Matt Zames, the executive tapped to take over management of JPMorgan Chase(JPM_)’s chief investment office (CIO), has a controversial resume…

Zames allegedly told a colleague about suspicions regarding Bernie Madoff some 18 months before his Ponzi scheme was revealed to the public.

He also worked at Long Term Capital Management, the now-infamous hedge fund comprised of top academics and Nobel Prize-winning economists whose blow-up rattled global markets in the late 1990s.

Zames also heads the Treasury Borrowing Advisory Committee, a Wall Street committee that advises the U.S. Treasury on managing its debt.

via JPMorgan’s New CIO Tied to Madoff, U.S. Treasury, LTCM – TheStreet.

After three years of near total silence since her husband, Bernard Madoff, admitted to running a Ponzi scheme that devastated thousands, Ruth Madoff has embarked on a nationwide sympathy tour. In the past week, she hit 60 Minutes and The Today Show, and gave an interview with the New York Times, all to support the new biography Truth and Consequences: Life Inside the Madoff Family. The overly sympathetic book was written by Laurie Sandell, who wrote about her own sociopathic father in the graphic memoir The Impostor’s Daughter. Truth and Consequences relies heavily on interviews with Ruth and her surviving son, Andrew. (Tragically, her other son, Mark, committed suicide late last year.)

As Josh Voorhees points out on the Slatest, Ruth repeats the same details in each interview: Ruth and Bernie tried to commit suicide while he was under house arrest; Ruth’s reaction to her husband’s admission of enormous financial fraud was, “What’s a Ponzi scheme?”; Ruth had no idea that her husband was bilking his investors for all they were worth. It is this last point that remains contentious. A look in the comments section of any press coverage of Ruth Madoff shows that lots of people still think she’s lying about what she knows (sample from that New York Times article: “What a bunch of lies. Anyone in the industry knows that the returns had to be made up. … [T]he sons knew it, the wife knew it, everyone knew it”).

Despite the haters who remain, Ruth’s big reveal seems to be working in her favor. The attitude toward her has certainly softened since 2009, when Sheelah Kolhatkar wrote a feature in New York solely about the vitriol directed toward Mrs. Madoff in the aftermath of her husband’s arrest. Part of why this publicity tour has been successful is because the last few years have been so clearly awful for her. She sobs in front of Morley Safer, not just about losing her companion of 50 years, but for losing her son, Mark, who had not spoken to her in the two years before his death. She’s small-boned, and looks breakable and frail beneath the studio lights.

Another reason why Ruth no longer inspires exclusively hatred is, quite frankly, she’s broke. She’s had to pay for her husband’s crimes, which gives an irate public something concrete to hold onto. When the news first broke in late 2008, Ruth was silent while her lawyers fought to keep a big pot of Bernie’s ill-gotten gains. (According to New York, Ruth argued for over $70 million in homes, savings and jewelry.) She’s let go of all that. Truth and Consequences outlines the terrible financial straits that Ruth is in. She’s living in Florida near her sister Joan and Joan’s husband, both of whom have had to come out of retirement to work as cab drivers because they lost their nest egg when Madoff’s financial fraud was unearthed. She can barely afford a $30 present for her granddaughter, or new shoes. (“Luckily, in Florida you can wear flip flops all the time.”) And either because she knows it’s good P.R., or she feels legitimately penitent, Ruth hands out food with Meals on Wheels in her spare time.

http://www.slate.com…_madoff_s_.html

As politicians and central bankers around the world desperately try to keep their debt drenched ponzi scheme going for awhile longer, the mood darkens among the populations of developed countries around the world. I came across a quote from, of all people, Vladimir Lenin that describes how the last six weeks seemed to me:

“There are decades where nothing happens; and there are weeks where decades happen.”

It seems like history is accelerating. Momentous events have been occurring regularly since 2007. Our political and financial leaders are blindsided on a daily basis by each new crisis. The majority of the American public continues to be apathetic, willfully ignorant, and constantly absorbed by their array of electronic gadgets and mindless drivel spewed at them by media conglomerates. Rather than think critically, most Americans allow left wing and right wing mainstream media to formulate their opinions for them through their propaganda and misinformation operations. Linear thinkers, who make up the majority of the political, social, media and financial elite in this country, believe the world progresses and moves ever forward. In reality, the world operates in a cyclical fashion, with generations throughout history reacting to events in a predictable manner based upon their stage in life. The reason the world has turned so chaotic, angry and fraught with danger since 2007 is because we have entered another Fourth Turning. Strauss & Howe have been able to document a fourfold cycle of generational types and recurring mood eras in American history back 500 years. They have also documented the same phenomenon in other countries.

