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caniff
Joined: 03 Feb 2004
Location: All over the map
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 Posted: Wed Feb 25, 2009 10:52 pm Post subject: The dark lesson of Bernie Madoff |
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An interesting piece on the possible neurological basis for what may make this scumbag tick:
http://www.salon.com/env/mind_reader/2009/02/26/bernie_madoff/
Check out the video clip linked in the first paragraph. What a depressing situation.
I can only hope the prison he is eventually sentenced to isn't some white-collar criminal country club. He deserves to do real hard time, the arrogant a-hole, with all the challenges that typically go along with survival in such facilities.
We live in times now where I don't think he's gonna get much sympathy from the powers that be. He'll be hung out to dry, and rightfully so. I guess I'd call that a silver lining. |
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canuckistan
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Joined: 17 Jun 2003
Location: Training future GS competitors.....
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| Posted: Thu Feb 26, 2009 6:41 am Post subject: |
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Even more gobsmacking--all those 'smart' people investing all that money ......never asked questions about those impossible returns. NEVER.
Which brings us to this quote worth remembering:
"There was a tendency to confuse good manners and good tailoring with integrity and intelligence."
John Kenneth Galbraith |
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Chuvok
Joined: 25 Jan 2009
Location: Russia
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canuckistan
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Joined: 17 Jun 2003
Location: Training future GS competitors.....
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Thu Mar 12, 2009 6:58 pm Post subject: |
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Where Madoff, who is 70, ends up incarcerated will be a decision for the federal Bureau of Prisons. Concerns among some people that he could end up in a cushy "Club Fed" are misplaced. Such comfy quarters, defense attorneys say, are a thing of the past � and to a great extent existed more in legend than in fact. At the same time, those hoping for Madoff to rot in a Devil's Island-like detention will also be disappointed.
Under Bureau of Prison guidelines, Madoff is likely to end up in a medium-security prison. That's more restrictive and regimented than a minimum- or low-security facility, but it's a far cry from a super-max lockup reserved for the nation's most dangerous inmates. Still, says Peter Henning, a criminal law professor at Wayne State University Law School, "it's no fun." |
http://www.msnbc.msn.com/id/29663944/ |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Mar 12, 2009 7:43 pm Post subject: |
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| He lost tens of millions of Russian gangster money. I'd be very surprised if he lives many years. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Thu Mar 12, 2009 7:54 pm Post subject: |
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| canuckistan wrote: |
Even more gobsmacking--all those 'smart' people investing all that money ......never asked questions about those impossible returns. NEVER.
Which brings us to this quote worth remembering:
"There was a tendency to confuse good manners and good tailoring with integrity and intelligence."
John Kenneth Galbraith |
I don't like blaming the victims here. Madoff has had better credentials and more experience than any other major operator of a ponzi scheme has. He helped design Nasdaq, and then ran its ethics committee that oversaw the conversion to entirely online trading centers. Its completely understandable that smart people would believe he could beat the market consistently. He did, after all, design the market. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Thu Mar 12, 2009 9:06 pm Post subject: |
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| I think what irritates me the most about this is that his guity plea means he doesn't have to tell where all the money went. |
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canuckistan
Mod Team
Joined: 17 Jun 2003
Location: Training future GS competitors.....
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| Posted: Fri Mar 13, 2009 5:54 am Post subject: |
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| Kuros wrote: |
| canuckistan wrote: |
Even more gobsmacking--all those 'smart' people investing all that money ......never asked questions about those impossible returns. NEVER.
Which brings us to this quote worth remembering:
"There was a tendency to confuse good manners and good tailoring with integrity and intelligence."
John Kenneth Galbraith |
I don't like blaming the victims here. Madoff has had better credentials and more experience than any other major operator of a ponzi scheme has. He helped design Nasdaq, and then ran its ethics committee that oversaw the conversion to entirely online trading centers. Its completely understandable that smart people would believe he could beat the market consistently. He did, after all, design the market. |
Nasdaq, schmasdaq--that allowed him to snow the SEC folks. What did the SEC know that others who avoided Madoff didn't? Nothing! He handed them a set of cooked books. But there were still plenty of investors who avoided him because of a key lack of transparency to his operation and who stuck with thorough due diligence, which Madoff just didn't seem to allow. Some very basic questions that any comprehensive money manager would ask were consistently ignored/rebuffed. They tried to caution others, only to be villified and their doubts explained away as "jealousy."
