Category Archives: History
Things that happened more than 12 months ago.
some excerpts from the story
Recently, our nation’s financial chieftains have been feeling a little unloved. Venture capitalists are comparing the persecution of the rich to the plight of Jews at Kristallnacht, Wall Street titans are saying that they’re sick of being beaten up, and this week, a billionaire investor, Wilbur Ross, proclaimed that “the 1 percent is being picked on for political reasons.”
Ross’s statement seemed particularly odd, because two years ago, I met Ross at an event that might single-handedly explain why the rest of the country still hates financial tycoons – the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi.
“I believe that God has a plan for all of us. I believe my plan involves a seven-figure bonus.”
The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. No self-aware and socially conscious Wall Street executive would have agreed to be part of a group whose tacit mission is to make light of the financial sector’s foibles. Not when those foibles had resulted in real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.
The second thing I realized was that Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.”
- Adam Smith
The somewhat autobiographical story of Jordan Belfort and Stratton Oakmont.
The story of Jordan Belfort is closely but not exactly told in ‘wolf of wall street’. Some names and facts have been changed to protect the less guilty. In the film he alludes to what Lehman brothers and other now infamous investment/banking houses were doing with derivatives ten years before it became topical (and disastrous).
Having just Acquired his stock brokers license Jordan Belfort begins working at L.F. Rothschild as a stockbroker on wall street. Two problems: 1) This Rothschild is not related to the ultra moneyed European Rothschilds, and 2) the 1987 stock market crash occurred on his first day and he looses his job with he collapse of the company he worked for.
Jordan then stumbles into penny stocks and realizes with his license to sell blue chip stocks he can then induce the much bigger market into far riskier and stock broker lucrative penny stocks. But along the way Jordan attracts a band of merciless hustlers that become his boiler room. The film Boiler room is also about this con game. If this wasn’t enough there we the drugs, The drugs were cocaine, Quaaludes and almost anything they could get their hands on, prescription or not.
A bunch of small time drug dealers/dabblers hustle their way to the top, their modus operandi is essentially no different to the larger game. Agressive con men fueled by drugs and excess in a massive ponzi scheme, what could go wrong? The creation of an artificial empire of hookers, drugs and a charismatic cult leader imploring and mentoring his followers to rake in more mammon (money). Some of the editing in the movie even shows blatant continuity errors when Jordan is wasted on drugs. The rolling down the country club stairs to get to his car is an example, though the car damage is more obvious.
Its a fugazi
The money that goes into the market stays in the market. The pyramid is not build if people start removing the blocks. Just like removing a block from the corner of a pyramids base can collapse the whole pyramid. So if you are skilled enough to get people to invest in the first place, be skilled enough to make them keep their money in the game. All the money is fake once it enters the system, destined to never be seen again by investors.
Think about it, if the broker takes a 50% commission on the sale of $1000 of stocks the clients investment has lost 50% on day 1. The stock has to reach to more than $2000 just for the client to break even. Where exactly does the money to pay investors come from? from the fugazi vortex? No, any possible gains are then plowed back into the vortex of imaginary money. So for a penny stock investor to make money their stock price must reach more than 201% of their purchase price. While some penny stocks can do this they are rare, especially when you consider that most of the stock were subject to price manipulation in a classic pump and dump system.
A fire in the side show can spread to the big-top.
Regulators really don’t care for the victims of these frauds, they just want to make sure a few operators don’t threaten the faith in larger ponzi game (con) of money printing and taxation. Its salient point that Belfort served 22 months of a 4 year sentence for frauds totaling 110 million dollars. A small penalty for stealing the life savings of thousands of people He was forced to pay back about 10 million which mostly came from the sale of his house leaving the question open, where did the other 100 million go? Remember the guy was using a variety of money laundering systems.
22 months imprisoned for stealing 110 Million dollars from his clients, that equates one month in prison for stealing 5 million dollars.
Would you be willing to steal 5 million dollars if you punishment was only 1 month in prison and there is a good chance you were able to hide a great deal of the money and have it waiting for you secretly once you were freed?
The state is less concerned when you steal from the citizenry than when you steal from the state.
The state also punishes small thefts so much more harshly than large thefts. Recall the scene where the butler has an orgy at Jordan’s apartment and his money and jewelery is stolen. Oh the horror that some one might steal from him in a day, the amount that he might steal in a minute.
So what happens when everyone decides to go home?
