Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #658 Update on the Meltdown

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With the upheaval of the mar­ket econ­o­my, we begin to rec­og­nize the mon­u­ments of the bour­geoisie as ruins, even before they have crum­bled.

Wal­ter Ben­jamin (cir­ca 1937),
“Black sheep” of the Frank­furt School

Indeed. Although Mr. Emory does not sub­scribe to Marx­ist eco­nom­ic the­o­ry, it is dif­fi­cult to dis­count Ben­jam­in’s elo­quent obser­va­tions. As Barack Oba­ma pre­pares to assume the helm of the ship of state, the eco­nom­ic waters are very trou­bled and alto­geth­er per­ilous.

Explor­ing aspects of the eco­nom­ic col­lapse, this pro­gram begins by not­ing that banks are declin­ing to say how they are spend­ing the tax­pay­er mon­ey they have received as part of the bailout. Author/commentator David Siro­ta pro­vides insight as to a pos­si­ble rea­son for the banks’ ret­i­cence. Rel­e­vant data sug­gest that the premise for the bailout might not be “as adver­tised”! In addi­tion, Siro­ta notes that, tak­ing the erro­neous data at face val­ue and then draw­ing the wrong con­clu­sions from it, many states are insti­tut­ing dra­con­ian bud­get cuts that will be coun­ter­pro­duc­tive. Adding to the flood tide of bad eco­nom­ic news was the rev­e­la­tion that the hedge fund run by Bernard Mad­off was actu­al­ly a huge Ponzi scheme. (Emphat­i­cal­ly spec­u­la­tive in nature, the analy­sis of the Mad­off affair occu­pies the bal­ance of the pro­gram.) Although he claims to have act­ed alone, there is rea­son to view Mad­off — “Lee Har­vey Mad­off” as we might call him — as the vis­i­ble ele­ment of a much larg­er oper­a­tion. Note­wor­thy is the fact that the cast of char­ac­ters impli­cat­ed in one aspect or anoth­er of this oper­a­tion includes the Attor­ney Gen­er­al of the U.S., who has recused him­self from the inves­ti­ga­tion, because his son rep­re­sents one of the prin­ci­pals. The col­lapse has raised many impor­tant ques­tions, includ­ing queries as to where the mon­ey went. What the bril­liant Lucy Komis­ar calls “off­shore” is one pos­si­biltiy, with Swiss banks com­ing into focus. Anoth­er pos­si­bil­i­ty is that Mad­off clients received much of the money–clients that includ­ed the Thyssen fam­i­ly, mary ele­ment of the Under­ground Reich and long­time allies of the Bush fam­i­ly. Among the vic­tims are many Jew­ish char­i­ties and indi­vid­u­als who con­tribute to Israeli infra­struc­ture, includ­ing the non-prof­it of Nobel Prize win­ner and Holo­caust Elie Wiesel. Exam­in­ing the milieu involved with the Mad­off affair, the pos­si­bil­i­ty that Mad­off (like a num­ber of Jews) front­ed for the Bor­mann cap­i­tal net­work must be seri­ous­ly con­sid­ered. Clos­ing with an apoc­a­lyp­tic vision, the broad­cast notes an Army War Col­lege report indi­cat­ing that an eco­nom­ic col­lapse might all but destroy the Unit­ed States.

Pro­gram High­lights Include: The sus­pi­cious “sui­cide” of a key hedge fund man­ag­er, Mad­off investor and mem­ber of the French eco­nom­ic elite; the fear of a Mad­off crit­ic — artic­u­lat­ed in a 2005 report on to the SEC on Mad­of­f’s operation–that he was afraid for his and his fam­i­ly’s safe­ty because of his warn­ings about the fund; links of the Mad­off milieu to John J. McCloy II; links of the Mad­off milieu to for­mer SEC head and Car­lyle group asso­ciate Arthur Levitt; the ridicu­lous­ly small, sin­gle audi­tor over­see­ing the Mad­off fund; review of the Bor­mann cap­i­tal net­work’s use of Jews as fronts for their oper­a­tions; review of the Bor­mann cap­i­tal net­work’s con­trol over the French eco­nom­ic elite.