I was curious about the nuts and bolts of how Madoff managed to avoid closer scrutiny, and have come away gobsmacked at how many people were willing to give him a pass on basic stuff.
http://online.barrons.com/article/SB123517376442637077.html?mod=rss_barrons_funds/Q_and_A
Some highlights:
Billions of $ under Madoff's management, and he's using an unknown 3-person auditing company working out of some dinky office in NY that no one's ever heard of, "to save my investors money."
What's a few mil to use a credible big hitter auditing company if you want to be on the up-and-up?
Using the split-strike put/call strategy but people who know everyone in the biz cannot find out who he's using to make those puts/calls with. Well of course not, he wasn't making trades. And the smartest heads in the biz just couldn't seem to duplicate his "strategy."
#1 it was about greed overshadowing common sense.
#2 it was Madoff's carefully cultivated aura of "you're lucky to get in" herd mentality.
For the wealthy folks who got taken "investing with Bernie" seemed to be all about bragging at the country club. I don't feel bad for them. And now they're blaming everyone else except themselves. This is the era of no personal responsibility after all.
When someone hands over their savings, let alone life's savings to any firm or individual to invest they have a basic responsibility to know where it's going, how it's going to be invested, at what risk/terms, and if the individual/company passes all benchmark tests of transparency. If the investor doesn't mind losing their money, then go ahead and don't ask questions. It doesn't matter if they're wealthy or mom-and-pop.
THAT is the dark lesson of Bernie Madoff.
At least that's how I see it.
P.S. all my money is in bulletproof stuff. That may be considered overly conservative, but at least I still have it!
Last edited by canuckistan on Fri Mar 13, 2009 8:18 am; edited 1 time in total |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Fri Mar 13, 2009 7:13 am Post subject: |
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| canuckistan wrote: |
| "... people who know everyone in the biz cannot find out who he's using to make those puts/calls with. Well of course not, he wasn't making trades. And the smartest heads in the biz just couldn't seem to duplicate his 'strategy.' " |
This is similar to the $100,000 made by Hillary Clinton in commodities. There were no "trades" made then either.
Bill and Hillary should be with this guy. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Fri Mar 13, 2009 7:23 am Post subject: |
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Several decades ago, there was a guy (and you'd be really surprised if I told you who, but sorry, I can't) who tried to get me in on the "ground floor" of his new investment business.
So, I looked the thing over, and his promised returns, and I asked the hard questions. His answers were all BS and so I told him flat out that:
1) I knew it was a Ponzi scheme (he denied it).
2) I knew I could get in early and make big bucks like he promised, and then get out, which would be fine with him in his growing stage.
3) I knew he would eventually get caught and go to prison, and likely some of his early investors would go with them, if they knew, like I did.
So, he yelled and screamed and ranted at me.
There was a great deal of pressure to "invest" with this guy over the next 6 months or so. It was impossible for me to get away from him completely at the time.
Finally, about 18 monts later, the guy got caught. Someone managed to get "inside" and report him. Hundreds of investors lost millions of dollars. He and his managers and office staff and several early investors were charged and went to prison.
I had a very close view of it all.
Prison isn't enough. That SOB should rot in hell. |
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canuckistan
Mod Team
Joined: 17 Jun 2003
Location: Training future GS competitors.....
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| Posted: Fri Mar 13, 2009 7:29 am Post subject: |
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For anyone who dropped most of their money on Madoff these last 8 years, even a 2-second Google would have pointed them in the right direction concerning questions to ask.
SEC investigations sure scream "problem", if not "questions." Were they answered to everyone's satisfaction? There's only so far you can skate on "proprietary formula."
That's not even taking Markopolos' well-publicized warnings into account way back when.
#1: Greed and complacency.
I once had this boss--he was a self-made guy, tough as nails, didn't suffer fools gladly.
One day he told me "If you're stupid enough to get ripped off, you deserve it." Pretty brutal assessment. But I've kept it in mind all these years. |
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