Madoff: Symbol of the Age of Deregulation

More details have been coming out about the role that giant-scale Ponzi artist Bernie Madoff played in the whole Age of Financial Deregulation (a.k.a. casino capitalism), here in the US.
On Thursday, Madoff was indicted in federal court in New York for having committed securities fraud regarding the $50 billion of other people’s money he lost by running his Ponzi scheme.
Notable among Madoff’s affiliations is that he was a past Chairman of the board of the Nasdaq stock exchange, and treasurer and board member of Yeshiva University in New York. Among the investors whose money he lost were Jewish philanthropic organizations, some of them with strong interests in Israel. (Recently Sheldon Adelson and Sam Zell, who have both been large-scale supporters of Israel’s settler movement, have also lost huge amounts of money. I can’t find out yet whether Madoff supported pro-settler or pro-withdrawal movements in Israel.)
The Seeking Alpha blog had a fascinating post about Madoff yesterday, written by someone described only as “fund manager ‘Cassandra'”.
Cassandra wrote that he (or just possibly she) could never figure out what it was that Madoff had been doing all these years to generate a steady stream of income for his investors. She– yes, thanks to commenter Larry I’ve discovered she is a she— also had never met anyone who had formerly worked as a trader for Madoff, which she found strange.
My understanding is that because Madoff was supposedly executing his own trades, rather than running them through an outside institution, he was able to hide what he was doing– or, as it may turn out, not doing at all– from the scrutiny of everyone except his auditor. And crucially, the auditor used by Bernard L. Madoff Investment Securities LLC was listed as Friehling & Horowitz, who was described in this Bloomberg piece as, “an auditor operating out of a 13-by-18 foot location in an office park in New York City’s northern suburbs.”
The Bloomberg piece noted that investment adviser Jim Vos of Aksia investigated Madoff Securities intensively in 2006 and identified a number of red flags:

    Among the … “red flags” cited by Aksia was the “high degree of secrecy” surrounding the trading of the feeder fund accounts, which provided capital to Madoff Securities, and its use of a trading strategy that appeared “remarkably simple,” yet “could not be nearly replicated by our quant analyst.”
    Friehling & Horowitz operates from a storefront office in the Georgetown Office Plaza in New City, sandwiched between a pediatrician’s office and another medical office…
    A woman who works in a nearby office, who didn’t want to be identified, said Friehling doesn’t come to the office regularly. When he does, he is the only person there…

Not exactly the kind of auditorial capacity one needs, to be able to keep track of $50 billion worth of investments…
Back to Cassandra. She wrote at length about his own, apparently longstanding mystification about the source of Madoff’s presumed ‘success’ as an investor:

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Getting to Global Zero (Nuclear Weapons)

I went to a great press event today, for the new worldwide movement ‘Global Zero’, which has rolled out what looks like a quite achievable plan to verifiably rid the world of all nuclear weapons by 2035.
Hallelujah. A new day is dawning… (Sorry, I can’t get that spiritual out of my head today.)
One of the most striking aspects of today’s event was the participation of two retired high-level security officials from each of India and Pakistan… And they all seemed to agree that their countries’ nuclear weapons have no actual utility, either militarily or politically.
This judgment was particularly striking given the current tensions between the two countries in the wake of the Mumbai terror attacks.
Shaharyar Khan, the former Foreign Secretary of Pakistan, said explicitly, “Since India and Pakistan exploded their nuclear weapons in 1998 there has been a qualitative change in terms of seeing that they do not have utility. We’ve gained much maturity in this realm.”
His compatriot Lt. Gen. (ret) Talat Masood said,

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A new mediator for Tehran & Washington: Iraq!

So now, the ever-mercurial Ali Dabbagh, spokesman for Iraqi PM Nuri al-Maliki, says he’s been urging Barack Obama to initiate a serious, sustained dialogue with Iran.
Reuters reports that Dabbagh,

    also called for dialogue to improve relations between Iran and Arab countries. “The time has come for a new, serious, and calm policy with an open-minded vision,” Dabbagh said.

(HT: Bill the spouse).
So now the Iraqi government, joint foster-child of Washington and Tehran, wants “mommy” and “daddy” to start talking nicely with each other. Good for Maliki.
It’s important that he takes– and hopefully sticks to– this position. Remember back when the US was trying to gin up anti-Iranian feeling in the US on the grounds that Iran was undertaking various heinous efforts to attack and undermine the Baghdad government? Now the foster-child is putting his own voice directly into the discussion.
Reuters adds this:

    Without specifying whether he was addressing Iran or the United States, Dabbagh called for respect for international law, alternatives to military solutions to conflict, and for regional answers to regional problems.
    “Solutions (must not be) forced from outside,” he said.

By the way, I don’t speak Farsi but there are some reports (e.g. here) that “Obama” can be understood by Farsi speakers as meaning “he is with us.” That, along with the president-elect’s other two names, could connect powerfully with the millennialism that seems to rumble around in the hearts of many of Iran’s theocrats. Can any readers here shed more light on the linguistic, sociological, or political aspects of this question?