1. The pro­gram begins by not­ing that banks are declin­ing to say how they are spend­ing the tax­pay­er mon­ey they have received as part of the bailout.

“It’s some­thing any bank would demand to know before hand­ing out a loan: Where’s the mon­ey going?

But after receiv­ing bil­lions in aid from U.S. tax­pay­ers, the nation’s largest banks say they can’t track exact­ly how they’re spend­ing the mon­ey or they sim­ply refuse to dis­cuss it.

‘We’ve lent some of it. We’ve not lent some of it. We’ve not giv­en any account­ing of, ‘Here’s how we’re doing it,” said Thomas Kel­ly, a spokesman for JPMor­gan Chase, which received $25 bil­lion in emer­gency bailout mon­ey. ‘We have not dis­closed that to the pub­lic. We’re declin­ing to.’

The Asso­ci­at­ed Press con­tact­ed 21 banks that received at least $1 bil­lion in gov­ern­ment mon­ey and asked four ques­tions: How much has been spent? What was it spent on? How much is being held in sav­ings, and what’s the plan for the rest?

None of the banks pro­vid­ed spe­cif­ic answers.

“ ‘We’re not pro­vid­ing dol­lar-in, dol­lar-out track­ing,’ said Bar­ry Kol­ing, a spokesman for Atlanta, Ga.-based Sun­Trust Banks Inc., which got $3.5 bil­lion in tax­pay­er dol­lars.

Some banks said they sim­ply did­n’t know where the mon­ey was going.

‘We man­age our cap­i­tal in its aggre­gate,’ said Regions Finan­cial Corp. spokesman Tim Deighton, who said the Birm­ing­ham, Ala.-based com­pa­ny is not track­ing how it is spend­ing the $3.5 bil­lion it received as part of the finan­cial bailout. . . .”

“Banks Keep Bailout Spend­ing Secret”

2. Author/commentator David Siro­ta pro­vides insight as to a pos­si­ble rea­son for the banks’ ret­i­cence.

“Please, for­give me for say­ing it. I know it’s a tad annoy­ing, but it has to be said to Amer­i­ca’s rul­ing class in this hum­ble col­umn space. Because if it’s not said here, then you can bet it won’t be said any­where else, and it needs to be said some­where on behalf of the mil­lions of cit­i­zens who were right.

We told you so.

In the slow-motion train wreck that became the eco­nom­ic melt­down, our bipar­ti­san polit­i­cal estab­lish­ment and the syco­phan­tic pun­dit­buro have been wrong over and over and over again. They told us that evis­cer­at­ing con­sumer pro­tec­tions would unleash the mar­ket’s benev­o­lent pow­er and boost the econ­o­my. They told us that a tril­lion-dol­lar Wall Street bailout would solve a cred­it cri­sis. They told us that bailout would be sub­ject­ed to intense over­sight and scruti­ny. Wrong, wrong and wrong — and when crit­ics pre­dict­ed just that, sneer­ing com­men­ta­tors and con­gres­sion­al lead­ers berat­ed us as know-noth­ing Lud­dites, con­spir­a­cy the­o­rists or both.

But with the release of three new reports, there’s no debate any­more. The stud­ies prove that the crit­ics were right and the ide­o­logues of Wash­ing­ton were wrong.

When in 2005 Con­gress over­whelm­ing­ly passed a cred­it-card indus­try-writ­ten bill gut­ting bank­rupt­cy laws, pro­gres­sives were right to try to stop it — and not just because it was an immoral move to legal­ize usury. We were right because as the New York Fed­er­al Reserve Bank reports, the bill played an inte­gral role in the fore­clo­sure surge that crushed the econ­o­my.

In the past, bank­rupt­cy laws made sure debtors first and fore­most con­tin­ued pay­ing their mort­gages so that they could stay in their homes. But the 2005 leg­is­la­tion effec­tive­ly com­pels debtors to first pay off their cred­it cards, mean­ing many then have no mon­ey left to pay their mort­gages. The Fed’s report esti­mates that the bank­rupt­cy bill is caus­ing 32,000 more fore­clo­sures per quar­ter than the econ­o­my would have already gen­er­at­ed.

