Your Questions About Is The Stock Market A Big Ponzi Scheme

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Mark asks…

Will you write your US Senator and US Congressman?

Dear Senator / Congressman

How well has Mary Shapiro run the ship at FINRA? Today’s Wall Street Journal front page article discusses this. But after reviewing this, I don’t believe that CHANGE will be in the cards for the investing public.

During in past decade, where did all the trouble in the financial world come from? Was it from Main Street or was it Wall Street? (Enron’s electricity manipulators are now the oil market manipulators. Supply and demand forces do not drive oil up $25 in one day!) Have the scandals come from the regional or community banks, credit unions, independent broker-dealers or independent planning firms? No, it came from the BIG FIRMS on Wall Street’s with their Non-transparent, Unregulated Credit Default Swaps and other undecipherable schemes. It was assisted by the abolishing of protection policies like the “Uptick Rule”. So speculators could short company stocks into the ground in just a couple of days.

Criminal Con-man, Bernard Madoff ran a brokerage firm that was under FINRA oversight and an insider; once the head of the NYSE. The SEC admittedly knew about it in 1998 but turned a blind eye. It could have stopped then at 1 billion but, was allowed to grow into a 50 billion dollar ponzi scheme. Please stop appointing the gangsters as policemen and, stop allowing them to regulate their own criminal activity.

Maybe the regulators should eat their own cooking. If the higher ranks of the SEC and FINRA were sold equity indexed annuities, life insurance promoted as retirement savings, annuities with 16 year surrender periods, tax shelters found to be abusive, complex mortgage securities that they couldn’t understand or securities firm recommends but trash privately, MAYBE they would change their tune.

I see, with this appointment of Mary Shapiro, the continuation of supporting the system that has put us in the economic position we are in today and the further erosion of consumer protection.

DO YOUR JOB, NEW SENATOR!!! Start protecting the little man on main street, the majority of your constituency! FIX IT!!!

I must cite Jeff Bogue’s article, Jeff is an independent, fee-only financial planner with his firm, Bogue Asset Management, LLC as a reference for my letter. I sent this to my senator and congressman. Please write something to them. Let them know how you feel. Copy / paste mine if you agree and are to busy to write your own.

Justin answers:

I wouldn’t know how to write something with the dynamics that you just voiced therefore I will cut and paste and add a comment of my own for backing your voice.

Paul asks…

Is online MLM ( Multi Level Marketing) spam ?

After Destiny 2000, a Malaysian based gold biz (investment) co. operating Bangladesh.
Young Generation and specially educated sec get panic. We have experienced stock market tragedy1996 that takes 6 billion BDT app. got rid off. I visited the site several times found no SPAM, safety, security and privacy policies; Winding up and pay back GRANTEE scheme. Bangladesh Unit having an incorporation certificate along so called 15 lacks ( 1.5 million BDT) import lic !
Their transaction volume perhaps million times more !! No Anti Money Laundering and local and international licenses found nor Central BB (Bangladesh Bank) permission.

Everyone needs some additional income to satisfy barely necessities of their lives other than regular sources. Perhaps Local and int Spammers GUILD’S might prey the situation or may not be..

This is a BIG BILLION USD Q ?? Any body HELP me out, proper KNOL & know how solicited.
Thank you in advance for patience hearing, valued time and sharing…appreciate your generosity

Web site address:
91 days ago by rao j singh [send email]
dear all
this is rao j.singh from haryana
i want to warn all unipay2u investor to stop investing in unipay2u
i also a high level achieved in unipay with investment of about 67 laks so
During my visit to Malaysia organized by unipay2u i became friendly with on person .I will not disclose the name, but he is close associate of mr JAMES CEO OF BEST GENIUS and UNIPAY2U .Today he called me from Malaysia and inform me that the company have disputes in BANGLADESH with GOVT . THE same problem is arising in india and in a short span of time the company is packing fom INDIA AND BANGLADESH . SO I again warn all net worker and common people not to invest but withdraw your money as early as possible..

Copy paste from the link at:
RE: inquiry about Independent service center & FAQ”S?
For Technical / Purchaser support:
Customer Care is available 24/7 by Email and provides a 16 to 24 hour response time. Our technical support email is We welcome all to review our detailed frequently asked questions. Both purchaser support and FAQ’s are available.
Aforesaid- Copy paste of support notice at your site but found contradictory. On the contrary- I sent you email Date: Tue, 24 Aug 2010 05:42:48 +1100. Now 26, almost 48 hours have been going to passed but no respond of YOU. So I don’t like to comments on…the ball is at your court !

