Ponzi Schemes and Carbon Reduction Schemes
There is a Russian proverb – ‘when you live beside the graveyard, you can’t cry for every funeral’.
Recently in the news, there has been nothing new, just repetitions of the same themes over and over – economic bailouts, corporate fraud and distraction politics. As a result, I have become desensitised and no longer feel any shock.
I will comment on two piece of related news: Bernie Madoff’s $50bn Ponzi Scheme and Kevin Rudd’s Carbon Pollution Reduction Scheme. How are they connected? They are both scams.
Bernie Madoff’s Ponzi Scheme
For many years, New York investment manager Bernie Madoff operated a hedge fund that consistently returned 12% per annum to investors for many years.
Early this month, it all fell apart when investors wanted out. The fund turned out to be a Ponzi Scheme that merely used new investors capital to pay distributions to previous investors.
This has been described as the “world’s biggest corporate fraud by a single individual”, resulting in estimated losses of $50 billion US dollars. I personally doubt that he acted alone.
Incredibly, the alarm bells were raised as far back as 9 years ago when an analyst named Harry Markopolous sent a report to the SEC titled “The World’s Largest Hedge Fund is a Fraid”. It is not clear if the SEC took any action on this.
How did he get away with it? I’m not sure, but he did have many friends in high places – after all, he was a former chairman of NASDAQ.
Regulators generally don’t care about small investors, but now that some rich and prominent people got hurt, perhaps the SEC will start taking corporate transparency seriously.
Kevin Rudd’s Carbon Pollution Reduction Scheme
Australian Prime Minister Kevin Rudd set a token 5% Carbon Dioxide reduction target for the year 2020. Expectations were as originally as high as 15% and some were demanding a reduction of 25%.
Clearly, he wanted to maintain his popularity by doing something to appease the Climate Change believers, but not dare risk anything to further exacerbate our economic problems.
So what was has been achieved by this? Apart from the fact that Global Warming Alarmism is bullsh**, China’s own CO2 emission growth will of course outstrip our savings within several months. Even if we ignored China, the flawed computer models (that others believe in) indicate that a much much larger cut would be needed to reverse a warming tread.
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