We told you so.

When almost every media voice in Amer­i­ca was sound­ing the alarm of finan­cial pan­ic and demand­ing a Wall Street bailout plan, when bailout oppo­nents were round­ly ridiculed as ‘irre­spon­si­ble’ by politi­cian and pun­dit alike — those oppo­nents were nonethe­less right to say then what a study from the Min­neapo­lis Fed­er­al Reserve Bank says now: that the case had­n’t been made.

While reporters and the Bush admin­is­tra­tion fran­ti­cal­ly insist­ed that bank-to-busi­ness lend­ing had ceased, inter-bank lend­ing had stopped, and short-term ‘com­mer­cial paper’ loans had dried up, the Min­neapo­lis researchers tell us that ‘all three claims were false’ and con­tin­ue to be false; that ‘nobody has explained how the mon­ey sys­tem has frozen when the data says it has not’; and that ‘a tril­lion-dol­lar inter­ven­tion warrant(ed) a bit more seri­ous analy­sis.’

We told you so.

When law­mak­ers said the bailout includ­ed strict over­sight mea­sures, skep­tics were right to say that claim was patent­ly untrue. Accord­ing to a new analy­sis by fed­er­al offi­cials at the Gov­ern­ment Account­abil­i­ty Office, nonex­is­tent over­sight means ‘tax­pay­ers may not be ade­quate­ly pro­tect­ed’ and that the bailout’s stat­ed goal of fix­ing the econ­o­my ‘may not be achieved in an effi­cient and effec­tive man­ner.’

Yes, we told you so.

And so now, even though these damn­ing reports have gar­nered scant news cov­er­age, per­haps there will be a change. As we — the prag­mat­ic pro­gres­sive major­i­ty — demand tough new finan­cial reg­u­la­tions; job-cre­at­ing invest­ments in pub­lic infra­struc­ture; labor law reforms; uni­ver­sal health care; revised trade poli­cies; a repeal of the odi­ous bank­rupt­cy bill and an end to Wall Street wel­fare — maybe our humil­i­at­ed rulers will start lis­ten­ing.”


“Polit­i­cal Estab­lish­ment Trashed Con­sumer Pro­tec­tions — and Look What We Got” by David Siro­ta; San Fran­cis­co Chron­i­cle; 12/15/2008.

3. In addi­tion, Siro­ta notes that, tak­ing the erro­neous data at face val­ue and then draw­ing the wrong con­clu­sions from it, many states are insti­tut­ing dra­con­ian bud­get cuts that will be coun­ter­pro­duc­tive.

” . . . That’s what’s going on in rev­enue-starved states right now: gov­er­nors are prepar­ing to slash mid­dle-class pro­grams and are resist­ing calls to raise tax­es on the wealthy. Nowhere is this class war more pro­nounced than in New York — the home of the finan­cial thieves who killed the econ­o­my. Hav­ing halved its top tax rate over the last three decades, New York today faces a $15.4 bil­lion deficit. In response, Gov. David Pater­son, a Demo­c­rat, might have asked his state’s Gor­don Gekkos to pay high­er tax­es, espe­cial­ly con­sid­er­ing the idea’s pop­u­lar­i­ty in polls and the news that Wall Street’s elite are still swim­ming in mon­ey. Indeed, accord­ing to CBS News, the alleged­ly belea­guered finan­cial indus­try is so flush with cash it plans to dole out $14 bil­lion in exec­u­tive bonus­es this year.

Yet, far from forc­ing rob­ber barons to pay their fair share, Pater­son told the New York Times that tax­ing mil­lion­aires is ‘the last place you want to go.’ Instead, he pro­pos­es to pun­ish Joe and Jane Six-pack by hik­ing the tax­es and cut­ting the pro­grams that dis­pro­por­tion­ate­ly impact them. Specif­i­cal­ly, he wants to increase sales tax­es, col­lege tuitions and licens­ing fees and slash edu­ca­tion and low-income health pro­grams.