The housing collapse, near meltdown of our financial system, revolutions in the Middle East, economic turmoil in Europe, poisoned political atmosphere in Washington DC, and most recently the Occupy Wall Street movement are part of a larger cycle. The four living generations have each entered the phases of their lives that will lead to a convulsive upheaval and destruction of the existing social order. We’ve entered a twenty year period of Crisis as described by Strauss & Howe:

“A CRISIS arises in response to sudden threats that previously would have been ignored or deferred, but which are now perceived as dire. Great worldly perils boil off the clutter and complexity of life, leaving behind one simple imperative: The society must prevail. This requires a solid public consensus, aggressive institutions, and personal sacrifice. People support new efforts to wield public authority, whose perceived successes soon justify more of the same. Government governs, community obstacles are removed, and laws and customs that resisted change for decades are swiftly shunted aside. A grim preoccupation with civic peril causes spiritual curiosity to decline. Public order tightens, private risk-taking abates, and crime and substance abuse decline. Families strengthen, gender distinctions widen, and child-rearing reaches a smothering degree of protection and structure. The young focus their energy on worldly achievements, leaving values in the hands of the old. Wars are fought with fury and for maximum result.” – Strauss & Howe

http://www.theburnin…rm.com/?p=22946

If the $2.6 trillion in U.S. Treasury bonds the Social Security Trust Fund is holding are shaky, then so are the bonds held by individuals and most financial institutions in the U.S. and governments around the world. Since the demand for U.S. Treasury bonds remains high, the quality of this investment is either about as safe as any on the planet, or every private and public money manager in the world has gone stupid at the same time.

As long as the U.S. continues to repay its bond holders, Social Security can continue to pay its full benefits until 2037. And if nothing is done to change Social Security by 2037 the system would still have funds to pay 78% of its obligations to retirees, widows and the disabled.

In other words, there is no immediate Social Security financial crisis.

But there is a Social Security political crisis resulting from an intense misinformation campaign to disable it or to destroy it outright.

In a recent commentary published by the Huffington Post Lori Hansen Riegle and her husband and former Michigan U.S. Senator Don Riegle unearthed this revealing gem:

“House Republican Majority Leader Eric Cantor (R-VA) provided some insight to their Social Security views in a recent NPR interview when he was talking about Social Security and said, “We are going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want it to be.”

Interpretation: Cantor and those who share his views want an American future that does not include Social Security. At all. Social Security is a government program, and government programs are to be demolished or avoided.

Texas Governor Rick Perry considers Social Security a “Ponzi” scheme. Wisconsin’s Paul Ryan, the Republican point man on congressional budget policy, agrees with him. Here’s what Ryan said about this during a recent radio interview:

“It is a pay-as-you-go system where earlier investors or, say, taxpayers, get a positive rate of return and the most recent investors, or taxpayers, get a negative rate of return.”

The problem with Ryan’s definition is that taxpayers are not getting a negative rate of return, and won’t for decades, allowing plenty of time for whatever minor changes may be needed beyond 2037.

http://uspolitics.ei…rce=patrick.net

Full Tilt Poker A Ponzi Scheme According To U.S. Attorney
By DAVID B. CARUSO
09/20/11 03:59 PM ET

NEW YORK — An Internet poker company that was blocked from operating in the U.S. in the spring as part of an online gambling crackdown was “not a legitimate poker company, but a global Ponzi scheme,” federal prosecutors said Tuesday.

The popular Full Tilt Poker website illegally raided player accounts to fund operations and make lavish payments to its owners, Justice Department lawyers said in a revised civil lawsuit filed in New York.

Over four years, the company used $444 million in player money to pay board members, including well-known professional poker players Christopher Ferguson and Howard Lederer, investigators said.

The poker site had promised players that their accounts were protected and wouldn’t be touched. But authorities say that, as of March, the company had only $60 million left in its bank accounts to cover the $390 million it owed to players. It routinely mingled player money with its own finances, and took cash from some customers to pay out winnings due to others, prosecutors said.

“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” U.S. Attorney Preet Bharara said in a statement. “Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars.”

http://www.huffingtonpost.com/2011/09/20/full-tilt-poker-ponzi-scheme_n_972349.
html?icid=maing-grid10%7Chtmlws-main-bb%7Cdl1%7Csec1_lnk2%7C97511

GOP presidential candidate Rick Perry repeated his characterization of Social Security as a Ponzi scheme in Wednesday night’s debate, and insisted that the retirement program is unfair to young workers. If Perry is right, maybe we should end Social Security immediately. What would happen if we did?

Bad things, at least in the near term. As Jackie Calmes of the New York Times points out, the difference between Social Security and a Ponzi scheme is that people who have paid into Social Security will eventually collect their money. If the program ended tomorrow, they wouldn’t, and Social Security really would become a Ponzi-like system. The results would be the same as when any massive economic fraud collapses—a calamity. Poverty among retirees would surge. The program represents 41 percent of the income for elderly Americans, and almost all of the personal income for a significant proportion of single retirees.

Current workers and employers would see an immediate benefit, in the form of a 6.2 percent increase in income, because the tax that funds Social Security would disappear. But the economy as a whole would suffer for several years. The young are more likely to save and invest. That’s good for the economy, but its salutary effects take longer to materialize than the immediate demand that the elderly create, since they spend their money as fast as it comes in.

