The only thing they have to fear is ... us.

  Banks around the world have rushed to disclose potential losses from the Madoff scandal in an apparent bid to avert any deepening of the suspicion which has frozen credit markets, and in stark contrast to widespread reticence in recent months as the subprime mortgage crisis unfolded.

  Top world financial groups on Monday revealed massive potential losses from an alleged scam run by Wall Street trader Bernard Madoff, admitting they were fooled by a classic pyramid investment fraud:

• British, French, Japanese and Spanish banks and funds said investments totaling billions of dollars (euros) could be wiped off their balance sheets by a scandal that is set to affect some of the richest people in the world.
• Royal Bank of Scotland said it could lose about 400 million pounds (598 million dollars, 444 million euros), joining a growing list of banks and investors in Europe, Asia and the United States struck by the scandal.
• Shares in Santander, the biggest bank in Spain and the second largest in Europe after HSBC , plunged after the lender said it had an exposure of more than three billion dollars to Madoff Investment Securities in New York.
• France's Natixis investment bank, already brought low by subprime losses, put its maximum exposure at 450 million euros (606 million dollars). Retail banking giant BNP-Paribas revealed potential losses of 350 million euros.
• Japanese financial giant Nomura said it could lose up to 303 million dollars and officials in South Korea said financial institutions there a total exposure of some 95 million dollars to Madoff's scandal-hit investment scheme.

   Madoff, a 70-year-old Wall Street veteran, was arrested last Thursday.He is alleged by US prosecutors to have confessed to defrauding investors of 50 billion dollars in a long-running scam that collapsed after clients asked for their money back as a result of the global financial crisis. A comprehensive accounting worth the read

   How do you think the little guy - the guy who's watched his retirement savings be hacked in half by the current mortgage collapse and subsequent financial crisis - is going to react to this? Badly I think. Most people have become all too aware lately that not only do stringent regulations not prevent this sort of thing, but that members of Congress are at least complicit and greed will override the most earnest scrutiny of the most diligent of corporate leaders. In short, investors around the world are questioning the very institutions we are now frantically attempting to prop up and support.

   The truth is even uglier than has been revealed. High stakes financial risk attracts the greatest of egos willing to do anything to win - the little guy be damned. I know - I've been there. The people I met at the Center of the Universe were the most unprincipled and self-interested imaginable. For them, nothing else matters but the next big score. Free markets are a wonderful concept enriching all participants as long as things are going well. But when things go badly - it's the little guy who suffers the most. Madoff's clients will liquidate some assets and lick their wounds in the last of their mansions.

   The solution? I submit that this dramatic contraction in the world's economies will spur a renewed interest in saving money, on a personal and societal basis. I hope people begin to understand that credit is something you turn to when all else fails - not a way of life. That governments and the politicians who run them are the least qualified to do what's best for any individual. Individuals who expect or assume someone else is better qualified to provide the basic necessities will eventually go hungry in the cold rain. What's needed now is not more centralized control or supervision - it is more personal involvement, responsibility and accounting.

   And those who have betrayed the public and private trust need to be held to account. Politicians, rogues, swindlers and frauds should never be allowed to buy their freedom or leniency with high-priced lawyers or political power. Blagojevitch, Madoff, Abramoff, Rangel, Frank, Dodd and Stevens et al. It is time for the little guy to send a clear and resounding message to those who would betray and defraud - do so at the peril of your own existence. For the only emotion that will bridle and rein in unmitigated avarice is fear.

Real, certain, sure and palpable fear.

Spread the word! 

Comments

[Bomb-a-rama]

Blagojevitch, Madoff, Abramoff, Rangel, Frank, Dodd and Stevens et al. It is time for the little guy to send a clear and resounding message to those who would betray and defraud - do so at the peril of your own existence.

How long do you think it's going to take before Rangel, Frank, and Dodd answer for their actions? More importantly, do you believe that they actually will? For some reason, I have my doubts, especially in the case of Frank and Dodd.

[Steel]

They will never do so.

Precisely my point.

It took two decades before voters reacted to Democratic Congressional control during FDR and LBJ.

The Gingrich Revolution was an aberration and a hollow charade nonetheless.

I think, in this age of instant everything, young voters are going to react rather unfavorably to the likes of Frank & Dodd in the coming elections.

If, and only if, Conservatives can and will stand the higher ground of logical imperative and not continue to muddy the waters with specious and superfluous moral tangents.

Frank, Dodd and Rangel are beginning to embarrass their own and that will be their undoing.

The best example of this is William Jefferson.

Who in their right mind would ever imagine Cao winning in New Orleans?

Voters may be stupid but enough of 'em are not crazy.

We shall see.

[Anon 1:50]

Personally, I despise violence.

True, war has solved little problems like slavery, nazism, communism, religious fascism and so on... but it's so...noisy.

I am of the opinion that it is time to raise the crimes of business to a whole new level. Enron taking all those people for a ride? Death to the executives.

Personal fraud or identity theft? Flogging and branding.

Extortion, bribery, corruption, by persons in office? Death by stoning. (Let the pensioners have first fling).

Don't tell me it's "disproportionate". I grew up in the time when a pot seed in your car could get you years in the penitentiary.

It's "proportionate" if we say it is, and I say it's time to put these greedy bastards on notice, that their property, family, and lives are on the friggin' line if they torpedo a pension fund with their sneakiness.

Crime is what we say it is, and, friends, I say that crimes of cheating citizens, fraud, corruption and graft are worthy of burning at the stake, public flaying and drawing and quartering... and I haven't even begun to get creative here.

All televised of course, right after American Idol.

I'll bet a nickel that we can clean up this country and turn a fine profit to boot!

[Carl]

Your list of rogues , as usual, is short. No Rs are mentioned. Only Dems.

Wild capitalism carries the seeds of it's own destruction. The Market will not auto regulate as
many proponents including Greenspan believed, wrongly.

There is a need to prevent swindles and abuses. There is to prevent schemers from taking advantage of gullible humanity. Even if it is introduced as business course in the school system.

The Madoff incident is just a new reiteration of people done in by their greed. The list is endless.
It will happen again.

But it would not have happened in an islamic country. Interest is not allowed there.

[Uncle Fester]

Carl, it's the Dems turn in the bucket. Better get used to it. Besides, what do you think is going to happen when all the journos remember that scandal sells and they're sitting on a whole pile of it?

Best not to be in the way when the stampede starts...

[Steel]

Madoff is a Democrat, Carl.

...But it would not have happened in an islamic country. Interest is not allowed there....

Jaysus! Muslims invented corruption.

You bottle that Kool-Aid and you'll be a millionaire.