The financial circus was never mean to close, it was a designed as a 24/7 365 day operation with a sucker born every minute. Unfortunately the circus became so big that it altered the town. The wars it funded eventually created a population bubble. Soon the bubble in population had fewer children than before and so did those children. Soon there were less suckers born and more wise to the game and lived long enough to collect on the bets. It was known in financial circles that 2007-2009 would be a very difficult time for markets, as the baby boomers would begin to retire and their vast proportion of the worlds wealth would begin exiting the market.
The sub prime bubble just made this problem even worse and more sudden, the market was facing the perfect storm of peak oil and peak boomer investment both oil and boomers were about to go into terminal decline.
Its is not that Stratton Oakmont was an anomaly in the system, its just that they exposed what the financial system is: a giant Ponzi scheme run by arrogant delusional narcissists addicted to excess and hedonism.
He was not the first Ponzi operator and he wont be the last, Bernie Madoff proved that, Madoff was just more sophisticated and low key in his approach.
But the biggest Ponzi will be implode soon, fiat currency itself.
So where is he now? Jordan Belfort currently is on the sales and motivation speaker circuit and still presumably owes tens of millions of dollars to his former investors.
As soon as you realize senior members of AFP (Australian Federal Police) were involved in drug smuggling at airports using baggage handlers to hide drugs in peoples bags, you can see the coverup and scapegoating going into overdrive.
This fact along with evidence disappearing everywhere or being refused, shows that this woman was framed.
On the day Victorian government was debating laws to effectively criminalize protest , protestors for Ukraine democracy met at the exact place where Robert Doyle’s Melbourne City Council brutally crushed a democracy Movement called Occupy Melbourne.
This may actually be Victoria’s last protest where protest is legal.
Yet another irony is the Ukrainian situation protest was also made illegal recently.
So I’m sure we’d love for you to have democracy Ukraine, but we don’t have it our selves.
Well that’s probably a better headline for the story than The Age selected. It really sucks when some great investigative journalism is buried under a bland almost non event headline.
I think our headline is a better reflection of the facts and would certainly draw more attention, I mean you guys want to sell more news papers and subscriptions right?
Actually the next story is related and if you actually aded the headlines together, it actually becomes a better headline, but still doesn’t quite connect the dots for the would be reader.
Now the first story is exclusive, but then again editgate cyberwar was also.
So in case you have read too much of The Age this month or are other wise stuck behind a paywall/firewall here are the stories sans images.
WorkSafe pays law firms bonuses to minimise victims’ payouts
Nick McKenzie and Richard Baker
Victoria’s work safety authority is paying lawyers millions of dollars in confidential bonuses to minimise payouts in compensation cases brought by alleged victims of workplace accidents.
In at least one case, a firm representing the authority received more than $1 million in bonuses over 12 months on top of legal fees.
The bonuses are paid out by WorkSafe Victoria, which receives its funding from fees paid by Victorian businesses. The bonus scheme has provoked debate inside the legal community because of the potential it will encourage firms to cut corners in order to maximise their bonus payouts, or devise other strategies that may not be in the best interest of victims or the scheme.
But defenders of the bonus system say it encourages lawyers to deal with cases more efficiently and prevents rorting of the state’s workers’ compensation scheme.
Leaked files from law firm Lander & Rogers reveal that it has made about $5 million in WorkSafe bonuses over five years by minimising payouts to alleged Victorian victims of workplace accidents. The biggest yearly bonus payout to the firm was $1.2 million in 2010.
The leaked files also show that the legal firm encourages its lawyers to offer ”entertainment” to WorkSafe Victoria executives at the tennis, musicals and barristers’ functions. A well-placed source said that at least two senior WorkSafe staff had attended events paid for by the Melbourne firm.
The leaked Lander & Rogers files show one strategy proposed by the firm involves creating closer ties, or becoming ”relationship partners” with lawyers representing workplace accident victims via ”targeted plaintiff firm strategies”.
Lawyers who support the incentive scheme argue it encourages law firms to deal with cases in a fair and timely fashion.
They say that maintaining professional relationships with plaintiff firms also leads to fairer outcomes by reducing legal hostilities that can lead to unnecessary litigation.
In defending the bonus scheme, a WorkSafe spokesman said that the extra payouts were offered because the fees defence firms get paid for handling WorkSafe cases ”are significantly less than standard commercial rates”. ”Performance incentives are designed to preserve and protect the interests of the scheme and the amount paid in [bonuses in] 2012-13 represents 0.3 per cent of the total benefits paid to injured Victorian workers last year,” the spokesman said.
