiteering state-cartel kleptocracy to continue gorging on public spending.So what desperately needed efficiencies and improvements are imposed on the higher education cartel by handing the cartel another trillion dollars of public spending? None.

What desperately needed efficiencies and improvements are imposed on the healthcare cartel by handing the cartel trillions of dollars in publicly funded “Medicare for all”? None.

What desperately needed efficiencies and improvements are imposed on the national defense cartel by handing the cartel additional trillions of public spending? None.

What kind of sense does it make to encourage wasteful consumption on a finite planet with limited resources? The entire rationale of Modern Monetary Theory (MMT) is that the productive capacity of the economy isn’t being maxed out because we’re not consuming enough.

…click on the above link to read the rest of the article…

How To Beat A Manipulator

How To Beat A Manipulator

I’ve been busy working through some of my own stuff lately, while marveling at how closely my personal journey has been mirrored in the larger world. I wrote out the following as a personal exercise while meditating on all the similarities between abusive personal relationships with manipulators and our relationship as a species with the sociopathic plutocrats who rule us. I got a lot out of writing it, and it came out relatively readable, so I figured I’d publish it as-is in case anyone else finds it useful too. Here ya go!

~

Humans are hackable. Ask any conman. Our desire to think we have control over our lives often hides this from ourselves, but most of us are highly suggestible and hypnotizable. If you think you’re not, you’re in more danger of being hacked than someone who has humbled themselves enough to see how this works in them.

There’s no need to be ashamed of being conned. Realizing that you’ve been, or are being, conned will naturally bring up feelings of embarrassment, but it’s never your fault that someone’s taken you for a ride. Get clear: conning someone is the crime; being conned is being a victim of that crime. That’s how the law sees it in fraud cases. Manipulators would love you to think that it’s your fault for allowing yourself to be manipulated, but that’s just another manipulation isn’t it?

Manipulators use one of our most astounding, useful, and beautiful human characteristics when they con us — empathy. Our innately trusting nature is the reason why we’ve been able to collaborate on large scales to create and innovate in extraordinary ways unseen anywhere else in the animal kingdom.

…click on the above link to read the rest of the article…

Stock markets look ever more like Ponzi schemes

Stock markets look ever more like Ponzi schemes

The FT has reported this morning that:

Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability.

They added:

UK plc’s net debt has surpassed pre-crisis levels to reach £390.7bn in the 2017-18 financial year, according to analysis from Link Asset Services, which assessed balance sheet data from 440 UK listed companies.

So what, you might ask? Does it matter that companies are making sense of low-interest rates to raise money when I am saying that government could and should be doing the same thing?

Actually, yes it does. And that’s because of what the cash is being used for. Borrowing for investment makes sense. Borrowing to fund revenue investment (that is training, for example, which cannot go on the balance sheet but still adds value to the business) makes sense. But borrowing to pay a dividend when current profits and cash flow would not support it? No, that makes no sense at all.

Unless, of course, you are CEO on a large share price linked bonus package and your aim is to manipulate the market price of the company. It is that manipulation that is going on here, I suggest. These loans are being used to artificially inflate share prices.

The problem is systemic. In the US the problem is share buybacks, which I read recently have exceeded $5 trillion in the last decade, meaning that US companies are now by far the biggest buyers of their own shares. That is, once again, market manipulation.

And this manipulation does matter.

People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick.

…click on the above link to read the rest of the article…

Full Faith and Credit in Counterfeit Money

Full Faith and Credit in Counterfeit Money

There are nooks and corners in every city where talk is cheap and scandal is honorable.  The Alley, in Downtown Los Angeles, is a magical place where shrewd entrepreneurs, shameless salesmen, and downright hucksters coexist in symbiotic disharmony.  Fakes, fugazis, and knock-offs galore, pack the roll-up storefronts with sparkle and shimmer.

Several weeks ago, the LAPD seized $700,000 worth of counterfeit cosmetics from 21 different Alley businesses.  Apparently, some of the bogus makeup products – which were packaged to look like trendy brands MAC, NARS, Kyle Cosmetics, and more – were found to contain human and animal excrement.

“The best price is not always the best deal!” remarked Police Captain Marc Reina via Twitter.  Did you hear that, General Electric shareholders?

Yet the Alley, for all its dubious bustle, offers a useful public service.  It provides an efficient calibration for the greater world at large; a world that’s less upright and truthful than an honest man could ever self-prepare for.  In 30-seconds or less, the Alley will impart several essential lessons:

The price you’re first quoted is the sucker’s price.  To negotiate effectively, you must appear to care far less about buying than the merchant cares about selling.  Don’t trust someone that says, “trust me.”  And, most importantly, don’t believe what you see and read…or what you hear.

Reality Bites

For everything worthwhile, there exists a counterfeit.  This modest insight extends well beyond the boundaries of flea markets and tent bazaars.  It extends outward to news, money, prescription drugs, wars, public schools, Congress, corn ethanol, medical insurance, public pensions – you name it.  There’s plenty of fraud, phony, and fake going on.

For example, in the year 2018, the most reputable news outlets have been reduced to mere purveyors of propaganda.  The stories they spread are stories of fiction.

