Bernard madoff

By Pam Martens and Russ Martens: April 10, 2024 ~
As the financial crisis of 2008 was ravaging century-old financial institutions on Wall Street and collapsing the U.S. economy, the central bank of the United States, the Federal Reserve, launched an effort to restore market liquidity by becoming the buyer of the toxic sludge flooding Wall Street in the form of Mortgage-Backed Securities (MBS).
On November 25, 2008, in delicately-parsed language, the Fed announced it planned to buy $500 billion of MBS that was backed by government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac, and Ginnie Mae. That was the first of what would become Quantitative Easing (QE) to infinity at the Fed. The Fed’s MBS holdings have grown from the planned $500 billion to $2.4 trillion as of last Wednesday.
Just as it did with the bulk of its $29 trillion bailout programs to Wall Street during and after the 2008 financial crisis, the Fed farmed out its MBS buying program to the New York Fed, which, in turn, farmed out one critical leg of the program to the very Wall Street mega bank that had corrupted a significant part of the MBS market: JPMorgan Chase.
A little more than a month after the Fed’s MBS announcement, on December 31, 2008, the New York Fed signed a contract with JPMorgan Chase to be the sole custodian of the securities it bought under the MBS program. That contract with JPMorgan Chase was amended on April 1, 2010; April 26, 2011; April 17, 2014 and again on January 30, 2017. (As of this morning, the original contract and its amendments are available at the New York Fed’s website. Should those documents disappear, we have archived the same documents on our website here.)
Wall Street On Parade wrote about JPMorgan Chase being the sole custodian of the Fed’s MBS program in 2014 and again in 2020. In both years, the New York Fed confirmed that JPMorgan Chase remained the sole custodian of its MBS securities. But something strange happened this week when we sought our routine confirmation from the New York Fed.
On Monday, we emailed the communications department at the New York Fed and asked if JPMorgan Chase was still holding the MBS portfolio for the New York Fed.
The New York Fed has a vendor department, which, ostensibly, vets its vendors and keeps track of its vendor contracts. It should have taken less than five minutes to phone that department and verify if the MBS custodian contract with JPMorgan Chase was still in effect.
Instead, we received an email on Monday saying a response to our question would be forthcoming on Tuesday. When 5:00 p.m. Tuesday rolled around with no response, we emailed the New York Fed again for an answer, asking the following:
“Per below, can you confirm that JPMorgan Chase remains the sole custodian of the Agency Mortgage-Backed Securities held by the Fed?
“The FRBNY still has the Vendor Agreement indicated as current on its website so this shouldn’t be a problem to confirm. I’m just checking with you folks out of an abundance of caution to verify my facts.”
This time, the response from the New York Fed was Kafkaesque. We were told we could not put quotes around the information from the New York Fed or name the person giving us the information. And, the information that was provided to us was off topic. We were told that beginning in 2010 the New York Fed began to use internal staff to make its own purchases of MBS.
We shot back with yet another email:
“I’m asking strictly about the Custodian. Does that remain JPMorgan Chase?”
We were told via email that the New York Fed had nothing else to say on the matter.
We then took the screenshot below at the New York Fed’s website showing expired vendor contracts versus those not marked as “expired.” It would appear from this that the contract making JPMorgan Chase the sole custodian of the Fed’s $2.4 trillion in MBS debt securities is still in effect.
Why would the New York Fed confirm the same question in 2014 and 2020 but be so bizarrely cagey about confirming this information in 2024?
Could it be that the crime factory at JPMorgan Chase has simply gotten too embarrassing for the New York Fed to acknowledge its association with it?
The New York Fed failed to find a new custodian for the $1.49 trillion of MBS that JPMorgan Chase was holding for the Fed on January 7, 2014 when the Justice Department charged the bank with two criminal felony counts for its role in the Bernard Madoff Ponzi scheme. The bank admitted to the charges; paid $1.7 billion into a Madoff victims fund; and was given a 3-year Deferred Prosecution Agreement and put on probation for the same period.
The New York Fed also failed to replace JPMorgan as custodian when it was holding $1.7 trillion of the Fed’s MBS on May 20, 2015 and was charged with its third criminal felony count in less than a year and a half. On that occasion, JPMorgan Chase admitted to one criminal count brought by the Justice Department for its role with other banks in rigging the foreign exchange market. The bank paid a fine of $550 million and was put on probation again.
JPMorgan Chase admitted to its fourth and fifth felony counts on September 29, 2020 and, once again, the New York Fed saw no reason to remove its $2 trillion in mortgage securities out of the reach of the criminally-inclined bank. The 2020 felony counts, once again brought by the Justice Department, involved “tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts” and “thousands of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds,” according to the Justice Department. The bank agreed to pay $920 million in fines and restitution to various regulators. It was given another Deferred Prosecution Agreement and put on probation for the third time.
Apparently, rigging the sovereign debt market of the United States is not a disqualifying event to serve as a vendor at the New York Fed – raising the question as to what on earth would be a disqualifier.
Not only did the Federal Reserve and the New York Fed look the other way at five criminal felony counts in deciding to retain JPMorgan Chase as a custodian of its securities, but it looked the other way as JPMorgan Chase was repeatedly charged with fraud involving the very same securities it was holding for the Fed.
On November 15, 2013, JPMorgan Chase announced that it had agreed to pay $4.5 billion to settle claims by private investors that it had defrauded them in mortgage-backed securities.
On November 19, 2013, JPMorgan agreed to pay $13 billion to settle claims by the Department of Justice, the FDIC, the Federal Housing Finance Agency, and various State Attorneys General over its fraudulent practices involving mortgage-backed securities. Associate Attorney General Tony West said this at the time:
“Through this $13 billion resolution, we are demanding accountability and requiring remediation from those who helped create a financial storm that devastated millions of Americans. The conduct JPMorgan has acknowledged — packaging risky home loans into securities, then selling them without disclosing their low quality to investors — contributed to the wreckage of the financial crisis. By requiring JPMorgan both to pay the largest FIRREA penalty in history and provide needed consumer relief to areas hardest hit by the financial crisis, we rectify some of that harm today.”
Then, on February 4, 2014, JPMorgan admitted to a civil fraud action brought by the U.S. government for “submitting false certifications” to various government agencies to get its toxic mortgages insured by those agencies and “failing to self-report to HUD-FHA hundreds of loans that it had identified as fraudulent or otherwise deficient, and to submitting loan data to HUD-FHA that lacked integrity.” The bank was fined another $614 million in that matter.
To summarize: JPMorgan Chase played an integral role in bringing on the financial crisis of 2008 which forced the Fed to launch a bond-buying program to resuscitate the U.S. economy. JPMorgan Chase then benefitted by getting paid fees in the tens of millions of dollars to hold those bonds for the Fed. The bank then continued to engage in serial criminal activity; being put on probation; getting off probation and engaging in more criminal activity: All while the New York Fed entrusted it with trillions of dollars of Fed securities sitting inside its house of crime.
Making this situation even more absurd (if that’s possible), the 2017 amendment that the New York Fed signed with JPMorgan Chase effectively gutted crucial conflicts of interest protections. One section reads as follows:
“Bank [JPMorgan Chase] or any of its divisions, branches or Affiliates may be in possession of information tending to show that the Instructions received may not be in the best interest of Customer [Federal Reserve Bank of New York]. Bank [JPMorgan Chase] is under no duty to disclose any such information.”
In the fourth quarter of 2019, when JPMorgan Chase was custodian of $1.4 trillion of MBS for the Fed, it was also getting a massive bailout from the New York Fed via repo loans. As the chart below shows, JPMorgan Chase was the second largest recipient of these repo loans, receiving $2.59 trillion on a cumulative, term-adjusted basis, for a financial crisis that has yet to be credibly explained.
Congress has threatened in the past to investigate the cozy ties between Wall Street and the New York Fed. The American people must demand that this happens sooner rather than later.

