Before anybody gets their knickers in a twist and calls me an anti-Semite, let me assure you that were Bernie Madoff and friends little green men from Mars, I’d have the same opinion: everybody involved engaged in criminal negligence at the least. I’m not saying they deserve what’s happening to them, but decades of turning a blind eye for the monthly one percent return regardless of market conditions constitutes having your hand in the cookie jar.
From Bloomberg:
A so-called clawback of paid-out funds in the Madoff liquidation could result in lawsuits against investors such as charities, hedge funds and individuals who redeemed profits and took out principal.
Fair enough, but spare us the misplaced outrage:
Here is a Jew accused of cheating Jewish organizations trying to help other Jews, they say, and of betraying the trust of Jews and violating the basic tenets of Jewish law. A Jew, they say, who seemed to exemplify the worst anti-Semitic stereotypes of the thieving Jewish banker.
Bullshit. Investors got a one line statement with their dividend check. They didn’t know what Bernie was doing and they didn’t care, so long as the checks kept coming.
There are no victims here. I say prosecute the lot of them.
OTOH:
Individual investors who lost money in Bernard Madoff’s alleged $50 billion fraud may be able to recover some of their money by seeking U.S. tax refunds. “The Madoff debacle will result in what amounts to another federal government bailout,” said Warren Kessler, an attorney at the Los Angeles law firm Kessler & Kessler. “It is likely that the Treasury will wind up refunding taxes,” at least on the loss of money individuals invested with Madoff, he said.
Fortunately, someone agrees with me:
I’ve been reading stories about the hard-luck investors and charities that invested with Madoff all over the place. In fact, Saturday’s WSJ could almost be called propaganda designed to make readers feel sympathy for Madoff investors (thank God for the James Grant article, which salvaged the issue). Don’t fall for it. These investors knew what they were getting themselves into when they invested with a hedge fund.
In the comments I found the 2005 anonymous complaint to the SEC concerning Madoff Investment Securities, LLC.
Again in the comments, from a letter to UBS clients admitting they believed they had engaged in illegal front-running:
The investment presented the opportunity to participate in a unique return stream that combined a splitstrike option strategy with the market information of one of the world’s largest market-makers in equity securities… In essence, the perceived edge was Madoff’s ability to gather and process market-order-flow information and use this information to time the implementation of the split strike option strategy.
Don’t tell me the investors are immune to prosecution.
The author finally shows up in the comments to set the record straight:
The real victims are non-Madoff investors who will suffer diminished returns from their mutual funds. Their mutual funds hold companies like UBS and other entities that invested with Madoff. No one will be bailing out these Main Street investors, but they are the real victims. Yet, all the attention is being given to Madoff’s investors, who are a highly exclusive group of hedge fund investors and investors who failed to diversify their investments.
You know, Fec, I heard John Edwards was heavy into these hedge fund thingys.
Wonder if the wings got clipped? He seems to be way off the radar lately.
Dr. Mary that hedge fund is called Fortress Investment Group, that would be interesting to know.
Madoff was exposed by Barron’s in 2001 as a suspicious character. Like Martin Weiss who attempted to expose Enron, the doubters were mysteriously silenced and Weiss claimed he was threatened, which I have no reason to doubt. Weiss promotes a strategy of capital preservation.
here is another foundation down the drains check this out
http://news.yahoo.com/s/afp/20081224/ts_alt_afp/usfinancefraudwieselfoundation
I’m not really interested in chasing the Breck Girl. I like what I read in the comments to the last cited post: You can’t cheat an honest man.
Now you are in trouble FEC,
http://apnews.myway.com/article/20081225/D959SJMO0.html
It makes sense that we defraud those closest to us. In Madoff’s case, I believe he started out with the best of intentions. The tangled web and all that came much later.
As an ex-addict (alcohol) I believe people can become addicted to most anything. The nature of the addiction is dependent on the substance of abuse.
Best of intentions … meet… ego gratification.
We all have our demons. Mine’s watching free HBO.
When people can be led to believe that wealth can be created from fiat, they are at a vulnerable stage in a mania where they can be made to believe that up is down, down is up and a trillion dollar injection into a cadaver will put a fog on the mirror placed under its nostrils. Cheating an honest man is difficult, you’re right. An honest man has an honest model and anything which conflicts with his model is abandoned early in the data presentation. If a person lacks such a model, they are vulnerable to data which doesnt conflict with an incorruptible model. In human modeling, data is thrown out if it conflicts with the persons model. Even if valid data is introduced to a flawed model, the data is thrown out before the person will alter or reconstruct his model. This is why myths are so infrequently abandoned. So be careful what you allow yourself to believe. Certainty is the end of inquiry.
It seems to me that certainty breeds extremism, as seen in the US political system via the political left and right.
It’s bad enough that Power Mongers would divide the populace for their enrichment, but to have the population self-divide is … insane !
BTW, Beelze, have you read any of Taleb’s material on modeling. I haven’t but hope to sometime.
My only exposure to Taleb was concerning the Black Swan. The fourth quadrant seemed to define the error of hedge fund quants – something known since the first fund failure and subsequently ignored.
RBM..yes i have.Taleb, Mises, Maybury, Hazlitt and Hayek. Taleb is very accurate but Maybury has been right within hours on events concerning the praxeological since the early 90’s. Maybury writes for Bluestocking Press. Used by most homeschoolers. I have everything Taleb has uttered on disc. Remarkable thinker and debunker.
Fecamungus: Taleb was rolling his eyes and buying leap calls on body bags as Marty Scholes was accepting the coveted prize.
This will teach me not to try to go deep with you.
Continuing investigation of Madoff -
Black Money Investors:
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