…click on the above link to read the rest of the article…

What Kind of Hyper-Enthusiastic Market is this that Blindly Keeps Pursuing Scams to Make a Fortune Overnight, even if They Already Crashed the First Time?

What Kind of Hyper-Enthusiastic Market is this that Blindly Keeps Pursuing Scams to Make a Fortune Overnight, even if They Already Crashed the First Time?

It’ll take many more sell-offs and the collapse of many more iffy stocks before this hyper-enthusiasm, after nine years of central bank nurturing, is finally wrung out of the market.

Shares of “blockchain” company LongFin (LFIN) plunged 17% today to $14.31, the sixth trading day in a row of plunges. Intraday on Friday, March 23, shares still traded at $73. The astonishing thing isn’t that they’ve plunged 81% over those six trading days, but that they had more than doubled over the prior two weeks, and that they’re still trading above penny-stock status to begin with.

LFIN started trading on December 13, following their IPO. On December 15, LongFin announced – with what I called it “a mix of gobbledygook, hype, and silliness” – that it had acquired a “Blockchain-empowered solutions provider,” namely a website that belonged to a Singapore corporation that is 95% owned by Longfin’s CEO and chairman.

Though neither the announcement nor the transaction passed the smell-test, shares skyrocketed 2,700% to an intraday high of $142.55 on December 18, giving it a market cap of $7 billion and making it the role model for a bevy of other “blockchain” companies. Then, as stock jockeys grappled with reality, shares plunged. As did the shares of other “blockchain” companies.

But then on March 12, it started all over again, when index provide FTSE Russell announced that LongFin would be added to some of its indices, including the widely-tracked Russell 2000, effective March 16:

Then all kinds of things happened.

On March 26, short-seller Citron Research tweeted: “If you are fortunate enough to get a borrow, indeed $LFIN is a pure stock scheme. @sec_enforcement should not be far behind. Filings and press releases are riddled with inaccuracies and fraud.”

…click on the above link to read the rest of the article…

 

How Much Longer Can We Get Away With It?

How Much Longer Can We Get Away With It?

Alas, fakery isn’t actually a solution to fiscal/financial crisis..
This chart of “debt securities and loans”–i.e. total debt in the U.S. economy–is also a chart of the creation and distribution of new money, as the issuance of new debt is the mechanism in our financial system for creating (or “emitting” in economic jargon) new currency: when a bank issues a new home mortgage, for example, the loan amount is new currency created out of the magical air of fractional reserve banking.
Central banks also create new currency at will, and emitting newly created money is how they’ve bought $21 trillion in assets such as bonds, mortgages and stocks since 2009. Is there an easier way to push asset valuations higher than creating “money” out of thin air and using it to buy assets, regardless of the price? If there is an easier way, I haven’t heard of it.
Which brings us to the question: how much longer can we get away with this travesty of a mockery of a sham? How much longer can we get away with creating “money” by issuing new debt/liabilities to grease the consumption of more goods and services and the purchases of epic bubble-valuation assets?
Since humans are still using Wetware 1.0 (a.k.a. human nature), we can constructively refer to the Roman Empire’s experience with creating “money” with no intrinsic value. The reason why the Roman Empire (Western and Eastern) attracts such attention is 1) we have a fair amount of documentation for the period, something we don’t have for other successful empires such as the Incas, and 2) we’re fascinated by the decline and collapse of the Western Empire, a structure so vast and successful that collapse seemed impossible just a few decades before the final unraveling.
One of the books I’m currently enjoying is The Fate of Rome: Climate, Disease, and the End of an Empire, a new exploration of the impact of climate change and pandemics on the Roman Empire’s final few centuries.

…click on the above link to read the rest of the article…

Indian Banks Face Crippling Credit Crunch As PNB Scandal Worsens

The biggest financial fraud in India’s history just got bigger.

On Monday, Punjab National Bank disclosed that a fraud previously believed to be $1.7 billion had swollen to $2 billion as the true extent of the fraud is still coming into focus.

But the impact that this now-$2 billion fraud has had on the shares of PNB and other state-run Indian banks is having a wide-ranging impact across the country’s financial system, according to Bloomberg.

Foreign banks, worried about the systemic lapses that the scandal has exposed, have become unwilling to lend money to smaller Indian firms – causing massive disruptions in trade finance. All of this pressure has hammered the Indian rupee, which is on track for its first monthly drop since September. This is largely because India’s economy, like the US, runs a trade deficit, and depends on capital inflows to function.

Foreign capital comes through foreign funds’ purchases of Indian stocks and bonds, local exporters’ sale of foreign-currency earnings and dollar loans from foreign banks. India is one of the world’s biggest users of trade funding worldwide, according to the ICC Global Survey 2017.

The fraud was purportedly masterminded by Nirav Modi and his uncle Mehul Choksi, both of whom are on the run.

The two men worked with a PNB employee named Gokulnath Shetty, who recently retired. Shetty would issue fraudulent letters of undertaking to help companies create by Choksi and Modi apply for loans through the foreign branches of other Indian banks. The fraud continued as, when it came time to repay the loans, Shetty would issue still more LoU’s to cover the balance.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase