Financial Fraud: The Tip-Off
"Tell me why I'm so lucky!" This was the challenge hurled by the head of Capital Markets of my former Wall Street firm at any trader who booked a profit. My partner, who ran our trading business, had the Head of Accounting sitting outside his office and he tracked the firm's securities operations like a hawk. Since perfect markets have the profits squeezed out of them, a reported profit demanded an explanation. Why were we so lucky?
My former partner lived the first rule of avoiding financial scams: understand where your money is, what it is doing, and the logic of your profits. If you don't understand, if it does not make sense to you, if it does not reflect how the real world really works, then it is prudent to assume you are dealing with fraud.
There are a few basic rules that will help you protect yourself from most financial frauds. Consistent returns were the dead giveaway that something was fishy at Madoff's operations. Consistent returns, however, are a siren's song for investors who want to prosper inside a financial bubble.
Madoff raised funds through intimate networks. Critics say this is why you would not bank and invest with people you know. Rubbish. You need to know who you bank and invest with. You also need to know what they are doing with the money. Black boxes are usually frauds -- whether by individual investment firms or by the partnership of the Treasury and central bank.
In this week's Solari Report (Thursday, January 8 at 9PM EST), we'll review some simple rules to help you avoid financial frauds and embrace the "rock-and-roll" of investment in the real world. I'll also look at a number of hi-visibility reports that the U.S. dollar is about to tumble. Why are "insiders" suddenly going public on this subject? Let's explore why.
Then I will be joined by nutritionist Dr. Laura Thompson, a healer who has brought many people back to health from seemingly impossible odds. I know — I am one of them. One of the great blessings of seeking out people who are researching "what is really going on" is that they are applying real solutions to real problems. When it comes to health, this is absolutely critical.
In addition, I will
be talking about the movie Syriana
, one of the most realistic dramas I have seen on the geopolitics of oil. Ever heard someone say, "Why isn't anyone doing anything about this?" Syriana helps us answer this question. It also sheds light on the logic behind Obama's appointment of a former U.S. Budget Director to head the CIA.
You can learn more about The Solari Report and subscribe here.
I hope you'll join us.
-- Catherine Austin Fitts
Mapping The Real Deal is a column on Scoop supervised by Catherine Austin Fitts. Ms Fitts is the President of Solari, Inc. http://www.solari.com/. Ms. Fitts is the former Assistant Secretary of Housing-Federal Housing Commissioner during the first Bush Administration, a former managing director and member of the board of directors of Dillon Read “ Co. Inc. and President of The Hamilton Securities Group, Inc.