Pater­son defend­ed his pro­pos­als by telling PBS’ Bill Moy­ers ‘that when you tax the wealthy in the down­turn of an econ­o­my, you have an auto­mat­ic link of a loss of job oppor­tu­ni­ties and then a loss of pop­u­la­tion.’ The ratio­nale sounds intel­li­gent­ly prag­mat­ic — until you peruse the rel­e­vant data.

When New Jer­sey recent­ly raised tax­es on the wealthy, Prince­ton Uni­ver­si­ty researchers found that most of those who lat­er left the state moved to places with high­er tax­es, mean­ing there is no causative link between levies on the rich and res­i­den­tial flight. Like­wise, when New York tem­porar­i­ly raised high-income tax­es after 9/11, the state added 127,000 jobs, mean­ing no link exists between high­er tax­es on the rich and job loss.

Dur­ing times of sur­plus­es, gov­er­nors could get away with the unsub­stan­ti­at­ed non­sense Pater­son is ped­dling. But now, 43 states con­front short­falls, and because states can­not run deficits, the dol­lars and sense of these argu­ments mat­ter. Law­mak­ers must choose what pol­i­cy will cre­ate the best chances for eco­nom­ic recov­ery: spend­ing cuts or tax increas­es, and if the lat­ter, on whom?

The answer isn’t rock­et sci­ence. As Nobel Prize-win­ning econ­o­mist Joseph Stiglitz says, ‘Reduc­tions in gov­ern­ment spend­ing on goods and ser­vices (are) like­ly to be more dam­ag­ing to the econ­o­my in the short run than tax increas­es focused on high­er-income fam­i­lies.’

That’s because gov­ern­ment cuts auto­mat­i­cal­ly decrease the con­sump­tive spend­ing pro­grams that broad­ly stim­u­late the econ­o­my where­as tax increas­es, when aimed at the wealthy, more often impact funds socked away in sav­ings.

‘The more that the tax increas­es (are) focused on those with low­er propen­si­ties to con­sume (i.e., the rich),’ Stiglitz notes, ‘the less dam­age is done to the weak­ened econ­o­my.’

Incred­i­bly, Pater­son acknowl­edges how destruc­tive his bud­get is, admit­ting that his own ‘edu­ca­tion cuts are dra­con­ian, the health care cuts are pro­hib­i­tive [and] the tax­es that are being levied ... are not fair.’

So why would he — or any gov­er­nor — nonethe­less try to leg­is­late such idio­cy? Because mil­lion­aires are the ones who finance guber­na­to­r­i­al can­di­da­cies, and their cam­paign con­tri­bu­tions buy tax pro­tec­tion. The result is what anoth­er New York roy­al­ist promised.

‘Only the lit­tle peo­ple pay tax­es,’ said Leona Helm­s­ley — a doc­trine that will exac­er­bate this reces­sion if states keep mak­ing it true.”

“Eco­nom­ic Death and Mil­lion­aire Tax­es” by David Siro­ta; San Fran­cis­co Chron­i­cle; 12/26/2008.

4. Next, the pro­gram explores the death of a blog­ger who post­ed under the name “Tan­ta.” An expert on eco­nom­ic mat­ters who fore­told much of the fis­cal unpleas­ant­ness that has tran­spired, her death was cer­tain­ly time­ly for the male­fac­tors involved in its cre­ation.

“The blog­ger Tan­ta, an influ­en­tial voice on the mort­gage col­lapse, died Sun­day morn­ing in Colum­bus, Ohio.

Tan­ta, who wrote for Cal­cu­lat­ed Risk, a finance and eco­nom­ics blog, was a pseu­do­nym for Doris Dungey, 47, who until recent­ly had lived in Upper Marl­boro, Md. The cause of death was ovar­i­an can­cer, her sis­ter, Cathy Stick­el­maier, said.

Thanks in large part to Tanta’s con­tri­bu­tions, Cal­cu­lat­ed Risk became a cru­cial source of pre­scient analy­sis as the hous­ing mar­ket at first fal­tered, then col­lapsed and final­ly spawned a full-blown cred­it cri­sis.