AARO was VERY careful to avoid accusing any of the whistleblowers who testified to them of making false, fictitious, or fraudulent statements. Instead, they emphasized how ALL witnesses believed what they were telling AARO. ❗️That was very intentional ❗️ When Michael Herrera provided his testimony to AARO, he was required to sign a document acknowledging compliance with 18 U.S.C. § 1001, which makes it a felony to make false, fictitious, or fraudulent statements, punishable by fine and up to 5 years imprisonment.
https://preview.redd.it/3cpsbj6z7xnc1.png?width=912&format=png&auto=webp&s=210ba69d97ccf14f509f2d0f87829abe9fb8d9d6
(I would assume all other whistleblowers who testified to AARO signed similar agreements.) This is the same statute cited to prosecute Martha Stewart, Bernard Madoff, Michael Cohen, and others, which led to large fines and jail time. If AARO accused any of the whistleblowers of lying, they would have to prove it, which, of course, they want to avoid at all costs. This is why the entire "Section I: Introduction" is focused on validating and accepting people's beliefs in UAP. It gives them an out so they won't have to accuse even a single person of committing a felony.
https://preview.redd.it/a9qo56zx7xnc1.png?width=1181&format=png&auto=webp&s=607e03c61592b1a33666f3b530c9c8b5e7200c24

In the financing of a car sale with a zero dollar down loan contract, the transactions in the ledgers of all three parties go something like this (I think)
Staring assumptions A. Bank has money, an asset B. Buyer has IOU capacity, an asset C. Seller has vehicle, an asset