The immediate redistributive effects of ending Social Security wouldn’t be limited to young versus old—there would be geographic winners and losers as well. Since Social Security checks keep coming in no matter what happens to the local economy, the program tends to stabilize aging and struggling locales. If it disappeared suddenly, havens for the elderly (PDF) like Florida, the slow-growing farm belt, and shrinking cities such as Detroit would suffer badly. Major urban centers teeming with youth would fare relatively well.

http://www.slate.com/id/2303391/

Ya gotta give Bernanke credit for being THE most consistent clueless (or lying) Fed Politburo Head, ever.

For, as reported here:

http://www.cnbc.com/id/44411981

…our own loveable, Pigman in Chief is now soothingly cooing that the U.S. bank’s:

TWO-HUNDRED BILLION DOLLAR

…exposure to the crippled ChozoZone banks is “manageable”.

Yeah, just like Bernanke was assuring Congress that “Subprime is contained” back in 2007, before that particular Ponzi scheme imploded…taking down Fannie/Freddie/FHLBs and every single Pigman financial gambler on the planet.

(Spock Conclusion): Well, it’s been EXACTLY three-years to the day since the GSEs imploded and I’m sorry to report that NOTHING has changed:

1. Same Alpha Thugs and Pigmen in charge

4. Same sheeple clueless as ever.

…so please forgive me if I remain a little cynical and bitter regarding the prospects of us EVER seeing meaningful reform to our political/economic system.

Aug 23, 2011
The winner economy and the loser economy
By Spengler

Just what do America’s large multinational corporations have to do with the US economy? Very little, judging by the data.

Item: Final sales of domestic product rose by 3.8% (without adjustment for inflation) from the second quarter of 2010 to the second quarter of 2011. Sales of S&P 500 corporations rose by 10%.

Item: Employment in the S&P 500 corporations rose by 10.6% between 2009 and 2010, to a total of 18.666 million. Total employment in the United States rose by 0.7% over the same period, to 130.26 million. Employees of the S&P 500, that is, comprise less than 8% of total US employment, and their employment pattern bears no resemblance to the aggregate.

Item: Profits of S&P 500 corporations rose by 19% between the second quarter of 2010 and the second quarter of 2011. Nominal GDP (gross domestic product) of the US rose by 3.7%.

Item: 47% of S&P 500 sales are overseas.

Item: Americans with no college-level education have an unemployment rate of 9.9% and (which is much more revealing) a labor-force participation rate of just 61%. Americans with some college education have an unemployment rate of 8.6% and a participation rate of 70%. And Americans with a bachelor’s degree or more have an unemployment rate of 5%, but a participation rate of 76%. Huge numbers of less-educated Americans, that is, don’t ”participate” in the labor force because there is nothing for them to do. But Americans with a college degree (as devalued as those degrees are) have little unemployment and a very high rate of ”participation.”

America, as I observed last week (The people’s Ponzi scheme, Asia Times Online August 15), imported $6 trillion of the world’s savings between 1998 and 2007. That great migration of capital employed an army of construction workers, mortgage bankers, retailers, lawyers and others dragged along by the tide. Real estate tax collections surged along with home prices and local governments grew fat and hired legions of workers.

And the construction boom kept less-educated Americans (and a great many immigrants) occupied. The construction industry has imploded, local governments have laid off 400,000 workers since August 2008, and countless service firms have disappeared. Nothing will bring them back.

Given the magnitude of the bubble that had to be popped, the outcome actually is encouraging. Most Americans with a college degree barely can add and subtract and compose a business letter, and most of them rode the bubble in various capacities. Yet despite the collapse of many white-collar professions, the unemployment rate of college-educated Americans remained around 5%. That testifies to the flexibility of the American economy and the resourcefulness of American job-seekers

http://www.atimes.com/atimes/global_economy/mh23dj04.html

http://www.bloomberg.com/video/67122488/

“The whole new regulatory reform is a joke. The whole new government is a Ponzi scheme.”

“It’s unbelievable…Goldman…no one has any criminal convictions.”

Bernie, Bernie. You went too small-time, that’s why you got busted.

BUTNER, N.C. — Bernard L. Madoff said he never thought the collapse of his Ponzi scheme would cause the sort of destruction that has befallen his family.

In his first interview for publication since his arrest in December 2008, Mr. Madoff — looking noticeably thinner and rumpled in khaki prison garb — maintained that family members knew nothing about his crimes.

But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.

Mr. Madoff, who is serving a 150-year sentence, seemed frail and a bit agitated compared with the stoic calm he maintained before his incarceration in 2009, perhaps burdened by sadness over the suicide of his son Mark in December.

Besides that loss, his family also has faced stacks of lawsuits, the potential forfeiture of most of their assets, and relentless public suspicion and enmity that cut Mr. Madoff and his wife Ruth off from their children.

In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.

“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”

http://www.nytimes.c…ew.html?_r=2