Internal Lander & Rogers figures from 2011 show its WorkSafe department made almost $4 million in profit, most of which is later distributed to the firm’s partners. The law firm’s WorkSafe lawyers also generated bigger profit margins – up to 35 per cent – than lawyers from any other section of Lander & Rogers.
The WorkSafe spokesman also said the bonuses were only awarded if law firms ”meet a range of performance criteria, which includes achieving a timely outcome for injured workers’ claims for compensation and reducing the use of the courts”. WorkSafe declined to answer questions on the total in bonuses it paid law firms or how many gifts WorkSafe staff received.
”WorkSafe adheres to the criteria set out in the gifts, benefits and hospitality policy framework 2012 issued by the Public Sector Standards Commissioner and expects all employees to comply with the policy,” the spokesman said.
In response to questions about its bonuses and gift-giving policy, a Lander & Rogers spokesman said: ”Like other firms who provide legal services to WorkSafe, Lander & Rogers is eligible to receive performance incentives where it meets certain criteria, which include helping to ensure timely resolution of injured workers’ claims.
”We maintain professional working relationships with all plaintiff firms and other stakeholders in the workers compensation scheme and always work in the best interest of WorkSafe.”
The law firm threatened Fairfax Media with legal action if it published details from its leaked files.
In other developments linked to the management of WorkSafe cases, it is understood that some defence firms have reduced the hiring of private detectives who conduct surveillance on allegedly injured workers. The practice of conducting surveillance on workers has recently drawn the ire of several Victorian judges because it is viewed as expensive and intrusive.
But several lawyers who spoke to Fairfax Media said that surveillance was a critical tool to prevent rorting.
Disabled Victorians to miss out on disability insurance scheme
Up to 900,000 disabled Victorians will not qualify for the national disability insurance scheme and the state government needs to increase funding to the sector to meet growing demand, the peak body for the sector says.
A National Disability Services submission to the state budget says that while DisabilityCare Australia is a tremendous opportunity to help 100,000 Victorians with a serious or permanent disability, hundreds of thousands more will require help. People with non-permanent or moderate to mild disability will not necessarily qualify for the scheme.
The organisation’s submission says there are about 1 million Victorians with a disability, including 338,200 with a profound or severe disability.
”This suggests that some 900,000 Victorians with a disability won’t qualify for the NDIS and will still require access to mainstream services such as transport, housing, education, health, justice and mental health,” it says.
NDS Victoria state manager James O’Brien said the state government had a role to play building a strong disability sector able to make the transition to the scheme.
”The NDIS won’t be the panacea for all, and we need a whole-of-government approach to ensure that mainstream services are accessible for all Victorians with a disability,” he said.
The Napthine government is also urged to lift annual investment to disability services by $900 million over the next five years. The group argues that with the government’s forecast surplus of $2.5 billion in 2016-17, the fiscal environment would allow the government to do so.
The submission outlines how demand continues to outweigh investment in the sector – it says while funding for the sector increased by 7.5 per cent last year, on the back of the trial of the national disability insurance scheme in Barwon, demand for services grew by 10 per cent. ”The real cost of providing disability services continues to escalate and government indexation fails to keep pace,” it says.
The submission says there should be more public-sector procurement from accredited disability organisations. It also wants the government to build more inclusive public spaces.
Building the capacity of the sector also requires more workers and NDS warns demand will rapidly outstrip supply unless action is taken now. The establishment of the scheme will require 25,000 workers by 2020; currently, there are just 12,000 in Victoria. ”This poses a huge challenge,” the submission says.
The government has welcomed the submission from NDS but will not comment on the budget ahead of its release in May.
So what does all of this mean?
Some great journalism, but journalists sometime can’t really say what they think for a variety of reasons, such is the sad state of our ‘deMOCKracy’. Fortunately we can say what ever we like as long as we feel its true.
The WorkSafe Premiums you are being forced to pay for has now become a slush fund for lawyers and government bureaucrats.
The levy you are being forced to pay for NDIS is just becoming a federal government slush fund.
Denise Cosgrove is embezzling (stealing) money paid by the Victorian tax payer, worst of all she’s using it to bribe lawyers into robbing WorkSafe claimants. She’s only been in the role of CEO for 12 months. This con artist really moves fast.
A quite disturbing picture pieced together from mainstream media, gulags and concentration camps coming to the USA. Very confronting stuff, its time to check your cognitive dissonance. Why can’t totalitarian fascism be installed in the USA? The constitution prevents it, until you realist the US government is ignoring the US constitution when it suits their agenda. The safety mechanism is now gone, and the slippery slope begins.