After only part of this morning’s House hearing starring Harry Markopolos, there’s little doubt that Bernie Madoff‘s true identity is Dr. Evil.
What else can one think when House members wondered aloud whether there are “mini-Madoffs” or “medium-size Madoffs” lurking in the Wall Street wastelands.
Markopolos answered in the affirmative and said he plans to “deliver a mini-Madoff to the SEC tomorrow,” adding, “Hopefully they listen to me this time.”
The House Financial Services Committee members agreed that this time the SEC will probably listen to Markopolos. There’s no hint, however, of who Markopolos is talking about.
A mini-Madoff! Like Mini-Me! Cool!
But speaking of Dr. Evil, Markopolos also pointed out (as I and some others have) that Wall Street’s fraudsters couldn’t pull off their schemes without Mayor Mike Bloomberg‘s proprietary sophisticated hardware/software machines.
There’s no other way, many say, to conjure up the increasingly sophisticated financial instruments that ruined Wall Street and will no doubt ruin it again during the next bubble.
Bloomberg is supposedly the biggest philanthropist in America; he got the money from the sale of his machines on Wall Street.
Which leads to the question: How could Mayor Bloomberg not have known the various nefarious uses to which his machines could be put? Of course he knows.
Which leads to this: Wall Street’s meltdown happened on his watch, and it was created by his pals — his customers — at the Street’s big banks. So why didn’t he stop it or at least see the signs of an impending disaster?
If not him, who? If not then, why not?
And now he wants another mayoral term to keep our streets supposedly safe when the only street he knows — Wall Street — has become the most dangerous stretch of pavement in the country?
Markopolos didn’t make that point, but he did say that the SEC operates at a tremendous disadvantage in trying to understand the complex schemes of the Street’s white-shoed gangsters by not having nearly enough Bloomberg terminals. Give the SEC more Bloomberg terminals, he told the House panel, because the fraudsters and scamsters have them.
Wild-eyed Harry also has a beef with the press: He contended that a Wall Street Journal reporter (whom he didn’t name) was very interested three years ago and was willing to fly to Boston to meet with Markopolos but that the reporter’s editors were scared off by Madoff’s power and reputation and nixed it. (For more on that, see Gary Weiss‘s post on Seeking Alpha.)
Treated with extreme deference, Markopolos is surely one of the most brash witnesses to testify on Capitol Hill in quite a while. And well-prepared — browse his lengthy (but entertaining) written testimony if you can’t wait for the sound bites later today.
Of course, he can back it up, having warned a decade before Madoff confessed to his sons that Bernie was a fraudster.
At least, Markopolos can back it up for now. His hubris, his zealotry, his sense of certainty — they make you wonder whether Markopolos, like Madoff’s scheme, is too good to be true.
Anyway, Markopolos’s halo — or is it his intense eyes? — cast an eerie glow for now on the scene of perhaps capitalism’s all-time worst disaster.
California Democrat Brad Sherman noted that Markopolos isn’t just some “wild-eyed populist.” Sherman was half-right. Markopolos is definitely wild-eyed — he has the look and tone of a zealot — but he’s also the staunchest defender of capitalism one could imagine, and that includes Ayn Rand.
And imaginative, too. Markopolos raised the intriguing notion that retired Wall Street bigwigs, people with little or no hair, as he put it, should be hired by the SEC to replace the young whippersnappers who now infest the agency’s lower ranks.
Markopolos reasons that veterans won’t have to do it for the money, because they’ve already made theirs and that they would be foxes able to sniff out the rotten eggs in the henhouse.
This probably won’t happen, unless these Wall Street veterans are suddenly imbued with that sense of civic responsibility that Barack Obama mentioned in his inaugural address.