Tan­ta used her exten­sive knowl­edge of the loan indus­try to com­ment, cas­ti­gate and above all instruct. Her fans ranged from the Nobel lau­re­ate Paul Krug­man, an Op-Ed colum­nist for The New York Times who cit­ed her in his blog, to ana­lysts at the Fed­er­al Reserve, who cit­ed her in a paper on ‘Under­stand­ing the Secu­ri­ti­za­tion of Sub­prime Mort­gage Cred­it.’ . . .”

“Doris Dungey, Pre­scient Finan­cial Blog­ger, Dies at 47” by David Stre­it­feld; The New York Times; 11/30/2008.

5. Much of the pro­gram focus­es on the Bernard Mad­off scan­dal, the biggest Ponzi scheme in his­to­ry. Dubbed “Lee Har­vey Mad­off” by Mr. Emory, Mad­of­f’s claim to be the only one involved is high­ly dubi­ous.

“Like the con­clu­sion that Lee Har­vey Oswald was a lone gun­man, the the­o­ry that Bernard Mad­off act­ed alone is hard to swal­low.

True, Mad­off has alleged­ly con­fessed that he per­pe­trat­ed a mas­sive fraud that left behind $50 bil­lion in loss­es; and he claimed to have done this all alone.

But this is a man who kept false records, sent bogus doc­u­men­ta­tion, bilked investors for bil­lions, lied for years to friends and know­ing­ly harmed char­i­ties. It’s with­in the realm of accept­able behav­ior to cast a jaun­diced eye upon his con­fes­sion. . . .”

“Did Mad­off Act Alone?” by Katie Ben­ner; money.cnn.com; 11/30/2008.

6. The sus­pi­cious “sui­cide” of a Mad­off investor from France rais­es sus­pi­cions. Part of the French pow­er elite, de la Ville­huchet invest­ed mon­ey with Mad­off on behalf of wealthy Euro­pean clients. In this con­text, it is impor­tant to under­stand the deci­sive influ­ence of the Bor­mann cap­i­tal net­work on the French pow­er elite. FTR #305 goes into this at some length.

“But after los­ing more than $1 bil­lion of his clients’ mon­ey to Bernard Mad­off, Rene-Thier­ry Magon de la Ville­huchet had enough. He locked the door of his Madi­son Avenue office and appar­ent­ly swal­lowed sleep­ing pills and slashed his wrists with a box cut­ter, police said.

A secu­ri­ty guard found his body Tues­day morn­ing, next to a garbage can placed to catch the blood. . . The bloody scene marked a gris­ly turn in the Mad­off scan­dal in which mon­ey man­agers and investors were ensnared in an alleged $50 bil­lion Ponzi scheme. De la Ville­huchet is believed to have lost about $1.4 bil­lion to Mad­off.

No sui­cide note was found, said NYPD spokesman Paul Browne.

De la Ville­huchet, 65, was an esteemed financier who tapped his upper-crust Euro­pean con­nec­tions to attract clients. It was not imme­di­ate­ly clear how he knew Mad­off or who his clients were.

He grew increas­ing­ly sub­dued after the Mad­off scan­dal broke, draw­ing sus­pi­cion among jan­i­tors at his office Mon­day night when he demand­ed that they be out of there by 7 p.m. Less than 13 hours lat­er, his body was found. . . .De la Ville­huchet (pro­nounced veel-ou-SHAY) comes from rich French lin­eage, with the Magon part of his name refer­ring to one of France’s most pow­er­ful fam­i­lies. The Magon name is even list­ed on the Arc de Tri­om­phe in Paris, a mon­u­ment com­mis­sioned by Napoleon in 1806.

‘He’s irre­proach­able,’ said Bill Rapavy, who was Access Inter­na­tion­al’s chief oper­at­ing offi­cer before found­ing his own firm in 2007.

De la Ville­huchet’s firm enlist­ed inter­me­di­aries with links to wealthy Euro­peans to gar­ner investors. Among them was Philippe Junot, a French busi­ness­man and friend who is the for­mer hus­band of Princess Car­o­line of Mona­co, and Prince Michel of Yugoslavia. . . .”

“Sui­cide Mad­off Investor Was ‘Hon­or­able Man’ ” [AP]; msnbc.msn.com; 12/24/2008.