Moreover out of curiosity- have started research on YOU & bellow are the some facts
Some reviews from INDIA at:

Justin answers:

Multi Level Marketing = scam, and probably a Ponzi scheme…

William asks…

Can somebody explain Bernie Madoff’s ponzi scheme?

So my dad told me last night that he got people to give him their money with promises he’d make them money from the stock market and investments, right? And then he’d go to more people, get their money, and pay back the first people with their money.

Okay, I understand how this is very illegal and why he is going to rot in jail. I don’t understand how he could make a profit from this. After all, he has to keep giving money back to the oldest loaners he hasn’t paid back yet… He didn’t STEAL it, the market just crashed big time, right? So like… yeah, how could he turn a profit?

Justin answers:

You have the main principle right, he pays investor 1 with the money from investor 2. So when he gets to investor 15 and there is no investor 16 he is in trouble and that is what happened. The scheme works while more people are investing than are withdrawing.

When the markets crashed investors got nervous and wanted cash. He couldnt pay and so the truth came to light.

He never actually turned a profit. He didnt invest at all. He lived off the investments, money clients thought was going to buy shares was buying his house, boat and cornflakes. So he did steal and in a very big way.

Joseph asks…

Is my idea PROOF that poor people pay most the taxes in this country i.e. like 1.4 trillion in revenue a year?


The fact of the matter is BUSINESSES PAY NO TAXES!!!! True they do in actuality but in reality they do not becasue the put the expenses on the consumer. If tomorrow the government said WE ARE TIRED of all the big retailers making so much Money Like Wal-Mart,Target,Costco and Safeway and they RAISED taxes up on them and also told them that they had to pay their employees a higher wage this would increase how much they had to pay out but guess what? The very next day they would all just RAISE their prices for their goods thereby taking that expense and putting on consumers 😉 i.e. the average everyday person. Worse yet most the wealth is traded on PUBLIC markets but MOST of it is owned by the richest 3% of this country. So there you have it rich people will continue to make money off owning businesses in the form of stock-ones traded publicly, or privately, and they will continue to own most the wealth and pay very little taxes off the money they make PERCENT wise.

Note against stupid argument 1: As for the excuse rich people pay more for personal taxes, this is bogus becasue generally dividends are taxed at 15% and then long term capital gains from the sale of an asset are only taxes at 15% too. Long term capital gains can be used when a company takes their net income and invests it INTO the company essentially tax free increasing the NET WORTH of the shareholders of a company. Worse yet they pay NO SOCIAL SECURITY!! That’s right folks, unless you are a jerk enough to have to EARN your income, you pay no social security. That means that if I am Mr. Warbuck and own 10 Mcdonalds with mangers that run them, and 100,000 shares of Wal-Mart and Exxon Mobile, I PAY NO SS on the money I make. I have a few managers full time who watch my Mcdonalds so I am not earning that thus no SS tax on my net income. On the shares on Own in Exxon and Wal-Mart I pay no social security taxe on that either becasue I didn’t have to EARN it you did the worker ;]- the poor fella!! Only JERKS have to earn there money remember!!!!

Conclusion: Lets go over this one more time.
Rich people own most the business wealth with a set number on net income to make in mind for the year. They then pay supposed taxes, but if those taxes are raised and interfere with what the company wants in net income then they are put on the CONSUMER anyway. The companies invest in themselves tax free, the company equity is sold again and only taxed at 15% = a lot of money for rich people and their friends. They work it so they pay no social security like you do-you have to be a jerk to earn money; frankly an idiot in society.

Note: social security is a ponzi scheme which doesn’t give what you put in. psss it’s another tax for those terrible stupid people that earn money.


Justin answers:

Yes, businesses do pay taxes. Yes, it is passed onto the consumer- no matter how large or small the business is.
They are paid by the consumer because that is how they make their revenue to pay their accounts. So in essence yes, we pay their taxes, water bill, electricity, salaries and phone bills.
For those that don’t pay SS, they will not be eligible to receive it so don’t worry about it.
Yes, rich people do own most of the businesses. Yes again- the taxes are paid by the consumer (because that is their source of revenue) so when taxes are raised they are passed to the consumer to foot the bill (how else does business get its money?)

Chris asks…

No Bailout For Fannie and Fred?

If anyone else is bailed out in this mortgage mess should it not be the homeowner and not the criminal Wall Street Banker friends of Mr. Paulson?
Don’t your agree that any government money used should help the individual American and not the stock holders of these corrupt institutions that dreamed up this fiasco?
The republicons scream NO SOCIALISM, NO SOCIAL HEALTHCARE! No SCHOOL LUNCHES! and then ask for billions from the tax payers to save their buddies!
What do you think?