1. Bank Debit Cash (Money given)*
2. Bank Credit Accounts Receivable (loan created)
3. Buyer Credit Cash (money received)
4. Buyer Debit Accounts Payable (debt received)
5. Buyer Debit Cash (money given)
6. Seller Credit Cash (money received)
7. Seller Debit Inventory (car given)
8. Buyer Credit Asset (car received)
9. Buyer Debit Asset (car given)
10. Bank Credit Asset (car received)

• I suspect that JE #1 doesn’t exist because banks openly state that the cash doesn’t exist prior to the money being created. This means banks are not giving the buyer an asset in exchange for the IOU and the car title. There is nothing the buyer is able to consider and thus, without consideration, the title of the vehicle and any payments the buyer made to the bank are promptly returned to the buyer according to the section of the contract, under the section outlining terms of breach.

Without JE #1, this exchange is the verbal equivalent of a lie, the accounting version of fraud, and the moral version of theft. It is dishonest, criminal, and immoral.
For this reason, criminal and civil penalties may be filed against the bank since this missing JE is proof of fraud. Precedent for these charges and convictions are plentiful and can be found in (but not limited to) the following cases:

• SEC v Worldcom, Inc.
• Newby v Enron Corp
• United States v Bernard L. Madoff
• United States v Bankman Fried

If any accountant or lawyer can show me JE #1 (Bank debit cash) and prove there was in fact cash available to debit, in the sale of a loan contract, I’ll happily consider it.

The bandwagon effect is a psychological phenomenon in which people do something primarily because other people are doing it, regardless of their own beliefs, which they may ignore or override. This tendency of people to align their beliefs and behaviors with those of a group is also called a herd mentality. This phenomenon can be seen during bull markets and the growth of asset bubbles. Here, at this moment in time, you need to come to a logical conclusion of the big question yourself. Are you a part of the bandwagon, are you holding bags, or are you thinking rationally?

• “You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right - that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else.” - Warren Buffett
• https://www.youtube.com/watch?v=j6niTA1AMws (Must Watch - Seriously)

That smug face after calling out a Patsy
Following the group led to the housing crisis in 2007. Financial institutions all joined the subprime mortgage bandwagon, creating an unregulated and unstable housing bubble. Investors and buyers all believed the market would continue to be stable because everyone else also believed it would remain stable. The markets can remain inefficient so long as people behave irrationally due to fear and greed.
13F Filings: https://www.investopedia.com/terms/f/form-13f.asp
The Securities and Exchange Commission's (SEC) Form 13F is a quarterly report that is required to be filed by all institutional investment managers with at least $100 million in assets under management. It discloses their equity holdings and can provide insights into what the “smart money” is doing in the market.

• Timing: A frequent criticism of the form is the fact that it only requires fund managers to file 13F reports 45 days after the end of each quarter. Most managers submit their 13Fs as late as possible because they do not want to tip off rivals to what they are doing.
• Herd Behavior: One risk for both professional and retail investors is the tendency of money managers to borrow investment ideas from one another. Hedge fund managers are no more immune to behavioral biases than anyone else. After all, if you are a fund manager, it is safer to be wrong with the majority than wrong alone. This can lead to crowded trades and overvalued stocks. And if small investors are late to the party getting into a trade, they are likely to be late getting out.
• An Incomplete Picture: Another issue with 13F filings is that funds are only required to report long positions, in addition to their put and call options, American Depositary Receipts (ADRs), and convertible notes. This can give an incomplete and even misleading picture, because some funds generate most of their returns from their short-selling, only using long positions as hedges. There is no way to distinguish these hedges from genuine long positions on 13F forms.
• Bernard Madoff dutifully filed 13F forms every quarter.

13F provides a loophole for hedge fund managers. In a 2010 statement, the SEC itself acknowledged the form had many problems and recommended a number of changes should be made in order to ensure "useful and reliable data is provided to the public and government regulators."
The SEC's internal review also noted that although "the SEC would be expected to make extensive use of Section 13(f) information for regulatory and oversight purposes, no SEC division or office conducts any regular or systematic review of the data filed on Form 13F."
​
Illusory Truth Effect
Repetition can also affect what people believe to be true. People tend to believe claims are more true if they have been exposed to them more. This is why advertisements, propaganda, and false news all work: they expose people to the same idea over and over. This is known as the illusory truth effect.