7. De la Ville­huchet’s biceps were lac­er­at­ed. That’s quite a miss for some­one try­ing to cut his wrists.

” . . . His wrists and his left biceps were slashed, said Paul Browne, a New York police spokesman. A waste­bas­ket had been placed under his bleed­ing biceps, Browne said. . . .”

“Financier Is Found Dead in Mad­off After­math” by Zachary Kouwe and Michael Wil­son; Inter­na­tion­al Her­ald Tri­bune; 12/24/2008.

8. Among the wealthy investors who were involved with Mad­off were the Thyssen fam­i­ly, long time sup­port­ers of Hitler and prin­ci­pals in the Under­ground Reich.

“Thyssen Fam­i­ly. Source sends the fol­low­ing:

Thy­bo Invest­ments grew out of a fam­i­ly office for Thyssen. They have been in fund of funds it seems since 1989.

Thy­bo Inter­na­tion­al is a “prop­er” fund of fund but it’s new­er share class G invests only in one man­ag­er — and i’m 99% sure it’s Mad­off as the returns are almost the same. Some more info:

The fund start­ed in Jan 2007.
Ernst & Young. Lux­em­bourg are the audi­tors.
UBS Lux­em­bourg is the admin­is­tra­tor. . . .”

“Bernie Mad­of­f’s Vic­tims: The List”; Investorshub.advfn.com; 12/14/2008.

9. Whistle­blow­er Har­ry Markopo­los stat­ed that he feared for his safe­ty and that of his fam­i­ly because of the fact that he alert­ed the SEC about Mad­off years in advance of the break­ing of the scandal–to no avail. Per­haps he knew that his “biceps” might become “lac­er­at­ed” as well!

“The man who tried unsuc­cess­ful­ly for almost a decade to spur fed­er­al secu­ri­ties reg­u­la­tors to inves­ti­gate Bernard L. Mad­off did not ini­tial­ly dis­close his own iden­ti­ty to reg­u­la­tors because he feared for his life, accord­ing to tes­ti­mo­ny he has appar­ent­ly pre­pared for a Con­gres­sion­al hear­ing Wednes­day morn­ing. . . .”

“Mad­off Wit­ness Tells of Fear for Safe­ty” by Diana B. Hen­riques; The New York Times; 2/3/2009.

10. Then Attor­ney Gen­er­al Michael Mukasey recused him­self from the case because his son Mark rep­re­sents Frank DiPas­cali, one of the prin­ci­pals in the case.

” . . . The case took anoth­er twist Wednes­day when the Jus­tice Depart­ment said that Atty. Gen. Michael B. Mukasey had recused him­self from the Mad­off probe. Mukasey’s son, Mark Mukasey, is a defense lawyer rep­re­sent­ing one of the offi­cers at Mad­of­f’s firm. . . .”

“SEC Fail­ures Spur Calls for Agency Over­haul” by Jim Puz­zanghera and Wal­ter Hamil­ton; Los Ange­les Times; 12/18/2008.

11. Much of the mon­ey appears to have gone “off­shore” as Lucy Komis­ar puts it. Swiss banks are also com­ing into focus.

” . . . Now, as the links between Bernard L. Mad­off and elite pri­vate banks like Gene­va-based Union Ban­caire Privée emerge, this well-pol­ished rep­u­ta­tion has been tar­nished by the $50 bil­lion Ponzi scheme that Mr. Mad­off has been arrest­ed for and accused of run­ning.

L’Affaire Mad­off, as it has become known here and in Gene­va, has cast an unwant­ed spot­light onto the nor­mal­ly shad­owy world of pri­vate bankers in Switzer­land and oth­er cozy hid­ing places of off­shore wealth, like the Cay­man Islands and Lux­em­bourg. . . .”

“Mad­off Deal­ings Tar­nish a Pri­vate Swiss Bank” by Nel­son D. Schwartz; The New York Times; 12/23/2008.

12. One of the inter­est­ing per­son­ages involved with Mad­off was John J. McCloy, son of War­ren Com­mis­sion mem­ber, U.S. High Com­mis­sion­er for Ger­many and archi­tect of the Black Eagle Fund John J. McCloy.