Justin answers:


Congress believes corporations are important so they should be bailed out whenever their existence is threatened where as ordinary and poor Americans are replaceable and not of vital importance to the economy so if they have bad luck they should clean up the mess themselves or simply suffer. To the “free” market fundamentalists either one is fine as long as they are not required to show any form of solidarity.

“Fannie Mae and Freddie Mac have been at the center of the housing market speculation that generated billions for Wall Street investors and CEOs and has now come crashing down, precipitating the greatest financial crisis since the 1930s. The two companies are massively leveraged, holding a combined $81 billion in capital to back the mortgages they own or guarantee—a ratio of capital to debt of 1.6 percent.

Their Ponzi scheme structures have been undermined by the collapse in home prices and the virulent spread of foreclosures. Over the past nine months they have lost a combined $11 billion and their stock has fallen by as much as 80 percent—a decline that turned into a rout last week as their stock values were cut nearly in half.
Their debacle is the latest and to date most spectacular expression of the decay of American capitalism. It is another refutation of the myths promoted by the US ruling elite about the miraculous workings of the capitalist market—supposedly the pinnacle of human achievement.
At the same time, it exposes the cynicism behind the official mantra of “free enterprise.” When it comes to big capital, losses are socialized. Only profits remain private.
Paulson’s plan to use taxpayer funds to rescue Wall Street were worked out over the weekend in feverish closed door consultations between the Bush administration, the Fed, the big banks and investment houses and congressional leaders. They were under enormous pressure to come up with a plan before the Asian markets opened Monday, and the crisis atmosphere was compounded by the fact that Freddie Mac was scheduled to market $3 billion in short-term debt. A catastrophe was looming if the banks and investment houses refused to buy the company’s bonds.
There can be no doubt that Wall Street exploited the situation to extract from the government the broadest possible guarantees and assurances for its interests. But the entire scheme had to be sanctioned by the Democratic Congress, since it required changes in the charters and legal regulations governing the two companies.
The immediate and vocal support announced by key Democratic legislators for this massive taxpayer-funded bailout demonstrates the most important fact of American political life: the utter subservience of both parties and all of the official institutions to the financial aristocracy.
Rep. Barney Frank, the chairman of the House Financial Services Committee, proclaimed his agreement and pledged to have emergency legislation ready for Bush’s signature by the beginning of next week at the latest.
Senator Christopher Dodd, the chairman of the Senate Banking Committee, similarly signed off on the blank check for the mortgage giants. Senator Charles Schumer, a senior member of the Banking Committee, said, “The Treasury’s plan is surgical and carefully thought out and will maximize confidence in Fannie and Freddie while minimizing potential costs to US taxpayers.” He added that the plan would “be reassuring to investors, bondholders and mortgage-holders that the federal government will be behind these agencies should it be needed.”
The corporate-controlled media did its part to boost the scheme by portraying it for the most part as a boon to homeowners.
Suddenly, the much bemoaned “gridlock” in Congress vanishes. The Democrats, who have sought to explain away their repeated votes to fund the Iraq war by pointing to the supposedly insurmountable opposition of the Republicans to their “redeployment” plans, claiming “the votes aren’t there” for their partial withdrawal schemes, now march in lockstep with the minority party to rush through laws demanded by Wall Street. Other initiatives, such as those on immigration, have died as a result of unbridgeable differences between punitive and even more punitive bills. But on this issue, Congress moves with military dispatch.
There is nothing mysterious about the abject subordination of both Congress and the executive branch to Wall Street. Paulson, whose worth is estimated in the hundreds of millions, was chairman and CEO of Goldman Sachs before taking over the post of treasury secretary.
The Center for Responsive Politics reported in 2006 that about half of the Senate’s 100 members were millionaires, with an average net worth of $8.9 million. In 2004, 123 members of the 435-member House of Representatives earned at least $1 million.
The buying of legislators and their votes by corporate interests is carried out openly and shamelessly. Members of Frank’s House Financial Services Committee received over $18 million from financial services, insurance and real estate firms this year. Frank himself raised over $1.2 million, almost half of which came from finance and related industries.
Senator Dodd’s top contributor in the 2003-2008 election cycle was Citigroup, followed by SAC Capital Partners. He raised $4.25 million from securities and investment firms.
Senator Schumer’s top contributor was likewise Citigroup. He raised $1.4 million from securities and investment firms, his most lucrative corporate sector.