On Rights Day: Yes to Social & Economic Rights!

Happy Human Rights Day, everyone!
On this day 60 years ago the UN General Assembly, meeting in Paris, adopted the Universal Declaration of Human Rights. That was a signal development. However, the language of the UDHR was kept fairly general and proclamatory. The actual content of the universal rights it proclaimed was spelled out in two subsequent documents, the International Covenants on, respectively, (1) Civil and Political Rights, and (2), Economic, Social, and Cultural Rights.
The United States, to our country’s great shame, has never ratified the Covenant on Economic, Social, and Cultural Rights (ICESCR). When Jimmy Carter was president, in 1977, the US did at least sign it. But for the US to become a full party, that signature needs to be ratified by the Senate. By contrast, the US is a longstanding party to the covenant on civil and political rights.
The ICESCR spells out the universal right of all persons to such essential inputs for human wellbeing as a right to work, and the rights to housing, health care, education, and self-determination.
Given the threatening economic prospects that so many US citizens face today, it is more urgent than ever that we raise the demand that our country join the 159 states around the world that are full members of the ICESCR. You can see a map of them at the top of the page here. You can see the full listing of signatories and States Parties (right column), here.
What it would take for our country to become a full member of the ICESCR is that the US Senate should ratify the treaty.
Joining would have a number of clear advantages:

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AIG execs still acting like bandits

In September, the Bush administration announced it would fork $152 billion over to insurance giant AIG to bail it out of its mounting financial woes. Now, AIG CEO Edward Liddy has confessed in writing to Rep. Elijah Cummings that some 168 senior employees of the firm are being awarded what are called “retention payments”, ranging from $92,500 to $4 million this year. (HT: Calculated Risk.)
When will the President and the congressional leadership stop this immoral madness??
Kudos to Rep. Cummings for staying on the case of the greedy card-sharps who run AIG.
The Wall Street Journal is meanwhile reporting that AIG currently owes Wall Street’s biggest firms about $10 billion for speculative trades (i.e. bets) that have soured. I can’t read the portion of the story that’s behind their paywall. But the comments page there is running heavily against the AIG execs who’ve been letting all this happen.
So what’s happening is that $10 billion of our taxpayers’ money that Bush and Paulson handed to AIG is now going straight through AIG to other big Wall St. firms– and those top execs at AIG who have done this to us are expecting us taxpayers to pay them hefty bonuses (under the fancy name of “retention payments”) to reward them for their actions… and also, presumably, to make sure they stay on with AIG…
Excuse me? Why does AIG– or the American people, who now own 79.9 percent of the company– still “need” these greedy monsters to stay on the firm’s payroll?
In case anyone’s interested I could tell you I’ve never earned anything near $92,500 in a single year. Far less $4 million!
But then, I’ve also never engaged in “speculative trades” with other people’s money that helped any institution lose any portion of $10 billion.
Sack the lot of them. Get some competent managers in to run the people’s AIG, for goodness’ sake.

NATO’s Russian route to Afghanistan

NATO’s deputy assistant sec-gen for security cooperation and partnership, Robert Simmons, has been in Moscow pushing forward the plan to open a Russian route to resupply the NATO positions in Afghanistan. (HT: Afghanistan Conflict Monitor.)
This, two days after the well-planned attack on a NATO staging area in Peshawar that left 160 Afghanistan-bound trucks torched to a cinder.
Interfax tells us that Simmons described Russia-NATO cooperation on Afghanistan as “good on the whole.” He said NATO had received a plausible “proposal” from Russia regarding a trans-shipping agreement. However, to get the Russia route open will also require trans-shipping agreements with Kazakhstan, Uzbekistan, Belarus, and Ukraine, so NATO is working on those now.
Simmons also spoke about an agreement under which Afghan servicemen would receive training at “the Domodedovo center near Moscow.”
As I’ve discussed here before, the urgent need the western alliance has to get supplies to its troops in Afghanistan has forced it into a collaboration with Russia which makes any idea of outright confrontation with Moscow– such as Georgia’s President Saakashvili tried to stoke last August– quite suicidal for NATO.
If you look at the handy sketch-map of possible land routes into Afghanistan that B of Moon of Alabama published in November and the list of countries Simmons is talking to you can see that Simmons’s current “Russia route” will run somewhat to the north of B’s Red Line, thus avoiding the serious hassle and expense of transferring the goods to boats to get across the Caspian Sea. I think to get from either Uzbekistan or Kazakhstan into Afghanistan, the goods will also need to go across Turkmenistan. Maybe that leg is already in NATO’s bag?
This little rail map of Central Asia published by Stratfor in January is also handy. It shows that there is at present just one rail connection going from western China into one of the central Asian Stans: the line from Urumqi into Kazakhstan. But it also shows (in red) the two additional connectors the Chinese are currently working on. These will greatly strengthen China’s ability to exert influence in the entire Central Asian region.
As of now, Afghanistan does not have any national rail line. But China is now planning to build one. It will traverse the whole country north to south, linking Afghanistan to both Tajikstan and Pakistan (and not coincidentally also giving China an indirect outlet to the Arabian Sea.)
But the “China route” for getting NATO goods into Afghanistan– B’s Green Line– still seems to be a long way off. (Correct me if I’m wrong, anyone.) That leaves NATO having to juggle between reliance on Pakistan, or Russia, or on the unbelievably expensive option of shipping things in by air. Airlift is totally not a sustainable option over any length of time. Afghanistan is quite a lot bigger and more distant from NATO’s home-bases than West Berlin!
Hence, given the current uncertainties in Pakistan, NATO’s increasing reliance on Russia.