” . . . ‘As we know, Walter’s suc­cess came after sev­er­al thin years,’ wrote John J. McCloy, a banker from Green­wich who described him­self and his wife, Lau­ra, as the Noels’ ‘best friends for more than 30 years,’ in May in a let­ter rec­om­mend­ing the Noels to mem­ber­ship in a pri­vate club. . . .”

“In Fraud Case, Mid­dle­men in Spot­light” by Eric Konigs­berg; The New York Times; 12/16/2008.

13. Anoth­er sig­nif­i­cant per­son­age alleged­ly asso­ci­at­ed with Mad­off is for­mer SEC head and Car­lyle Group asso­ciate Arthur Levitt.

” . . . Ex-Secu­ri­ties and Exchange Com­mis­sion boss Arthur Levitt yes­ter­day fired back at crit­ics try­ing to lay at his feet some of the blame for the Bernie Mad­off scan­dal, say­ing he was­n’t asleep at the switch.

‘At this point, I don’t see any evi­dence that the SEC dropped the ball,’ Levitt, who’s now an advis­er to pri­vate-equi­ty shop Car­lyle Group, told The Post.

The 78-year-old Levitt also denied alle­ga­tions that he had a chum­my rela­tion­ship with Mad­off, who last week was arrest­ed on charges of hav­ing mas­ter­mind­ed a $50 bil­lion Ponzi scheme that has touched every­thing from hedge funds to char­i­ties to Euro­pean banks.

Some have sug­gest­ed that Levitt and Mad­off were close enough dur­ing the eight years that Levitt was SEC chair­man that it might have skewed his over­sight of the com­pa­ny. Addi­tion­al­ly, Levitt said he’s nev­er been ‚an investor in Mad­of­f’s advi­so­ry busi­ness. . . .”

“Mad­off-SEC’s Very Cozy Tie?” by Frank James; chicagotribune.com; 12/17/2008.

14. Many indi­vid­u­als and insti­tu­tions that invest­ed in Israeli infra­struc­ture were severe­ly dam­aged by Mad­off as well.

” . . . Many of the investors alleged­ly swin­dled by Wall Street Jour­nal mon­ey man­ag­er Bernard Mad­off are, like him, Jew­ish, and for many of them, con­tribut­ing to Jew­ish caus­es is a cru­cial part of their cul­ture. The effect of their loss­es on the Jew­ish phil­an­thropic world is being seen as noth­ing less than cat­a­stroph­ic. . . . Experts esti­mate that about 5 per­cent of all mon­ey donat­ed by Amer­i­can Jews–and 20 per­cent donat­ed to Jew­ish causes–goes to Israel, where hos­pi­tals, uni­ver­si­ties, syn­a­gogues and oth­er non-prof­it orga­ni­za­tions depend on Amer­i­can phil­an­thropy. While these insti­tu­tions had been suf­fer­ing from the eco­nom­ic down­turn well before the Mad­off  scan­dal broke, his arrest and the col­lapse of his invest­ment firm has has­tened the end for some.

One foun­da­tion that con­tributes to many caus­es in Israel, the Chais Fam­i­ly Foun­da­tion, has had to shut down due to its loss­es with Mad­off. ’ We are now inform­ing all those won­der­ful projects that there will be no more funds avail­able,’ said its pres­i­dent, Avra­ham Infeld, in Israel.”

“Jew­ish Char­i­ties Lose Big with Mad­off Invest­ments” [AP]; San Fran­cis­co Chron­i­cle; 2/17/2008; p. C2.

15. One of the biggest losers in the Mad­off affair was the non-prof­it of Holo­caust sur­vivor and  Nobel-Prize win­ner Elie Wiesel.

” . . . Wiesel, whose char­i­ta­ble foun­da­tion was wiped out by Mad­off, has until now most­ly kept qui­et about the alleged $50 bil­lion Ponzi scheme. But today, the Holo­caust sur­vivor and Nobel Peace Prize recip­i­ent spoke pas­sion­ate­ly about his betray­al by Mad­off, whom he referred to var­i­ous­ly as ‘a crook, a thief, a scoundrel,‘as well as a ‘swindler’ and ‘evil.’