The government-corporate nexus is awash in corruption and bribery. This has grown apace with the so-called “financialization” of the US economy over the past three decades. The ruling elite has systematically scrapped large sections of industry and increasingly amassed its wealth through forms of financial speculation divorced from and destructive of the productive forces. The result has been an immense growth of financial parasitism alongside a brutal assault on the social position and living standards of the working class.

Social inequality has grown to unprecedented levels, along with a new financial aristocracy that dominates all aspects of public life.

The counterpart of financialization is the criminalization of the American corporate-financial elite. Fannie Mae and Freddie Mac—which have their roots in social reforms enacted during the New Deal—epitomize these twin processes. Virtually unregulated, they have engaged in massive speculation, bolstered by accounting fraud and bribery, to provide multi-million-dollar salaries for their top executives.
The former CEO of Freddie Mac, Leland C. Brendsel, paid $16.4 million in fines last year to settle charges of mismanagement at the mortgage company. The year before, the company paid a penalty of $3.8 million for illegal payments and perks to members of the House Financial Services Committee.
Fannie Mae, for its part, was fined $400 million for accounting manipulation from 1998 to 2004, during which time top executives reportedly received more than $90 million in bonuses.
Nor will the proposed bailout of these companies halt the deepening crisis of American and world capitalism. It will inevitably further undermine global confidence in the US financial system, intensify the crisis of the US dollar and stoke inflationary pressures. What is emerging is a crisis in which the solvency of the US government itself is called into question. As the Wall Street Journal put it on Monday, “But with financial woes mounting, some investors are betting they may profit from weighing an unthinkable question: Could the US government default?”
The bailout with public funds of Fannie Mae and Freddie Mac will set a precedent for a far broader use of taxpayer money to rescue major financial companies. Last week Paulson and Bernanke went before the House Financial Services Committee to demand legislation institutionalizing federal intervention to bail out failing Wall Street firms. The response of key Democrats such as Frank was to urge the regulators to call for such measures now, rather than after the new Congress takes office next year.
The cost of such bailouts will be borne by the working class, in the form of deeper cuts in social programs, education, housing and basic infrastructure, and new waves of corporate downsizing and wage-cutting.
The working class cannot defend its vital interests through pressure on the Democrats or any other institution of the American plutocracy. In the coming class battles, it must organize itself as an independent political force to fight for t

Richard asks…

why Social Security is bad?

How can anyone possibly believe that social security is good. People should be allowed full ability to invest on their own, social security should not be a government program. For example, lets say the year is 1950, and every year you make 30, 6$ comes out for taxes, and 12$ comes out for social security. You earn 12$ a year. And currently it costs 1$ a month to live. Everything sounds good, right? Lets fast-forward to the year 2000, and you decide to retire. Your social security tax comes in at 1$ a month. But wait inflation has made the cost of living 5$ a month. Too bad now you cant afford to live. Life sucks. If you could have privately invested your money you could have put it in the stock market, or in real estate, made big profits, and lived happily ever after. So do you really think that social security is possibly good?

Justin answers:

It’s nothing more than a Ponzi scheme. We’re paying into it now, with the expectation that there will be a return on our “investment” when we hit the golden years. The truth of the matter is, the population is living longer now than ever before, which is putting a drain on the available SS funds. Then the problem is compounded by elected officials who want to “borrow” money from the funds, like it’s their own little bank account. Mark my words, when you and I are ready to draw from what we’ve put in, the coffers will be empty.


Donald asks…

Will obama get another bail out threw congress ,so he can save his failed administration and buy more time?

To sell off whats left of America before he JUST WALKS LIKE BUSH DID?
my guess is it won,t be like in the movie “Walking Tall” LOL
does anyone here watch the Infidel news or what!!!!

Justin answers:

Truth is, the banking system and American economy, headed by the Fed, turned into a giant ponzi scheme. When money is deposited into the bank, the bank must send 10 cents per dollar deposited to the Federal Reserve. They then lent the other 90cents per dollar to other banks, who in turn sent 10% to the Fed, lent the rest to another. Wealth wasn’t being created by making profit or earning interest, which is why interest rates could go so low. It was created by taking in more new deposits than was going out. It was all worthless paper monetary gains. When housing and commodities, as well as the stock market collapsed, the new deposits stopped coming in, and the loans couldn’t be repayed.

The bailouts were never designed to “fix” anything. Simply to delay the total collapse. The strategy now is you have a hole in your oil pan. As you drive down the road losing oil, you pour more into the engine to keep it going. That’s all that’s happening right now. Thus far, the biggest benefits of the bailouts to the government, is it has delayed the real disaster of the receding economy and depression from hitting the middle and poor sectors as hard as it will when it melts sown.

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