Obama on Iraq: before and after

After a spirited exchange with Alex regarding what Barack Obama’s plans might be for Iraq, I thought it would be informative to look at Obama’s remarks before and after the election.
March 19, 2008
I will immediately begin to remove our troops from Iraq. We can responsibly remove 1 to 2 combat brigades each month. If we start with the number of brigades we have in Iraq today, we can remove all of them [in] 16 months. After this redeployment, we will leave enough troops in Iraq to guard our embassy and diplomats, and a counter-terrorism force to strike al Qaeda if it forms a base that the Iraqis cannot destroy.
December 7, 2008 (Meet the Press)
We are going to maintain a large enough force in the region to assure that our civilian troops–or our, our, our civilian personnel and our, our embassies are protected, to make sure that we can ferret out any remaining terrorist activity in the region, in cooperation with the Iraqi government, that we are providing training and logistical support, maintaining the integrity of Iraq as necessary. And, you know, I–one of the things that I’ll be doing is evaluating what kind of number’s required to meet those very limited goals.

Jimmy and ME

from Forward.com
Former president Jimmy Carter is back with new advice for resolving the Israeli–Palestinian conflict. The former president is scheduled to publish a new book on the issue — slated for release on January 20, coinciding with the inauguration of Barack Obama.
The title for Carter’s new book, “We Can Have Peace in the Holy Land: A Plan That Will Work,” seemingly suggests a more optimistic tone than that of his previous book, “Palestine: Peace Not Apartheid.”
“I was going to call it, ‘Yes, We Can.’ My wife talked me out of it,” Carter said in jest, during a December 3 discussion in Atlanta.
No details were provided on the content of Carter’s new book, but based on recent remarks by the author, it is clear that his approach toward the Israeli–Palestinian conflict has not changed. According to an Associated Press report, the former president pointed, in the December 3 discussion, to the “persecution of Palestinians” and lack of American active involvement in the Middle East as the main sources for instability in the Muslim world.

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Recruiting for the Enemy

The US occupation forces in Iraq have, from the beginning of the occupation more than five years ago, engaged in the arbitrary imprisonment (“detaining”) of Iraqi citizens. As one former US soldier testified: “I witnessed and participated in countless massive operations led by American commanders whose metrics for success were numbers of detainees apprehended.”–Louis Montalvan
If you were a YSM (young Sunni male) found in a night-time US military sweep through Iraqi neighborhoods you stood an excellent chance of being zip-tied, thrown into the back of a truck and taken downtown. “Most of the people they detain are innocent,” said Iraqi Vice President Tariq al-Hashimi.
This has resulted in US prison populations in Iraq of nearly 20,000 prisoners, with another 26,000 being held by our Iraqi surrogates.
As Afghanistan heats up, more Afghan citizens are being arbitrarily arrested and held in prison. In August construction began on a new facility for as many as 1,100 detainees and now the US Military has initiated an inquiry into possible detainee abuse
All of this, of course, is in direct violation of the Geneva Convention which calls for the military to be responsible for the welfare of citizens in a war zone or occupied territory.
Protected civilians MUST be:

    – Treated humanely at all times and protected against acts or threats of violence, insults and public curiosity.
    – Entitled to respect for their honour, family rights, religious convictions and practices, and their manners and customs.

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Counterinsurgency 101

WARNING: There will be a test.
The US Department of Defense and its representatives continually use the word Counterinsurgency, or its acronym COIN, to describe the US efforts to secure, pacify and stabilize various countries such as Vietnam in the 60’s and Iraq, Afghanistan and Somalia currently.
But we also know that the Pentagon is known around the world for invading, occupying and destabilizing countries. Many people around the world correctly recognize that “offense” doesn’t mean “defense” and that “destabilize” doesn’t mean “stabilize.” All Americans recognize that “security” doesn’t mean “insecurity.”
But what about the term Counterinsurgency? Do we give the Pentagon a bye on this particular word, when we know that all their other definitions are pure horsepucky? Should we just blindly accept that what US forces are doing in other countries is Counterinsurgency, and that US opponents are dead-enders, terrorists and insurgents?
Of course not. At JWN nobody gets a free ride where the truth is concerned.

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