• https://www.youtube.com/watch?v=UrL_12Dsdwo
• https://www.youtube.com/watch?v=r07Gg92YjOI&t=11s
• https://www.youtube.com/watch?v=xVp77PCc6xM
• https://www.youtube.com/watch?v=5KOT0_I4Fvw
  • Ken Griffin about the importance of large amounts of data and applied qualitative analytics and behavior economics to better understand the companies they destroy.
• https://www.youtube.com/watch?v=XR5ver9VTuk

Numbers and opinions of GME vary depending on the sources and time data or opinion was published. GME has undergone share buybacks, retail going HAM, insider buys, institutional trades, stock vesting, a split via dividend, and other evolutions in the exchange of shares as well with respect to the total shares outstanding. Various data points change frequently over time and no website or tool will give you an answer as to what’s coming next, what’s happening now, or even what happened in 2021, a short 84 years ago. You are responsible for sifting through various possibilities of the truth, and coming to a logical conclusion on the best way to hedge yourself for the future. If you emotionally invest in the market being one direction or the other, you are in my opinion, thinking about it wrong. Emotionally invest in the direction of the company and management. Everything else will work itself out.
Self-reporting requirements for SHF, false reporting, and other loopholes make outside data unreliable, however; it should not be ignored. I often feel the truth is leaking out for small periods of time on various data aggregate services before it's covered back up, but - I also feel the entire financial world is teaming up against a small video game retailer in the greatest David vs. Goliath showdown in modern economics... so take that how you will. Continuing to learn, apply pressure to regulation changes, lock the float, cash flow positive, profitability, web3, customer service, competent management.... all these are the reasons we will eventually succeed. Who are we up against? I really don't know the exact answer to this, but based on what I see, everyone. If you believe the people "who couldn't lose" will realize it's over one day and willingly let the tendyman come, think again. They don't give a shit about Margin. They don't care about forced liquidations. As long as they have a fighting chance with a law to break or bend, they will. You care about you. They care about them.
FTD’s, OTC markets & order internalization, Dark pools, Spoofing, Wash trading (HFT, algos), Batching orders into odd lots under 100 even when 100+ shares are routed to a lit exchange, Marking shorts as longs, ETFs persistently over-shorted, Single-stock ETFs, leveraged ETFs, and inverse single-stock ETFs, Swaps, Tokenized securities (false locates), Options (DOOMPS as false locates), Reporting waivers (CFTC waiving swaps reporting Aug 2021 to Oct 2023, extended to 2025), Regulatory failure to issue commensurate punishment and/or revoke licensing, Selling more options contracts than shares in existence while simultaneously retaining profits, overseas positions not reported, Conventional shorting over 50% daily volume almost daily for over a year, Cost to Borrow decreases as available shares decrease, Factually incorrect media reporting and fomenting, Social media infiltration, Lowering bid and ask prices in the absence of trades to lower stock prices, Beneficial ownership deficiencies... should I continue?
All for what exactly? One more day. Why do I believe in the long-term, shorts are fucked? A CEO who gives a serious shit about the shareholders of his company. One that understands this situation entirely more than any of us, and is who I believe to be the most well rounded individual to address these issues. All issues. The turnaround of the company. The shorting. The media lies. But let me be clear and again - this is my opinion. We need to be patient. RC doesn't JUST want to kick the shorts in their.. shorts. He wants to build the best damn company in the world with a customer base that is family. We all know shorts could be vaporized IF RC did "XYZ". That's not in his best interest or the best interest of his shareholders. I love GME - and if you think this is a bash on the company you’re misunderstanding what I mean, but I am not excited at the thought of a MOASS; only to return to the same GME. Building a revolutionary company in Web3 is the goal. Re-read RC's letter to the company. If we have a beautiful business model in Web3 that can't be labeled as obsolete, a pivot to increased market share in all categories, all while profits grow and the float gets smaller - MOASS makes a lot more sense. A big reasoning for the buy button shutoff was the price being "disconnected from reality" - something they get to determine. Wait until what they thought was impossible, what they thought couldn't happen in their reality, is operational in front of them and the world to see. I hope you all want GME to be a badass company delighting gamers as much as you want MOASS. This would be tough if you focus only on the share price, Kenny, but if you are living a healthy life and think logically RC was correct - this is the greatest time in human history to be alive. All I can say is do your own research, know what you own (or don't own for that matter) - and hang in there.
“GameStop needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences – not remain a video game retailer that over prioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”
“In this spirit, we urge you to quickly provide stockholders with a credible and publicly-available roadmap for cost containment, prioritizing profitable retail locations and geographic markets, and building the e-commerce ecosystem gamers deserve. Please be advised that RC Ventures is not interested in receiving a lone seat on GameStop’s ten-member Board. It is not enticing to become an isolated stockholder advocate on a Board that has overlooked years of digital revenue opportunities and presided over massive value destruction without assuming full accountability. We want GameStop’s leaders to do their jobs and implement a strategy for bringing the Company into the 21st century."
Buckle up.
I'm already buckled. I can't buckle harder.
As always - miss you DFV and Blu.
Hi Dad

Bernard Madoff had fleeced billions from his victims and got 150 years.
In light our SFM executives didn't grab that much, but totally stole millions, so - what do you think they'll will get?
I reckon: - Karony 20 years - Smith 10 years - Nagy 15 years