Wiesel acknowl­edged that in addi­tion to hav­ing lost his foun­da­tion’s assets, he lost his per­son­al wealth to Mad­off. ‘All of a sud­den, every­thing we have done in 40 years—literally, my books, my lec­tures, my uni­ver­si­ty salary, everything—was gone,’ he said dur­ing a pan­el dis­cus­sion host­ed by Condé Nast Port­fo­lio.

His foun­da­tion, the Elie Wiesel Foun­da­tion for Human­i­ty, lost sub­stan­tial­ly all of its $15.2 mil­lion in assets to Mad­off; includ­ing his per­son­al invest­ments, total loss­es may be as high as $37 mil­lion. ‘We gave him every­thing, we thought he was God, we trust­ed every­thing in his hands,’ Wiesel said. . . .”

“Wiesel ‘Lost Every­thing’ to Mad­off”; Yahoo.com; 2/27/2009.

16. The col­lapse of the Mad­off oper­a­tion has fed anti-Semi­tism.

” . . . Remem­ber the spike in anti-Semi­tism after the finan­cial melt­down? This will be sim­i­lar, but with the poten­tial to be a lot more dam­ag­ing because Mad­off is actu­al­ly being charged crim­i­nal­ly. In the above arti­cle, Rob Esh­man points to the com­ments left on the site dealbreaker.com, which iden­ti­fied some of Madoff’s investors. Here’s a few of the remarks that will give many Jews chills:

“LOL Jews!...“
“Looks like a lot of Jews might be con­vert­ing to Mus­lim soon….in prison….“
“Now that the JEW has been thrown down the well, is our coun­try free? LETS THROW A BIG PARTY!!!“

I remem­ber that last line. Only it’s fun­nier as a joke, com­ing from Borat. . . .”

“Bernie Mad­off Gives Ammo to Anti-Semi­tes Every­where” by Brad A. Green­berg; The Jew­ish Jour­nal; 12/12/2008.

17. Mr. Emory opines that the Mad­off oper­a­tion may well have been a Bor­mann front. The Thyssens may well have been among the Mad­off clients that got mon­ey out of the oper­a­tion. The French elite may well have invest­ed as well. In this con­text, one should not lose sight of the fact that the Bor­mann net­work uses Jews as front men. There are a num­ber of things to be gained from such a gam­bit. First, a Nazi mon­ey laun­der­ing oper­a­tion would be superbly cam­ou­flaged by Jew­ish front oper­a­tors. Sec­ond­ly, the mon­ey paid by the Bor­mann net­work to the sup­port of Israel helps buy silence on the part of would-be Israeli Nazi hunters. Third­ly, it can lend sup­port to the anti-Semit­ic the­o­ry that Jews “con­trol the finan­cial sys­tem.” For more about “Bor­mann Jews” check out FTR #305.

18. Clos­ing with an apoc­a­lyp­tic vision, the broad­cast notes an Army War Col­lege report indi­cat­ing that an eco­nom­ic col­lapse might all but destroy the Unit­ed States.

“The Unit­ed States could be sleep-walk­ing into its next cri­sis, a mil­i­tary report said.

The report by the U.S. Army War Col­lege’s Strate­gic Insti­tute, said that a defense com­mu­ni­ty par­a­lyzed by con­ven­tion­al think­ing could be unpre­pared to help the Unit­ed States cope with a series of unex­pect­ed crises that would rival the Al Qai­da strikes in 2001, termed a “strate­gic shock.”

The report cit­ed the prospect of the col­lapse of a nuclear state lead­ing to mas­sive unrest in the Unit­ed States, Mid­dle East Newsline report­ed.

“Wide­spread civ­il vio­lence inside the Unit­ed States would force the defense estab­lish­ment to reori­ent pri­or­i­ties in extrem­is to defend basic domes­tic order and human secu­ri­ty,” the report, authored by [Ret.] Lt. Col. Nathan Freir, said.”

“Dooms­day: Report Warns of ‘Strate­gic Shock’ Lead­ing to Mas­sive Unrest”; World Tri­bune; 12/15/2008.

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